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HomeMy WebLinkAbout80A - SETTLEMENT AGMT FINAL VERSIONSETTLEMENT AGREEMENT This Settlement Agreement ("Agreement") is made and effective this le /) day of April, 2011 (the "Effective Date") by and among the Santa Ana Station District, LLC, a California limited liability company, the Related Companies of California, LLC, a California limited liability company, and Griffin Realty Corporation, an affiliated company of Griffin Holdings (collectively, the "Developer"); the Friends of Lacy Historic Neighborhood, an unincorporated association ("FOL"); Debra McENven, an individual; the City of Santa Ana, a municipal corporation, and the City Council of the City of Santa Ana (collectively, the "City"); and the Community Redevelopment Agency of the City of Santa Ana, a public body, corporate and politic, and the Board of the Community Redevelopment Agency of the City of Santa Ana (collectively, the "Agency"). Developer, FOL, the City and the Agency are collectively referred to herein as the "Parties" and individually as a "Party." FOL is sometimes referred to herein as the "Petitioner." The City and the Agency are sometimes collectively referred to herein as the "Respondents." The Developer is sometimes referred to herein as the "Real Parties in Interest." RECITALS A. The Developer is the developer of that certain redevelopment project commonly known as the "Station District Project" located on approximately six (6) acres of real property in the City of Santa Ana, which consists of unimproved and improved lots with residential uses. The parcels which make up the Station District Project are identified by the phases in which they will be constructed on Exhibit "A" hereto (the "Site Map"). Tile Site Map also identifies the boundaries of the area commonly known as the "Station District." The Station District Project will construct affordable rental housing that will be available to and occupied by persons and families of very low and extremely low income, affordable for-sale housing that will be available to and occupied by persons and families of moderate income, and market rate for-sale housing that will be available to all buyers, pursuant and subject to certain terms and conditions set forth in a Disposition and Development Agreement between the Agency and the Developer referenced below in paragraph E, the scope of which may be revised to comply with the terms of this Agreement. B. The Station District Project is located within the area of the City subject to the Transit Zoning Code ("TZC") in the central urban core of the City. The TZC area comprises over 100 blocks and 450 acres between First Street, Flower Sheet, Civic Center Drive, Grand Avenue and Interstate 5 (I-5) and, more specifically, in the area west of I-5, north of First Street, and between Grand Avenue and Flower Street and south of Civic Center Drive, as shown on Exhibit "B" hereto (the "TZC Project Area"), C. The Station District Project is also within an area commonly known as the "Lacy Neighborhood," which is bound by Civic Center Avenue on the north, First Street on the south, Main Street on the west and Santiago Street on the east, as shown on Exhibit "C" hereto (the "Lacy Neighborhood"). D. On or about June 7, 2010, the City Council of the City ("City Council") certified the Transit Zoning Code (SD 84A and SD 84B) Environmental Impact Report ("EIR") (SCH No. 2006071100) prepared by the City under the California Environmental Quality Act ("CEQA", Public Resources Code § 21000, et seq.), which analyzed the environmental impacts of the TZC at a programmatic level and the Station District Project at a project- specific level. On or about June 7, 2010, the City Council also adopted certain resolutions and ordinances necessary to implement the TZC. E. On or about June 7, 2010, the Board of the Agency ("Board") approved the Disposition and Development Agreement ("DDA"), attached hereto as Exhibit "G", between the Agency and the Developer for development of the Station District Project by Resolution No. CRA 2010-002, and the City Council consented to the approval of the DDA by Resolution No. 2010-027. F. Certain parcels within the Station District and the Lacy Neighborhood, on the northeast corner of Santa Ana Boulevard and Garfield Street (APN 398-303-04, APN 398-303-05, APN 398-303-06, and APN 398-303-07), may be developed for special needs affordable housing (the "Mercy House Project") or another form of affordable housing or other use. G. The City has identified an approximately 1.5 acre site within the Station District and the Lacy Neighborhood for potential future park/open space uses ("Potential Park Site"). The site is bound by Sixth Street on the north, Fifth Street on the south, Porter Street on the west and Lacy Street on the east, as shown on the Site Map (Exhibit "A"). H. On July 8, 2010, FOL filed a Petition for Writ of Mandamus against the City and Agency challenging the certification of the EIR and approval of the TZC, the Station District Project and the related purchase and demolition of certain structures in the Lacy Neighborhood in Orange County Superior Court Case No. 30-2010-00388033-CU-WM- CXC (the "Litigation"). Financing of the affordable rental housing component of the Station District Project is dependent on receipt of an allocation of federal low income tax credits granted pursuant to section 42 of the Internal Revenue Code and/or, if applicable, state tax credits pursuant to California Revenue and Taxation Code Sections 17057.5, 17058, 23610.4 and 23610.5 and California Health & Safety Code Section 50199, et seq. ("Tax Credits"), as allocated by the California Tax Credit Allocation Committee ("TCAC"). TCAC will hold two application cycles for awarding Tax Credits in 2011, unless circumstances warrant a reduction in the number of cycles. The Developer has submitted an application for the first funding cycle, and an award may be issued, if at all, on or about June 8, 2011 ("First Round"). Only rental housing projects are eligible for Tax Credits. Tax Credits can be allocated to new construction projects or existing properties undergoing rehabilitation. Tax Credits are allocated on a competitive basis so that those meeting the highest housing priorities and public policy objectives, as determined by TCAC, have first access to Tax Credits. The Parties have mutually agreed that settlement is the most efficient and practical way to resolve the Litigation. Without any Party admitting or denying the truthfulness of any of the allegations or claims raised between and among the Parties and without accepting any liability arising out of such claims, the Parties now intend to settle the Litigation in its entirety on the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual benefits of this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 1. Revised Station District Project FOL Settlement Property Plan and Entitlements. 1.1. Revised Station District Project. Developer hereby agrees to construct the Station District Project consistent with the development, rehabilitations and demolitions of the specific properties identified on the "FOL Settlement Property Plan", attached hereto as Exhibit "D" and fully incorporated by this reference, as further described on Exhibit "E" ("FOL Settlement Property Descriptions"), attached hereto and fully incorporated by this reference, pursuant and subject to the terms and conditions set forth in this Agreement and any terms and conditions set forth in the DDA, the scope of which will be revised to comply with the terms of this Agreement ("the Revised DDA"). Development of the Station District consistent with the FOL Settlement Property Plan and FOL Settlement Property Descriptions shall be known as the "Revised Station District Project". 1.2. Project Phases. Pursuant to the terms of the DDA or the Revised DDA, the project site will be conveyed by the Agency to the Developer, and constructed, in three separate, but potentially concurrent, phases. Phase R-1 and Phase R-2 shall both consist of affordable rental housing that is available to and occupied by persons and families of very low income and extremely low income. Phase FS shall consist of for-sale housing, a portion of which shall be available and occupied by persons and families of moderate income. The phases of the Revised Station District Project are shown on the Site Map (Exhibit "A") attached hereto and fully incorporated by this reference. 1.3. Construction of Phase R-1 and Phase R-2 Subject to Tax Credit Financing. Construction of Phase R-1 and Phase R-2 is subject to receipt of Tax Credits, as allocated by the TCAC. Tax Credits for Phase R-1 and Phase R-2 will be solicited by the Developer separately and will be subject to all terms and conditions set forth in the DDA and the Revised DDA. If the Developer is awarded Tax Credits in the First Round for Phase R-1, the Developer agrees that it shall use good faith efforts to apply for Tax Credits for Phase R-2 by July 6, 2011 for the second round of 2011 TCAC funding. If Tax Credits are not awarded in the First Round for Phase R-1, the Developer agrees that it shall use good faith efforts to apply for Tax Credits for Phase R-2 in the next available round of funding following the round in which Tax Credits are awarded for Phase R- 1. 1.4. Subject Properties in the Station District. Within the Station District, the properties listed on the FOL Settlement Property Descriptions (Exhibit "E") are the properties that the Parties agree will be either demolished, rehabilitated in place, or moved and rehabilitated as specifically set forth in Section 1 herein, and as shown on the FOL Settlement Property Plan. These properties are sometimes referred to herein using the identification (ID) number by which they are listed on Exhibit "E", e.g., "Property No. 1." 1.5. Rehabilitation and Development of Specific Properties. 1.5.1. Properties Nos. IA, 113, 2, 313, 3C, 4, 5, 6A, 8, and 13, as identified on Exhibit "E", will not be demolished and will instead be rehabilitated by the Developer to the standards set forth in Sections 1.5.2 and 1.5.3 below as part of Phase R-2 of the Revised Station District Project. The Parties acknowledge and agree that Property No. 4, currently located at 610-612 E. Fifth Street, may be relocated to 511 E. Fifth Street immediately following the Effective Date of this Agreement but will be rehabilitated as part of Phase R-2 of the Revised Station District Project. The Parties further acknowledge and agree that Property No. 13, currently located at 613 E. Sixth Street, may be relocated to 602 E. Sixth Street immediately following the Effective Date of this Agreement but will be rehabilitated as part of Phase R-2 of the Revised Station District Project. 1.5.2. Standards for Rehabilitation of Eligible and Listed Properties. The Parties agree that Properties Nos. IA, 2, 3B, 4, 5, and 6A will be rehabilitated by the Developer consistent with the "Secretary of the Interior's Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating Restoring and Reconstructing Historic Buildings" (36 Code of Federal Regulations § 67.2) ("Secretary's Standards"). As defined in the Secretary's Standards, "rehabilitation" means "the process of returning a building or buildings to a state of utility, through repair or alteration, which makes possible an efficient use while preserving those portions and features of the building and its site and environment which are significant to its historic, architectural, and cultural values as determined by the Secretary." The Parties agree that "rehabilitation," as defined in the Secretary's Standards and as used in this Subsection 1.5.2, not only incorporates the retention of features that convey historic character but also accommodates alterations and additions to facilitate continuing or new uses. Any structure set forth in Section 1.5.1 above and identified on the FOL Settlement Property Plan and the FOL Settlement Property Descriptions for "rehabilitation" which is listed on the SARHP will also be subject to the "Historic Structures Design Guidelines" set forth in Chapter 13 of the "City of Santa Ana's Design Guidelines and Development Standards" (the "Citywide Design Guidelines") and all other applicable provisions of the City of Santa Ana Municipal Code ("Municipal Code"). 4 1.5.3. Standards for Rehabilitation of Ineligible Properties. The Parties agree that Properties Nos. 1B, 3C, 8 and 13 will be developed by the Developer in compliance with the either the "Single Family and Two-Family Residential Guidelines" or the "Multiple Family Residential Guidelines" set forth in Chapters 6 and 7, respectively, of the Citywide Design Guidelines and all other applicable provisions of the Municipal Code. The Parties agree that FOL may provide information to the Agency in writing regarding reduced-cost solutions for implementing these rehabilitations, which the Agency will provide to the Developer, and the Developer will implement if the Developer reasonably determines that such solutions have no adverse consequences related to financing, construction and development of the Revised Station District Project. 1.6. Timing of Rehabilitation. The Developer will initiate rehabilitation of the properties designated for rehabilitation as part of Phase R-2 of the Revised Station District Project within one hundred and eighty (180) days of the execution of any Tax Credit Regulatory Agreement by the Developer as a requirement of receiving the Tax Credits for Phase R-2 of the Revised Station District Project. Prior to initiation of rehabilitation, the Agency will continue to maintain the properties designated for rehabilitation according to current practices, policies and standards. 1.7. Demolition of Specific Properties. As shown on the FOL Settlement Property Plan and as more specifically described in the FOL Settlement Property Descriptions, the Parties agree that Properties Nos. 3A, 613, 7, 9, 10, 11, 12, 13A, 14, 15, 16, 17, and 18 may be demolished, as specifically set forth below: 1.7.1. Properties No. 7, 12, 13A, 14, 15, 17, and 18. The Parties agree that demolition of Properties Nos. 7, 12, 13A, 14, 15, 17, and 18 may occur as soon as thirty (30) days after the Effective Date of this Agreement, or upon receipt of a Tax Credit award for Phase R-1, whichever comes first, or as otherwise needed to clear the parcels to permit receipt of future Tax Credit awards and/or other financing. 1.7.2. Properties No. 3A and 6B. The Parties agree that demolition of Properties No. 3A and 6B will occur as part of Phase R-2 of the Revised Station District Project, and will not occur until the Developer is awarded Tax Credits for Phase R-2. 1.7.3. Properties No. 9, 10, and 11. The Parties agree that so long as the Agency and/or the City owns Properties Nos. 9, 10, and 11, those properties, as well as structures on other parcels that the City or Agency may acquire on the Potential Park Site, may be demolished if and when the City formally designates any such parcel, or the entire Potential Park Site, for park/open space uses. As provided in Section 2, the Parties do not and will not contest said City approval. 1.7.4. Property No. 16. The Parties agree that demolition of Property No. 16 ("Minter Court") is subject to the specific provisions set forth in Section 3 of this Agreement. 1.7.5. The Parties acknowledge and agree that the Agency may initiate the bidding process on a demolition contract for any of the Properties identified in this Section 1.7 immediately following the Effective Date of this Agreement, and prior to the award of Tax Credits for Phase R-1, to ensure that the parcels will be cleared in compliance with all requirements for receiving Tax Credits or other financing. It is the intent of the Parties that the Properties identified in this Section 1.7 be demolished irrespective of the eligibility determination that may be made in the Historic Survey to be prepared under Section 4 of this Agreement. 1.8. Potential Demolition of Specific Additional Properties. The Parties acknowledge that the Agency may acquire Property No. 19 and Property No. 20, which are currently owned by third parties, and that if acquired, the structures on those parcels may be demolished irrespective of the eligibility determination that may be made in the Historic Survey to be prepared under Section 4 of this Agreement. 1.9. Submittal of Revised DDA. The Developer and the Agency will prepare and submit the Revised DDA for consideration by the Board as soon as possible after the Effective Date of this Agreement. 1.10. City and Agency Processing of the Revised DDA. The City and the Agency shall consider in good faith and process the Revised DDA as quickly permitted by law. 1.11. Support of Revised Station District Project. Petitioner FOL agrees not to oppose, challenge or undermine, and not to advocate that any members of the community, including any members of FOL, oppose, challenge or undermine the Revised DDA or the Revised Station District Project by referendum, initiative or otherwise. Petitioner FOL shall not, directly or indirectly, (i) commence any new litigation or any other judicial proceeding of any kind, nature or description against the Developer, the City, the Agency or any other Party in any way relating to the Revised DDA or the Revised Station District Project, or (ii) assert any claim, argument, appeal, demand, request or statement in opposition to the Revised Station District Project in connection with any administrative or legislative proceeding held with respect to the Revised DDA or the Revised Station District Project, or (iii) cooperate in any efforts to do any of the foregoing. Without limiting the generality of the foregoing, Petitioner FOL shall not prepare or submit any oral or written communication or appear at any public hearing in opposition to the Revised DDA, the Revised Station District Project, or any discretionary or ministerial governmental approval pertaining to the Revised Station District Project. 1.12. Covenant Not to Sue on Revised Station District Project. Petitioner FOL and each of its members and Debra McEwen covenant and agree that they shall forever refrain from instituting, prosecuting, maintaining, financing, proceeding on, participating in, encouraging, supporting, or advising or recommending to be commenced or prosecuted, any lawsuit, action or proceeding (judicial, arbitral, or administrative) which arises out of, or is or may be, in whole or in part, based upon, connected with or related to any Released Claims (as hereinafter defined) set forth in Section 9. The Parties acknowledge and agree that this Agreement is a complete defense to any lawsuit, action or proceeding which may be instituted by or on behalf of Petitioner FOL or Debra McEwen at any time and in which any Released Claims are or may be asserted. Debra McEwen and Petitioner FOL agrees that each of them, and their agents, attorneys, officers, and members, shall not directly or indirectly challenge, impede, or contest, by or in connection with, participating in, encouraging, supporting, or advising or recommending to be commenced or prosecuted any lawsuit, action or proceeding (judicial, arbitral, or administrative) relating to the approval, entitlement, implementation, construction, or funding of the Revised Station District Project, or any activities of the City or Agency related to carrying out the Revised Station District Project; and they shall not urge other persons to do so, or cooperate in any such efforts by other persons. 2. Covenant Not to Sue on the Potential Park Site. Petitioner FOL and Debra McEwen agree that the City and Agency may demolish Properties Nos. 9, 10 and 11 for park/open space uses and that the City or the Agency may acquire other properties located on the Potential Park Site identified on Exhibit "A" for park/open space uses. Petitioner FOL and each of its members and Debra McEwen covenant and agree that they shall forever refrain from instituting, prosecuting, maintaining, financing, proceeding on, participating in, encouraging, supporting, or advising or recommending to be commenced or prosecuted, any lawsuit, action or proceeding (judicial, arbitral, or administrative) which arises out of, or is or may be, in whole or in part, based upon, connected with or related to future demolition of structures or acquisition of property on the Potential Park Site for park/open space uses. Petitioner FOL and each of its members and Debra McEwen shall not, directly or indirectly, (i) commence any new litigation or any other judicial proceeding of any kind, nature or description against the City, the Agency or any other Party in any way relating to the use of the Potential Park Site for park/open space uses, or (ii) assert any claim, argument, appeal, demand, request or statement in opposition to any demolition or acquisition of property on the Potential Park Site in connection with any administrative or legislative proceeding held with respect to the use of the Potential Park Site for park/open space uses, or (iii) cooperate in any efforts to do any of the foregoing. Without limiting the generality of the foregoing, Petitioner FOL shall not prepare or submit any oral or written communication or appear at any public hearing in opposition to any demolition or acquisition of property on the Potential Park Site for park/open space uses, or any discretionary or ministerial governmental approval pertaining to any demolition or acquisition of property on the Potential Park Site for park/open space uses. 3. Availability of 611 North Minter Court for Sale. 3.1. Immediately following the Effective Date of this Agreement, the Agency will act with all reasonable expediency to offer the apartment court building located at 611 North Minter Court ("Minter Court"), identified as Property No. 16 in Exhibit "E", for sale to any buyer ("Buyer") willing and able to relocate the structure(s) off of the site designated as "Lot 1" on the FOL Settlement Property Plan (Exhibit "D"). The Parties acknowledge and agree that, any party desiring to relocate Minter Court must do so no later than May 15, 2011. Prior to said relocation, the potential Buyer or other party desiring to relocate Minter Court must comply with all legal requirements for purchase and relocation of the property, including all applicable municipal and other laws. If by May 19, 2011, it appears that the Developer is unlikely to receive an allocation of Tax Credits for Phase R-1 of the Revised Station District Project in the First Round of 2011 funding, the City, the Agency, and the Developer may decide to extend the deadline, and the Agency will not demolish Minter Court until the expiration of that future timeframe. If the Minter Court property is not sold and relocated by May 15, 2011, or by such later date as the City, the Agency and the Developer may agree, the Parties agree that Minter Court may be demolished immediately thereafter. If a Buyer requires financial assistance related to the purchase of Minter Court, a Buyer may contact the Agency, and the Agency will consider in good faith all available financing options, including loan programs. Any financing provided by the Agency will reduce the allocation of funds assigned to the Lacy Housing Fund by an equal amount. In no event shall the consideration of financing options delay demolition of Minter Court by the timeframes established in this paragraph 3.1. 3.2. The Parties acknowledge and agree that the Agency may initiate the bidding process on a demolition contract for demolition of Minter Court concurrently with offering Minter Court for sale to ensure that Lot 1 will be cleared prior to any award of Tax Credits for Phase R-1. 3.3. Petitioner FOL covenants and agrees that it, and each of its members, shall forever refrain from instituting, prosecuting, maintaining, financing, proceeding on, participating in, encouraging, supporting, or advising or recommending to be commenced or prosecuted, any lawsuit, action or proceeding (judicial, arbitral, or administrative) which arises out of, or is or may be, in whole or in part, based upon, connected with or related to bidding or approval of a demolition contract for demolition of Minter Court. 4. Preparation of Historic Survey. The City will retain a cultural resource professional who meets the Secretary of the Interior's Professional Qualifications Standards for Architectural History to conduct a survey to determine the historic status and eligibility for listing on either the California Register of Historical Resources ("CRHR") or the Santa Ana Register of Historical Properties ("SARHP") of all residential properties within the Lacy Neighborhood with a construction date prior to 1961 that have not been surveyed within five (5) years of the commencement of the survey to be conducted pursuant to this Section 4 ("Historic Survey"). The twenty-five (25) properties listed on the FOL Settlement Property Descriptions (Exhibit "E") and subject to the terms of this Agreement set forth in Exhibit "D" will therefore not be subject to the Historic Survey. The Historic Survey will be initiated immediately upon the Effective Date of this Agreement and the City will use best efforts to ensure that it is completed within one (1) year. The cultural resource professional conducting the survey will consult with the City to ensure that the Historic Survey is conducted in a manner consistent with the Municipal Code and City practice and procedure. The Historic Survey will be conducted as follows: the selected cultural resource professional will conduct a "preliminary survey" of all relevant properties to identify potentially eligible properties ("Preliminary Survey"). The preliminary survey will be conducted on foot or by vehicle and will gather visual information about all relevant properties. FOL and/or its members may provide information relevant to the historic qualifications of any potentially eligible property that will be surveyed as part of the Historic Survey within thirty (30) days of receiving notice of the initiation of the Preliminary Survey. The results of the Preliminary Survey will be documented with photographs and tabulated information, such as address; building type, style, and integrity; and date of construction. All properties determined to be potentially eligible, either by the aforementioned Preliminary Survey or by previous surveys conducted within five (5) years of the commencement of the Historic Survey and consistent with the standards set forth in Municipal Code Chapter 30 (Places of Historical and Architectural Significance), will be subject to an "intensive-level" survey and will be documented on both State of California Department of Parks and Recreation Historic Resources Inventory Primary Record forms (DPR 523 A) and a Building, Structure and Object Record (DPR 523 B). No forms will be prepared for properties that do not appear to be eligible based on visual inspection, physical integrity, or information provided by FOL. The findings of the survey will be summarized in a Survey Report, which will be available for review at the City's Planning Department and provided to FOL. The Parties agree to accept the determinations and conclusions of the Survey Report as of the time it is prepared, understanding that some properties deemed "ineligible" may become "eligible" with the passage of time. Lacy Neighborhood Housing Fund. Upon the Effective Date of this Agreement, the Agency will establish a $200,000 residential housing fund to encourage home owners in the Lacy Neighborhood to re-invest in their properties (the "Lacy Housing Fund"). The specific terms of the Lacy Housing Fund are attached hereto as Exhibit "F" and fully incorporated by this reference. The Parties acknowledge and agree that the Lacy Housing Fund would replace the $100,000 targeted residential loan program for the Lacy Neighborhood approved by the Agency on June 7, 2010. 5.1. Amount. At the end of each fiscal year (June 30) for five years, beginning June 30, 2012, any funds that remain in the Lacy Housing Fund account will roll over for use in the following fiscal year, such that at the beginning of each fiscal year (July 1) the account will contain $200,000, and no more than $200,000. The Agency will be responsible for ensuring that the account includes $200,000 at the beginning of each fiscal year (July 1) for five years, beginning July 1, 2012. July 1, 2015 is the last date upon which the Agency shall be responsible for ensuring that the fund contains $200,000. 5.2. Administration and Application Requirements. The Lacy Housing Fund will be administered by the Agency and will be subject to all requirements set forth in Exhibit "F", including income eligibility requirements. 9 5.3. Availability of Funds for Payment of Fees for Nomination to CRHR or SARHP. If any owner of property identified as eligible for listing by the Historic Survey in the Lacy Neighborhood wishes to nominate his or her home(s) for listing on either the CRHR or the SARHP, the owner may apply for a grant from the Lacy Housing Fund to finance payment of the nomination fees. If applying for such funding, the owner will be subject to all income eligibility requirements of the Lacy Housing Fund. Qualified applicants will receive grants as long as funds are available. 5.4. Availability of Funds for Payment of Application Fees for Mills Act Property Tax Abatement Prop-ram. If any owner of property in the Lacy Neighborhood wishes to apply for the Mills Act Property Tax Abatement Program, the owner may apply for a grant from the Lacy Housing Fund to finance payment of the application fees. If applying for such funding, the owner would be subject to all income eligibility requirements of the Lacy Housing Fund. Qualified applicants will receive grants as long as funds are available. 5.5. Contingent on No Legislative Modification of Agency's Powers. Funding and administration of the Lacy Housing Fund is expressly contingent on the absence of any modification of the Agency's powers, by state or federal legislation or otherwise, that precludes the Agency from performing its obligations under this Section 5. 5.6. Marketing. The Agency will conduct marketing consistent with its existing programs, including but not limited to, advertising to the Lacy Neighborhood Association and posting on the Agency's website. FOL and its members are encouraged to participate and assist in the marketing conducted for the Lacy Housing Fund and may contact the Housing Manager of the Agency immediately following the Effective Date of this Agreement to coordinate such participation. 6. Architectural Inspection and Salvage. The Agency will retain a qualified contractor to conduct salvage prior to demolition of any residential structures identified in Section 1.7 of this Agreement that will be demolished as part of the Revised Station District Project (i.e., Properties Nos. 3A, 613, 7, 12, 13A, 14, 15, 16, 17 and 18) and prior to demolition of any residential structures on Properties 9, 10, 11 located on the Potential Park Site. The Agency will provide the Santa Ana Historic Preservation Society with at least thirty (30) days notice prior to the demolition of any property as part of the Revised Station District Project or on the Potential Park Site to allow for architectural inspection prior to demolition and an opportunity to give direction to the Housing Manager of the Agency as to items worthy of salvage. The inspection to identify salvageable items and salvage must be completed by the conclusion of the 30-day (or more) period as set forth in the notice. The Parties agree that the Agency's contractor will remove all items identified as worthy of salvage. The Parties agree that the Santa Ana Historic Preservation Society and/or FOL and/or another third party will be responsible for relocation and storage of any and all items salvaged by the contractor, and neither the Agency nor the City is responsible relocation or storage of such items. If FOL or any of its members wish to be present during inspection and/or salvage of the property to be demolished, FOL and/or its 10 members will coordinate directly with Agency staff. The Parties acknowledge and agree that inspection and salvage will take place during regular business hours on weekdays (Monday through Friday, 8:00 A.M. to 5:00 P.M.) and that involvement in the inspection and/or salvage process by FOL and/or its members will require FOL and/or its members to be present during such times. 7. Notification Prior to Demolition of Structures in the Transit Zoning Code Project Area. For eighteen (18) months following the Effective Date of this Agreement, the Agency will use best efforts to mail or email notice of the Agency's intended demolition of properties for redevelopment in the Lacy Neighborhood, other than those properties that would be demolished pursuant to the Revised Station District Project, to FOL at least fifteen (15) days prior to such approval of demolition. FOL and/or its members are responsible for providing the Agency with the mailing address and/or email address where they would like to receive notice and shall be responsible for updating such contact information. Agency staff will make themselves reasonably available to FOL and/or its members, should they contact staff, to discuss any upcoming redevelopment projects in the City. If Petitioner FOL believes that the Agency has failed to provide the notice set forth in this Section 7, FOL shall notify the Agency of the alleged failure to give notice and, if approval of demolition of properties for redevelopment in the Lacy Neighborhood is in fact scheduled, the Agency shall have five (5) days to cure the alleged failure by mailing or emailing the required notice. 8. Conditions Precedent, Payment of Attorney's Fees and Dismissal of the Litigation. 8.1. Conditions Precedent to Obligations. All of the City's, Agency's and Developer's obligations set forth in this Agreement, are expressly contingent on Petitioner FOL's dismissal of the Litigation with prejudice, as set forth in Section 8.3 of this Agreement, and the absence of any intervening modification of the Agency's powers, by state or federal legislation or otherwise, that precludes the Agency (or its successor agency) from performing its obligations under this Agreement. Additionally, all of the City's, Agency's and Developer's obligations related to each Phase of the Revised Station District Project are expressly contingent on the both of following conditions precedent: (i) satisfaction of both the Agency's and the Developer's "Conditions of Closing" set forth in Section 204 of the DDA or the Revised DDA so long as the "Conditions of Closing" in the Revised DDA are in substantial conformance with the "Conditions of Closing" in the DDA; and (ii) final approval by the City and Agency of the Revised DDA. 8.2. Payment of Attorney's Fees and Costs. Immediately following the Effective Date of this Agreement, the Developer will pay the attorney fees and costs reasonably incurred by FOL in the Litigation, which the Parties have determined to be sixty- seven thousand four hundred ninety four dollars ($67,494.00) for attorney's fees and seven thousand five hundred six dollars ($7,506.00) for costs, for a total of seventy-five thousand dollars ($75,000.00). Payment shall be made to the Brandt- Hawley Trust Account by bank wire. 11 8.3. Dismissal of Litigation with Prejudice. Petitioner FOL shall provide an executed request for dismissal of the Litigation with prejudice to the City on the Effective Date of the Agreement. The City shall file the executed request for dismissal with the Orange County Superior Court upon the Brandt-Hawley Law Group's receipt of the payment of Attorney's Fees and Costs sent forth in paragraph 8.2. 9. Release of Claims. 9.1. FOL's Release. The Parties agree that, as of the Effective Date of this Agreement, Petitioner FOL and each individual member of FOL and Debra McEwen (the "Releasing Parties") shall be conclusively deemed to have released the City, the Agency and the Developer, and their respective heirs, administrators, successors, assigns, agents, employees, officers, partners and directors (the "Released Parties") from all rights, actions, claims, debts, demands, costs, contracts, allegations, liabilities, obligations, demands, and causes of action, whether known, suspected, or unknown, at law or in equity, which each of the Releasing Parties, or any of them, had, now has or as of the Effective Date of this Agreement has against the Released Parties, or any of them, arising from or relating to the Station District Project; the Revised Station District Project; the DDA; the Revised DDA; any future demolition of structures or acquisition of property by the Agency or the City on the Potential Park Site for park/open space uses; the associated EIR as it applies to the Station District Project, the Revised Station District Project, and the Potential Park Site's use for park/open space uses; and the Litigation or any portion thereof, including without limitation, all costs and fees incurred by the Releasing Parties in, or arising from, such actions (collectively, the "Released Claims"). The Releasing Parties, and each of them, shall conclusively be deemed to have waived and relinquished to the fullest extent that it may lawfully do so, all rights and benefits afforded by Section 1542 of the Civil Code of the State of California ("Section 1542") which states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." This release does not extend to the right of each Party, including members of Petitioner FOL, to institute legal action to seek specific performance of this Agreement, as set forth in Section 10.3. 9.2. Understanding of Section 1542 Waiver. The Releasing Parties, by executing this Agreement, assume the risk that they are unaware of the subject matter of this Agreement, or are otherwise mistaken as to relevant facts, and acknowledge that they may discover facts in addition to or different from those that they now know or believe to be true concerning the Released Claims and other matters contained in or concerning this Agreement. Each Party nevertheless agrees and intends this Agreement to be a complete release of the Released Claims, and to settle all disputes and differences relating to the Released Claims, known or unknown, suspected or unsuspected, that have existed, now exist, or may now exist between 12 or among the Releasing Parties and the Released Parties. The Releasing Parties hereby acknowledge and represent that (a) they understand the significance and the consequences of such specific waiver of unknown claims and hereby assume full responsibility for any injuries, damages, lawsuits or liabilities that they may incur, both now and hereafter, from the waiver of said unknown claims, (b) they may discover facts different from, or in addition to, those facts that they now know or believe to be true, and agree that this Agreement and the releases contained herein shall be and remain effective in all respects notwithstanding any such subsequent discovery of different or additional facts, (c) they have undertaken their own independent investigation of all of the facts relating to the matters being released herein and this Agreement, and in entering into this Agreement and granting the releases contained herein, is not relying on any representation, warranty, or statement of any other Party except as expressly set forth herein, and (d) this waiver is an essential and material term of this Agreement. 9.3. Notwithstanding the Released Claims. If the Developer or its successors and assigns do not proceed with Phase R-2 of the Revised Station District Project because Tax Credit allocations are not approved, Petitioner FOL and its members reserve the right to challenge in administrative and judicial forums the approval of any discretionary development permit by City or Agency on the parcels identified on the Site Map (Exhibit "A") as Phase R-2 that would not effectuate rehabilitation of Properties Nos. IA, 113, 2, 313, 3C, 4, 5, 6A, 8, and 13 as shown on the FOL Settlement Property Plan (Exhibit "D") and as more specifically described in the FOL Settlement Property Description (Exhibit "E"). 9.4. The terms and existence of this Agreement and any other documents, negotiations or statements by the Parties in connection therewith, to the extent these items are not matters of public record, shall not be admissible as evidence in any future litigation or any other action or proceeding involving the Parties, the DDA, the Revised DDA, the Station District Project, the Revised Station District Project, other projects that may be proposed in the TZC, or the EIR prepared for the TZC and Station District Project. 10. Default and Remedies. 10.1. Opportunity to Cure Alleged Default. Failure by any Party to perform any obligation hereunder within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A Party alleging a Default shall give written notice of Default to the other Party specifying in reasonable detail the nature of the alleged Default and, where appropriate, the manner in which the alleged default satisfactorily may be cured; offer to meet and confer in a good faith effort to resolve the issue; and provide the other Party sixty (60) days to cure the alleged Default commencing at the time of receipt of the notice of a properly detailed written Default notice provided, however, that notwithstanding the foregoing, the Parties acknowledge and agree that any failure by FOL to deliver in a timely manner the dismissal of 13 the Litigation with prejudice pursuant to Section 8.3 hereof, or the failure of the City to file such dismissal with prejudice pursuant to Section 8.3 hereof may impair Developer's ability to obtain or maintain the Tax Credits and, as a result thereof, neither FOL nor the City shall be entitled to any cure period as a result of the breach of their respective obligations under Section 8.3 hereof. The Parties agree that time is of the essence in the performance by FOL and the City of their respective obligations under Section 8.3 hereof. 10.2. Affect of Modification of Agency's Powers. In addition to specific provisions of this Agreement, performance by the City or Agency hereunder shall not be deemed to be in Default, if the Agency's powers are modified, by state or federal legislation or otherwise, in any way that precludes the City or Agency from performing its obligations under this Agreement as a matter of law. 10.3. Institution of Legal Action. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, after expiration of the cure period provided in Section 10.1 above, any Party may institute a legal action to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default. Specific performance shall be each Party's sole remedy against the other Party in the event of a breach hereunder. The rights and obligations of any non-breaching Party shall not be affected by the institution of a legal action alleging breach against another Party. 11. Representations and Warranties. Each of the Parties represents, warrants, and agrees as to itself ("Such Party") as follows: 11.1. Such Party has received independent legal advice from its attorneys with respect to the advisability of making the settlement provided for herein, and with respect to the advisability of executing this Agreement. Such Party has been fully advised by its attorneys with respect to its rights and obligations under this Agreement and understands those rights and obligations. 11.2. No other Party (nor any director, officer, member, manager, partner, trustee, agent, employee, representative or attorney of or for any other Party) has made any statement or representation to Such Party regarding any fact Such Party relied upon in entering into this Agreement, and Such Party is not relying on any statement, representation or promise, written or oral, of any other Party (or of any director, officer, member, manager, partner, trustee, agent, employee, representative or attorney for any other Party) in executing this Agreement, or in making the settlement provided for herein, except as otherwise expressly stated in this Agreement. 11.3. Prior to the execution of this Agreement, Such Party and Such Party's legal counsel have made such investigation of the facts and inquiries Such Party deemed necessary or desirable pertaining to this settlement, this Agreement and all the matters pertaining thereto. 14 11.4. Such Party or responsible director, officer, member, manager, partner, trustee or attorney thereof has read this Agreement and understands the contents hereof. Each director, officer, member, manager, partner, trustee or attorney executing this Agreement on behalf of Such Party is empowered to do so and thereby to bind Such Party. 11.5. Except as otherwise expressly represented, warranted or provided in this Agreement, Such Party assumes the risks that (i) it may hereafter discover facts in addition to or contrary to those it believed to exist or relied upon in entering into this Agreement, including, without limitation, unknown or unanticipated claims which, if known by Such Party on the Effective Date may have materially affected Such Party's decision to execute this Agreement, (ii) it may have mistakenly understood matters relevant to entering into this Agreement and (iii) another Party may have negligently misrepresented or negligently failed to disclose facts in connection with the entering into of this Agreement. Notwithstanding any such unknown or unanticipated claims, misunderstandings, mistakes, negligent misrepresentations or negligent nondisclosures, Such Party intends that this Agreement thereafter shall continue in full force and effect and shall not be subject to rejection or rescission for any reason, provided that such Party reserves all rights provided for in this Agreement. 11.6. Such Party has not heretofore assigned, transferred, or granted, or purported to assign, transfer, or grant to any person or entity, any of Such Party's Released Claims or any portion thereof. 11.7. Each term of this Agreement (other than Recitals A through J, above) is contractual and not merely a recital. Each of Recitals A through J, above, is true and correct. 11.8. Such Party is aware that it may hereafter discover claims or facts in addition to or different from those it now knows or believes to be true with respect to the matters related herein. Nevertheless, it is the intention of Such Party to assume the risk that claims or facts now known or thought to be true may later be found to be different and to fully, finally and forever settle and release all of Such Party's Released Claims. In furtherance of such intention, the releases given herein shall be and remain in effect as full and complete mutual releases of all such matters, notwithstanding the discovery or existence of any additional or different claims or facts relative thereto, and that this settlement shall not be subject to termination, rescission or modification by reason of any such change in claims or facts or knowledge of claims or facts. 11.9. Such Party shall execute all such further and additional documents as shall be reasonable, convenient, necessary or desirable to carry out the provisions of this Agreement. 15 11.10. Such Party acknowledges it has carefully read and fully understands all of the provisions of this Agreement and that Such Party is entering into this Agreement voluntarily. 11.11. Such Party acknowledges that it is within the contemplation of each of the Parties to this Agreement that each of them may have claims for relief or causes of action for malicious prosecution or abuse of process in connection with the filing of claims for relief, causes of action, counterclaims, or cross-complaints in the Litigation and matters undertaken in connection therewith; and that it is the intention of the Parties to this Agreement to release any such claims, to deny that any malicious prosecution of actions or abuse of process has occurred, and to represent and agree that the filing of all claims for relief, causes of action, counterclaims, or cross-complaints in the foregoing Litigation were done pursuant to the advice of legal counsel and upon probable cause. 12. General Provisions. 12.1. Governing Law. This Agreement shall be governed by and interpreted and construed in accordance with the laws of the State of California. 12.2. Construction. This Agreement shall in all cases be construed according to its fair and plain meaning, and not strictly for or against any of the Parties. As used in this Agreement, the masculine or neuter gender and single or plural numbers shall be deemed to include the others wherever the context so indicates or requires. 12.3. Entire Agreement. This Agreement constitutes the entire agreement and understanding of the Parties hereto with respect to the subject matter contained herein. All prior agreements or understandings, oral or written, are merged into this Agreement and are of no further force or effect. 12.4. Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 12.5. Computation of Time. 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 term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 12.6. Counterparts. This Agreement may be executed in counterparts and by facsimile or electronic signatures, and when joined together, all counterparts shall constitute one agreement, which shall be binding on all of the Parties, even though all signatures may not be on one original or the same counterpart. 16 12.7. Amendment. This Agreement may only be modified or amended by a written amendment thereto executed by all of the Parties. The Parties acknowledge that, due to the long term nature of the Revised Station District Project and the implementation thereof in three Phases, it may be necessary and/or appropriate at some time in the future, or from time to time, for the parties to execute additional documentation to clarify and implement the provisions of this Agreement. Each party agrees to cooperate in good faith to negotiate and enter into such various additional documentation for each Phase of the Project as may be determined to be reasonably necessary and/or appropriate by the Parties. Modifications to the terms of this Agreement as to one or more Phase(s) of the Project are permissible, so long as such actions are agreed to by all of the Parties and do not materially or substantially change or modify the uses or development permitted by the Revised Station District Project, or materially or substantially add to the costs, responsibilities, or liabilities incurred or to be incurred by the Agency. 12.8. No Admission. Neither the acceptance nor execution of this Agreement constitutes an admission of liability by any Party, nor shall it be construed as such. 12.9. Notice. Any notice, request, claim, demand or other communication required hereunder ("Notice") shall be in writing and shall only be effective upon delivery in person, by overnight courier with receipt requested, by facsimile transmission with confirmation of transmission or by registered or certified mail (postage pre- paid, return receipt requested) to the Party designated for receipt of the Notice upon such Party's actual receipt of the Notice. Notice shall be delivered to the Parties as follows: Susan Brandt-Hawley P.O. Box 1659 Glen Ellen, CA 95442 Friends of the Lacy Historic Neighborhood: c/o Jeffrey L. Dickman 1218 N. French Street Santa Ana, California 92701 c/o Alison Young 1102 S. Ross Street Santa Ana, California 92707 City of Santa Ana 17 20 Civic Center Plaza Santa Ana, California 92701 Attention: City Clerk Copy: City Attorney / Agency Counsel Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Attention: City Clerk Copy: City Attorney / Agency Counsel Santa Ana Station District, LLC 18201 Von Karman Avenue, Suite 900 Irvine, California 92612 Attention: William A. Witte Bocarsly, Emden, Cowan, Esmail & Arndt, LLP 633 West Fifth Street, 70th Floor Los Angeles, CA 90071 Attn: Lance Bocarsly 12.10. Authority. Each individual signing this Agreement on behalf of an entity represents and warrants that the individual has the right, power, legal capacity, and authority to do so, and that no further approval or consent of any person, spouse, officer, shareholder, board of directors, city council, or other person or entity is necessary. 12.11. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Parties, and their respective heirs, administrators, successors, assigns, agents, employees, officers, partners and directors. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the Parties or their respective successors and assigns, any rights or benefits under or by reason of this Agreement. 12.12. No Waiver. The failure of any Party to enforce any of its rights arising by reason of any breach of covenant on the part of any other Party will not constitute a waiver of such breach. No custom or practice which exists or arises between or 18 among the Parties in the course of administering this Agreement will be construed to waive any Party's rights to (i) insist upon the performance by any other Party of any covenant in this Agreement or (ii) exercise any rights given it on the account of any breach of such covenant. A waiver of any particular breach will not be deemed to be a waiver of same or any other subsequent breach. 12.13. Exhibits. Each of the Exhibits attached hereto shall be incorporated in this Agreement as if set forth in full herein. 12.14. Headings. The descriptive headings used in this Agreement are for convenience only and shall not affect the meaning of any provision of this Agreement. 12.15. Cooperation. Each Party agrees to cooperate with the other in implementation of this Agreement. 19 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth above. AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic Date: 4 - /,P- 1( By: wn Nancy Edw ids Executive Director BOARD OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic Date: Z/ -Z.. By: ? - rltss starnent Boardmember APPROVED AS TO FORM: Date: Lz- By: -? ?%" osep Straka, City Attorney ATTEST: ARIA D. HUIZAR CLERK OF THE COUNCIL 20 CITY: CITY OF SANTA ANA, a mtmicipal corporation Date: By: t ----? Davit) Ream City Manager CITY COUNCIL OF THE CITY OF SANTA ANA, a municipal corporation Da' By APPROVED AS TO FORM: Date: Bv: osep Straka, City Attorney ATTEST: MARIA D. HUIZAR C FRK OF THE COUNCIL 21 FRIENDS OF LACY: FRIENDS OF THE LACY HISTORIC NEIGHBORHOOD, an unincorporated association Date: L+ fem. 1 By: ffrey L. 'ckman 22 DEBORAH MCEWEN, an individual 1L / (f Date: L /?? Mcl?wen ti 23 DEVELOPER: SANTA ANA STATION DISTRICT, LLC, a California limited liability company By: The Related Companies of California, LLC, a California limited liability company, its member Date: t? By: William A. Witte, President By: Griffin Realty Corporation, a California corporation, its member Date: 15 A?v.L 2.01t By: Rog r To -ero, President 24 EXHIBIT "A" SITE MAP SITE MAP WITH PARK SITE AND PROJECT PHASING CID 112TH ST. F-71 11 ST. [i] ? I L LA ANA BL. 6TH ST. + : +: Ir 71 5TH ST. + +i E:1' ? ? ? s • N s z ? 0 o 4TH Sr. 1 I 7-1 i MA I' A V Z Q Z x 4TFFIy LL 3R F--] D 5T. (- m C? Y Phase 1 -R-1 Multifamily i am Phase 2 - R-2 Multifamily Phase 2 - R-2 Rehabilitation ??•?." For Sale « T + T + T + T Potential Park Site - - Station District Exhibit "A" EXHIBIT "B" TRANSIT ZONING CODE PROJECT AREA z m o o m ? o U m °' ?? ``VJY.?., i a N N d ?? RpFl =. lwor-? 61 QI ? ? m N C I/Y x?o J u ? I I Ir K a U EXHIBIT "C" LACY NEIGHBORHOOD, STATION DISTRICT AND SURROUNDINGS H • O L m V i IA O O o 4EN t/1 O O ._ L O J2 t cri Z 0 v c? J N ? O Q. J OL O a c ? U CO) ©O L - (D Q? o u m a'1 C ' r L Q O y r a co rr' N Y O N L o a o c z .Q O L) C fA LL Z V ¦ W EXHIBIT "D" FOL SETTLEMENT PROPERTY PLAN 0 z 0 a L Q W Z d' .J W W F J 2 Z lL ? N ? l() (!1 N.-N LL (n (7 O O 3 ? uNi v ONE W Q g CL z O d a W J yEE E E Ey LL, LU L, Q- c O c 0 Q .- a ? Q LLj E Q N J a -? m U = O W W W 0 K a LL N O a .?._- In <p L.L O fC _ W = O ?` to !O ..-.2 S m?LLj J= J o¢ m N Nc¢ 0 N O ?> j D '-'? i ` CO ? W ? m s v ? ? s E? N ? .J ll Li. li a ? W Z VJ ""?M N Z W Z W Z Z (n W a J u a ? -- E(nd ?=S ? ? Z V ? ? din co N N? W O VJ -S-: LL] ?? N LLI £ ? co ? W o 0 0 C U ?_ J s m? Z ? J N N m z p O Ou??u.i y ? Q?v a ?i ? O °J cz° N Nio uia Z w ¢ ?` d? t O?? c 0 Nzui ¢ui d N d N U' z V ;, ? 0 0 0? ` V? ? '- ? f? .-- ?`p° J ? n ? N J N N N w Q ? O??? d o ? o o Q Q d O LL N d O N N (UO ? ? ui s s W O E t(] to ? N > mz O 2- U U ? O N N ? U U plj fO (O U Q ~-£ 5 N (D (O t (O C c of `° 0 0 oL a- a- CL? ww p M_a d N ? a ?www J W w N? N y O O ?OO a W J W > J W > J ti W ? > m .- ._ ._ u? Q a 2) ? ?° m W 2 m y? o ?O = m <o N L m .- ? ?? v y OOO d'?O D D E O ? LLJ O-'Kd'?t(j aEi -a?i w w ?Q? ?= W N E CL o ' ' ' S = L > c D?d d ?d2 C mod' Q ¢SSS N O M O at O Q L J LL J J J JO JO JO O OJ a - IL EXHIBIT "E" FOL SETTLEMENT PROPERTY DESCRIPTIONS EXHIBIT "E" FOL SETTL EMENT PROPERTY DESCRIPTIONS H ? ADDRESS ACTION APN LEGAL DESCRIPTION A IA 501 -501 1/2 E. 5th Street Rehab in Place 398-332-09 FRUITS ADD BLK 6 LOT1 A 1 B 507 Mortimer Rehab in Place A 2 505 E. 5th Street Rehab in Place 398-332-08 FRUITS ADD BLK6LOT2 C 3A 505 N. Minter Street Demolish 398-333-09 FRUITS ADD BLK 7 LOT I C 3B 507 N. Minter Street Rehab in Place C 3C 601-603 E. 5th Street Rehab in Place 398-311-19 FRUITS ADD TO SANTA ANA EAST BLK F LOT 6 POR OF LOT AND POR OF LOTS 7 & 10 B 4 610-612 E. 5th Street Relocate to 511 E. 5th St. 398-338-03 FRUITS ADD BLK 8 LOT 8 D 5 615-617 E. 5th Street Rehab in Place 398-333-06 FRUITS ADD BLK 7 LOT 4 D 6A 621 E. 5th Street Rehab in Place 398-333-05 FRUITS ADD BLK 7 LOT 5 D 6B 508-510 N. Porter St. Demolish B 7 620 E. 5th Street Demolish 398-338-05 FRUITS ADD BLK 8 LOT6 E 8 712 E. 5th Street Rehab in Place 398-337-03 FRUITS ADD BLK 9 LOT8 9 720 E. 6th Street Hold (may demolish) 398-334-05 FRUITS ADD BLOCK I0LOT6 10 714 E. 6th Street Hold (may demolish) 398-334-04 FRUITS ADD BLOCK 10LOT7 11 710 E. 6th Street Hold (may demolish) 398-334-03 FRUITS ADD BLOCK 10 LOTS 1 12 617 E. 6th Street Demolish 398-311-08 FRUITS LKFW DDZOSANTA ANA EAST LOT II B 1 13 613 E. 6th Street Relocate to 602 E. 6th St. 398-311-07 FRUITS ADD TO SANTA ANA EAST LOT 7 BLK F (AND LOT IO BLK F (POR OF LOTS 1 13A 615 A & B E. 6th Street Demolish BEING E 18 FT ON N 1 14 609 E. 6th Street Demolish 398-311-06 UITS FRLK F( ND LOT SANTA ANA EAST LOT 7 4 15 623 N. Garfield Street Demolish 398-313-04 SANTA ANA EAST BLK 65 LOTS 6 & 7 1 16 611 N. Minter Street Demolish 398-311-01 BRK'F WLY loo FT (AND WLYE100 FT LOT3 BLK F(AND LOT 6 BLK F WLYI00 FT NLY 27.60 FT THERE 17 801 Santa Ana Blvd. Demolish 398-303-04 s SWLY OFT OF LOTS 66 LOTS 13, 14, 15 18 707 N. Garfield Street Demolish 398-303-04 s SWLY OFT OF LOTS 66 LOT513, 14, 15& 19 911 Brown Street Acquire & Demolish 398-313-10 FT(NDNELY EAST LOT Lore B x 6B K65 20 812 E. Santa Ana Blvd. Acquire & Demolish 398-313-03 ANTA ANA EAST OR OFLOTS 2,03 & 4 ALL IN BR 0 SLOT 'AND EXHIBIT "F" LACY NEIGHBORHOOD HOUSING FUND EXHIBIT °F" LACY HOUSING FUND PROGRAM The Community Redevelopment Agency of the City of Santa Ana (Agency) has designed the Lacy Housing Fund (Program) to assist owners of rental properties and owner occupants of detached single family homes to keep their homes attractive and well maintained. In addition, funds may be used for payment of fees associated with nomination to the California Register of Historical Resources (CRHR) or the Santa Ana Register of Historic Properties (SARHP) and Mills Act Property Tax Abatement Program. This Program is designed and implemented in accordance with the State laws that govern its funding source. Should those laws change, the Program may be modified so as to insure continued compliance with the law. Continued operation of the Program is dependent upon availability of funds. The maximum loan amount is $25,000. The amount eligible for the grant funds will be in addition to the maximum loan. Funding will be prioritized on a fiscal year by 75% to be expended for homes 50 years and older and 25% for homes less than 50 years old. Elic0bility Requirements Borrowers must be the owners of detached single family homes located within the Lacy Neighborhood (Attachment 1) in the City of Santa Ana. These properties may be either owner occupied or renter occupied. All owners of record must have a credit score of at least 580, and must be current on all loans and taxes related to the property. Owners must not have had a bankruptcy or foreclosure within the last two years. Total debt on the property, including the exterior rehabilitation loan, cannot exceed 95 percent of its appraised, after rehabilitation value. There can be no more than one loan superior to the Agency's rehabilitation loan. Only one loan and grant will be provided to a property under this program. Borrowers must agree to conform to all applicable Federal and State lead-based paint and asbestos regulations. All Notices of Violation issued by the City must be corrected by the time the Agency approved repairs are completed. For owner occupants, total annual income of the household, meaning all persons using the home as their primary residence, cannot exceed 120 percent of the area median income as determined by the California Department of Housing and Community Development. The following table was effective as of June 17, 2010: Household Size Maximum Income Household Size Maximum Income 1 Person $73,250 5 Persons $113,000 2 Persons $83,700 6 Persons $121,400 Page 1 of 3 Exhibit F Household Size Maximum Income Household Size Maximum Income 3 Persons $94,200 7 Persons $129,750 4 Persons $104,650 8 Persons $138,150 For rental properties, owners must demonstrate by means of evidence acceptable to the Agency that at the time of the owner's application, all tenant households had annual incomes at or below 120 percent of the area median income. All new tenants must be income certified prior to move-in. Rental units must not be over-crowded. For purposes of determining over-crowded there should be no more than 2 persons per bedroom plus 1 (eg. 2 bedroom unit cannot have more than 5 occupants). Owners must agree to restrict rents to those affordable to low income households (80% AMI), and to do so for a period of ten years commencing with the loan date. As of June 17, 2010 allowable rents were as follows: Bedroom Size Allowable Rent Studio 916 One Bedroom 981 Two Bedrooms $1,178 Three Bedrooms $1,308 Four Bedrooms $1,413 For owners who choose to rent their homes after the loan has been approved and recorded, the ten years will still commence with the loan date. Owners must agree to comply with all applicable Federal and State anti-discrimination laws. Use of Loan Proceeds The loan may be used for exterior repairs, replacements and improvements, including, but not limited to, the following categories: • non-conforming fences that are visible from the street • front yard landscaping and irrigation systems • damaged or deteriorated roof • flashing, sheathing, eaves, rafter tails, fascia board, gutters and downspouts • exterior walls, trim, exterior doors, screens and windows • damaged or deteriorated garage doors and garage door openers • damaged or deteriorated driveways and walkways • damaged or deteriorated exterior lighting • new security lighting Page 2 of 3 Exhibit F All work must be performed by licensed general contractors who meet the City's licensing and insurance requirements, and who have not been debarred by the U.S. Department of Housing and Urban Development. All work must be performed in accordance with applicable federal, state and local requirements. In addition to repairs, loan proceeds may be used to pay for certain costs normally associated with the loan process. These include but are not necessarily limited to the cost of appraisals, title reports, credit checks, flood certificates, underwriting fees, document preparation, and warehousing. The funds may also be used for the payment of fees associated with nomination of a property in the Lacy Neighborhood for listing on either the CRHR or the SARHP. An owner may apply for funding from the Lacy Housing Fund Program to finance payment of the nomination fees. If applying for such funding, the owner will be subject to all requirements of the Lacy Housing Fund. Funds may also be used to pay for fees associated with the application for Mills Act Property Tax Abatement Program. An owner may apply for funding from the Lacy Housing Fund to finance payment of the application fees. If applying for such funding, the owner would be subject to all requirements of the Lacy Housing Fund. Interest Rates and Repayment Exterior repair loans will have a zero percent interest rate, and payments will be deferred for thirty years or until the property is sold. The loans will be due and payable at the end of the thirty years, but payment may be deferred for borrowers who are unable to pay them off. These exterior repair loans are not assumable. Rental property owners who fail to comply with the ten year affordability requirement or to abide by all applicable Federal and State anti-discrimination laws will be immediately required to repay the loan. Owners must correct all Notices of Violation prior to the time the Agency loan is secured. Funds used for paying fees associated with nomination of their property for listing on the CRHR or the SARHP will be a grant. In addition, the fees associated with the application for Mills Act Property Tax Abatement Program will be a grant. Grant funds under this program will be payable directly from the Agency to the City for an approved application. Page 3 of 3 Exhibit F EXHIBIT "G" DISPOSTION AND DEVELOPMENT AGREEMENT DISPOSITION AND DEVELOPMENT AGREEMENT By and Between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA and SANTA ANA STATION DISTRICT, LLC Exhibit "G" DOCSOC11400673 v 141200272-0001 TABLE OF CONTENTS Page 100. DEFINITIONS .................................................................................................................3 200. CONVEYANCE OF THE SITE ....................................................................................12 201. Conveyance of the Site and Escrow; Consideration ..........................................12 201.1 Costs of Escrow ..................................................................................13 201.2 Escrow Instructions ............................................................................13 201.3 Authority of Escrow Agent ................................................................13 201.4 Closing ............................................................................................... 14 201.5 Closing Procedure .............................................................................. 15 202. Review of Title .................................................................................................. 15 203. Title Insurance ................................................................................................... 16 204. Conditions of Closing ........................................................................................ 17 204.1 Agency's Conditions of Closing ........................................................ 17 204.2 Developer's Conditions of Closing .................................................... 18 205. Representations and Warranties ......................................................................... 20 205.1 Agency Representations ........................... ................ 20 205.2 Developer's Representations .............................................................. 21 206. Condition of the Site ......................................................................................... 22 206.1 Investigation of Site ........................................................................... 22 206.2 Studies and Reports ............................................................................ 23 206.3 Remediation After Developer Elects To Terminate ........................... 23 206.4 No Warranties As To Site; Release of Agency .................................. 25 206.5 Developer Precautions After Closing ................................................. 26 206.6 Required Disclosures After Closing ................................................... 26 206.7 Abatement Report .............................................................................. 27 206.8 Developer Site Condition Indemnity ..................................................27 206.9 Agency Environmental Indemnity .....................................................28 207. Agency Acquisition of Additional Properties ....................................................28 208. Agency Acquisition of the Segura Parcels .........................................................28 209. Separate Phases ..................................................................................................29 210. Timing of Agency Obligations ......................................................................29 300. DEVELOPMENT OF THE PROJECT .........................................................................29 301. Developer's Obligation to Construct Developer Improvements; Scope of Development ...................................................................................................... 29 302. Design Review ................................................................................................... 29 302.1 Conceptual Site Plan .......................................................................... 29 302.2 Revisions ............................................................................................30 302.3 Defects in Plans .................................................................................30 302.4 Use of Architectural Plans ..................................................................30 302.5 Agency Executive Director Approval ................................................30 303. Land Use Approvals ..........................................................................................30 303.1 California Environmental Quality Act ...............................................31 303.2 Lot Merger ........................................................................................31 304. Time for Commencement and Completion of Construction .............................. 31 305. Development Obligations .................................................................................. 32 DOCSOC/ 1400673 v 141200272-0001 TABLE OF CONTENTS (Continued) Page 305.1 Cost of Construction ........................................................................... 32 305.2 Public Art Fee ..................................................................................... 32 305.3 Provision of Child Care Facilities ..................................................... 32 305.4 Retail Space ........................................................................................ 32 306. Insurance Requirements ..................................................................................... 32 306.1 Minimum Coverage/Endorsements .................................................... 33 306.2 Property Insurance .............................................................................. 34 306.3 Applicability to For-Sale Portion of the Project ................................. 35 307. Indemn ity ........................................................................................................... 35 307.1 Developer Indemnity .......................................................................... 35 307.2 Agency Indemnity .............................................................................. 36 308. Rights of Access ................................................................................................ 37 309. Nondiscrimination in Employment .................................................................... 37 310. Taxes and Assessments ...................................................................................... 37 311. Compliance with Laws ...................................................................................... 38 311.1 Prevailing Wage Laws ....................................................................... 38 312. Liens and Stop Notices ...................................................................................... 39 313. Release of Construction Covenants ................................................................... 40 314. Agency Financial Assistance ............................................................................. 40 314.1 Agency Loans ..................................................................................... 40 314.2 Repayment of the Agency Loans ....................................................... 41 314.3 Reporting Requirements for the Rental Portion of the Project .......... 41 314.4 Reporting Requirements for the For-Sale Portion of the Project....... 42 314.5 Security of Agency Loan .......................... 314.6 Disbursement of the Agency Loan ..................................................... 42 315. Homebuyer Assistance ...................................................................................... 42 315.1 Homebuyer Assistance Loan .............................................................. 42 315.2 Repayment of Homebuyer Assistance Loan ...................................... 42 315.3 Security for Homebuyer Assistance Loan .......................................... 43 315.4 Disbursement of Homebuyer Assistance Loan; Conditions Precedent Thereto; Developer's Marketing, Disclosure and Housing Counseling ........................................................................... 43 315.5 Subordination ..................................................................................... 45 315.6 Assumption ......................................................................................... 45 316. Financing of the Developer Improvements ........................................................ 45 316.1 Approval of Financing ....................................................................... 45 316.2 Tax Credit Equity ............................................................................... 46 316.3 Required Subrnissions ........................................................................ 47 316.4 No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease-Back for Development ............................................................. 47 316.5 Holder Not Obligated to Construct Developer Improvements ........... 47 316.6 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure ...................................................................................... 47 316.7 Failure of Holder to Complete Developer Improvements .................. 48 ii DOC S OC/1400673 v 141200272-0001 TABLE OF CONTENTS (Continued) Page 316.8 Right of the Agency to Cure Mortgage or Deed of Trust Default .....49 400. OPERATION OF THE PROJECT ................................................................................49 401. Provision of Extremely and Very Low Income Rental Housing-RentaI Portion of the Project ......................................................................................... 49 401.1 Number of Affordable Rental Units ...................................................49 401.2 Duration of Affordability Requirements ............................................49 401.3 Selection of Tenants ........................................................................... 49 401.4 Household Income Requirements ...................................................... 50 401.5 Affordable Rent .................................................................................. 50 401.6 Occupancy Limits .............................................................................. 50 401.7 Marketing Program ............................................................................ 50 401.8 Maintenance ....................................................................................... 51 401.9 Management Plan; Property Management ......................................... 51 401.10 Monitoring and Recordkeeping ......................................................... 52 401.11 Regulatory Agreement and Notice of Affordability Restrictions ...... 52 401.12 Relationship to Tax Credit Requirements .......................................... 53 401.13 Applicability of Section ..................................................................... 53 402. Provision of Moderate Income For-Sale Housing-For-Sale Portion of the Project ................................................................................................................ 53 402.1 Number, Location and Quality of Affordable For-Sale Units ........... 53 402.2 Maximum Sales Prices ....................................................................... 54 402.3 Affordable Housing Resale Restriction .............................................. 54 402.4 Selection of Buyers; Marketing and Outreach Plan ........................... 54 402.5 Income of Buyers ............................................................................... 55 402.6 Maintenance Covenants; Association CC&Rs ................................... 56 402.7 Applicability of Section ..................................................................... 56 403. Provisions Applicable to the Entire Project ....................................................... 57 403.1 Use in Accordance with Redevelopment Plan ................................... 57 403.2 Nondiscrimination Covenants ............................................................ 57 403.3 Applicability of Section .................................................................... 58 500. DEFAULT AND REMEDIES ....................................................................................... 58 501. Default Remedies ............................................................................................... 58 502. Institution of Legal Actions ............................................................................... 58 503. Rights of Termination ........................................................................................ 59 503.1 Termination by Agency........ ............................................................. 59 503.2 Termination by Developer ................................................................. 59 503.3 Termination by Either Party ............................................................... 60 504. Acceptance of Service of Process ...................................................................... 60 505. Rights and Remedies Are Cumulative ............................................................... 60 506. Inaction Not a Waiver of Default ....................................................................... 60 507. Force Majeure; Extension of Times of Performance ......................................... 60 600. GENERAL PROVISIONS ............................................................................................61 601. Notices, Demands and Communications Between the Parties ..........................61 iii DOCSOC/ l 400673v 141200272-0001 TABLE OF CONTENTS (Continued) Page 602. Transfers of Interest in Site or Agreement .........................................................61 602.1 Prohibition ......................................................................................... .61 602.2 Permitted Transfers ........................................................................... .62 602.3 Agency Consideration of Requested Transfer .................................. .63 602.4 Successors and Assigns ..................................................................... .63 602.5 Assignment by Agency .................................................................... .63 602.6 No Cross Default/Release from Liability .......................................... .64 603. Non-Liability of Officials and Employees of the Agency ................................ .64 604. Relationship Between Agency and Developer ................................................. .64 605. Agency Approvals and Actions ........................................................................ .64 606. Counterparts ...................................................................................................... .64 607. Integration ......................................................................................................... .64 608. Real Estate Brokerage Commission .................................................................. .65 609. Attorneys' Fees ................................................................................................. .65 610. Titles and Captions ........................................................................................... .65 611. Interpretation ..................................................................................................... .65 612. No Waiver ......................................................................................................... .65 613. Modifications ....... ............................................................................................. .65 614. Severability ....................................................................................................... .65 615. Computation of Time ........................................................................................ .66 616. Legal Advice ......................................................................................................66 617. Time of Essence .................................................................................................66 618. Cooperation ........................................................................................................66 619. Conflicts of Interest ............................................................................................66 620. Date of Agreement ............................................................................................66 621. Implementation of Agreement and Each Phase of the Project ..........................66 ATTACHMENTS: ATTACHMENT NO. I ATTACHMENT NO.2 ATTACHMENT NO.3 ATTACHMENT NO.4 ATTACHMENT NO.5 ATTACHMENT NO.6 ATTACHMENT NO.7 ATTACHMENT NO. 8A ATTACHMENT NO. 8B ATTACHMENT NO.9 ATTACHMENT NO. 10 ATTACHMENT NO. I I ATTACHMENT NO. 12 ATTACHMENT NO. 13 DOCSOC/1400673v 141200272-0001 SITE MAP LEGAL DESCRIPTION GRANT DEED BUDGET SCOPE OF DEVELOPMENT RELEASE OF CONSTRUCTION COVENANTS REGULATORY AGREEMENT PHASE FS PROMISSORY NOTE PHASE R-I AND PHASE R-2 PROMISSORY NOTES DEED OF TRUST AND ASSIGNMENT OF RENTS FORM OF RESIDUAL RECEIPTS REPORT FORM OF HOMEBUYER LOAN AGREEMENT NOTICE OF AFFORDABILITY RESTRICTIONS LIST OF DEVELOPER'S CONSULTANTS ELIGIBLE TO BE INCLUDED IN THIRD PARTY COSTS iv DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of June 7, 2010, by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic (the "Agency") and SANTA ANA STATION DISTRICT, LLC, a California limited liability company (the "Developer"). RECITALS The following Recitals are a substantive part of this Agreement: A. The Agency is a California redevelopment agency acting under the California Community Redevelopment Law, Part 1 of Division 24 of the Health & Safety Code (the "CRL" ). Section 33334.2 et seq. of the CRL authorizes and directs redevelopment agencies to expend a certain percentage of all taxes that are allocated to a redevelopment agency pursuant to Section 33670 for the purposes of increasing, improving and preserving the community's supply of housing, available at affordable housing cost, to persons and families of moderate income, low income, very low income, and extremely low income. Pursuant to Section 33334.3 of the CRL, the Agency has established a Low and Moderate Income Housing Fund (the "Housing Fund"). B. The Agency is authorized and empowered under the CRL to provide funding for the production, improvement, or preservation of affordable housing using tax increment revenues from the Housing Fund, and specifically for the construction of buildings or structures for affordable housing units for low or moderate income persons pursuant to Section 33334.2(e)(5) of the CRL. C. The Redevelopment Plan for the Merged Project (the "Merged Project") was approved by Ordinance Nos. 2662-2667 adopted by the City Council of the City of Santa Ana (the "City") on September 30, 2004 (the "Redevelopment Plan;" the geographic boundary of the Merged Project is referred to herein as the "Project Area"). D. Developer is experienced in the construction, development, operation and management of high quality housing which is affordable to persons and families of very low and low income in Southern California. E. In furtherance of the objectives of the CRL, the Agency desires to facilitate the redevelopment of approximately six (6) acres of real property located within the City, partially within the boundaries of the Project Area, which consists of unimproved lots and improved lots with residential uses with certain parcels owned by third parties (the "Additional Properties"), and certain parcels owned by the Agency ("Agency Parcels"), and certain other parcels owned by Segura (the "Segura Parcels") which Segura Parcels the Agency has a right to acquire pursuant to fully executed purchase agreements (the "Segura Purchase Agreements"). The Agency Parcels, Additional Properties and Segura Parcels are shown on the Site Map and the Additional Properties and Segura Parcels are listed on Attachment No. 1-A. The Agency is attempting to acquire the Segura Parcels and the Additional Properties. The Segura Parcels and DOCS00I 400673v 141200272-0001 the Additional Properties acquired by the Agency prior to the applicable Closing shall be included as part of the Site in accordance with Section 207. The Segura Parcels and any such Additional Properties so included pursuant to Section 207, together with the Agency Parcels are referred to herein as the "Site." The Site is located within a larger area known as the "Station District" and shown on the Site Map. F. By this Agreement, and subject to the terms and conditions herein, the Agency desires to transfer the Site to the Developer. The Developer desires to construct on the Site affordable rental housing that will be available to and occupied by persons and families of very low income and extremely low income, affordable for-sale housing that will be available to and occupied by persons and families of moderate income, and market rate for-sale housing that will be available to all buyers, pursuant and subject to the terms and conditions set forth in this Agreement and further described in the Scope of Development (the "Project"). G. This Agreement is in furtherance of and supersedes, with respect to the Site, the PREDEVELOPMENT AGREEMENT-DISTRICT MASTER PLAN and PREDEVELOPMENT AGREEMENT-AGENCY PARCELS between the parties hereto and both dated December 7, 2009. H. The Site will be conveyed to Developer and developed in three separate phases ("Phase R-1," "Phase R-2" and Phase FS") pursuant to the terms of this Agreement. Phase R-1 and Phase R-2 shall both consist of affordable rental housing that is available to and occupied by persons and families of very low income and extremely low income. Phase FS shall consist of for-sale housing, a portion of which shall be available to and occupied by persons and families of moderate income. Each phase may utilize a somewhat different and separate financing structure as provided in more detail in this Agreement and as may be further implemented and clarified in one or more Implementation Agreements (defined in Section 100). Each phase may close separately in which case the terms set forth herein for Closing and subsequent development shall apply to each Phase. I. The parties acknowledge and agree that the financing and other terms set forth in this Agreement may require adjustment to ensure that the Project (including each Phase thereof) is developed and operated in a manner reasonably acceptable to the Agency and financially feasible for the Developer. Therefore, in the event (i) the Developer is required to find alternate financing sources for the development and operation of any (or all) Phase(s) of the Project, (ii) one or more Phases are subject to a Transfer pursuant to Section 602 hereof (other than transfers permitted pursuant to Section 602.2), and/or (iii) the terms of this Agreement as to one or more Phase(s) of the Project otherwise requires adjustment, the parties may negotiate, as necessary, in good faith and reasonably consider entering into one or more additional Implementation Agreements for each Phase of the Project. J. A portion of the Site is located outside the Project Area; however, separately Agency and its legislative body (i.e., the City Council of the City) have determined that the conveyance of the Site (specifically, that portion of the Site that is located outside the Project Area) by the Agency to the Developer and the Developer's construction and development of the Project pursuant to this Agreement will be of benefit to the Agency's Merged Project pursuant to Section 33334.2(g)(1) of the CRL. With respect to the portion of the Site located 2 DOCSOC/ 1 400673v 141200272-0001 within the Project Area, the Developer's construction and development of the Project on such portion of the Site pursuant to this Agreement will be of benefit to the Agency's Merged Project, the Project Area and its inhabitants as well as the remainder of the community. K. The Project is vital to and in the best interest of the City and the health, safety and welfare of its residents, and is in accordance with the public purposes of applicable state and local laws and requirements. NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and conditions herein contained, the parties hereto agree as follows: 100. DEFINITIONS. "Abatement Report" is defined in Section 206.9. "Actual Knowledge" means the actual knowledge of the Agency Executive Director and/or William Witte of the Developer, without duty of further inquiry or investigation. With respect to Developer, the identity of the officer to whom actual knowledge is attributed may change upon any transfer by Developer pursuant to Section 602. Any such change shall be set forth in the instrument signed by the Agency releasing Developer as contemplated by Section 602.2. "Additional Property" or "Additional Properties" means certain properties owned by third parties as shown on the Site Map that the Agency may acquire and which will, if acquired prior to (i) with respect to Phase FS within forty-five (45) days of each separate Closing of each Portion or Phase of Phase FS, and (ii) with respect to Phases R-1 and R-2, at least forty-five (45) days prior to the date of any submission of a Tax Credit application to TCAC be included in the Conveyance with respect to such Phase. "Additional Properties Notice" is defined in Section 207. "Affordability Period" as to a Rental Unit is defined in Section 401.2, and as to an Affordable For-Sale Unit is defined in Section 402.3. "Affordable For-Sale Unit(s)" means a For-Sale Unit (or multiple For-Sale Units) that is/are restricted and sold by the Developer to Moderate Income Households pursuant to and consistent with the terms of this Agreement. "Affordable Housing Cost" means the maximum purchase price of an Affordable For-Sale Unit by a Moderate Income Household pursuant to Health & Safety Code Section 50052.5. "Affordable Rent" means the maximum monthly rent chargeable for a Rental Unit as described in Section 401.5. "Agency" means the Community Redevelopment Agency of the City of Santa Ana, a public body, corporate and politic, exercising governmental functions and powers and organized 3 DOCSOC/1400677v 14/200272-0001 and existing under Chapter 2 of the Community Redevelopment Law of the State of California, and any assignee of or successor to its rights, powers and responsibilities. "Agency Deed of Trusl" means a deed of trust securing each Promissory Note, as provided in Section 314.4, in the form of Attachment 9 hereto which is incorporated herein by reference. "Agency Executive Director" means the Executive Director of the Agency or his or her designee. "Agency Loans" is defined in Section 314.1. "Agency Title Policy Costs" is defined in Section 201.1. "Agency's Conditions Precedent" means the conditions precedent to the Closing for the benefit of the Agency, as set forth in Section 204.1 hereof. "Agreement" means this Disposition and Development Agreement between the Agency and the Developer. "Association CC&Rs" is defined in Section 315.4(c)(i). "Budget" means the development budget for each Phase attached hereto as Attachment No. 4 and incorporated herein by reference. "CEQA" means the California Environmental Quality Act. "CEQA Challenges)" means an action brought challenging the validity of this Agreement, the Land Use Approvals or any element of the Project based on the theory that the approvals required hereunder failed to comply with CEQA. "Child Care Facility" is defined in Section 305.3. "City" means the City of Santa Ana, a charter city and municipal corporation duly organized under the Constitution and laws of the State of California. "Claim or Liability" is defined in Section 206.4. "Closing," "Close" and "Close of Escrow" shall refer to the Conveyance of a Phase of the Site in accordance with the provisions set forth in Section 201.5. The Agency and the Developer anticipate that there will be three Closings, one for each Phase. "Closing Date" means each date of a Closing, as set forth in Section 201.4. "Conceptual Site Plan" means those plans and drawings showing the Developer Improvements, which include, but are not limited to, building materials, color board, elevations of all four sides of the Developer Improvements, preliminary landscape plans and a rendered perspective. 4 DOCSOCl1400673 v 1 4120027 2-000 1 "Construction Drawings" means those plans, specifications and drawings submitted to the building department of the City in sufficient detail to entitle the Developer to the issuance of appropriate building permits for the Developer Improvements. "Convey," or "Conveyed" or "Conveyance(s)" individually, is the conveyance of a Phase of the Site (or in the case of Phase FS, a Portion or Phase of Phase FS), by the Agency to the Developer on the Closing Date for such Phase (or Portion or Phase) in the manner set forth in Section 201.5. The Agency and the Developer anticipate that there will be three separate Conveyances, one for each Phase. "Date of Agreement" means June 7, 2010. "Default" is defined in Section 501. "Developer" means Santa Ana Station District, LLC, a California limited liability company, or permitted assignee. "Developer Improvements" means the Housing Units and associated improvements as required by this Agreement to be: (i) constructed upon the Site or the applicable Phase thereof, with related offsite improvements, as more particularly described in the Land Use Approvals and Scope of Development, and (ii) operated as affordable housing in conformity with the terms of this Agreement with respect to such Phase. "Developer Parties" is defined in Section 206.8. "Developer's Conditions Precedent" means the conditions precedent to the Closing for the benefit of the Developer, as set forth in Section 204.2. "Developer Title Policy Costs" is defined in Section 201.1. "Environmental Condition" means the absence or existence of (i) Hazardous Materials on the Site, or (ii) Hazardous Materials contamination due to the generation of Hazardous Materials from the Site, however such Hazardous Materials came to be placed where found. "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, without limitation, (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 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) Article 9 or Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (vi) Section 311 of the Clean Water Act (33 U.S.C. §1317), (vii) Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903), (viii) Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq., or (ix) any state or federal lien or "super lien" law, any environmental cleanup statute or 5 DOCSQC1400673v 14/200272-0001 regulation, or any permit, approval, authorization, license, variance or permission required by any governmental authority having jurisdiction. "Escrow" is defined in Section 201. "Escrow Agent" is defined in Section 201. "Evidence of Construction Financing" means evidence of funds adequate in the reasonable judgment of the Agency Executive Director, to construct and operate or market and sell, as applicable, each Phase of the Developer Improvements. "Evidence of Permanent Financing for the Rental Portion of the Project" means evidence of a permanent loan for Phase R-1 and/or Phase R-2, as applicable, in an amount not to exceed the amount necessary to take out the construction loan for such Phase. "Exceptions" is defined in Section 202 hereof. "Extremely Low Income" and/or "Extremely Low Income Households" shall mean extremely low income households as defined in Health & Safety Code Section 50106. "Final Phase FS Outside Closing Date" means the last date the final Closing with respect to Phase FS may occur. "For-Sale Portion of the Project" means that portion of the Project that consists of the For-Sale Units (including the Affordable For-Sale Units). The For-Sale Portion of the Project consists of six (6) lots as identified on the Site Map and shall be constructed in multiple phases, and shall include any Additional Properties designated for For-Sale Units which are added to the Project pursuant to Section 207 hereof. The Affordable For-Sale Units shall be located within the For-Sale Portion of the Project. "For Sale Unit(s)" means the Housing Unit(s) (inclusive of the Affordable For-Sale Units) that shall be constructed and developed on the For-Sale Portion of the Project pursuant to and consistent with the terms of this Agreement. A total of approximately thirty-two (32) For- Sale Units (plus the For Sale Units to be constructed on the Additional Properties) shall be constructed and developed by the Developer, inclusive of the Affordable For-Sale Units. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the City, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Agency, the Developer, the Developer Improvements, and/or the Site. "Grant Deed(s)" means the grant deed(s) for the Conveyance of each Phase from the Agency to the Developer (or its permitted assignees), in the form of Attachment No. 3 hereto which is incorporated herein by reference. "'Guarantor" is defined in Section 204.1(h). 6 DOCSOG 1400673v 14/200272-0001 "Guaranty" is defined in Section 204.1(h). "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 "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903) or (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601 et seq. "Homebuyer" means each purchaser of one of the Affordable For-Sale Units, including each member of the household comprising the purchaser. "Homebuyer Assistance Loan" is defined in Section 315.1. "Homebuyer Loan Agreement" means the agreement (including all attachments and exhibits thereto) in substantially the form attached hereto as Attachment No. 11 and incorporated herein by reference pursuant to which the Agency is to provide a Homebuyer Assistance Loan to a Homebuyer of an Affordable For-Sale Unit. "Housing Fund" is the Low and Moderate Income Housing Fund established and funded by the Agency pursuant to Section 33334.3 of the CRL. "Housing Project" or "Project" means the Developer Improvements. "Housing Units)" means the dwelling unit(s) required to be developed and operated by the Developer under this Agreement, including both the Rental Units and the For-Sale Units. "Implementation Agreement" and "Implementation Agreements" shall mean, individually and collectively, agreements entered into by the Agency and Developer (or its permitted successors and/or assigns) in order to implement and/or clarify the terms of this Agreement, which Implementation Agreements may be necessary for each Phase of the Project based on the Developer's sources of funding and financing for the development and operation of each Phase of the Project in accordance with the terms of this Agreement, as provided in Section 622 hereof. 7 DOCSOC/ 1400673 v 141200272-0001 "Indemnify" or "Indemnity" means to defend, indemnify and hold harmless. "Investor Limited Partner(s)" shall mean, the Tax Credit limited partner(s) of the Developer (or Developer's permitted assignee) for implementation of Phase R-1 and Phase R-2 of the Project. The Agency acknowledges that Phase R-1 and Phase R-2 may have different Investor Limited Partners. "Land Use Approvals" is defined in Section 303. "Legal Description" means the legal description of the Agency Parcels attached hereto as Attachment No. 2 and incorporated herein by reference. "Moderate Income" and "Moderate Income Households" means moderate income households as defined in Health & Safety Code Section 50093. "Monthly Housing Cost" means, for a Moderate Income Household purchasing an Affordable For-Sale Unit, all of the following associated with such Affordable For-Sale Unit, estimated or known as of the date of the proposed sale: (i) principal and interest payments on a mortgage loan, including any loan insurance fees associated therewith (provided that if the mortgage loan obtained by the purchaser contains an adjustable interest rate, then the principal and interest payments shall be deemed to be those which would be due upon a mortgage loan amortized over a thirty-year period with an interest rate equal to prevailing market rates for thirty-year fixed-rate mortgage loans); (ii) property taxes and assessments; (iii) fire and casualty insurance covering replacement value of property improvements; (iv) homeowner association fees; and (v) a reasonable utility allowance. The Monthly Housing Cost shall be an average of estimated costs for the next twelve (12) month period. "Monthly Rent" is defined in Section 401.5. "Notice" shall mean a notice in the form prescribed by Section 601. "Notice of Affordability Restriction" is defined in Section 401.11. "Outside Closing Date" means the Phase R-1 Outside Closing Date, the Phase R-2 Outside Closing Date or the FS Outside Closing Date, as applicable. "Partnership Agreement" means, with respect to each of Phase R-1 and Phase R-2, an agreement that sets forth the terms of a limited partnership to which the Developer Transfers its rights, interest, and obligations in and to this Agreement with respect to the applicable Phase of the Rental Portion of the Project, as such agreement may be amended from time to time, so long as consistent with the requirements of this Agreement. The Partnership Agreements shall be entered into between or among the general partners and the Investor Limited Partner that comprise the limited partnership that Developer assigns its rights and obligations to with respect to each Phase of the Rental Portion of the Project. "Phase(s)" shall mean, individually and collectively, Phase R-1, Phase R-2 and Phase FS of the Project. "Phase(s) sometimes refers to "Portion(s) or Phase(s)" where the context dictates. DOCSOCJ I400673v 141200272-0001 "Phase FS" shall mean the Phase of construction of the Project which shall include the development of approximately thirty-two (32) For-Sale units (inclusive of the Affordable For-Sale Units) on the For-Sale Portion of the Site. Specifically, Phase FS will be constructed within the area identified on the Site Map as "Lot A," "Lot B," "Lot C," "Lot D," "Lot E," and "Lot F." "Phase FS Agency Loan" is defined in Section 314.2. "Phase FS Guarantor" is defined in Section 204.1(h). "Phase FS Outside Closing Date" means the last date the first Closing with respect to Phase FS may occur as described in Section 201.4. "Phase FS Promissory Note" means a Promissory Note that sets forth the Developer's obligation to repay the Phase FS Agency Loan in the form which is attached hereto as Attachment No. 8A and incorporated herein by reference. "Phase R-1" shall mean the Phase of construction of the Project which shall include the development of approximately seventy four (74) Rental Units on the Rental Portion of the Property. Specifically, Phase R-I will be constructed within the area identified on the Site Map as "Lot 1." "Phase R-1 Agency Loan" is defined in Section 314.1. "Phase R-1 and Phase R-2 Guarantor" is defined in Section 204.1(b). "Phase R-I Outside Closing Date" means the last date the Phase R-I Closing may occur as described in Section 201.4. "Phase R-I Promissory Note" and "Phase R-2 Promissory Note" means, in the case of each of Phase R-I and Phase R-2, a promissory note that sets forth the Developer's obligation to repay the Phase R-1 Agency Loan and the Phase R-2 Agency Loan, respectively, the form of which is attached hereto as Attachment No. 8B and incorporated herein by reference. Each Promissory Note shall bear simple interest at the rate of one percent (1%) per annum, commencing upon the date of funding under such Promissory Note and shall be for a term ending on repayment in full of the Note but in no event later than the earlier to occur of (a) fifty- eighth (58th) year after recordation of the Release of Construction Covenants, or (b) December 31, 2075, on which date all principal and accrued but unpaid interest shall be paid in full. Each Note shall be non-recourse to the Developer. Each Promissory Note shall be payable from a portion of "Residual Receipts" generated by the Phase to which such Promissory Note relates as set forth in Section 314.2 and shall be secured by an Agency Deed of Trust. "Phase R-2" shall mean the Phase of construction of the Project, which shall include the development of approximately forty (40) Rental Units on the Rental Portion of the Property and shall include any Additional Properties designated for Phase R-2 which are added to the Project pursuant to Section 207 hereof. Specifically, Phase R-2 will be constructed within the area identified on the Site Map as "Lot 2," "Lot 3" and "Lot 4." 9 QOCSOG1400673v]4/200272-0001 "Phase R-2 Agency Loan" is defined in Section 314.1. "Phase R-2 Outside Closing Date" means the last date the Phase R-2 Closing may occur as described in Section 201.4. "Portion(s) or Phase(s)" means the portion(s) or phases(s) of Phase FS being separately conveyed. "Project Area" means the project area for the Redevelopment Plan. "Project" is defined in Recital F. "Property Manager" is defined in Section 401.9. "Purchase Price" shall mean the price to be paid as consideration for the purchase of the Site by the Developer from the Agency, as set forth in Section 201. "RAP" is defined in Section 206.4. "Redevelopment Plan" means the Redevelopment Plan for the Merged Redevelopment Project as approved by Ordinance No. 2662-2667 adopted by the City Council of the City of Santa Ana on September 20, 2004, as amended. "Regulatory Agreement" means the Regulatory Agreement which is to be recorded as an encumbrance of each Phase of the Rental Portion of the Project in a form which is attached hereto as Attachment No. 7 and incorporated herein, in accordance with Section 401.11. The Regulatory Agreement may sometimes be referred to herein as the "Agency Developer CC&Rs" or the "CC&Rs." "Release of Construction Covenants" means the document which evidences the Developer's satisfactory completion of the Developer Improvements, as set forth in Section 313 hereof, in the form of Attachment No. 6 hereto which is incorporated herein by reference. "Remedial Work" is defined in Section 206.4. "Rental Portion of llte Project" means that portion of the Project that consists of the Rental Units. The Rental Portion of the Project consists of four (4) lots as identified on the Site Map and shall be constructed in two separate Phases (Phase R-1 and Phase R-2). "Rental Unit" or "Rental Units" means the Housing [nit(s) that is/are constructed and developed within the Rental Portion of the Project, all of which shall he rented or lease to Extremely Low Income Households and/or Very Low Income Households as provided in this Agreement. "Report" means the preliminary title report, as described in Section 202 hereof. "Revised Budget" means the revised development budget prepared by the Developer and approved by the Agency Executive Director, acting in her reasonable discretion, prior to and as a condition precedent to Closing of the applicable Phase of the Rental Portion of the Project and, 10 DOCSOM 400673 v l V200272-000 l in the case of the Phase FS, prior to the Conveyance and as a Condition Precedent of the first phase within Phase FS, in the same format as the Budget, showing Total Development Costs based on the then most current information. "Schedule of Performance" means the schedule prepared and approved by the Developer and the Agency Executive Director within thirty (30) days of the Date of Agreement setting out the dates and/or time periods within which certain obligations set forth in this Agreement must be accomplished, subject to Section 507 below. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing between the Developer and the Agency Executive Director. The Agency Executive Director is authorized to initially approve the Schedule of Performance and make such revisions as she deems reasonably necessary, subject to concurrence of the Developer. "Scope of Development" means the Scope of Development attached hereto as Attachment No. 5 and incorporated herein by reference, which describes the scope and quality of development of the Developer Improvements to be constructed by the Developer pursuant to the terms and conditions of this Agreement. The Scope of Development is subject to revision from time to time as mutually agreed upon in writing between the Developer and the Agency Executive Director. The Agency Executive Director is authorized to make such revisions as he or she deems reasonably necessary, subject to the concurrence of the Developer. "Segura Parcels" are shown on the Site Map and described in Attachment No. 1A. "Segura Purchase Agreements" is defined in Recital E. "Site" has the meaning set forth in Recital E. "Site Condition" is defined in Section 206.2. "Site Improvements" means all existing, as of the date hereof, above-ground structures and underground basements, utility vaults and/or septic tanks, and any debris associated with demolition of the foregoing, including without limitation such basements and/or septic tanks are identified on Attachment No. 1. "Site Map" means the map which is attached hereto as Attachment No. 1 and incorporated herein by reference. "Site Plait Review Fee" means the fee imposed pursuant to City Council Resolution No. 2009-030, Section VIII, Revenue Account No. 5409, as amended from time to time. "Soils and Geological Condition" means the condition of the soil and its stability as it relates to the developability of the Site. "Station District" is defined in Recital E. "Tax Credit Regulatory Agreement" shall mean the regulatory agreements which shall be recorded against each Phase of the Rental Portion of the Site (or any portion thereof) with respect to the issuance of Tax Credits. lI DOCSOG1400673v 14/200272-0001 "Tax Credits" shall mean federal low income housing tax credits granted pursuant to Section 42 of the Internal Revenue Code and/or, if applicable, state tax credits pursuant to California Revenue and Taxation Code Sections 17057.5, 17058, 23610.4 and 23610.5 and California Health & Safety Code Sections 50199, et seq. "TCAC" means the California Tax Credit Allocation Committee, the allocating agency for Tax Credits in California. "Third Patty Costs" means Site Plan Review Fees and those amounts actually paid or obligations incurred for work actually done by those consultants, contractors and advisors of the Developer listed on Attachment No. 13 and incorporated herein by reference not to exceed Two Hundred Sixty-Five Thousand Dollars ($265,000). "Title Company" is defined in Section 202. "Title Policy" is defined in Section 203. "Total Development Costs" means the total development costs for the Developer Improvements for each Phase as shown on the Budget and the Revised Budget. "Transferee" is defined in Section 602.1. "Transferor" is defined in Section 602.1. "Very Low Income" and/or "Very Low Income Households" shall mean very low income households as defined in Health & Safety Code Section 50105. 200. CONVEYANCE OF THE SITE. 201. Conveyance of the Site and Escrow; Consideration. Subject to all of the terms and conditions of this Agreement, the Agency shall convey fee title to each Phase of the Site to the Developer, and the Developer agrees to accept fee title to each Phase of the Site. The parties specifically recognize and acknowledge that Phase FS will close in two or more Portions or Phases, with the specific Portions or Phases subject to the mutual agreement of the parties. The Conditions Precedent to Closing, and all of the other provisions of this Section 201, shall he applicable to each such Portion or Phase of Phase FS being Conveyed. With respect to Phase R-1, the Agency shall use commercially reasonable efforts to acquire the Segura Parcels and the Additional Property applicable to Phase R-1 on or before September 15, 2010, if Developer is awarded a reservation of Tax Credits for Phase R-1 in the second Tax Credit round of 2010, and otherwise forty-five (45) days prior to submission date of a Tax Credit application to TCAC for Phase R-1 if Developer does not receive a reservation of Tax Credits in the second round of 2010, as all such dates may be extended by a CEQA challenge, and, with respect to Phase R-2, forty-five (45) days prior to the date of any submission of a Tax Credit application to TCAC with respect to the Additional Properties included in each applicable Phase, subject to force majeure resulting from a CEQA Challenge, but in no event shall the Agency be required to undertake or complete such acquisition by use of its power of eminent domain. The Purchase Price for each Phase of the Site shall be One Dollar ($1.00). In implementation of the Conveyances, the parties shall open escrow (each, an "Escrow") with Old Republic Title Company, or another escrow 12 DOCSOG 1400673v 1 4/20027 2-000 1 company mutually satisfactory to both parties (the "Escrow Agent") within fifteen (15) days after the Date of Agreement. In the event that the Segura Parcels have not been acquired by the Agency on or before September 15, 2010 (if Developer is awarded a reservation of Tax Credits for Phase R-1 in the second Tax Credit round of 2010, and otherwise forty-five (45) days prior to submission date of a Tax Credit application to TCAC for Phase R-1 if Developer does not receive a reservation of Tax Credits in the second round of 2010, as all such dates may be extended by a CEQA challenge), the Developer shall redesign Phase R-1 so as to exclude the Segura Parcels in which event Developer's obligations with respect to Phase R-1 shall be extended by the time necessary for such redesign. If and to the extent the Additional Properties and/or Segura Parcels have been acquired by the Agency within the time frame set forth herein, the acquired Additional Parcels and/or Segura Parcels shall become part of the Site. 201.1 Costs of Escrow. The Agency shall pay the premium for the Title Policy as set forth in Section 203 hereof, recording fees, if any, and the documentary transfer taxes, if any, due with respect to each Conveyance ("Agency Title Policy Costs"). The Developer shall pay for any additional costs with respect to title insurance for each Conveyance, including the cost of an ALTA policy, any surveys or inspections necessary for the issuance of an ALTA policy or any endorsements requested by the Developer pursuant to Section 203 not paid by the Agency as part of the Agency Title Policy Costs ("Developer Title Policy Costs"). All other usual fees, charges, and costs which arise from the Escrows shall be split 50/50. 201.2 Escrow Instructions. This Agreement constitutes the joint escrow instructions of the Agency and Developer, and the Escrow Agent to whom these instructions are delivered is hereby empowered to act under this Agreement. The parties hereto agree to do all acts reasonably necessary to close this Escrow in the shortest possible time. Insurance policies for fire or casualty are not to be transferred, and Agency will cancel its own policies, if any, with respect to each Phase after the Closing associated with such Phase. All funds received in the Escrow for a particular Phase shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank authorized to do business and currently doing business in the State of California. All disbursements shall be made by check from such account. If in the opinion of either party it is necessary or convenient in order to accomplish a Closing, such party may require that the parties sign supplemental escrow instructions; provided that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall control. The parties agree to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. Each Closing shall take place when both the Agency's Conditions Precedent and the Developer's Conditions Precedent as set forth in Section 204 have been satisfied with respect to the applicable Phase. Escrow Agent is instructed to release the Agency's and Developer's escrow closing statements to the respective parties. 201.3 Authority of Escrow Agent. With respect to the Closing for each Phase, the Escrow Agent is authorized to, and shall: DOCSOC/ 1400673 v 141200272-0001 13 (a) Pay and charge the Agency for the Agency Title Policy Costs, and any amount necessary to place title in the condition necessary to satisfy Section 202 of this Agreement. (b) Pay and charge the Developer and Agency each 50% of escrow fees, charges, and costs payable under Section 201.1 of this Agreement, excluding documentary transfer taxes. (c) Pay and charge the Developer for the Developer Title Policy Costs. (d) Record the Grant Deed, Regulatory Agreement, Notice of Affordability Restrictions, as to the Rental Portion of the Project, Agency Deed of Trust for such Phase, and any and all other recordable documents when both the Developer's Conditions Precedent and the Agency's Conditions Precedent for such Phase have been fulfilled, or waived by the Developer or Agency, respectively. (e) Do such other actions as necessary, including obtaining the applicable Title Policy, to fulfill its obligations under this Agreement. (f) Within the discretion of the Escrow Agent, direct the Agency and Developer to execute and deliver any instrument, affidavit, and statement, and to perform any act reasonably necessary to comply with the provisions of FIRPTA and any similar state or federal act or regulation promulgated thereunder. The Agency agrees to execute a Certificate of Non-Foreign Status by individual transferor and/or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act for each Phase as may be required by the Escrow Agent, on the form to be supplied by the Escrow Agent. (g) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099-S form, and be responsible for withholding taxes, if any such forms are provided for or required by law. 201.4 Closing. Each Phase shall close (each a "Closing") within thirty (30) days of the satisfaction of all of the Agency's and Developer's Conditions Precedent to Closing for such Phase as set forth in Section 204 hereof, with respect to each Phase but in no event later than (a) the earlier to occur of (i) one hundred fifty days after Developer receives a preliminary reservation of Tax Credits for Phase R-1 (with Developer entitled to apply for Tax Credits for four consecutive rounds), or March 31, 2013 ("Phase R-1 Outside Closing Date"), (b) the earlier to occur of (i) one hundred fifty days after Developer receives a preliminary reservation of Tax Credits for Phase R-2 (with Developer entitled to apply for Tax Credits for four consecutive rounds) or March 31, 2014 ("Phase R-2 Outside Closing Date"), and (c) January 31, 2011 for the first Closing with respect to Phase FS ("Phase FS Outside Closing Date") and January 31, 2012, for the final Closing with respect to Phase FS (the "Final Phase FS Outside Closing Date"), subject to extensions due to (x) events of force majeure pursuant to Section 507 (provided, that, no extension of the Phase R-1 Outside Closing Date, the Phase R-2 Outside Closing Date or the Phase FS Outside Closing Date due to force majeure shall be longer than twelve (12) months unless such extension results from CEQA challenge), or (y) written extensions made by the 14 DQCSOC/ 1400673v 141200272-0001 Developer and Agency Executive Director (the "Outside Closing Date"). In the event a Closing fails to occur for any Phase by the applicable Outside Closing Date as a result of the failure to obtain Tax Credits, in spite of Developer's commercially reasonable efforts to obtain same, the Developer shall not be deemed to be in Default under this Agreement, but the Agency may elect to terminate this Agreement with respect to such Phase. Each Closing shall occur at a location within Orange County at a time and place reasonably agreed on by the parties. The "Closing" shall mean the time and day the Grant Deed for the applicable Phase is filed for record with the Orange County Recorder. The "Closing Date" shall mean the day on which each applicable Closing occurs. Concurrently with the Closing for the first Portion or Phase of Phase FS, Agency and Developer shall enter into a right of entry agreement, in a form reasonably acceptable to the parties, which will include indemnities and insurance provisions in favor of Agency and which permits Developer to enter upon the balance of Phase FS which has not then been Conveyed to Developer for the purpose of grading and site preparation. 201.5 Closing Procedure. Escrow Agent shall close Escrow for each Phase, as follows: (a) Record the Grant Deed for such Phase with instructions for the Recorder of Orange County, California to deliver the Grant Deed to the Developer; (b) Record the Agency Deed of Trust for Phase R-1, Phase R-2, or Phase FS, as applicable with instructions for the Recorder of Orange County, California to deliver the Agency Deed of Trust to the Agency; (c) Record the Regulatory Agreement for Phase R-1 or Phase R-2, as applicable (but not for Phase FS since there will be no Regulatory Agreement associated with Phase FS) with instructions for the Recorder of Orange County, California to deliver the Regulatory Agreement to the Agency; (d) Instruct the Title Company to deliver the applicable Title Policy to the Developer; (e) Deliver the Promissory Note to the Agency for Phase R-1, Phase R-2, or Phase FS, as applicable; (f) File any informational reports required by Internal Revenue Code Section 6045(e), as amended, and any other applicable requirements; (g) Deliver the FIRPTA Certificate for such Phase, if any, to the Developer; and (h) Forward to both the Developer and Agency a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into Escrow, with such recording and filing date and information endorsed thereon. 202. Review of Title. The Developer shall, at its cost and expense, secure a survey of each Phase of the Site. Within thirty (30) days after the Date of Agreement, the Agency shall 15 DOCSOC/1400673v 14/200272-0401 cause Old Republic Title Company, or another title company mutually agreeable to both parties (the "Title Company"), to deliver to the Developer a standard preliminary title report (the "Report") with respect to the title to the Site, together with legible copies of the documents constituting title exceptions (the "Exceptions") set forth in the Report. The Developer shall have the right to approve or disapprove in its sole discretion (i) the Report, (ii) the Exceptions, (iii) any surveys delivered to it by Agency or ordered by Developer, (iv) the availability and cost of any title endorsements the Developer or its lenders may desire, and (v) any other matters pertaining to title (collectively, the "Title Matters"); provided, however, that the Developer herein approves the following Exceptions: (a) the Redevelopment Plan; (b) the lien of any nondelinquent taxes and assessments (to be prorated at Close of Escrow) with respect to each Phase; and (c) the provisions of the Grant Deed. The Developer shall have one hundred twenty (120) days from the Date of Agreement to give written notice to the Agency and Escrow Holder of the Developer's approval or disapproval of any Title Matters. The Developer's failure to give written disapproval within such time limit shall be deemed approval of all Title Matters. If the Developer notifies the Agency of its disapproval of any Title Matter, the Agency shall have the right, but not the obligation, within ten (10) business days after receiving written notice of the Developer's disapproval, to notify the Developer that it will cause the same to be cured at the Agency's sole cost to the Developer's satisfaction. If the Agency cannot or does not timely so elect by timely delivery of notice, the Developer shall have ten (10) business days after the expiration of such ten (10) business day period to either give the Agency written notice that the Developer elects to proceed with the purchase of the Phase affected thereby subject to the disapproved Title Matter(s) or to give the Agency written notice that the Developer elects to terminate the rights and obligation of the parties under this Agreement with respect to such Phase. The Developer shall have the right to approve or disapprove any subsequent title exceptions not caused by the Developer and reported after the Developer has approved the Title Matters in the manner set forth above, including Title Matters associated with any Additional Properties. If the Developer disapproves any subsequent title exception, and the matter cannot be solved to the satisfaction of the parties, the Developer shall have the right to terminate the rights and obligations of the parties under this Agreement with respect to the Phase affected thereby. Except as set forth herein, the Agency shall not voluntarily create any new exceptions to title following the Date of Agreement. 203. Title Insurance. Concurrently with recordation of each Grant Deed conveying title to the applicable Phase, there shall be issued to the Developer a CLTA (or, at Developer's request, an ALTA) owner's policy of title insurance (each, a "Title Policy") in the amount of the unrestricted fair market value of the portion of the Site being conveyed, as agreed upon by the parties prior to Closing, together with such endorsements as the Developer arranges with the Title Company during the title review period described in Section 202, issued by the Title Company insuring that the title to such Phase is vested in the Developer with no exceptions other than those approved by the Developer pursuant to Section 202. The Title Company shall 16 DOCSOG1400673v14l200272-000 L provide the Agency with a copy of each such Title Policy. Any additional costs, including the cost of an ALTA policy, any surveys or inspections necessary for the issuance of an ALTA policy, or any endorsements requested by the Developer, shall be borne by the Developer. 204. Conditions of Closing. The Closing for each Phase is conditioned upon the satisfaction of the following terms and conditions of such Phase within the times designated below. 204.1 Agency's Conditions of Closing. The Agency's obligation to proceed with the Closing for each Phase is subject to the fulfillment, or waiver by the Agency Executive Director, of each and all of the conditions precedent (a) through (i), inclusive, described below with respect to such Phase (the "Agency's Conditions Precedent"), which are solely for the benefit of Agency, and which shall be fulfilled or waived on or before the applicable Outside Closing Date. Any condition not specifically waived prior to such Closing shall be deemed waived upon Conveyance for the Phase associated with such Closing: (a) No Default. Prior to the Close of Escrow for such Phase, the Developer has not committed and failed to cure any default in any of its obligations under the terms of this Agreement with respect to such Phase and all representations and warranties of the Developer contained herein shall be true and correct in all material respects. (b) Payment of Closing Costs and Purchase Price. The Developer shall have deposited the Purchase Price for such Phase and all costs payable by Developer of such Closing into Escrow in accordance with Section 201 into Escrow. (c) Execution of Documents. The Developer shall have executed and, as necessary for recordation, shall have had acknowledged, any documents required hereunder with respect to such Phase and shall have delivered such documents into Escrow (including, without limitation, the Notice of Affordability Restrictions). (d) Conceptual Site Plan and Land Use Approvals. The Developer shall (i) have obtained City and Agency Executive Director approval of the Conceptual Site Plan and final Construction Drawings for all of the Developer Improvements in such Phase, (ii) have obtained all Land Use Approvals necessary for the development of such Phase, as set forth in Section 303 hereof, and (iii) take such actions as are necessary to insure that building permits for the development of such Phase shall be issued concurrently with Closing of the portion of the Site associated with such Phase, or demonstrate to Agency's reasonable satisfaction that building permits for the development of such Prase are ready to be issued but for the payment of fees associated therewith, and that the funds necessary for the payment of such fees has been allocated, reserved and committed in the construction financing or equity contributions which are available upon and after the date of the Closing. (e) Insurance. The Developer shall have provided proof of insurance as required by Section 306 hereof with respect to such Phase. (f) Financing. The Agency shall have approved the Evidence of Construction Financing of the Developer Improvements for such Phase as provided in Section 316.1 hereof and the financing consistent with the Evidence of Construction Financing 17 DOCSOC11400673v 141200272-0001 for such Phase shall have closed and funded or be ready to close and fund at the applicable Closing. (g) General Contractor Contract. The Developer shall have provided or caused to be provided to the Agency Executive Director a copy of a valid and binding contract between the Developer and one or more California-licensed general contractors for the construction of the Developer Improvements associated with such Phase, certified by the Developer to be a true and correct copy thereof, or shall have provided to the Agency Executive Director a copy of the construction budget for such Phase if the Developer elects to act as the general contractor/owner-builder. (h) Guaranty. The Developer shall obtain and provide for the benefit of the Agency a separate guaranty for each Phase (the "Guaranty") in a form reasonably acceptable to the Agency Executive Director, pursuant to which The Related Companies, L.P., a New York limited partnership, as guarantor of Phase R-1 and Phase R-2 ("Phase R-1 and Phase R-2 Guarantor"), and such entity as may be approved by the Agency Executive Director, acting in her sole and absolute discretion as the Guarantor of Phase FS, if there is a transfer or assignment of Phase FS ("Phase FS Guarantor") (collectively, the "Guarantor(s)"), shall guaranty completion of the construction of each applicable Phase or Phases (1) substantially within the time limits set forth herein and in the Schedule of Performance, (2) substantially in accordance with the Scope of Development, as the same may be modified from time to time in accordance with the terms of this Agreement, (3) free and clear of any mechanics liens, materialmen's liens and equitable liens, and (4) all costs of construction shall be paid prior to delinquency. In addition, the Guaranty will provide for the waiver by Guarantor of any and all rights, waivers and defenses which may otherwise be available under state or federal law to prevent the Agency's enforcement of the Guarantor's obligations under the Guaranty. (i) Revised Budget. The Developer has prepared and the Agency has approved the Revised Budget for the applicable Phase. 204.2 Developer's Conditions of Closing. The Developer's obligation to proceed with the Closing of each Phase is subject to the fulfillment or waiver by the Developer of each and all of the conditions precedent (a) through (n), inclusive, described below (the "Developer's Conditions Precedent"), which are solely for the benefit of the Developer, and which shall be fulfilled or waived on or before the applicable Outside Closing Date. Any condition not specifically waived prior to Closing shall be deemed waived upon Conveyance for the Phase associated with such Closing: (a) No Default. Prior to the Close of Escrow for such Phase, the Agency has not committed and failed to cure any defaults in any of its obligations under the terms of this Agreement with respect to such Phase and all representations and warranties of the Agency contained herein shall be true and correct in all material respects. (b) Execution of Documents. The Agency shall have executed, and as necessary for recordation, shall have had acknowledged, the applicable Grant Deed and any other documents required hereunder with respect to such Phase, and shall have delivered such documents into Escrow. DOCSOC/1400673Y 141200272-0001 18 (c) Payment of Closing Costs. Prior to the Close of Escrow for such Phase, Agency shall have paid all required costs of such Closing into Escrow in accordance with Section 201. (d) Review and Approval of Title. Developer shall have reviewed and approved the Condition of Title of such Phase, as provided in Section 202. (e) Financing. Developer shall have obtained, and the Agency shall have approved Evidence of Construction Financing for such Phase consistent with the approved Evidence of Construction Financing of the Developer Improvements for such Phase as provided in Section 316.1, and the financing for such Phase shall have closed and funded or be ready to close and fund concurrent with the applicable Closing. (f) Title Policy. The Title Company shall, upon payment of Title Company's regularly scheduled premium, have agreed to issue the Title Policy for each Phase upon each Closing, in accordance with Section 203. (g) Environmental. The Developer shall have approved the Environmental Condition of the portion of the Site included in the applicable Phase and shall not have elected to cancel Escrow and terminate this Agreement pursuant to Section 206.2 hereof and the Remedial Work (if required pursuant to that Section) shall have been completed as provided herein. (h) Conceptual Site Plan and Land Use Approvals. The Developer shall (i) have obtained City and Agency Executive Director approval of Conceptual Site Plan and final Construction Drawings for all of the Developer Improvements in such Phase, (ii) have obtained all Land Use Approvals necessary for the development of such Phase, including, without limitation, Subdivision Map Act compliance, any necessary zone change and/or approval of any required density bonus, and (iii) take such actions as are necessary to insure that building permits for the development of such Phase shall be issued concurrently with the Conveyance of the portion of the Site associated with such Phase. (i) Soils and Geological Condition. Developer shall have approved the Site Condition with respect to such Phase in accordance with Section 206.1 hereof. 0) Relocation. The Agency shall have relocated all tenants and other inhabitants of the portion of the Site on which such Phase is or will be located in accordance with all existing federal, state and local laws. (k) Site Improvements. The portion of the Site on which such Phase is or will be located shall be free of all Site Improvements. (1) Environmental Condition. The portion of the Site on which such Phase is or will be located shall be free of all Hazardous Materials, including, without limitation, asbestos and lead-based paint, all in accordance with Section 206.7 below, and the Developer shall have received and approved the Abatement Report described in Section 206.7 below. DOCS OG k 4 00673 v 14!200272-000 I 19 (m) Condition of Site. The Agency shall be unconditionally committed to deliver (i) fee title to the portion of Site on which such Phase is or will be located in accordance with the requirements of the Scope of Development, and (ii) possession of such portion of the Site on which such Phase is or will be located subject to no rights of tenants in possession. (n) Revised Budget. The Developer has prepared and the Agency has approved the Revised Budget for the applicable Phase. 205. Representations and Warranties. 205.1 Agency Representations. The Agency represents and warrants to the Developer as follows: (a) Authority. The Agency is a public body, corporate and politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000), which has been authorized to transact business pursuant to action of the City. The Agency has full right, power and lawful authority to grant and convey the Site as provided herein and the execution, performance and delivery of this Agreement by the Agency has been fully authorized by all requisite actions on the part of the Agency. (b) FIRPTA. The Agency is not a "foreign person" within the parameters of FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar state statute, or the Agency has complied and will comply with all the requirements under FIRPTA or any similar state statute. (c) No Conflict. To the best of the Agency's knowledge, the Agency's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the Agency is a party or by which it is bound. (d) Notices of Violation. The Agency has no knowledge of, nor has Agency received any notice of or know of any basis for, any violations of laws, statutes, regulations, ordinances, other legal requirements with respect to the Site (or any part thereof) or with respect to the use, occupancy or construction thereof, or any investigations by any governmental or quasi-governmental authority into potential violations thereof or any condemnation or eminent domain proceedings pending or threatened with respect to the Site or any portion thereof. In the event the Agency receives notice of any such violations or investigations affecting the applicable Phase prior to the Closing of such Phase, the Agency promptly shall notify the Developer thereof. (e) Leases and Contracts. Except as and to the extent disclosed to the Developer, in writing, there are no leases or other contracts to which the Agency is a party which would affect the property comprising the applicable Phase comparison Site. (f) Delivery of Materials and Documents. The Agency's staff has delivered all relevant materials and documents in its possession and pertaining to the Site to the Developer. 20 DOCS001400673v 14!200272-DOO t Until the Closing, the Agency shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 205.1 not to be true as of Closing, immediately give written notice of such fact or condition to the Developer. Such exception(s) to a representation shall not be deemed a breach by the Agency hereunder, unless such representation was false when made, but shall constitute a matter which the Developer shall have a right to reasonably approve or disapprove. If the Developer elects to close Escrow following disclosure of such information, the Agency's representations and warranties contained herein shall be deemed to have been made as of the Closing, subject to such disclosed matter(s). If, following the disclosure of such matter, the Developer elects to not close Escrow, then this Agreement and the Escrow shall automatically terminate and neither party shall have any further rights, obligations or liabilities hereunder. The representations and warranties set forth in this Section 205.1 shall survive the Closing. 205.2 Developer's Representations. The Developer represents and warrants to the Agency as follows: (a) Authority. The Developer is a duly organized California limited liability company and is authorized to do business and is in good standing under the laws of the State of California. The copies of the documents evidencing the organization of the Developer which have been delivered to the Agency are true and complete copies of the originals, as amended to the Date of Agreement. The Developer has full right, power and lawful authority to accept the Conveyance of the Site and undertake all obligations as provided herein and the execution, performance and delivery of this Agreement by the Developer has been fully authorized by all requisite actions on the part of the Developer. (b) Experience. The Developer (or its managing member) is an experienced developer of residential projects similar in size, scope, and quality to the Developer Improvements to be constructed pursuant to this Agreement. (c) No Conflict. To the best of the Developer's knowledge, the Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the Developer is a party or by which it is bound. (d) No Developer Bankruptcy. Developer is not the subject of a bankruptcy proceeding. (e) Compliance with Laws. The Developer warrants and represents that it will carry out the development of the Site in conformity with all Governmental Requirements, including, without limitation, all applicable state and federal labor standards and requirements, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City's Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq. DOC S O C/ 14 0067 3 v 14/20027 2-0001 21 Until the Closing, the Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 205.2 not to be true as of Closing, immediately give written notice of such fact or condition to the Agency. Such exception(s) to a representation shall not be deemed a breach by the Developer hereunder, but shall constitute an exception which the Agency shall have a right to approve or disapprove if such exception would have an effect on the value and/or operation of the Site. If the Agency elects to close Escrow following disclosure of such information, the Developer's representations and warranties contained herein shall be deemed to have been made as of the Closing, subject to such exception(s). If, following the disclosure of such information, the Agency elects to not close Escrow, then this Agreement and the Escrow shall automatically terminate and neither party shall have any further rights, obligations or liabilities hereunder. The representations and warranties set forth in this Section 205.2 shall survive the Closing. 206. Condition of the Site. 206.1 Investigation of Site. Prior to the execution of this Agreement, Agency has caused a "Phase 1" investigation of the Environmental Condition of the Site which was undertaken by Converse Consultants, identified as: (i} CONVERSE PROJECT NO. 10-42-118-01 612,614,622, AND 626-628 EAST SANTA ANA BOULEVARD 604,606,614-618,620 AND 622 NORTH LACY STREET 601-603, 609, 613, and 617 EAST 6TH STREET 709 AND 711 EAST 6TH STREET 609 AND 611 NORTH MINTER STREET (Block 1) SANTA ANA, CALIFORNIA (ii) CONVERSE PROJECT NO. 10-42-118-02 601, 605-607, 609, 611 NORTH LACEY STREET 80I BROWN STREET (Block 2) SANTA ANA, CALIFORNIA (iii) CONVERSE PROJECT NO. 10-42-118-08 501, 505, AND 511 EAST 5TH STREET 501 '/2 - 507 MORTIMER STREET (Block A) SANTA ANA, CALIFORNIA (iv) CONVERSE PROJECT NO. 10-42-118-09 606, 610-612, 616, AND 620 EAST 5TH STREET (Block B) SANTA ANA, CALIFORNIA (v) CONVERSE PROJECT NO. 10-42-118-10 712 EAST 5TH STREET (Block E) SANTA ANA, CALIFORNIA ("Agency Environmental Site Assessment"), with the cost of such investigation being borne by the Agency. Agency represents and warrants that Developer has been provided a copy of all reports and test results produced in connection with the environmental investigation of the Site 22 DOCSOC/1400673v 14/200272-0001 by Agency. If Developer desires, Developer shall also cause a "Phase 1" and/or "Phase 2" investigation of the Environmental Condition of the Site to be undertaken ("Developer Environmental Site Assessment"), with the cost of such investigation(s) to be borne by the Developer. Developer covenants that Agency has been or will be provided with all reports and test results produced in connection with the Developer Environmental Site Assessment. Agency and the Developer hereby represent and warrant to the other, except as set forth in the Agency Environmental Site Assessment and the Developer Environmental Site Assessment, that they have no Actual Knowledge, and have not received any notice or communication from any governmental agency having jurisdiction over the Site, notifying such party of, the presence of surface or subsurface zone Hazardous Materials in, on, or under the Site, or any portion thereof. The Developer shall reasonably approve or disapprove of the Environmental Condition and the Soils and Geological Condition of the Site (the "Site Condition") in its sole discretion within the time set forth in the Schedule of Performance. The Developer's approval of the Site Condition shall be a Developer's Condition Precedent to the Closing. Except as set forth in the next sentence of this paragraph, if the Developer disapproves the Environmental Condition of the entire Site, then either party may terminate this Agreement by written notice to the other. If the Developer disapproves the Environmental Condition of a Portion or Phase of Phase FS, then the Developer may terminate this Agreement as to such disapproved Portion or Phase only by written notice to the Agency, and approve the remaining Portion or Phase of Phase FS. Pursuant to Section 206.3, the Agency may nullify such election on the terms and conditions set forth therein. Notwithstanding the foregoing, the termination of this Agreement pursuant to this Section 206.1 will not result in the termination of the Agreement with respect to any other Phase (or in the case of Phase FS, Portion or Phase) of the Site already Conveyed to the Developer. 206.2 Studies and Reports. Prior to each Closing, representatives of the Developer shall have the right of access to all portions of the Site for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement, including the investigation of the Site Condition for each Phase and structural/civil engineering work. Any preliminary work undertaken on the Site by Developer prior to each Closing shall be done at the sole expense of the Developer, and only after the Developer executes a right of entry agreement (for any Portion or Phase of the Site that has not yet been subject to a Closing) in a form reasonably acceptable to the Agency Executive Director. Any preliminary work shall be undertaken only after securing any necessary permits from the appropriate governmental agencies. 206.3 Remediation After Developer Elects To Terminate. Upon receipt of Developer's notice to terminate based upon the Environmental Condition of the Site, Agency may, at Agency's option, agree to cause the remediation of the Site in accordance with the recommendations of Developer's Environmental Consultant, Developer's Environmental Site Assessment and all Governmental Requirements ("Agency's Election to Remediate"), provided, Agency hereby agrees to make Agency's Election to Remediate in the event that Agency reasonably estimates that the cost to conduct the Remedial Work for all of the Phases of the Site will not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) ("Remedial Work Expenditure Cap"). In estimating the total cost of Remedial Work for all of the Phases of the Site, Agency may make reasonable assumptions regarding the projected cost of Remedial Work DOCSOC/ 1400673 v 141200272-0001 23 for those Phases of the Site which it has not yet Conveyed to the Developer. Agency may reserve a reasonable portion of the Remedial Work Expenditure Cap as necessary to fund the cost for potential Remedial Work for those other Phases. Agency shall give notice to Developer and Escrow Agent of such election and Developer's notice to terminate shall be ineffective; provided, however, that Developer has approved of the scope of the Remedial Work and the RAP prior to the commencement of such work. If Agency makes Agency's Election to Remediate, then within a reasonable period after giving notice to Developer that it intends to proceed with remediation of the Site, Agency shall deliver to Developer for Developer's approval a proposed remedial action plan ("RAP") prepared by Agency's Environmental Consultant ("Agency's Environmental Consultant"), which RAP shall be approved by the public agency asserting jurisdiction over the remedial work to be performed pursuant to the RAP (the "Remedial Work"). The Remedial Work shall assure the suitability of the Site for the development, occupancy and operation of the Project and shall be performed in accordance with applicable Governmental Requirements and Environmental Laws, and shall be conducted in accordance with the requirements of Health and Safety Code Section 33459, et seq., in a manner which is intended to qualify for the immunity which is provided by Health and Safety Code Section 33459.3. Upon making Agency's Election to Remediate and receiving Developer's approval of the RAP and the scope of the Remedial Work, Agency shall cause the Remedial Work to be performed and completed continuously and diligently. Agency's compliance with the provisions of this Section, and the issuance of a letter, certificate or other official writing by all governmental agencies which have asserted jurisdiction over the remediation of the Site, which provides that no further investigation, monitoring, remediation, response or removal is currently necessary considering the development, occupancy and operation of the Project ("No Further Action Letter"), and confirmation of the completion of the Remedial Work by Developer's Environmental Consultant, shall each be a Developer's Condition Precedent to the Closing for the applicable Phase and the Outside Closing Date for such Phase shall be extended until such conditions are satisfied. Upon completion of the Remedial Work, Agency shall deliver to Developer a certificate executed by the Agency's Environmental Consultant that the Remedial Work has been completed in accordance with all applicable laws. Notwithstanding the foregoing, if Developer, based upon Developer's Environmental Site Assessment, Agency's Environmental Site Assessment and the RAP, reasonably estimates that the Remedial Work cannot be completed within ten (10) weeks, then Developer may terminate the Escrow and this Agreement by written notice to Agency; provided, that such termination shall not apply to any Phase that has Closed prior to the date of such termination. Each date for performance under this Agreement and the Schedule of Performance shall be extended on a day-for-day basis for each day of delay as a result of the Remedial Work. As an alternative to Agency causing the performance of the Remedial Work pursuant to this Section, Developer may, at its sole and absolute discretion, propose ("Developer's Remediation Proposal") that Developer perform, or have performed, the Remedial Work by written notice to Agency accompanied by an estimate of the cost of performing the Remedial Work ("Developer's Remedial Work Estimate"). In the event that Developer's Remedial Work Estimate is less than the Remedial Work Expenditure Cap, Agency shall elect to DOCS00 1400673v 14/240272-4401 24 either (i) accept Developer's Rernediation Proposal, in which event Developer shall perform the Remedial Work in accordance with this Section and Agency shall reimburse Developer in an amount not to exceed Developer's Remedial Work Estimate within thirty (30) days following receipt by Agency of written request therefor by Developer, together with copies of invoices and/or other such evidence as reasonably necessary to substantiate such costs and expenses, or (h) reject Developer's Remediation Proposal, in which event Agency shall perform the Remedial Work in accordance with this Section. In the event that Developer's Remedial Work Estimate is greater than the Remedial Work Expenditure Cap, Agency may elect to terminate the Escrow and this Agreement, provided such termination shall be ineffective if Developer then elects to perform the Remedial Work in accordance with this Section and bear any costs and expenses in excess of the Remedial Work Expenditure Cap. 206.4 No Warranties As To Site; Release of Agency. Except as otherwise expressly provided herein, the Site Condition upon delivery from the Agency to Developer shall be "as-is," with no warranty expressed or implied by Agency, including without limitation, presence of Hazardous Materials or the condition of the soil, its geology, the presence of known or unknown seismic faults, or the suitability of the Site for the development purposes intended hereunder. From and after the date on which Developer completes grading with respect to any Phase of the Site as evidenced by certification by the City's Building Official, and to the extent that Developer does not object in writing to the Environmental Condition of such Phase within ten (10) days following completion of such grading, the Developer shall waive, release and discharge forever the Agency and the City, and their respective employees, officers, agents and representatives, from all present and future claims, demands, suits, legal and administrative proceedings and from all liability for damages, losses, costs, liabilities, fees and expenses, present and future ("Claim or Liability"), arising out of or in any way connected with the Site Condition as it relates to such Phase, except (i) arising out of the willful misconduct of the Agency or its employees, officers, agents or representatives; or (ii) if and to the extent the Developer can demonstrate to a court of competent jurisdiction that the Agency and/or City were the direct and proximate cause of the Site Condition which is the subject matter of the Claim or Liability, including, without limitation, attorneys' fees; or (iii) for Agency's obligations under Section 206.3. Upon the effectiveness of the release contemplated by this Section, the parties acknowledge that the Agency's ownership would not be the direct and/or proximate cause of any Site Condition if such Site Condition was in existence at the time of the Agency's acquisition and continued during the Agency's ownership. In the event that Developer objects to the Environmental Condition as described above, Developer may elect (at the time it objects to the Environmental Condition) to accept such Environmental Condition, in which event the Agency shall reimburse Developer for its actually incurred costs of any Remedial Work undertaken by Developer to remediate the disapproved Environmental Condition; provided, however, that the maximum amount of such reimbursement shall be equal to the portion of the Remedial Work Expenditure Cap not previously expended pursuant to Section 206.3 above. In the event of such election, Developer shall submit to Agency a description of the Remedial Work performed, together with copies of invoices and/or such other evidence as reasonably necessary to substantiate such costs and expenses, and Agency shall reimburse Developer within ten (10) days of its receipt of such materials, subject to the cap set forth hereinabove. If Developer does not elect to accept such Environmental Condition in its notice objecting to such Environmental 25 D OCSOC/ 1400673 v 141200272-0001 Conditions, Agency may, within thirty (30) days of such written objection, elect in writing to either remediate the Environmental Condition to the extent required to satisfy Developer's objection or terminate this Agreement as to the applicable portion of the Site (but not as to any other Phase of the Site which has Closed prior to such termination), in which case Developer shall reconvey the applicable portion of the Site to the Agency and neither party shall have any rights or obligations with respect to the other in connection with such portion of the Site. Notwithstanding the foregoing, the termination of this Agreement pursuant to this Section 206.4 with respect to any Phase will not result in the termination of the Agreement with respect to any other portion of the Site already Conveyed to the Developer. The Developer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Upon the effectiveness of the release set forth in this Section 206.4, the Developer waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code. 206.5 Developer Precautions After Closing. Upon the Closing of any Phase, the Developer shall take all reasonable precautions to prevent the release into the environment of any Hazardous Materials in violation of law which are located in, on or under the portion of the Site associated with such Phase. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In 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, removal and disposal of Hazardous Materials. 206.6 Required Disclosures After Closing. After the Closing of any Phase, the Developer shall notify the Agency, and provide to the Agency a copy or copies, of all environmental permits, disclosures, applications, entitlements or inquiries relating to the portion of the Site included within such Phase, including notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self-reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks. After the Closing with respect to any Phase, the Developer shall report to the Agency, as soon as possible after each incident, any unusual or potentially important incidents with respect to the Environmental Condition of the portion of the Site included within such Phase. After the Closing of any Phase, the event of a release of any Hazardous Materials into the environment in violation of law on such Phase, the Developer shall, as soon as possible after the release, furnish to the Agency a copy of any and all reports relating thereto and copies 26 DOCSOC'/1400673v 141200272-0001 of all correspondence with governmental agencies relating to the release. Upon request, the Developer shall furnish to the Agency a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 206.7 Abatement Report. Prior to the Close of Escrow for a Phase, the Agency shall, at its sole cost and expense, deliver to the Developer a written report, reasonably acceptable to the Developer, prepared by a licensed third party unrelated to the Agency or any contractor(s) or subcontractor(s) undertaking any portion of the abatement of Hazardous Materials associated with removal and abatement of any improvements currently on the Site, confirming that all such Hazardous Materials have been properly abated and removed in compliance with all applicable laws, rules and regulations (the "Abatement Report"). In addition, concurrent with delivery of the Abatement Report to Developer with respect to a particular Phase, the Agency shall deliver to Developer a letter from the provider of the Abatement Report for such Phase authorizing the Developer and any other entity whose identity was provided to Agency prior to the time the Agency enters into a contract for preparation and delivery of the Abatement Report to rely on the Abatement Report. Prior to entering into a contract to retain the provider of the Abatement Report, Agency shall request from Developer the names of those parties Developer requires to be entitled to rely on such Abatement Report. Promptly following such request, Developer shall deliver a list of such names to Agency; provided, that, if Developer has not, as of such time, identified all of its lenders and investors who will need to rely on such Abatement Report, Developer may deliver an incomplete list to Agency and Agency shall add the names identified on such incomplete list to the reliance provisions of such contract and use best efforts, at no additional cost to Agency, to insert a requirement in such contract allowing the addition of more names to such list following the execution of the contract. 206.8 Developer Site Condition Indemnity. Upon the Closing, Developer agrees to indemnify, defend and hold Agency harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorney's fees), resulting from, arising out of, or based upon the Site Condition, including without limitation (i) the release, use, generation, discharge, storage or disposal by Developer or by any individual or entity for which Developer bears the legal liability including, but not limited to, officers, agents, employees or contractors of Developer (collectively, the "Developer Parties") of any Hazardous Materials in violation of Environmental Laws during the period of the Developer's ownership of the applicable Phase of the Site, on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Phase of the Site by Developer or any of Developer Parties during the period of the Developer's ownership of the Phase of the Site, and/or (ii) the violation, or alleged violation, by Developer or any of Developer Parties of any Environmental Laws relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Site during the period of the Developer's ownership of the applicable Phase of the Site. This indemnity shall include, without limitation, any damage, liability, fine, penalty, cost or expense arising from or out of any claim, action, suit, or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for 27 D OC SOC11400673v14/200272-0001 lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment with respect to the applicable Phase of the Site. 206.9 Agency Environmental Indemnity. Upon the Closing, Agency agrees to indemnify, defend and hold Developer and the Developer Parties harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees) resulting from, arising out of, or based upon (i) the presence, release, use, generation, discharge, storage or disposal of any Hazardous Materials in violation of Environmental Laws during the period prior to the Closing, on, under, in or about, or the transportation of any such Hazardous Materials to or from the Site, during the period prior to the Closing; or (ii) the violation, or alleged violation, of any Environmental Laws relating to the presence, use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Site during the period prior to the Closing. This indemnity shall include, without limitation, any damage, liability, fine, penalty, cost or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse affect on the environment. 207. Agency Acquisition of Additional Properties. The Agency and the Developer acknowledge that the Agency is continuing its attempts to acquire all of the Additional Properties which it does not presently own. If and to the extent the Agency is successful in acquiring some or all of the Additional Properties forty-five (45) days prior to the (i) Closing of the applicable Portion or Phase of Phase FS, or (ii) date of any submission of a Tax Credit application to TCAC for the Phase of the Rental Portion of the Project to which each such Additional Property relates (as shown on the Site Map), the Agency shall send written notice thereof to Developer (the "Additional Property Notice"). Upon receipt of the Additional Property Notice, the Agency and the Developer shall negotiate in good faith to amend the Scope of Development for the Phase or Phases to which such Additional Properties relate, as well as an increase in the amount of the Agency Loan for Phase R-2, to the extent such Additional Properties relates to Phase R-2. From and after the date set forth on the Schedule of Performance for each Phase, the Agency shall immediately discontinue all attempts to acquire Additional Properties for such Phase and shall not send any Additional Property Notices for such Phase. The Agency Executive Director shall have the authority to approve the amended Scope of Development for affected Phases and the increased amount of the Agency Loan associated therewith, and any such amendments or increases shall be reflected in the Implementation Agreement(s) for the applicable Phases. The inclusion of Additional Properties for a Phase shall not revise the Purchase Price as to the applicable Phase. 208, Agency Acquisition of the Segura Parcels. The Agency and the Developer acknowledge that the Agency has concurrently herewith approved the Segura Purchase Agreements. Developer hereby approves the condition of title and Site Condition with respect to the Segura Parcels. In reliance on that approval, Agency agrees to use commercially reasonable efforts to acquire the Segura Parcels pursuant to the Segura Purchase Agreements. Upon acquisition of the Segura Parcels by the Agency, the Segura Parcels will become a part of the DOCSOCJ1400673v 141200272.0001 28 Site and be developed in conjunction with Phase R-1. In the event that the Agency fails to acquire the Segura Parcels on or before September 15, 2010 (if Developer is awarded a reservation of Tax Credits for Phase R-I in the second Tax Credit round of 2010, and otherwise forty-five (45) days prior to submission date of a Tax Credit application to TCAC for Phase R-1 if Developer does not receive a reservation of Tax Credits in the second round of 2010, as all such dates may be extended by a CEQA challenge), the Developer shall redesign Phase R-1 excluding the Segura Parcels, in which event Developer's obligations with respect to Phase R-1 shall be extended by the time necessary for such redesign. 209. Separate Phases. The parties acknowledge and agree that Phase R-1, Phase R-2 and Phase FS may be separately owned, financed and developed, and that, in the event of the separate ownership of the Phases, a Default under this Agreement relating to one Phase, the applicable Phase Regulatory Agreement, applicable Phase Promissory Note or Agency Deed of Trust shall not be considered a Default relating to any other Phase; in other words, there shall be no cross-defaults between Phases or between the ownership entities for each Phase. If such separation occurs, the owner of Phase R-1 shall be solely and exclusively responsible for the Phase R-1 rights and obligations under this Agreement, the owner of Phase R-2 shall be solely and exclusively responsible for the Phase R-2 rights and obligations under this Agreement, and the owner of Phase FS shall be solely and exclusively responsible for the Phase FS rights and obligations under this Agreement. 210. Timing of Agency Obligations. With respect to the Segura Parcels, the Agency shall, within one hundred twenty (120) days of acquisition of each such parcels, cause each of the following to occur (collectively, the "Agency Site Obligations"): (a) relocate all tenants and other inhabitants thereof in accordance with all existing federal, state and local laws, (b) cause such parcel to be free of all Site Improvements, and (c) complete remediation of any Hazardous Materials it is required to remediate in accordance with the terms of this Agreement. With respect to the Agency Parcels, the Agency shall complete the Agency Site Obligations within sixty (60) days for Phase R-1 and within ninety (90) days for Phase R-2 and Phase FS of the earlier to occur of (x) expiration of the thirty (30) day period following the Date of Agreement within which a CEQA Challenge may be initiated or (y) resolution of any CEQA Challenge. With respect to the Additional Properties, the Agency shall, within one hundred fifty (150) days of acquisition of each of such Additional Properties, cause each of the Agency Site Obligations to occur. 300. DEVELOPMENT OF THE PROJECT. 301. Developer's Obligation to Construct Developer Improvements; Scope of Development. The Developer shall construct each Phase of the Developer Improvements substantially in accordance with the Land Use Approvals, the Scope of Development and the plans, drawings and documents submitted by the Developer and approved by the Agency as set forth herein. 302. Design Review. 302.1 Conceptual Site Plan. Concurrently with approval of this Agreement, the Developer has submitted and the Agency has approved conceptual drawings for the Developer 29 DOCSOM 400673Y 141200272-0001 Improvements, specifically showing a site plan, external facade improvements, and elevations of all four sides of the Developer Improvements (collectively, the "Conceptual Site Plan"). 302.2 Revisions. If the Developer desires to propose any revisions to the Agency approved Conceptual Site Plan, it shall submit such proposed changes to the Agency, and shall also proceed in accordance with any and all State and local laws and regulations regarding such revisions. At the sole discretion of the Agency, if any material change in the basic uses of any Phase of the Site is proposed in the Conceptual Site Plan from the basic uses of such Phase of the Site as provided for in this Agreement, then this Agreement is subject to renegotiation of all terms and conditions, including without limitation, the economic terms of this Agreement with respect to such Phase of the Site. If the Conceptual Site Plan for a Phase, as modified by the proposed change, generally and substantially conform to the requirements of this Section 302, the Agency Executive Director shall review the proposed change and notify the Developer in writing within fifteen (15) days after submission to the Agency as to whether the proposed change is approved or disapproved. The Agency's Executive Director is authorized, but not obligated, to approve changes that 1) do not significantly modify the overall cost of the Development Improvements; 2) do not reduce the quality of materials to be used; and 3) do not reduce the imaginative and unique qualities of the project design. 302.3 Defects in Plans. The Agency shall not be responsible either to the Developer or to third parties in any way for any defects in the Conceptual Site Plan, nor for any structural or other defects in any work done according to the approved Conceptual Site Plan, nor for any delays reasonably caused by the review and approval processes established by this Section 302. The Developer shal l hold harmless, indemnify and defend the Agency, the City and their respective officers, employees, agents and representatives from and against any claims, suits for damage to property or injuries to persons arising out of or in any way relating to defects in the Conceptual Site Plan, including without limitation, the violation of any laws, and for defects in any work done according to the approved Conceptual Site Plan. 302.4 Use of Architectural Plans. In the event this Agreement is terminated pursuant to Section 303.1 below, the Agency shall become the owner and have the right to use any Conceptual Site Plan and/or architectural plans which are submitted to the Agency by the Developer pursuant to this Section 302. To this end, concurrently with receipt by Developer of the reimbursement contemplated by Section 303.1, the Developer shall execute and cause the Developer Parties to execute such documentation as may be reasonably required by Agency to confirm and evidence such ownership. 302.5 Agency Executive Director Approval. Whenever Agency approval is required under this Section 302, such approval may be by the Agency Executive Director or his or her designee. 303. Land Use Approvals. Before commencement of construction of any Phase of the Developer Improvements or other works of improvement pursuant to this Agreement, the Developer shall, at its own expense, use its commercially reasonable efforts to secure or cause to be secured any and all land use and other entitlements, permits and approvals which may be required for such Phase of the Developer Improvements by the City or any other governmental agency affected by such construction or work ("Land Use Approvals"). The Agency will, upon DOCSOC11400673v 141200272-OOOI 30 request, provide reasonable assistance to the Developer in the Developer's pursuit of such entitlements, permits and approvals. If the Developer is unable to obtain any Land Use Approvals for a Phase of the Developer Improvements, the Developer may terminate its rights obligations under this Agreement with respect to such Phase. The Developer shall, without limitation, apply for and secure all permits and pay for all fees required by the City, County of Orange, and other governmental agencies with jurisdiction over the Site or the development thereof. Developer acknowledges and agrees that the execution of this Agreement does not constitute the granting of or a commitment to grant any required land use permits, entitlements or approvals by the Agency or the City. 343.1 California Environmental Quality Act. The Agency and the Developer acknowledge and agree that the Agency is solely responsible for undertaking to completion, at its sole cost and expense, any environmental studies and documents required pursuant to the California Environmental Quality Act ("CEQA"). Subject to a determination by the parties as to whether or not to proceed with compliance with CEQA, or terminate further efforts regarding the "Project" identified in such CEQA compliance, Agency shall duly file (and/or shall cause City to duly file) a Notice of Determination and/or Notice of Exemption pursuant to the requirements of CEQA within five days after the date of Agency and City approval of this Agreement. The Agency hereby agrees that, if any challenge to completion of the requirements of CEQA delays or prohibits Developer from initially applying for financing for Phase R-1 or R-2 of the Project (including, without limitation, a reservation of Tax Credits) beyond February 1, 2012, or delays prohibits Developer from commencing development of Phase FS beyond February 1, 2012, then the Developer shall be entitled to terminate this Agreement as to those Phases for which financing applications or development is prevented or delayed as set forth herein and, upon any such termination, the Agency shall reimburse Developer for its Third Party Costs within sixty (60) days of submission of documentation to the Agency supporting such Third Party Costs. 303.2 Lot Merger. On or prior to December 31, 2010 with respect to Phase R-1 and on or prior to the date on which Developer applies for Tax Credits with respect to Phase R-2, the Agency shall cause a lot merger pursuant to Santa Ana Municipal Code Sections 34-366 through 34-377 or other Subdivision Map Act compliance so as to combine all of the applicable parcels of the applicable Phase into a single parcel. 304. Time for Commencement and Completion of Construction. The Developer shall commence construction pursuant to validly issued building permits with respect to the Rental Portion of the Project on or before thirty (30) days after the Closing for the applicable Phase and shall complete construction of the Developer Improvements for the applicable Phase of the Rental Portion of the Project on or before twenty four (24) months following commencement. For Phase FS, grading on all Portions or Phases of Phase FS will commence within 30 days of the Conveyance of the first Portion or Phase of Phase FS. Construction of the Developer Improvements pursuant to validly issued building permits will commence within ninety (90) days of Conveyance of the first Portion or Phase of Phase FS, and within 30 days after Conveyance of subsequent Portions or Phases of Phase FS. Completion of all construction shall occur on or before twenty-four (24) months after commencement of construction on the first Portion or Phase of Phase FS.. 31 D OC S O G 1400673 v 14!200272-0001 305. Development Obligations. 305.1 Cost of Construction. All of the costs of the planning, design, development and construction of the Developer Improvements shall be borne solely by the Developer. 305.2 Public Art Fee. Developer will provide public art on Site or in the nearby vicinity at cost of not less than one-half percent (.5%) of the building permit valuation for Phases R-I and R-2 ('Public Art Amount"). The Agency and community representatives identified by the Agency will identify the locations and the local artistic resources available to provide such public art. If and to the extent less than the Public Art Amount is expended, this difference will be paid to the Agency as a fee. 305.3 Provision of Child Care Facilities. Upon issuance of a final certificate of occupancy for the proposed approximately 3000 square foot community center to be located within Phase R-1, Developer will cause up to 1000 square feet on unimproved space within such community center to be available at no cost for a child care facility at the Site (the "Child Care Facility"); provided, however, if a suitable day care provider is not identified within six (6) months of issuance of a final certificate of occupancy for the Child Care Facility, Developer's obligations under this Section 305.3 shall terminate. The Developer shall coordinate with the Agency and community representatives designated by the Agency to identify a qualified day care provider. Developer makes no representation or warranty that such space is fit for any purpose, including, without limitation, the Child Care Facility. The Child Care Facility will be operated by a child care provider approved by Developer in its sole and absolute discretion pursuant to a lease which will also be subject to Developer's approval in it is sole and absolute discretion. Developer shall have no liability or obligation with respect to the identification of a child care provider or for the services provided at the Child Care Facility. 305.4 Retail Space. The Developer will construct and offer commercial retail space of approximately fifteen hundred (1500) square feet of gross leasable area within Phase R-1 to a tenant reasonably acceptable to Developer for rent at less than market value so as to provide an opportunity, first to residents of the Station District and second to residents of the City, to provide neighborhood serving retail at affordable rents. The Agency and community representatives designated by the Agency will assist in coordinating Developer's efforts in this regard. In the event that the parties are unable to locate such tenant within ninety (90) days from the issuance of a temporary certificate of occupancy for such retail space, then Developer is no longer obligated under this Section 305.4. 306. Insurance Requirements. The Developer shall secure from a company or companies licensed to conduct insurance business in the State of California, pay for, and maintain in full force and effect from and after the Closing for each Phase, and continuing for the duration of Affordability Period (except as provided in Section 306.3 hereof), insurance as required herein for such Phase, issued by an "A: VI" or better rated insurance carrier as rated by A.M. Best Company. The Developer shall furnish certificates of insurance and endorsements to the Agency prior to the applicable Closing and shall furnish complete copies of such policy or policies upon request by the Agency. 32 DOCSOC11400673v 141200272-0001 306.1 Minimum Coverage/Endorsements. Notwithstanding any inconsistent statement in the policy or any subsequent endorsement attached hereto, the protection afforded by these policies shall be written on an occurrence basis in which the Agency, City, and their respective elected and appointed officials, officers, employees, agents and representatives (together, "Additional Insureds") are named as additional insureds on all coverage, except for workers' compensation coverage, and shall: (a) Name Additional Insureds (from above) as additional insureds on a Commercial General Liability ("CGL") policy; (b) Include an endorsement to the CGL policy naming the Additional Insureds as additional insureds, and said endorsement shall be delivered to the Agency Executive Director prior to and as an Agency's Condition Precedent (and maintained as required herein); (c) Provide a combined single limit of broad form commercial general liability insurance in the amount of Two Million Dollars ($2,000,000) per occurrence, which will be considered equivalent to the required minimum limits, and such insurance shall (i) be written on an occurrence form, (ii) be written with a primary policy form with limits of not less than $1,000,000 per occurrence; (iii) be written with one or more excess layers to bring the total of primary and excess coverage limits to not less than $2,000,000 per occurrence, (iv) not be written with a deductible greater than $25,000 per occurrence, (v) contain a waiver of subrogation in favor of the Agency; (d) Provide primary automobile liability insurance for owned, non-owned, and hired vehicles, as applicable to, or for any use related to, the Project, in an amount not less than One Million Dollars ($1,000,000) combined single limit, with excess insurance coverage to bring the total amount of automobile liability insurance coverage to an amount not less than Two Million Dollars ($2,000,000) per accident for bodily injury and property damage; (e) Bear an endorsement or shall have attached a rider providing that Agency shall be notified not less than thirty (30) days before any expiration, cancellation, or non-renewal of such policy or policies, and shall be notified not less than ten (10) days after any event of nonpayment of premium; and (f) Developer shall also file with Agency the following signed certification: "I am aware of, and will comply with, Section 3700 of the Labor Code, requiring every employer to be insured against liability of Workers' Compensation or to undertake self-insurance before commencing any of the work." Developer shall comply with Sections 3700 and 3800 of the Labor Code by securing, paying for and maintaining in full force and effect from and after the Closing, and continuing for the duration of the Affordability Period, complete workers' compensation insurance, to statutory limits, with employers liability limits not less than One Million Dollars 33 DO CSOC11400673 v 14200272-0001 ($1,000,000) per occurrence, and shall furnish a Certificate of Insurance to the Agency before the commencement of construction. All Additional Insureds shall not be responsible for any claims in law or equity occasioned by the failure of the Developer to comply with this Section 306.1. Every workers' compensation insurance policy shall bear an endorsement or shall have attached a rider providing that, in the event of expiration or proposed cancellation of such policy for any reason whatsoever, the Agency shall be notified, giving the Developer a sufficient time to comply with applicable law, but in no event less than thirty (30) days before such expiration, cancellation, or reduction in coverage is effective or ten (10) days in the event of nonpayment of premium. (g) Should any of the insurance coverage required here be written with an annual aggregate such aggregate shall be disclosed in writing to the Agency. (h) For all insurance required under this Section 306.1, the Agency shall have the right, at every five (5) year period, to review the types and limits of insurance coverage required herein and to make reasonable adjustments, provided that such types and limits shall not exceed that typically carried by the owner and operator of a comparable affordable housing apartment complex, of approximately the same size, in Orange County, California, based on reasonable research and investigation by the Agency. 306.2 Property Insurance. Commencing upon the Closing for each Phase and continuing for the duration of the Affordability Period with respect to such Phase, Developer shall secure, maintain, and pay for the following all-risk Property Insurance; provided, however, in the case of Builder's Risk insurance where Developer is not the general contractor, Developer may cause the required builder's risk insurance to be secured, maintained, and paid for by the general contractor: (a) Prior to the start of construction and continuing until the completion of construction (the latter of final acceptance of the Project or issuance of the final certificate of occupancy for the Project): all-risk Builder's Risk (course of construction) insurance coverage in an amount equal to the full cost of the hard construction costs of the Project. Such insurance shall cover, at a minimum: all work, materials, and equipment to be incorporated into the Project; the Project during construction; the completed Project until such time as it is accepted by the Agency; and storage and transportation risks. Such insurance shall protect/insure the interests of the Developer/owner and all contractor(s), and all subcontractors, as each of their interests may appear. If such insurance includes an exclusion for "design error," such exclusion shall only be for the object or portion which failed. Such insurance shall include an insurer's waiver of subrogation in favor of each protected/insured party thereunder and the Agency. The Agency shall be named as an additional loss payee, as its interests may appear, with a loss payable endorsement, which shall be delivered to the Agency prior to the start of construction. (b) Commencing with the completion of construction and continuing for the duration of the Affordability Period: (a) all-risk physical damage insurance coverage, on an all-risk basis, covering all insurable structures and equipment, including coverage for building code changes, in an amount not less than 100% of the replacement cost of the total values at risk, which shall be adjusted for increased costs of construction and replacement on an annual basis, 34 DOCSOC /1400673v]4/200272-0401 to protect against loss of, damage to, or destruction of the Project; such insurance shall not contain a coinsurance clause; (b) business interruption and extra expense insurance to protect the Developer and all Additional insureds covering loss of revenues and/or extra expense incurred by reason of the total or partial suspension or delay of, or interruption in, the operation of the Project, or any portion thereof, caused by loss or damage to or destruction of any part of the insurable real property structures or equipment as a result of the perils insured against under such all-risk property insurance, covering a period of suspension, delay or interruption of at least twelve (12) calendar months, in an amount not less than the amount required to cover such business interruption and/or extra expense loss during any such period; such insurance shall not contain a deductible in an amount in excess of a thirty (30) day period; and (c) as applicable, boiler and machinery insurance in the aggregate amount of the full replacement value of the equipment typically covered by such insurance; such insurance shall be extended to include business interruption/extra expense coverage, as described above, provided, however, that the limits of coverage shall be not less than ninety (90) days instead of twelve (12) months. On the coverage required under this subparagraph 306.2(b), all Additional Insureds shall be named as an additional loss payee, as their interests may appear, with a lenders loss payable endorsement whenever possible, and if not attainable for Additional Insureds other than Agency, then a loss payable endorsement may be utilized, which shall be delivered to the Agency at the completion of construction and prior to the expiration of the builder's risk coverage required herein. (c) For all insurance required under this Section 306.2, said polices shall provide, by endorsement, that they will not be cancelled or non-renewed without at least thirty (30) days prior written notice to the Agency, except in the event of non-payment of premium which shall provide for at least ten (10) days prior written notice to the Agency. 306.3 Applicability to For-Sale Portion of the Project. The insurance provisions and requirements as set forth in this Section 306 shall apply to both the Rental Portion of the Project and the For-Sale Portion of the Project; provided, however, that notwithstanding any provision or requirement of this Section 306, the Developer shall have no obligation to maintain any form of insurance with respect to any Housing Unit (including any Affordable For- Sale Unit) located within the For-Sale Portion of the Project upon the sale of such Housing Unit to a third-party buyer. Upon the sale of the last Housing Unit located within the For-Sale Portion of the Project, the Developer shall have no further obligation to maintain any insurance with respect to the For-Sale Portion of the Development that would otherwise be required pursuant to this Section 306. 307. Indemnity 307.1 Developer Indemnity. Developer shall indemnify, defend and hold harmless Agency and City, their respective officers, agents, employees and volunteers from and against any and all loss or damage, expenses, injuries, death to any person, damage to real or personal property, claim, demand, suit, action, judgment, settlement, reasonable attorney's fees, costs, or proceeding of any kind arising out of Developer's actions and obligations pursuant to this Agreement, Developer's implementation of this Agreement, Developer's securing of financing, design development drawings, the engineering, construction, reconstruction, structural integrity of the Project, maintenance of Project, operation and subsequent sale of the Project, including but not limited to: 35 DOCSOG 1400673 14/200272.0001 (a) latent material defects in construction of the Project; (b) any construction defect in the Project; (c) personal injury, including death, of the employees, agents, officers, and/or volunteers of Developer, Developer Parties, and/or any subcontractors, independent contractors, partners, and/or subsidiaries or third parties in connection with the Project; (d) property damage claims of the employees, agents, officers, and/or volunteers of Developer, Developer Parties, and/or any subcontractors, independent contractors, partners, and/or subsidiaries or third parties in connection with the Project; (e) delay in construction of the Project beyond the dates set forth herein and the Schedule of Performance and subject to farce majeure; and (f) the failure to make required real estate disclosures to subsequent buyers of homes on Phase FS. Developer's obligation to indemnify as set forth in this Agreement shall extend to loss or damage, expenses, injuries, death to any person, damage to real or personal property, claim, demand, suit, action, judgment, settlement, reasonable attorney's fees, costs, or proceedings of any kind that are discovered or accrue, either before or after the termination of this Agreement. Notwithstanding the foregoing, Developer shall not be required to indemnify and hold harmless Agency or the City for liability attributable to the active negligence of, intentional misconduct by, or breach of this Agreement by Agency or the City or any of their boards, officers, employees, representatives or agents. 307.2 Agency Indemnity. Agency shall indemnify, defend and hold harmless Developer and its officers, agents, and employees from and against any and all loss or damage, expenses, injuries, death to any person, damage to real or personal property, claim, demand, suit, action, judgment, settlement, reasonable attorney's fees, costs, or proceeding of any kind arising out of Agency's and City's actions or omissions pursuant to this Agreement, Agency's performance of its obligations under this Agreement, and the negligence of, intentional misconduct by, or breach of this Agreement by Agency or the City or any of their boards, officers, employees, representatives or agents, including but not limited to: (a) Agency's relocation of the residents and occupants of the Site. (b) The entry upon the Site after Closing by Agency or City or their respective officers, agents, employees and volunteers. (c) Agency's acquisition and management of the Site prior to the Closing for the applicable Phase of the Site. Agency's obligation to indemnify as set forth in this Agreement shall extend to loss or damage, expenses, injuries, death to any person, damage to real or personal property, 36 DOCSOCI 1400673v] 4/200272-0001 claim, demand, suit, action, judgment, settlement, reasonable attorney's fees, costs, or proceedings of any kind that are discovered or accrue, either before or after the termination of this Agreement. Notwithstanding the foregoing, Agency shall not be required to indemnify and hold harmless Developer for liability attributable to the active negligence of, intentional misconduct by, or breach of this Agreement by Developer or its officers, employees, representatives or agents; nor shall the Agency indemnify and hold Developer harmless with respect to any action challenging the validity of this Agreement or any other actions of Agency in connection with approval of this Agreement, including without limitation, CEQA Challenges. 308. Rights of Access. Prior to the issuance of a Release of Construction Covenants with respect to each Phase (as specified in Section 313 of this Agreement), for purposes of assuring compliance with this Agreement, representatives of the Agency shall have the right of reasonable access to any Phase of the Site that has not yet received a Release of Construction Covenants, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Developer Improvements so long as the Agency representatives comply with all safety rules. In exercising such entry right, the Agency shall not interfere with or disrupt the Developer's construction activities. The Agency (or its representatives) shall, except in emergency situations, notify the Developer prior to exercising its rights pursuant to this Section 308, with a minimum 24 hours notice. In such event, the Agency shall defend, indemnify and hold the Developer, its members, partners, employees, and officers, harmless with respect to any claim, demands, damages, defense costs, liability or expense (including, without limitation, reasonable attorneys' fees and court costs) of any kind or nature relating to the Agency's exercise of its right of access pursuant to this Section 308. 349. Nondiscrimination in Employment. Developer certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies, and all subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, sexual orientation, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 62I , et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Section 12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and all other anti-discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. The Developer shall allow representatives of the Agency access to its employment records related to this Agreement during regular business hours to verify compliance with these provisions when so requested by the Agency. 310. Taxes and Assessments. Except to the extent exempt therefrom, the Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on each Phase of DOCS001400673 v 141200272-0001 37 the Site attributable to periods subsequent to Closing for such Phase, subject to the Developer's right to contest in good faith any such taxes. Following the Closing for any Phase, the Developer shall remove or have removed any levy or attachment made on any Phase of the Site or any part thereof, or assure the satisfaction thereof within a reasonable time. The Developer may apply for property tax abatement from the payment of all property taxes or assessments during the period of its ownership on any interest in or to the Site or any part thereof. 311. Compliance with Laws. The Developer shall carry out the design, construction, development and operation of the Developer Improvements in conformity with all applicable laws, including all applicable state labor standards, City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City's Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq., and any other applicable Governmental Requirements. 311.1 Prevailing Wage Laws. Developer shall carry out the construction through completion of the Project and the overall development of the Site in conformity with all applicable federal, state and local labor laws and regulations, including, without limitation, if applicable, the requirements to pay prevailing wages under federal law (the Davis-Bacon Act, 40 U.S.C. Section 3141, et seq., and the regulations promulgated thereunder set forth at 29 CFR Part 1 (collectively, "Davis-Bacon")) and California law (Labor Code Section 1720, et seq.). Notwithstanding the foregoing, (a) the Agency hereby acknowledges and agrees that nothing in this Agreement (or any of the documents entered into by the Agency and the Developer in connection with the transactions contemplated by this Agreement) is intended to impose on the Developer, contractually or otherwise, the obligation to pay prevailing wages under federal, state or local law, and (b) the Agency hereby represents and warrants to the Developer, its successors and assigns, that all funds used by the Agency in connection with this Agreement and the transactions contemplated hereby, including, without limitation, funds used and to be used by the Agency to acquire each and every component of the Site, funds used and to be used to pay for relocation and demolition of existing improvements on the Site, funds used and to be used to fund the Agency Loans and funds used and to be used to fund Homebuyer Assistance Loans, solely constitute moneys from a Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the California Health and Safety Code, all within the meaning of Section 1720(c)(4) of the California Labor Code. The Agency understands and agrees that the Developer will materially rely on the foregoing warranties in its determination as to whether prevailing wages are required pursuant to California law or Davis-Bacon. The parties acknowledge that a financing structure utilizing certain federal and/or state funding sources and financing scenarios not otherwise identified herein may trigger compliance with applicable state and federal prevailing wage laws and regulations. The applicability of federal, 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 the Agency Executive Director. The Developer shall be solely responsible, expressly or impliedly and legally and financially, for determining and effectuating compliance with all applicable federal, state and local public works requirements, prevailing wage laws, labor laws and standards, and, except as 38 HOC S OC/ 1400673 v 14120027 2.0001 provided above, neither the Agency nor City makes 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. The Developer expressly, knowingly and voluntarily acknowledges and agrees that neither the Agency nor City have previously represented to the Developer or to any representative, agent or Affiliate of Developer, or any contractor(s) or any 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 construction undertaken pursuant to this Agreement is (or is not) a "public work," as defined in Section 1720 of the Labor Code or under Davis-Bacon. The Developer knowingly and voluntarily agrees that the Developer shall have the obligation to provide any and all disclosures or identifications as required by Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation. If and only if the representation and warranty provided by the Agency to the Developer in this Section 311.1 remains true, correct and complete in every respect, the Developer shall Indemnify, protect, pay for, defend and hold harmless the Agency, the City and their respective officers, employees, agents and representatives from and against any and all loss, liability, damage, claim, cost, expense and/or "increased costs" (including reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction (as defined by applicable law) and/or operation of the Project, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (i) the noncompliance by the Developer with any applicable local, state and/or federal law or regulation, including, without limitation, any applicable federal and/or state labor laws or regulations (including, without limitation, if applicable, the requirement to pay state and/or federal prevailing wages); (ii) the implementation of Section 1781 of the Labor Code and/or of Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation; and/or (iii) failure by the Developer to provide any required disclosure or identification as required by Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation. If and only if the representation and warranty provided by the Agency to the Developer in this Section 311.1 remains true, correct and complete in every respect, it is agreed by the parties that, in connection with the development and construction (as defined by applicable law or regulation) of the Project, including, without limitation, any and all public works (as defined by applicable law or regulation), the Developer shall bear all risks of payment or non-payment of prevailing wages under applicable federal, state and local law or regulation and/or the implementation of Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, and/or any other similar law or regulation. "Increased costs," as used in this Section 311.1, shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be amended from time to time. The foregoing indemnity shall survive termination of this Agreement and shall continue after completion of the construction and development of the Project by the Developer. 312. Liens and Stop Notices. From and after the Closing for a particular Phase and during the construction of such Phase, the Developer shall use all reasonable efforts to not allow to be placed on such Phase or any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting any Phase of the Developer Improvements or any Phase of the Site or any portion thereof by reason of Developer's predevelopment, development and/or 39 DOCSOC/ 1400673v 14/200272-0001 construction activity, the Developer shall within thirty (30) days of such recording or service or within five (5) days of the Agency's demand whichever last occurs: (a) pay and discharge the same; or (b) affect the release thereof by recording and delivering to the Agency a surety bond in sufficient form and amount, or otherwise; or (c) provide the Agency with other assurance which the Agency deems, in its reasonable discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of Agency from the effect of such lien or bonded stop notice. 313. Release of Construction Covenants. Promptly after completion of any Phase of the Developer Improvements in conformity with this Agreement, the Agency shall furnish the Developer with a "Release of Construction Covenants" for such Phase, substantially in the form of Attachment No. 6 hereto which is incorporated herein by reference. The Agency shall not unreasonably withhold any such Release of Construction Covenants. The Release of Construction Covenants shall be a conclusive determination of satisfactory completion of the applicable Phase of the Developer Improvements and the Release of Construction Covenants shall so state. Any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in such Phase of the Site shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement except for those continuing covenants as set forth in Section 400 of this Agreement as they relate to such Phase. If the Agency refuses or fails to furnish a Release of Construction Covenants, after written request from the Developer, the Agency shall, within thirty (30) days of written request therefor, provide the Developer with a written statement of the reasons the Agency refused or failed to famish such Release of Construction Covenants. The statement shall also contain the Agency's opinion of the actions the Developer must take to obtain such Release of Construction Covenants. If the Agency shall have failed to provide such written statement within such thirty (30) day period, the Developer shall renew its request and if the Agency fails to furnish either such Release of Construction Covenants or a written statement of reasons that such Release of Construction Covenants will not be provided within an additional period of ten (10) days after renewal of the request by Developer, the Developer's construction covenants shall conclusively be deemed satisfied with respect to such Phase as if the Agency had issued the Release of Construction Covenants. A Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the Developer Improvements, or any part thereof. The Release of Construction Covenants is not a notice of completion as referred to in Section 3093 of the California Civil Code. 314. Agency Financial Assistance. 314.1 Agency Loans. Based on the Budget, Agency hereby agrees to loan to the Developer, subject to the terms and conditions set forth within this Agreement and the documents and instruments executed by the Developer in connection with this transaction, the 40 DOCSOG 1400673v! 4!200272-0001 amount of Ten Million, Eight Hundred Thousand Dollars ($10,800,000) for Phase R-1 (the "Phase R-1 Agency Loan") and Four Million, Seven Hundred Seventy Thousand Dollars ($4,770, 000) for Phase R-2 (the "Phase R-2 Agency Loan") and One Million, Five Hundred Thousand Dollars ($1,500,000) for Phase FS (the "Phase FS Agency Loan"). The Phase R-1 Agency Loan, the Phase R-2 Agency Loan, and the Phase FS Agency Loan shall be adjusted upward and/or downward if and to the extent the Total Development Costs set forth in the Revised Budget varies from the Total Development Cost set forth in the Budget. The Phase R-1 Loan, Phase R-2 Loan and the Phase FS Agency Loan are sometimes collectively referred to herein as the "Agency Loans." 314.2 Repayment of the Agency Loans. The Phase R-1 Agency Loan, the Phase R-2 Agency Loan and the FS Agency Loan shall each be evidenced by a separate Promissory Note, and the Developer's obligation to repay each such Agency Loan shall be set forth in such Promissory Notes (the "Phase R-1 Promissory Note," "Phase R-2 Promissory Note" and the Phase FS Promissory Note or, collectively the "Promissory Notes"). The Agency Loans shall be funded solely from moneys from a Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the California Health and Safety Code, all within the meaning of Section 1720(c)(4) of the California Labor Code. Capitalized terms in this Section 314.2 not defined herein are defined in the Promissory Note. (a) Phase R-1 Promissory Note and Phase R-2 Promissory Note Payable From Residual Receipts. The Phase R-1 Promissory Note and Phase R-2 Promissory Note shall be payable from fifty percent (50%) of the "Residual Receipts" of the Phase of the Rental Portion of the Project to which such Promissory Note relates, after payment of (i) Operating Expenses, and (ii) Debt Service allocable to such Phase of the Rental Portion, until such Promissory Note has been paid in full; provided, however, that if such calculation results in a negative number for any given year, Residual Receipts shall be zero for that year. In the event that the Developer obtains other approved financing that also requires payment from Residual Receipts, the Residual Receipts shall be allocated to repayment of both (or all) loans in an amount proportionate to the relative amount of such loans, so that each soft loan receives a proportional share of a total of no more than fifty percent (50%) of the Residual Receipts for such Phase of the Rental Portion of the Project in each year. (b) Phase FS Promissory Note. The Phase FS Promissory Note is payable after close of escrow of all of the For-Sale Units from twenty-five percent (25%) of the net proceeds of such sales after Developer has received a return of twelve percent (12%) on costs, as more particularly set forth in the Phase FS Promissory Note. In the event that such amount is not sufficient to pay the full amount of the Phase FS Promissory Note, the remaining balance of the Phase FS Promissory Note shall be reduced to zero upon the Developer's payment of the foregoing amount to the Agency. 314.3 Reporting Requirements for the Rental Portion of the Project. With respect to each Phase of the Rental Portion, the Developer shall annually, on or before April 30th of each year, commencing in the year after the issuance of the first certificate of occupancy for such Phase, submit to the Agency an audited financial statement and a Residual Receipts Report, in the form attached hereto as Attachment No. 10 and incorporated herein, which shall provide the basis for the Developer's payment of Residual Receipts to the Agency with respect to such DOCSOGI 400673v14/200272-0001 41 Phase. The Agency Executive Director may waive the requirements of this Section 314.3 in the event the Developer timely submits to the Agency a report prepared for any other federal, state or local government agency that contains the information required by Attachment No. 10. The Residual Receipts Report, or the report accepted by the Executive Director in lieu of the Residual Receipts Report, must be prepared or audited by an entity independent of the Developer in order to satisfy the requirements of this Section 314.3. 314.4 Reporting Requirements for the For-Sale Portion of the Project. Within one hundred twenty (120) days after the close of escrow of the sale of the last For-Sale Unit the Developer shall submit to the Agency a financial statement setting forth the Profit Sharing Amount, and the Net Profit, Gross Sales Proceeds, For-Sale Units Development Cost, and For Sale Units Development Profit upon which the Profit Sharing Amount has been calculated (as those terms are defined in the Phase FS Promissory Note. 314.5 Security of Agency Loan. Each Promissory Note shall be secured by a deed of trust to be recorded as an encumbrance against the applicable Phase to which such Promissory Note relates, which deed of trust shall be substantially in the form attached hereto as Attachment No. 9 attached hereto, which is incorporated herein (the "Agency Deed of Trust"). The Agency acknowledges that it will be necessary to subordinate each Agency Deed of Trust to deeds of trust securing other sources of financing obtained by the Developer. The Agency Executive Director is authorized to execute any and all documents necessary in order to subordinate each Agency Deed of Trust, but only if and to the extent such subordination is reasonably necessary. 314.6 Disbursement of the Agency Loan. The proceeds of each Agency Loan shall be disbursed for hard and soft costs of construction for the applicable Phase to which such Agency Loan relates, and shall be disbursed to Developer's institutional construction lender for such Phase pro rata with the proceeds of the construction loan (subject to the approval of such institutional construction lender) at such time as Agency and such institutional construction lender approves such disbursement upon completion of a line item under the Budget. 315. Homebuyer Assistance. 315.1 Homebuyer Assistance Loan. The Agency hereby agrees to loan to each qualified Moderate Income Homebuyer of an Affordable For-Sale Unit the amount of Thirty Thousand Dollars ($30,000) (each, a "Homebuyer Assistance Loan"), subject to the terms and conditions set forth in this Agreement, and subject further to the terms and conditions set forth within the documents and instruments executed by each Homebuyer, including the Homebuyer Loan Agreement, all in compliance with applicable laws and regulations. The Agency shall fund each Homebuyer Assistance Loan solely from moneys from a Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the California Health and Safety Code, all within the meaning of Section 1720(c)(4) of the California Labor Code. 315.2 Repayment of Homebuyer Assistance Loan. Each Homebuyer's obligation to repay the Homebuyer Assistance Loan shall be set forth in a promissory note substantially in the form attached to the Homebuyer Loan Agreement. The Homebuyer Assistance Loan shall not accrue interest until and unless an event of acceleration occurs under 42 DOCSOM 400673v 141200272-0001 the terms of the Homebuyer Loan Agreement, in which case an interest rate or equity share amount shall apply as provided in the Homebuyer Loan Agreement. 315.3 Security for Homebuyer Assistance Loan. Each promissory note evidencing a Homebuyer Assistance Loan shall be secured by a deed of trust to be recorded as an encumbrance to the applicable Affordable For-Sale Unit, substantially in the form attached to the Homebuyer Loan Agreement. The priority of such encumbrance shall be junior and subordinate only to the approved first lien as further provided in Section 315.5. 315.4 Disbursement of Homebuyer Assistance Loan; Conditions Precedent Thereto; Developer's Marketing, Disclosure and Housing Counseling. In connection with the first sale of each Affordable For-Sale Unit, the full amount of the proceeds of each Homebuyer Assistance Loan shall be disbursed by the Agency into the escrow established by the Developer and the Homebuyer for such initial sale and conveyance of each applicable For-Sale Unit to the Homebuyer. Disbursement shall occur on demand of the escrow officer, but the Agency shall be provided not less than ten (10) days notice of the estimated closing date, and all conditions precedent to the Agency's obligation to disburse such monies shall have been satisfied by Developer (and the applicable Homebuyer) prior to escrow officer's demand. The proceeds shall only be expended and paid to fund a portion of the applicable Homebuyer's costs of acquisition of the Affordable For-Sale Unit in order to make such unit available at an Affordable Housing Cost. (a) The Agency's obligation to disburse proceeds of the Homebuyer Assistance Loan is expressly conditioned upon and will occur as soon as practicable after each Homebuyer's execution and delivery of the Homebuyer Loan Agreement (including any other documents required thereunder) and in conformity with applicable laws and regulations and all submittals provided thereunder, and such disbursement shall occur concurrently with the recordation of all documents required to be recorded at closing pursuant to the Homebuyer Loan Agreement and attachments thereto, and close of escrow for disposition of such Affordable For- Sale Unit pursuant to the terms hereof. (b) Developer shall be responsible at its sole cost and expense for marketing, housing counseling, disclosures, and sale for and related directly or indirectly to each and all Affordable For-Sale Units to each and all prospective Homebuyers. (i) In connection therewith, Developer shall in any marketing effort relative to the Affordable For-Sale Units fully disclose its obligation to provide the Affordable For-Sale Units and each prospective Homebuyer shall be provided a true and complete copy of the form of the Homebuyer Loan Agreement, and all attachments thereto. (ii) Developer shall cause to be provided to each prospective Homebuyer one-on-one housing counseling couceming such prospective Homebuyer's potential purchase of an Affordable For-Sale Unit, in particular the provisions relating to the Ion-term affordability covenants and restrictions on resale applicable to such Affordable For-Sale Unit. The one-on-one counseling shall be videotaped and a copy of the videotape shall be provided to Agency staff on a DVD within ten (10) days after the counseling session. DOCS001400673 v 141200272-0001 43 (iii) The form of Developer's purchase and sale agreement, marketing materials, draft disclosure documents, and scope/personnel/method for housing counseling to and for prospective Homebuyers of Affordable For-Sale Units shall be provided to the Agency Executive Director for review and approval prior to the issuance of the first building permit for the Project. (iv) In connection with the Developer's marketing efforts and its obligation to provide housing counseling and appropriate disclosure to prospective Homebuyers of Affordable For-Sale Units as described in subsection above, the Agency acknowledges that it will assist the Developer in a limited role in that the Agency staff will be reasonably available for reasonably limited times to receive and answer questions of prospective Homebuyers, but only as to those prospective Homebuyers who have been previously screened and evaluated by the Developer (or its agent) as a Moderate Income Household meeting the criteria established herein as potentially qualified to purchase an Affordable For-Sale Unit as well as reviewed preliminarily as to and regarding creditworthiness and eligibility to apply for and obtain a first lien mortgage to purchase an Affordable For-Sale Unit. Nothing in the foregoing statement regarding the Agency's limited role in housing counseling shall obligate, involve, or require Agency (or City) or any of their staff, consultants, or counsel to assist in the marketing, housing counseling, disclosure, or sale of any For-Sale Units to any prospective or actual buyer, or selection of such buyer, which is and shall remain the Developer's sole legal, contractual, and Financial responsibility. (c) The sale of each Affordable For-Sale Unit by the Developer to an eligible Homebuyer shall be subject to the satisfaction, or waiver by the Agency Executive Director of the following conditions precedent numbered (i) through (x) inclusive: (i) Association CC&Rs. Pursuant to the requirements of Section 402(b) of this Agreement, the Developer shall have (or caused to have) prepared, approved, executed, formed, and caused to be recorded the Declaration of Covenants, Conditions and Restrictions for the homeowners association (the "Association") for the For-Sale Portion of the Project (the "Association CC&Rs") prior to issuance of the first certificate of occupancy (temporary or permanent) for any Housing Unit (whether or not such Housing Unit is restricted pursuant to the terms of this Agreement) within the For-Sale Portion of the Project. (ii) Affordable For-Sale Unit Completed. The applicable Affordable For-Sale Unit shall have been completed, as evidenced by issuance of the certificate of occupancy for such Affordable For-Sale Unit. (iii) Escrow. The Homebuyer's purchase of the Affordable For- Sale Unit shall be transacted through an escrow with an escrow holder satisfactory to the Developer and Agency Executive Director. Costs for such escrow shall be charged to and deducted from the proceeds of the Homebuyer Assistance Loan. (iv) Escrow Instructions. The Agency Executive Director (or his or her designee) shall have approved the instructions for the Homebuyer's escrow. It is anticipated that the Agency Executive Director (or his or her designee) will approve such instructions within fifteen (15) days after receipt of a complete package of escrow instructions DOCSOG I400673v 141200272-0001 44 and sufficient evidence indicating that the selected Homebuyer satisfies the requirements of this Agreement. (v) Homebuyer Loan Agreement. The Agency and the Homebuyer shall have entered into a Homebuyer Loan Agreement and all related loan documents and such Homebuyer Loan Agreement and such other documents shall have been duly executed, attested, notarized and delivered to the escrow holder with appropriate title and escrow instructions and such Homebuyer Assistance Loan shall be ready to close (subject to the Agency funding the proceeds of such Homebuyer Assistance Loan into escrow) concurrent with the Developer's escrow to sell the Affordable For-Sale Unit to the Homebuyer. (vi) Insurance. The Agency shall have received sufficient evidence of the issuance of a homeowner's insurance policy with a guaranteed replacement provision for the Affordable For-Sale Unit and a lender's loss payable endorsement in its favor. (vii) Affordability and Intone Requirements. The Agency Executive Director shall be satisfied that the Homebuyer meets the applicable Moderate Income requirements of the CRL and that the Monthly Housing Cost for the For-Sale Unit is no greater than an Affordable Housing Cost. (viii) Representations and Warranties. The representations and warranties of the Developer contained in this Agreement shall be correct as of the close of each such escrow as though made on and as of that date, and the Agency Executive Director shall have received a certificate to that effect signed by the Developer. (ix) No Default. No Default by the Developer shall have occurred with respect to Phase FS, and no event shall have occurred with respect to Phase FS which, with the giving of notice or the passage of time or both, would constitute an Default by the Developer with respect to Phase FS. 315.5 Subordination. The deed of trust securing the Homebuyer's repayment of the Homebuyer Assistance Loan may be made subordinate only to the deed of trust to be held by the first lien lender that is approved by the Agency pursuant to the Homebuyer Loan Agreement. The deed of trust securing the Homebuyer's repayment of the Homebuyer Assistance Loan shall be subordinate to no other lien(s), except as provided in the Homebuyer Loan Agreement or as otherwise expressly approved in writing by the Agency Executive Director in his or her sole and absolute discretion. 315.6 Assumption. The Homebuyer Loan and Homebuyer Loan Agreement shall be assumable by eligible and qualified successors and assigns of the Homebuyer who are approved in writing by the Agency pursuant to the terms of the Homebuyer Loan Agreement. 316. Financing of the Developer Improvements. 316.1 Approval of Financing. As required herein and as one of Agency's Condition Precedent to each Closing, the Developer shall submit to the Agency Evidence of Construction Financing and Evidence of Permanent Financing for the Rental Portion of the Project for a Phase on or before the date set forth in the Schedule of Performance. The Agency DQCSOC /I400673v14/200272-0401 45 shall approve or disapprove such Evidence of Construction Financing and/or Evidence of Permanent Financing for the Rental Portion of the Project for such Phase within fifteen (15) days of receipt of a complete submission. Approval shall not be unreasonably withheld or conditioned. If the Agency shall disapprove any such Evidence of Construction Financing and/or Evidence of Permanent Financing for the Rental Portion of the Project, the Agency shall do so by Notice to the Developer stating the reasons for such disapproval and the Developer shall promptly obtain and submit to the Agency new Evidence of Construction Financing and/or Evidence of Permanent Financing for the Rental Portion of the Project for such Phase, as applicable. The Agency shall approve or disapprove such new Evidence of Construction Financing and/or Evidence of Permanent Financing for the Rental Portion of the Project in the same manner and within the same times established in this Section 316.1 for the approval or disapproval of the Evidence of Construction Financing and Evidence of Permanent Financing for the Rental Portion of the Project as initially submitted to the Agency. The Developer shall close the construction portion of the approved financing concurrently with the Closing for such Phase; provided that the closing of approved financing may be delayed pursuant to Section 507 of this Agreement. The parties understand and acknowledge that the Developer may propose the use of equity financing with no debt financing as its construction financing for Phase FS. 316.2 Tax Credit Equity. The following requirements must be satisfied in order for the equity financing for Tax Credit funding for each of Phase R-1 and Phase R-2 to be approved by the Agency pursuant to this Section 316: (a) The Developer shall use good faith efforts to solicit no less than two (2) competitive bids from Tax Credit Investors for each of Phase R-1 and Phase R-2 of the Project and shall have selected as the Investor Limited Partner for each Phase the investor offering overall the most beneficial rates and terms, as reasonably approved by the Agency Executive Director. The Developer shall submit complete documentation relating to each such competitive solicitation to the Agency, including true copies of the invitation to bidders and each full bid package submitted by bidding Tax Credit investors, in order to permit the Agency to determine that the Developer has selected its Investor Limited Partner for such Phase that has offered the most beneficial terms of financing and Tax Credit equity as required by this Agreement. All such documentation shall be submitted no less than forty-five (45) days prior to Closing for the applicable Phase. (b) The equity investment of the Investor Limited Partner(s) of the limited partnership for each of Phase R-l and Phase R-2 shall not be less than the approximate prevailing price for Tax Credits for similar developments at such time, taking into consideration all relevant factors such as timing of required payments and amount of the Tax Credits. (c) The identity of the Investor Limited Partner(s) shall be reasonably acceptable to the Agency. (d) Developer or its affiliates may receive a developer fee of up to the maximum amount permitted by TCAC for each of Phase R-1 and Phase R-2. Fifty percent (50%) of the Developer Fee for each of Phase R-1 and Phase R-2 may be disbursed only after and conditioned upon completion of the construction of such Phase, subject to Developer's eligibility for issuance by the Agency of the Release of Construction Covenants for such Phase. DOCSOG 1404673 v 141200272-4041 46 316.3 Required Submissions. In connection with each of Phase R-1 and Phase R-2, Developer shall submit the following documents as evidence of Tax Credit financing: (a) The Partnership Agreement or equivalent funding commitment letter for such Phase from the Investor Limited Partner(s) which demonstrates that Developer has sufficient funds and committed capital/equity for commencement through completion of construction of such Phase, and that such funds have been committed to construction of the Phase. (b) A copy of the preliminary reservation letter from TCAC for such Phase, notifying Developer that an allocation of Tax Credits has been reserved for the construction of such Phase of the Developer Improvements, and further documentation demonstrating that there have not been any material changes to the information provided by Developer in the application submitted to TCAC relative to such Phase (or documentation demonstrating that such material changes have been approved by TCAC), and that if there are material changes then such information will be provided to TCAC (and the Agency). 316.4 No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease-Back for Development. Mortgages, deeds of trust and sale/leaseback financing are to be permitted before completion of the construction of each Phase of the Developer Improvements only with the Agency's prior written approval, which shall not be unreasonably withheld or delayed, and only for the purpose of securing loans of funds to be used for financing the acquisition of such Phase, construction of such Phase of the Developer Improvements (including architecture, engineering, legal, and related direct costs as well as indirect costs) on or in connection with such Phase, permanent financing, and any other purposes necessary and appropriate in connection with development of such Phase under this Agreement, and only to the extent such financing is by a responsible financial lending institution, person or entity on commercially reasonable terms. The words "mortgage" and "trust deed" as used hereinafter shall include sale and lease-back. The Developer may enter into a conveyance for financing after the completion of such Phase of the Developer Improvements without the approval of the Agency. 316.5 Holder Not Obligated to Construct Developer Improvements. The holder of any mortgage or deed of trust authorized by this Agreement shall not be obligated by the provisions of this Agreement to construct or complete any Phase of the Developer Improvements or any portion thereof, or to guarantee such construction or completion; nor shall any covenant or any other provision in this Agreement be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site (or any Phase) to any uses or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 316.6 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by the Developer as provided herein, whenever the Agency may deliver any notice or demand to the Developer with respect to any breach or default by the Developer in completion of construction of the Developer Improvements, or any other default under this Agreement, the Agency shall at the same time deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement a 47 DOCSOC/1400673v 14/200272-0041 copy of such notice or demand. Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within thirty (30) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Developer Improvements (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement reasonably satisfactory to the Agency. The holder, in that event, must agree to complete, in the manner provided in this Agreement, the Developer Improvements. Any such holder properly completing the Developer Improvement shall be entitled, upon compliance with the requirements of Section 313 of this Agreement, to a Release of Construction Covenants. It is understood that a holder shall be deemed to have satisfied the thirty (30) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Site if and to the extent any such holder has within such thirty (30) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. 316.7 Failure of Holder to Complete Developer Improvements. In any case where, thirty (30) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site receives a notice from the Agency of a default by the Developer in completion of construction of any Phase of the Developer Improvements under this Agreement, and such holder has not exercised the option to construct as set forth in Section 316.6, or if it has exercised the option but has defaulted hereunder and failed to timely cure such default, the Agency may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust. If the ownership of the applicable Phase has vested in the holder, the Agency, if it so desires, shall be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: (a) The unpaid mortgage or deed of trust debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); (b) All expenses with respect to foreclosure including reasonable attorneys' fees; (c) The net expense, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent management of the Site; (d) The costs of any improvements made by such holder; (e) An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency; and 48 D OC S OG 1400673 v L 41200272.0001 (f) Any customary prepayment charges imposed by the lender pursuant to its loan documents and agreed to by the Developer. 316.8 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 the Developer prior to the completion of the construction of any of any Phase of the Developer Improvements or any part thereof, the Developer shall immediately deliver to the Agency a copy of any mortgage holder's notice of default and the Agency shall have the right but no obligation to cure the default if the Developer fails to cure within thirty (30) days after the Agency notifies the Developer of its intention to cure. In such event, the Agency shall be entitled to reimbursement from the 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 applicable Phase 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 316. 400. OPERATION OF THE PROJECT. 401. Provision of Extremely and Very Low Income Rental Housing-Rental Portion of the Project. 401.1 Number of Affordable Rental Units. Pursuant to this Agreement and the Regulatory Agreement, the Developer covenants and agrees to make available, restrict occupancy to, and rent the Rental Units at an affordable rent pursuant to Section 401.5 as follows: (a) Thirty-nine (39) of the two (2) bedroom Rental Units in Phase R-1 to Very Low Income Households at an Affordable Rent; twenty (20) of the two (2) bedroom Rental Units in Phase R-2 to Very Low Income Households at an Affordable Rent; (b) Eleven (11) of the two (2) bedroom Rental Units in Phase R-1 to Extremely Low Income Households at an Affordable Rent; five (5) of the two (2) bedroom Rental Units in Phase R-2 to Extremely Low Income Households at an Affordable Rent; (c) Nineteen (19) of the three (3) bedroom Rental Units in Phase R-I to Very Low Income Households at an Affordable Rent; nine (9) of the three (3) bedroom Rental Units in Phase R-2 to Very Low Income Households at an Affordable Rent; and (d) Four (4) of the three (3) bedroom Rental Units in Phase R-1 to Extremely Low Income Households at an Affordable Rent; three (3) of the three (3) bedroom Rental Units in Phase R-2 to Extremely Low Income Households at an Affordable Rent. 401.2 Duration of Affordability Requirements. The Rental Units shall be subject to the requirements of this Agreement for the later of (i) fifty-five (55) years from the date of the City's issuance of a certificate of occupancy for the applicable Phase or (ii) repayment in full of the Note. 401.3 Selection of Tenants. The Developer shall be responsible for the selection of tenants for the Rental Units in compliance with lawful and reasonable criteria, as set 49 DOCSOG 1400673v 141200272.0001 forth in the Regulatory Agreement and the Management Plan which is required to be submitted and approved by the Agency pursuant to Section 401.9. 401.4 Household Income Requirements. Following the initial lease-up of the Rental Units in each of Phase R-1 and Phase R-2, and annually thereafter, the Developer shall submit to the Agency, at the Developer's expense, a summary of the income, household size and rent payable by each of the tenants of the Rental Units of such Phase. At the Agency's request, the Developer shall also provide to the Agency completed income computation and certification forms, in a form reasonably acceptable to the Agency, for any such tenant or tenants. The Developer shall obtain, or shall cause to be obtained by the Property Manager, a certification from each household leasing a Rental Unit demonstrating that such household is a Very Low Income Household or Extremely Low Income Household, as applicable, and meets the eligibility requirements established for the Rental Unit. The Developer shall verify, or shall cause to be verified by the Property Manager, the income certification of the household. 401.5 Affordable Rent. The maximum Monthly Rent chargeable for the Rental Units shall be annually determined in accordance with the following requirements. The Monthly Rent for the Rental Units to be rented to Extremely Low Income Households shall not exceed the requirements of TCAC and the Monthly Rent for the Rental Units to be rented to Very Low Income Households shall not exceed the more restrictive of (i) TCAC or (ii) the amount set forth in Section 50053(b)(2) of the California Health and Safety Code. For purposes of this Agreement, "Monthly Rent" means the total of monthly payments charged to and paid by tenants for (a) use and occupancy of each Rental Unit and land and facilities associated therewith, (b) any separately charged fees or service charges assessed by the Developer which are required of all tenants, other than security deposits, (c) a reasonable allowance for an adequate level of service of utilities not included in (a) or (b) above, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuels, but not including telephone service, and (d) possessory interest, taxes or other fees or charges assessed for use of the land and facilities associated therewith by a public or private entity other than the Developer. In the event that all utility charges are paid by the landlord rather than the tenant, no utility allowance shall be deducted from the rent. "Monthly Rent" does not include optional payments by tenants for optional services provided by the Developer or the Property Manager. 401.6 Occupancy Limits. The maximum occupancy of the Rental Units shall not exceed more than such number of persons as is equal to the sum of the number of bedrooms in the unit, multiplied by two (2), plus one (1). For the two (2) bedroom units, the maximum occupancy shall not exceed five (5) persons. For the three (3) bedroom units, the maximum occupancy shall not exceed seven (7) persons. 401.7 Marketing Program. The Developer shall prepare and obtain Agency Executive Director's approval, which approval shall not be unreasonably withheld, of a marketing program for the leasing of the Rental Units within each Phase (the "Marketing Program"). The leasing of the Rental Units shall be marketed in accordance with the approved Marketing Program as the same may be amended from time to time with Agency Executive Director's prior written approval, which approval shall not unreasonably be withheld. The DOCSOC/1400573v 14/200272-0001 50 Developer shall provide the Agency with periodic reports with respect to the leasing of the Rental Units. The Marketing Program shall contain a Lottery and Wait List/Preference List for initial lease-up only. The Developer shall be responsible to organize, schedule and coordinate a lottery drawing to select potential tenants for the Rental Units for initial lease-up only, which shall be open to the public. The lottery shall take place not less than 90 days prior to completion of the applicable Phase of the Rental Units. Preference in the lottery, so long as not inconsistent with federal and State law (including, without limitation, all fair housing laws, rules and regulations), shall be given as follows: (1) Any persons who have been displaced from their residences due to programs or projects implemented by the Agency within the Station District; and (2) Other households who live or work in Santa Ana. Subject to all fair housing laws, rules, and regulations, all categories shall receive preference in the order listed. The requirements of this Section 401.7 shall only apply to the extent that the number of applicants for Rental Units exceeds the number of Rental Units available for lease upon initial lease-up. For the purpose of the lottery drawing, the lottery will be divided by those who have claimed a preference and those who do not. All lottery forms will be drawn and numbered to create a complete list of alternate applications. The Developer shall provide written notification to lottery participants informing them of the results and their priority number. This priority number represents the order with which prospective tenants will be reviewed for final determination of eligibility. If a household who was selected claimed a preference but could not verify such preference, then that participant will be deemed ineligible and the next selected participant will be notified. 401.8 Maintenance. The Developer shall maintain each Phase of the Rental Portion of the Project, or cause same to be maintained in a decent, safe and sanitary manner, and in accordance with the standard of maintenance of first class affordable housing apartment units within Orange County, California. If at any time the Developer fails to maintain each Phase of the Rental Portion of the Project in accordance with this Agreement and such condition is not corrected within five (5) days after written notice from the Agency with respect to graffiti, debris, and waste material, or thirty (30) days after written notice from the Agency with respect to general maintenance, landscaping and building improvements, then the Agency, in addition to whatever remedy it may have at law or in equity, shall have the right to enter upon such Phase and perform all acts and work necessary to protect, maintain, and preserve such Phase, and to attach a lien upon such Phase, or to assess such Phase in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the Agency and/or costs of such cure, including a reasonable administrative charge, which amount shall be promptly paid by the Developer to the Agency upon demand. 401.9 Management Plan; Property Management. For each Phase of the Rental Portion of the Project, the Developer shall submit for the reasonable approval of the Agency a "Management Plan" which sets forth in detail the Developer's property management 51 DOCSOC/ 1400673Y 141200272-0001 duties, a tenant selection process and crime prevention program, the procedures for the collection of rent, the procedures for eviction of tenants, the rules and regulations of such Phase of the Rental Portion of the Project and manner of enforcement, a standard lease form, an Operating Budget, the identity of the manager of such Phase of the Rental Portion of the Project (the "Property Manager"), and other matters relevant to the management of the Rental Portion of the Project. The management of each Phase of the Rental Portion of the Project shall be in compliance with the Management Plan which is approved by the Agency. The Agency hereby approves Related Management Company, L.P. as the Property Manager for each Phase of the Rental Portion. If the Agency determines that the performance of the Property Manager as to a particular Phase is deficient based upon the standards set forth in the Management Plan and in this Agreement, the Agency shall provide notice to the Developer of such deficiencies, and the Developer shall use its best efforts to correct such deficiencies. In the event that such deficiencies have not been cured within the time set forth in Section 501, the Agency shall have the right to require the Developer to immediately remove and replace the Property Manager for such Phase with another property manager or property management company which is reasonably acceptable to the Agency, which is not related to or affiliated with the Developer, and which has not less than five (5) years experience in property management, including significant experience managing housing facilities of the size, quality and scope of the applicable Phase of the Rental Portion of the Project. 401.10 Monitoring and Recordkeeping. Throughout the Affordability Period, Developer shall comply with all applicable recordkeeping and monitoring requirements set forth in Health and Safety Code Section 33418 and shall annually complete and submit to the Agency a report, prior to January 30th of each year, for each Phase of the Rental Portion which includes the name, address, income and age of each occupant of a Rental Unit, the bedroom count and Monthly Rent for such Rental Unit. The Agency agrees that the Developer may submit reporting forms prepared and submitted in connection with any other similar reporting requirement, including reports prepared for tax credit compliance, to the extent those forms contain the information required hereunder. Representatives of the Agency shall be entitled to enter each Phase of the Rental Portion of the Project, upon at least seventy-two (72) hours prior written notice, to monitor compliance with this Agreement, to inspect the records, and to conduct an independent audit or inspection of such records. The Developer agrees to cooperate with the Agency in making each Phase of the Rental Portion of the Project available for such inspection or audit. The Developer agrees to maintain records in a businesslike manner, and to maintain such records for the term of this Agreement. 401.11 Regulatory Agreement and Notice of Affordability Restrictions. The requirements of this Agreement which are applicable to the Rental Portion of the Project after the conveyance of the Site to the Developer are set forth in each Regulatory Agreement. Additionally, the Developer shall record a Notice of Affordability Restrictions on Transfer of Property ("Notice of Affordability Restrictions") as to each Phase of the Rental Portion of the Project in the form attached hereto as Attachment 12 and incorporated herein by this reference, which shall run with the land and shall be enforceable against any owner who violates a covenant or restriction and each successor in interest who continues the violation pursuant thereto. The execution of a Regulatory Agreement and the Developer's execution of a Notice of Affordability 52 DOCSOCI1400673 v 14/200272-0001 Restrictions is a condition precedent to the Closing for a Phase, as set forth in Section 204. The Agency shall subordinate this Agreement, each Regulatory Agreement and Notice of Affordability Restrictions to the construction and permanent financing approved pursuant to Section 316.1 by the execution of a subordination agreement in a form determined to be reasonably acceptable to the Executive Director. 401.12 Relationship to Tax Credit Requirements. Notwithstanding any other provisions of this Agreement, to the extent that a Tax Credit Regulatory Agreement executed by the Developer as a requirement of receiving the Tax Credits for either (or both) Phase(s) of the Rental Portion of the Project or any other regulatory agreement executed by the Developer as a requirement to obtain financing for either (or both) Phase(s) of the Rental Portion of the Project, are less restrictive with respect to the requirements applicable to tenant selection, tenant income levels, unit rent levels or any other aspect of the construction and operation of such Phase(s) of the Rental Portion of the Project than as provided in this Agreement and the Regulatory Agreement, then the Developer shall comply with the requirements of this Agreement, including the applicable Regulatory Agreement; provided, however, that in the event the covenants or restrictions, including the affordability restrictions set forth in this Agreement, including the Regulatory Agreements, are not the most restrictive provisions applicable to either (or both) Phase(s) of the Rental Portion of the Project, and to the extent of an inconsistency between or among such agreement(s), the Developer shall comply with the most restrictive of such agreements. The foregoing requirements shall apply to the Developer and to its Property Manager who is involved in the selection of tenants or the determination of rent amounts for the Rental Portion of the Project. 401.13 Applicability of Section. The provisions of this Section 401 apply only to the Rental Portion of the Project and are wholly inapplicable to the For-Sale Portion of the Project. 402. Provision of Moderate Income For-Sale Housing-For-Sale Portion of the Project. 402.1 Number, Location and Quality of Affordable For-Sale Units. One (1) of the Housing Units developed on each of the six (6) separate lots constituting Phase FS, the For-Sale Portion of the Development shall be sold to Moderate Income Households, at the prices set forth in Section 402.2 hereof, i.e., the Affordable For-Sale Units. The location of the Affordable For-Sale Units within the For-Sale Portion of the Project will be subject to the reasonable approval of the Agency Executive Director pursuant to applicable laws and regulations. The Developer covenants and agrees that the workmanship, quality of materials, and costs of construction for and the amenities, and physical features of each and all of the Affordable For-Sale Units shall be equal to, and under no circumstances or conditions less desirable than, all other Housing Units in the For-Sale Portion of the Project. (a) The Developer will be constructing several models, plans, or types of Housing Units in the For-Sale Portion of the Project. All of the Affordable For-Sale Units will be three (3) bedroom Housing Units. Three of the Affordable Housing Units will be Plan 1 Units, two of the Affordable Housing Units will be Plan 2 Units, and one of the Affordable Housing Units will be a Plan 3 Unit (as those terms as described in the Scope of Development). DOCSOClk 400673v14l200272-0001 53 The Developer covenants and agrees that all the Affordable For-Sale Units in all respects shall be the same/comparable in terms of quality of construction, amenities, materials, design, etc. as the Housing Units of the same size and model that are designed, constructed, and sold on the open market. (b) The Agency acknowledges that a buyer of a market Housing Unit may elect and pay for upgrades or improvements that are not included in the purchase price for a Housing Unit of the same size and model and thus not necessarily included in a corresponding Affordable For-Sale Unit, but nothing in the foregoing acknowledgment modifies or lessens the Developer's obligation to provide first quality Affordable For-Sale Units as described above. 402.2 Maximum Sales Prices. Developer covenants and agrees that each of the Affordable For-Sale Units shall be sold at an Affordable Housing Cost. The Developer acknowledges and agrees that such calculation may require it to adjust the sales price for each Affordable For-Sale Unit in order that the cumulative sums of the Homebuyer Assistance Loan, Homebuyer's down payment, and proceeds of first lien are adequate to purchase such unit in light of the statutory requirements that the Monthly Housing Cost or payment for such unit does not exceed the Affordable Housing Cost as calculated as of the anticipated date of sale of each Affordable For-Sale Unit. 402.3 Affordable Housing Resale Restriction. The Homebuyer of each Affordable For-Sale Unit shall be obligated to enter into and execute the Homebuyer Loan Agreement, which includes the requirement to pay a Contingent Equity Share Amount if the Affordable For-Sale Unit is not sold to Eligible Persons and Families, and such other documentation as the Agency reasonably requires. The Homebuyer Loan Agreement shall provide for a forty-five (45) year affordability period (the "Affordability Period"), and shall permit the sale of the Affordable For Sale Unit for a price in excess of that otherwise permitted by the Homebuyer Loan Agreement prior to the end of the Affordability Period upon the payment of an equity sharing amount to the Agency which permits the seller to retain a portion of the sale proceeds. 402.4 Selection of Buyers; Marketing and Outreach Plan. The Developer shall provide the Agency with a copy of its Marketing and Outreach Plan which shall set forth how the Developer plans to provide interested households with information about the Affordable For-Sale Units. The Developer shall be solely responsible for the selection of qualified purchasers of the Affordable For-Sale Units. Developer shall ensure that there will be homebuyer education in accordance with Section 315.4(b)(ii) hereof. The goal of the Marketing and Outreach Plan is to insure that (i) targeted marketing of Affordable For-Sale Units is provided to persons with the priorities set forth below, and (ii) the marketing of Affordable For-Sale Units to the general public be as broad and inclusive as possible in order to inform and attract as many prospective buyers as possible. If the Developer reasonably expects that the number of qualified purchasers of the Affordable For Sale Units will significantly exceed the supply, the marketing plan may include a lottery drawing with respect to the Affordable For-Sale Units, which shall be open to the public. The Outreach and Marketing Plan and the associated applicant selection procedures will be targeted to purchasers regardless of race, color, religion, sex, disability status, familial status or national origin. 54 D OCSOG 1400673 v 14200272-0001 Information shall also be provided on the Developer's website, City of Santa Ana website, City cable channel, Workforce Investment Board, Santa Ana Chamber of Commerce, Santa Ana Unified School District, Rancho Santiago Community College District, Community Development Resource Network Newsletter, through neighborhood associations and to persons who have been displaced within the Station District. Preference shall be given as follows: (1) persons displaced within the Station District shall be given an exclusive period of not less than fourteen (14) days to purchase Affordable For-Sale Units, (2) after the conclusion of the exclusive period pursuant to subparagraph (1) above, households who live or work in Santa Ana shall be given an exclusive period of not less than fourteen (14) days to purchase Affordable For-Sale Units, and (3) after the conclusion of the exclusive period pursuant to subparagraph (2) the general public shall be eligible to purchase Affordable For-Sale Units. The Agency shall provide the Developer with a list of persons displaced within the Station District and their contact information. Separate lists shall be maintained for each preference category. If a potential buyer claims a preference but could not verify such preference, such purchaser shall be provided the same priority as members of the general public. Pre-purchase counseling must be completed prior to the Closing of each Affordable For-Sale Unit. 402.5 Income of Buyers. Prior to the sale of any Affordable For-Sale Unit, the Developer shall submit to the Agency Executive Director a completed income computation and certification form, in such form as may be provided by the Agency. Gross income and net income of the household shall be determined in accordance with Health and Safety Code Section 50093 and the provisions of Sections 6914 and 6916 of Title 25 of the California Code of Regulations. The Developer shall obtain a certification from each prospective Homebuyer demonstrating that such prospective Homebuyer is a Moderate Income Household and meets the eligibility requirements established for the Affordable For-Sale Unit and that such Affordable For-Sale Unit will be made available for purchase and sold at an Affordable Housing Cost to such prospective Homebuyer. Notwithstanding anything herein to the contrary, each prospective Homebuyer shall be required to make a down payment of not less than three percent (3%) of the purchase which down payment must be part of the net assets of the prospective Homebuyer at the time of application. The Developer shall verify the income certification of the prospective Homebuyer as set forth below. The Developer shall verify the income of each proposed Homebuyer of the Affordable For-Sale Units by at least one of the following methods as appropriate to the proposed Homebuyer: (a) obtain two (2) paycheck stubs from the person's two (2) most recent pay periods; (b) obtain a true copy of an income tax retum from the person for the most recent tax year in which a return was filed; 55 DOCSOC/1400673v 14/200272-0001 (c) obtain an income verification certification from the employer of the person; (d) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the person receives assistance from such agencies; or (e) obtain an alternate form of income verification reasonably requested by and/or acceptable to the Agency, if none of the above forms of verification is available to the Developer. 402.6 Maintenance Covenants; Association CC&Rs. The Developer shall maintain the For-Sale Portion of the Project and all improvements thereon, including all landscaping, in compliance with all applicable provisions of the City's Municipal Code, during the period of Developer's ownership of the For-Sale Portion of the Project or any portion thereof. The Developer shall prepare and submit the Association CC&Rs for the For-Sale Portion of the Project to the Agency Executive Director for- his or her reasonable approval. The Association CC&Rs shall be recorded against the For-Sale Portion of the Project prior to the sale of any Housing Units. The Association CC&Rs shall require the owners of all Housing Units constructed on the For-Sale Portion of the Project to be members of the Association. The Association CC&Rs shall entitle each such owner to use of the common areas and facilities to be constructed on the For-Sale Portion of the Project and shall set forth an equitable apportionment of the costs of maintaining and operating such common areas and facilities. The Association CC&Rs shall also obligate the Association to maintain and assume all liability for any landscaping that is actually installed on the common areas for the For-Sale Portion of the Development. The Association CC&Rs shall be enforceable by the Agency and City (with the right, but not the obligation to enforce the same), and any substantive amendment(s) to such Association CC&Rs shall require the consent of the Agency Executive Director, which consent shall not unreasonably be withheld. The Association CC&Rs shall specifically state that both the City and Agency are intended third party beneficiaries thereof with the ability to enforce all the obligations set forth therein, including, without limitation, the ability to cause any and all maintenance and repair obligations to be performed or to otherwise undertake such maintenance and repair subject to reimbursement for the costs incurred in connection with such maintenance and/or repair secured by a lien on the property affected by the maintenance/repair. The internal streets, if any, to be installed by Developer on the For-Sale Portion of the Project shall be private streets and the City shall not accept any dedication of such streets; therefore, the Association CC&Rs shall include a provision obligating the members of the Association to undertake and bear any and all costs associated with the maintenance and repair of the internal streets on the For-Sale Portion of the Project. 402.7 Applicability of Section. The provisions of this Section 402 apply only to the For-Sale Portion of the Project and are wholly inapplicable to the Rental Portion of the Project. DOC S OC/ 14 4067 3 v 141200272-0001 5b 403. Provisions Applicable to the Entire Project. 403.1 Use in Accordance with Redevelopment Plan. The Developer covenants and agrees to devote, use, operate, and maintain the Site and the Project in accordance with the Grant Deed, the Regulatory Agreement, and this Agreement. All uses conducted on the Site, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to the Redevelopment Plan, all applicable provisions of the City's Municipal Code, any and all laws, rules, and regulations applicable to the Site and the Project, and the recorded documents pertaining to and running with the Site. 403.2 Nondiscrimination Covenants. The Developer covenants by and for itself and any successors in interest that, except as otherwise provided or permitted by law, 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 Site, 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 reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Site. The foregoing covenants shall run with the land. Except as otherwise provided or permitted by law, the Developer shall refrain from restricting the rental, sale or lease of the Site (or any portion thereof) on any of the bases listed above in this Section 403.2. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation 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 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 premises herein conveyed, 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 reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "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) 57 D OC S OG 1400673v 14120027 2-0001 and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts: "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 premises which are the subject of this Agreement, 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 reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." The covenants established in this Section 403.2 shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency and its successors and assigns, and shall remain in effect in perpetuity. 403.3 Applicability of Section. The provisions of this Section 403 apply to the entire Project, including both the For-Sale Portion of the Project and the Rental Portion of the Project. 500. DEFAULT AND REMEDIES. 501. Default Remedies. Subject to the extensions of time set forth in Section 507, failure by either party to perform any obligation hereunder or failure to use best efforts to fulfil I a condition precedent within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. The refusal or failure of the Developer or Agency to close Escrow following satisfaction of the Agency's and/or Developer's Conditions Precedent for benefit of the party failing or refusing to close Escrow constitutes a "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, nor terminate this Agreement, and the other party shall not be in Default as to non- monetary Defaults other than transfers not permitted under this Agreement (as to which no right to notice or cure shall apply) if such party within thirty (30) days from receipt of such notice promptly, with due diligence, commences to cure, correct or remedy such failure or delay and thereafter completes such cure, correction or remedy with due diligence. As to monetary Defaults, a cure period of ten (10) days upon written notice shall apply. 502. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, after expiration of the cure period provided in Section 501 above, either party may institute an action at law or equity to seek DOC SOG1400673v 14/200272-0001 58 specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purposes of this Agreement. Specific performance shall be available as a remedy to the greatest extent legally allowable. Such legal actions must be instituted in the Superior Court of the County of Orange, State of California, in an appropriate municipal court in that county, or in the United States District Court for the Central District of California. Notwithstanding anything to the contrary contained herein, nothing in this Agreement, including the Attachments and in any Implementation Agreements hereto, shall be construed to provide that a Default relating to one Phase shall constitute a Default under any other Phase, i.e., there shall be no cross defaults between Phases or each Phase's Developer entity. Accordingly, any rights and remedies sought under this Agreement following a Default shall be limited to the Phase in which such Default occurred. 503. Rights of Termination. 503.1 Termination by Agency. In the event that the Agency is not in Default under this Agreement, and (a) the Developer does not fulfill one or more of the Agency's Conditions Precedent with respect to a Phase which is capable of being satisfied by the Developer on or before the time set forth herein (or in the Schedule of Performance) and such condition is not satisfied after notice and an opportunity to cure as provided in Section 501 hereof, and such failure is not caused by the Agency; or (b) the Developer is otherwise in Default under the terms of this Agreement and fails to cure such Default within the time set forth in Section 501 hereof; then this Agreement and any rights of the Developer or any assignee or transferee with respect to or arising out of this Agreement shall, at the option of the Agency, be terminated as to such Phase by written notice thereof to the Developer. From the date of the written notice of termination of this Agreement as to such Phase by the Agency to the Developer and thereafter this Agreement shall be deemed terminated as to such Phase (but not as to any other Phase), then the Agency shall not be obligated to make any further disbursement of the Agency Loan for such Phase or of any Homebuyer Assistance Loan, repayment of the Promissory Note relating to such Phase shall be accelerated, and there shall be no further rights or obligations between the parties with respect to such Phase, except that if the Developer is in default hereunder, the Agency, after delivery of notice of default and expiration of the cure period provided in Section 501 hereof, may pursue any remedies it has at law or equity against the Developer in accordance with Section 502 hereof. 503.2 Termination by Developer. In the event the Developer is not in Default under this Agreement, and (a) the Agency does not fulfill one or more of the Developer's Conditions Precedent with respect to a Phase which is capable of being satisfied by the Agency on or before the time set forth in this Agreement (or in the Schedule of Performance) and such condition is not satisfied after notice and an opportunity to cure as provided in Section 501 hereof, and such failure is not caused by the Developer; or (b) the Agency is otherwise in Default under the terms of this Agreement and fails to cure such Default within the time set forth in Section 501 hereof, then this Agreement and any rights of the Agency with respect to or arising out of this Agreement shall, at the option of the Developer, be terminated as to such Phase by written notice thereof to the Agency. From the date of the written notice of termination of this Agreement as to such Phase by the Developer to the Agency and thereafter this Agreement shall be deemed terminated as to such Phase (but not as to any other Phase), the Developer shall not 59 DOCSOG 1400673v 14/200272-0001 be obligated to further perform under this Agreement with respect to such Phase and there shall be no further rights or obligations between the parties with respect to such Phase, except that if the Agency is in default hereunder then the Developer, after delivery of notice of default and expiration of the cure period provided in Section 501 hereof, may pursue any remedies they it has at law or equity against the Agency in accordance with Section 502 hereof. 503.3 Termination by Either Party. In the event that the Agency is prohibited by law from using money from the Housing Fund to fulfill any of its obligations hereunder or the use of the other funding sources by Developer triggers the requirement to pay prevailing wages, then each party may terminate this Agreement as to any Phase which has not previously been conveyed to the Developer, and neither party shall have any further rights or obligations with respect to the other with respect to the terminated Phases. 504. Acceptance of Service of Process. In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Agency Executive Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made in any manner as may be provided by law. 505. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 506. Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 507. Force Majeure; 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: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; mandamus proceedings; administrative proceedings; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of the City or Agency which shall not excuse performance by the Agency); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the 60 D ocsoGl400673v14/200272-0001 other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of the Agency and Developer. Notwithstanding any provision of this Agreement to the contrary, the lack of funding to complete the Developer Improvements shall not constitute grounds of enforced delay pursuant to this Section 507. 600. GENERAL PROVISIONS. 601. Notices, Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this Agreement must be in writing and may be given by any commercially acceptable means to the party to whom the Notice is directed at the address of the party as set forth below, or at any other address as that party may later designate by Notice. To Agency: Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Attention: Agency Executive Director Copy: City Attorney I Agency Counsel Copy to: Stradling Yocca Carlson & Rauth 660 Newport Center Drive, Suite 1600 Newport Beach, California 92660 Attention: Thomas P. Clark, Jr. To Developer: Santa Ana Station District, LLC 18201 Von Karman Avenue, Suite 900 Irvine, California 92612 Attention: William A. Witte Any written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 602. Transfers of Interest in Site or Agreement. 602.1 Prohibition. The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. For the period commencing upon the Date of Agreement and until the termination of the Redevelopment Plan, no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement, nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Site or the Developer Improvements thereon, (any of which is hereafter referred to as a "Transfer") without prior written approval of the Agency, except as expressly set forth hereinafter. The person or entity making the Transfer is referred to herein as the Transferor and the person or entity accepting the Transfer is referred to herein as the "Transferee." 61 DOC S OC11400673 v 14!200272-0001 602.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, the Agency approval of a Transfer shall not be required in connection with any of the following: (a) Any transfers of Phase R-I and Phase R-2 of the Site or assignment of the Agreement with respect to Phase R-I and Phase R-2 to an entity or entities (each, a "Tax Credit Partnership") in which the Developer (or a limited liability company in which The Related Companies of California, LLC, directly or indirectly, owns a controlling interest) is a general partner or managing member. Affordable Housing Access, Inc. (or a limited liability company in which Affordable Housing Access, Inc. is a managing member) is hereby pre-approved as a general partner or managing member of any such Tax Credit Partnerships. (b) Any grant by a Tax Credit Partnership of a purchase option and/or right of first refusal of its rights in and to Phase R-1 and/or Phase R-2 to affiliates of The Related Companies of California, LLC and/or Affordable Housing Access, Inc, or the transfer of Phase R-1 and/or Phase R-2 pursuant thereto. (c) The conveyance or dedication of any portion of the Site to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Developer Improvements. (d) Any requested assignment for financing purposes (subject to such financing being considered and approved by the Agency pursuant to Section 316 herein), including the grant of a deed of trust to secure the funds necessary for construction and permanent financing of the Developer Improvements. (e) Subject to the provisions of this Agreement, the leasing of Rental Units to qualified persons and households in the normal course of business. (f) Subject to the provisions of this Agreement, the sale of For-Sale Unit(s) to qualified persons and households in the normal course of business. (g) Any Transfer of the For-Sale Portion of the Project and the corresponding rights and obligations of this Agreement relating to Phase FS and the For-Sale Portion to City Ventures, LLC, a Delaware limited liability company (or a limited liability company in which City Ventures, LLC or an entity controlled by City Ventures, LLC is the managing member and, directly or indirectly, owns a controlling interest) ("City Ventures"), provided that City Ventures assumes all of the provisions of this DDA that relate to and/or concern the For-Sale Portion of the Project pursuant to an assumption agreement (or assignment and assumption agreement) that is submitted to and approved by the Agency Executive Director. Notwithstanding anything to the contrary contained in this Agreement, or otherwise, upon any Transfer contemplated by Sections 602.2(a) or (g) above, the Agency shall release and forever discharge the Developer from any further liability or obligation with respect to the obligations under this Agreement as to the Phase to which such assignment(s) relate, which release shall include, without limitation, release under Section 1542 of the California Civil Code. The Agency shall provide such release in writing concurrent with such assignment or DOCSOG 1400673v 14/200272-0001 62 Transfer (and it may be set forth in any applicable Implementation Agreement associated with the Phase to which release relates). From and after any assignment or Transfer under Sections 602.2(a) or (g), for all purposes of the Phase to which such assignment or Transfer relates under this Agreement (and the Attachments) the tern "Developer" shall thereafter mean and refer solely and exclusively to the assignee or Transferee, and not to the original Developer hereunder or the assignee or Transferee of any other Phase. In the event of a Transfer by the Developer under subparagraphs (a) through (g), inclusive, above not requiring the Agency's prior approval, the Developer nevertheless agrees that at least ten (10) days prior to such Transfer it shall give written notice to the Agency of such Transfer and satisfactory evidence that the Transferee has assumed jointly with the Developer the obligations of this Agreement. 602.3 Agency Consideration of Requested Transfer. The Agency agrees that it will not unreasonably withhold approval of a request made pursuant to this Section 602, provided the Developer delivers written notice to the Agency requesting such approval. Such notice shall be accompanied by sufficient evidence regarding the proposed assignee's or transferee's applicable operational qualifications and experience, and its financial commitments and resources, in sufficient detail to enable the Agency to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 602 and as reasonably determined by the Agency. The Agency shall evaluate each proposed transferee or assignee on the basis of its applicable development and/or qualifications as it relates to a proposed transferee who is obligated to complete the Developer Improvements, and experience in the operation of facilities similar to the Developer Improvements, and its financial commitments and resources, and may reasonably disapprove any proposed transferee or assignee, during the period for which this Section 602 applies, which the Agency determines does not possess equal or better qualifications than the transferring Developer. An assignment, assumption and release agreement in form satisfactory to the Agency's legal counsel shall also be required for all proposed assignments. Within thirty (30) days after the receipt of the Developer's written notice requesting Agency approval of an assignment or transfer pursuant to this Section 602, the Agency shall either approve or disapprove such proposed assignment or transfer, or shall respond in writing by stating what further information, if any, the Agency reasonably requires in order to determine the request complete and determine whether or not to grant the requested approval. Upon receipt of such a response, the Developer shall promptly furnish to the Agency such further information as may be reasonably requested. 642.4 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Developer and its permitted successors and assigns. Whenever the term "Developer" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 602.5 Assignment by Agency. The Agency may assign or transfer any of its rights or obligations under this Agreement with the approval of the Developer, which approval shall not he unreasonably withheld; provided, however, that the Agency may assign or transfer any of its interests hereunder to the City at any time without the consent of the Developer. 63 DOCSOG 1400673 v 141200272-0041 642.6 No Cross Default/Release from Liability. In the event of a Transfer of Phase FS permitted under Sections 602.2 and/or 602.3 (i) a Default by a Transferor or Transferee shall not be considered a Default by the other, and (ii) the Transferor shall be relieved of any further liability hereunder with respect to Phase FS. 603. Non-Liability of Officials and Employees of the Agency. No member, official or employee of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any Default or breach by the Agency or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. 604. Relationship Between Agency and Developer. It is hereby acknowledged that the relationship between the Agency and the Developer is not that of a partnership or joint venture and that the Agency and the Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the attachments hereto, the Agency shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Developer Improvements. The Developer agrees to indemnify, hold harmless and defend the Agency from any claim made against the Agency arising from a claimed relationship of partnership or joint venture between the Agency and the Developer with respect to the development, operation, maintenance or management of the Site or the Developer Improvements. 605. Agency Approvals and Actions. The Agency shall maintain authority of this Agreement and the authority to implement this Agreement through the Agency Executive Director. The Agency Executive Director shall have the authority to make approvals, issue interpretations, waive provisions, request issuance of warrants and make payments authorized hereunder, make and execute further agreements (including Implementation Agreements) and/or enter into amendments of this Agreement on behalf of the Agency so long as such actions do not materially or substantially change or modify the uses or development permitted on the Site, or materially or substantially add to the costs, responsibilities, or liabilities incurred or to be incurred by the Agency as specified herein, and such interpretations, waivers and/or amendments may include extensions of time to perform as specified in the Schedule of Performance and any schedule of performance attached to an Implementation Agreement. All material and/or substantive interpretations, waivers, or amendments shall require the consideration, action and written consent of the Agency Board. Further, Agency Executive Director shall maintain the right to submit to the Agency Board for consideration and action any non-material or non- substantive interpretation, waiver or amendment, if in his or her reasonable judgment he or she desires to do so. 606. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in three (3) originals, each of which is deemed to be an original. 607. Integration. This Agreement contains the entire understanding between the parties relating to the transaction contemplated by this Agreement. 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 DOCSOC/ 1400673v 141200272-0001 64 based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. This Agreement includes pages 1 through 66 and Attachment Nos. i through 13, which constitute the entire understanding and agreement of the parties, notwithstanding any previous negotiations or agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. 608. )Steal Estate Brokerage Commission. The Agency and the Developer each represent and warrant to the other that no broker or finder is entitled to any commission or finder's fee in connection with the Developer's acquisition of the Site from the Agency. The parties agree to defend and hold harmless the other party from any claim to any such commission or fee from any broker, agent or finder with respect to this Agreement which is payable by such pay. 609. Attorneys' 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. 610. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. Reference to Section numbers are to Sections in this Agreement, unless expressly stated otherwise. 611. Interpretation. 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 be interpreted as though prepared jointly by both parties. 612. No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 613. Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. 614. Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 65 DOCS Ofi/ l 400673 v 141200272- 0001 615. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 616. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly 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 agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 617. Time of Essence. Time is expressly made of the essence with respect to the performance by the Agency, the Developer of each and every obligation and condition of this Agreement. 618. Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 619. Conflicts of Interest. No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 620. Date of Agreement- The date of this Agreement shall be the date set forth in the first paragraph hereof. 621. Implementation of Agreement and Each Phase of the Project. The parties acknowledge that, due to the long tern nature of the Project and the implementation thereof in three Phases, it may be necessary and/or appropriate at some time in the future, or from time to time, for the parties to enter into various Implementation Agreements or to otherwise execute additional documentation to clarify and implement the provisions of this Agreement, provide for one or more Transfers, and/or provide for the incorporation of additional or different funding and/or financing sources for the development and operation of each Phase of the Project. Each party agrees to cooperate in good faith to negotiate and enter into such various Implementation Agreements for each Phase of the Project as may be determined to be reasonably necessary and/or appropriate by the Developer and the Agency Executive Director, in their reasonable discretion, subject to the limitations of Section 605. Implementation Agreements entered into pursuant to this Section 621 may modify the terms of this Agreement as to one or more Phase(s) 66 DOC5gG140G673v14/200272-000 1 of the Project, so long as such actions do not materially or substantially change or modify the uses or development permitted on the Site, or materially or substantially add to the costs, responsibilities, or liabilities incurred or to be incurred by the Agency. IN WITNESS WHEREOF, the Agency and the Developer have executed this Agreement as of the date set forth above. AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic -Q& "-f' By: Cynthia J. NeI on Executive Director ATTEST: r D Se ? Maria D. Huizar, Clerk of the Council [Signature block continues on next page.] DO CSOCI 14 00673v 141200272-0001 67 DEVELOPER: SANTA ANA STATION DISTRICT, LLC, a California limited liability company By: The Related Companies of California, LLC, a California limited liability company, its member W? By: William A. Witte, President By: Griffin Realty Corporation, a California corporation, its member By: gcr N. To t, President 68 DOCSOCt 1400673v 141200272-0001 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Orange SS. On June 24, 2010 before me L.J. Ortiz-Rodriguez, Notary Public Date Name and Title of Officer (e.g., "Jane Doe. Notary Public") personally appeared Cynthia J. Nelson Name(s) or signer(s) who proved to me on the basis of satisfactory evidence to be the personal whose name is/ _X subscribed to the within in trumen# L. J. ORTIZ-RODRIGUEZ and acknowledged to me that lshelez Commission 0 1848409 executed the same in < Notary Public - California and that by = Orange County ? authorize capacity(i ?,rtslherlt ?ir si natu a on the instrument the My Comm. Expires May 30,2013 g person or a enti upon behalf of which the person acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing is true and correct. WITNESS my hand and official seal. Place Nolary Seal Above Signatu ( o ryPublic OPTS NAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ? Individual ? Corporate Officer - Title(s): ? Partner -- ? Limited ? General ? Attorney in Pact ? Trustee ? Guardian or Conservator ? Other: Signer is Representing: CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Orange SS. On June 7. 2010 before me Claudia M. FernandezShaw, Notary Public Dale Name and Title of Officer (e.g., 'Jane Doe, Notary Public') personally appeared William A. Witte Name(g) of Signora) CLAUDIA Nil. RANANDEZ SHAW Cotnrdulon • 1875126 16MY Notary Public - Calllornla WARP County Cantu. Who Jan25.20t4 who proved to me on the basis of satisfact?o?r+' evidence to be the person whose namets! t?e-subscribed to *Iwithin instrument and acknowledged to me that ala?Js4ieftftey executed the same in 're;r- authorized capacityre-/p ) and that by signatu on the instrument the person, or the entity upon behalf of which the pe sono) acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing is true and correct. ESS my. hand and official seal. Place Notary Seal Above OPTIONAL Signature of Notary Public (J -6,4 Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ? Individual ? Corporate Officer - Title(s): ? Partner -E] Limited El General ? Attorney in Fact ? Trustee ? Guardian or Conservator ? Other: Signer is Representing: CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Orange ISS. On June 7, 2010 before me Claudia M. 1"ernandezShaw, Nota Public Date Name and Title of officer (e.g., 'Jane Doe, Notary Public') personally appeared Roger N. Torriero Now (a) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person) whose name(,4 t,-Wbft subscribed to the within instrument and acknowledged to me that ,.:04he{they executed the same in J:MAerlthVr authorized capacityQpg , and that by vMl Brlthamir signatdr ) on the instrument the person ('01 or the entity upon behalf of which the personf acted, executed the instrument. CUWIDIA M. FERNANDEZ SHAW Gonxnloeion # 1875128 1 certify under PENALTY OF PERJURY under -+ Notary Public - California the laws of the State of California that the o. Expires pJan county 25,20f4 foregoing is true and correct. omrn M G TNESS hand and official seal ./w• Place Notary Seal Above signal re or Notary Pub" DPTIQNAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ? Individual ? Corporate Officer - Title(s): ? Partner -- ? Limited ? General ? Attorney in Fact ? Trustee ? Guardian or conservator ? Other: Signer is Representing: ATTACHMENT NO. I SITE MAP .? uH6TON Av. ID 7T r U U n S7AFRM Si .000 ? cyj uD ?. '?' / rp 6TH ST. ? FR rr T. Im STX 9T, ]ED lqt AA74A BL l4 TH T ? 6TH $i. 6TH ST. 1 10. I I ? ? ti tao 6iH 5T- 1 ° 6TH ST. N 9 IE]EIF-I 9 q ? :1 r I I I I I I I I U 4 S j I 11 1 I I? I I I I I V I I I m C7' i Agency Parcels ® Phase R-1 Segura Properties Phase R-2 Adrf lional Properties ® Phase F-S SlaUon District ATTACHMENT NO. I-1 DOCSOG1400673v 14/200272-0001 ATTACHMENT NO.2 LEGAL DESCRIPTION Phase FS Address 1 609 N. Garfield 2 901 Brown 3 905 Brown 4 511 E. Fifth Street 5 505 E. Fifth Street 6 501 E. Fifth Street (501 112 & 507 Mortimer) 7 602-604 E. Sixth Street (511-517 N. Minter St) 8 621 E. Fifth Street (508 & 510 N. Porter) 9 615 E. Fifth Street 10 607 E. Fifth Street 11 601 E, Fifth Street (507 & 505 N. Minter St) 12 712 E. Fifth Street 13 606 E. Fifth Street 14 610 & 612 E, Fifth Street 15 616 E. Fifth Street 16 620 E. Fifth Street APN Legal Description 398-313-07 SANTA ANA EAST LOT 12 BLK&S{A,\'D L(jr U BLK 65 398-313-08 SANTA ANA EAST LOr 14 BLK&S SWLY So FT AND SWLY 50 Fr Lam 15 & 161111( 6S 398-313-09 SANTA ANA EAST LOT BLK 65LOTS 14, 15 AND 16. -EX NELY RECT 507•T AND FX S WELY KECT 50 Fr, 398-332-07 1 RLM ADD BLK 6 LOT 3 398-332-08 FRUM ADD BLK 6 LOT 2 398-332-09 FRUITS ADD BLK6 LOT 1 398-333-01 KtUM ADD RIX 7 LUT 10 398-333-05 398-333-06 398-333-08 398-333-09 398-337-03 398-338-02 398-338-03 398-338-04 398-338-05 1.3tUrrS ADD ISLK 7 LOTS FRUM ADS)11LK? L(Yr4 FRUM. ADD I11.K71X)T2 VKUHS ADD F11.K7 LOT i MUM% ADD WX 91,(7r 8 MtUr[S ADD 111A 31 LOT9 17RUn S ADD BLK b 11n X I RUNS ADD JAX1111)r7 1•RUnS A1)1) 111A K 1,()T 6 ATTACHMENT NO. 2-1 D OC S O C/ 1400673 v 141200272-0001 Phase R-1• Address 1 611 N. Minter (621 N. Minter) 2 612 E. Santa Ana Blvd. 3 709 E. Sixth Street 4 711 E. Sixth Street 5 604 N. Lacy 6 606 N. Lacy 7 614 & 618 N. Lacy 8 620 N. Lacy 9 614 E. Santa Ana Blvd. 10 622 E. Santa Ana Blvd. 11 626 & 628 E. Santa Ana Blvd. 12 622 N. Lacy 13 601 -603 E. Sixth Strect (609 N. Minter) DOCSOC/ 1400673v 141200272-0001 APN Legal Description 398-311-01 1RunS ADD TO SANTA ANA IINSr1,O'T 2 DIX I? W1,Y 100 Fr (ANU WLY 100 IT LOT 3 DLK RAND LUT 6 DIX F WLYI00 PT NIX 27.60 1? THEM 398-311-02 1•RUIIS ADD TO SANTA ANA I;A.ST LOT 2111-K F FLY 70 FT(AND ELY 70FTLQIS3&66LKF 398-311-09 MUM ADD TO SANTA ANA I;AbT UK I I DLK F6'I,Y 48 Fr W LY l20 r r(AND ELY 48FT WLY 120 Fr LU9' 12 DLK F 398-311-10 IRUMS ADDTO SANTA ANA IAST LOT 13 DIX FRF'F.Y 70 FTELY 50 FT 398-311-11 FRUITS ADD TO SANTA ANA I AST FAT 1111 LK FSELY 12 Fr ELY 50 IT TI LE RE•OFjLOTI2 DIX 1:NWI.Y 25 irrEI,Y501T T11FiRIS01' 398-311-12 FTUITSA11DTOSANTAANAI•ASTMr11111.KFNWLY391.7ELY 50 Fr 398-311-13 FRUITS ADDTOSAWAANAPASTLOT9DIXF(ANDSa1TW23 rr LOT B DIX F 398-311-14 1RUrIS ADD TO SANTA AN A F &ST LOT R B IX F ALI. -Ex S7 Fr W 23 Fr- 398-311-15 11UIFS ADD TO SANTA ANA Fz&STLOT 11TLK F WLY 70 FT(AND WLY 70 Fr L ORS i&5 DIXf 398-311-16 11WITS ADD TO SANTA ANA FAST LOT I DLK F %VLY 50 RELY 100 Fr(AND WLY 50 Fr E.I.Y 100 IT LOTS 1 & 5 111.91! 398-311-17 FRUITS AID) TO SANTA ANA FAST LOT 1 DLK F ELY 50 FT(A.VD ELY 5D Fr L Of S DLK F 398-311-18 FRUrrSADl)TOSANTA ANA1-1WWT5DLKFELY50FT 398-311-19 FRUITSAI)DTOSANTA ANAFASTDIXFLOT6POkOFLOTAND POR OF LOTS 7 & 10 ATTACHMENT NO. 2-2 Phase R-2: Address APN Legal Description 1 611 N. Lacy 398-312-04 SANTA ANA FAST LOT 10 OLK76(AND LOT I I DLK 76 2 609 N. Tracy 398-312-05 SANTA ANA FAST LOT 12 nLK76(ANn N V2 LOT L3 BLK 16 3 601 N. Lacy 398-312-08 ANA S&N A HL K EAST LOT 15 DLK76 SWLY 107 FT(AND SWLY 107 FT Uff 16 16 4 801 Brown 398-312-09 SANTA ANA EAST LOT 15 DLK76 NELY 43 FT(AND NT-LY 43 FT LOT 16 ELK 76 5 618 N. Garfield 396.312-15 SANTA ANA CAST LOT 25 DLK76 AND LOT 26 DLK76 6 622-624 N. Garfield 398-312-16 SANTA ANA CAST LOT 27DLK76(AKDLOr29ULK76 7 626-628 N. Garfield 398.312-17 SANTA ANALASTLOT29DLK76NELY9DMANI)NELY9017LOT 3O D LK 76 8 714 E. Santa Ana Blvd. 398-312-19 SANTA ANA EAST LOT 29 DLK76 SWLY 60 HAND SWLY 60 IT LOTS 30 TO 321N ELK 76 9 630 N. Garfield 398.312-19 SANTA ANA EAST LOT 31 DLK76 ?OR OF LOT AND POR OP LOT 32 ELK 76 10 605-607 N. Lacy 398-312-20 SANTA ANA EAST ULK 76 MTN AND BLK 76 POR LOT 13 11 625 N. Garfield 398.313-01 SANTA ANA EAST LOT5 DLK65(AND LOT I ULK65 W 501T(AND W 50 Fr LOTS 2.3& 4 DLK 65 12 804 E. Santa Ana Blvd. 398-313-02 SANTA ANA EASTLOrIDLK65E30IT(ANDE30Fr WLOO FT LOTS 2.3 & s DLK6S 13 623 N. Garfield 398-313-04 SANTA ANA EAST DLK 65 LOTS 6 & 7 14 619 N. Garfield 398-313-05 SANTA ANA EAST D LK 65 LOTS 6&9 ATTACHMENT NO. 2.3 D OC S O G 1400673 v] 41200272-0001 ATTACHMENT NO.3 RECORDING REQUESTED BY, ) AND WHEN RECORDED MAIL TO: ) Community Redevelopment Agency ) of the City of Santa Ana } 20 Civic Center Plaza ) Santa Ana, California 92702 } Attn: Executive Director 1 This document is exempt from payment of a recording fee pursuant to Government Code Sections 27383 and 6103. GRANT DEED For valuable consideration, receipt of which is hereby acknowledged, the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic ("Agency"), acting to carry out the Redevelopment Plan ("Redevelopment Plan") for the Redevelopment Project ("Project"), under the Community Redevelopment Law of California, as of 2010, hereby grants to a ("Developer"), the real property hereinafter referred to as the "Agency Parcels," described in Exhibit A attached hereto and incorporated herein, subject to the existing easements, restrictions and covenants of record described there. 1. The Agency Parcels are conveyed in accordance with and subject to the Redevelopment Plan for the Redevelopment Project, and a Disposition and Development Agreement entered into between Agency and Developer dated as of , 2010 ("Agreement"), a copy of which is on file with the Agency at its offices as a public record and which is incorporated herein by reference. The Agreement generally requires the Developer to construct certain for-rent and for-sale dwelling units on the Agency Parcels ("Improvements") and to operate such Improvements in accordance with the terms of the Agreement and that certain Regulatory Agreement executed by and between the Agency and Developer and recorded concurrently herewith. 2. Agency excepts and reserves from the conveyance herein described all interest of the Agency in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Agency Parcels lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from said Agency Parcels or other lands, but without, however, any right to use either the surface of the Agency Parcels or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the Agency Parcels in such a manner as to create a disturbance to the use or enjoyment of the Agency Parcels. ATTACHMENT NO. 3-1 DOC SOC11400673v 14!200272-0001 3. Developer covenants by and for itself and any successors in interest that, except as otherwise provided or permitted by law, 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 Agency Parcel, 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 reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Agency Parcel. The foregoing covenants shall run with the land. Except as otherwise provided or permitted by law, Developer shall refrain from restricting the rental, sale or lease of the Site on any of the bases listed above in this Section 3. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation 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 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 premises herein conveyed, 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 reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "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 leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts: "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 ATTACHMENT NO. 3-2 DOCS OG l 40067 3 v 14/200272-0001 the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this Agreement, 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 reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." 4. Except as otherwise expressly provided herein, the Site Condition upon Conveyance from the Agency to Developer shall be "as-is," with no warranty expressed or implied by Agency, including without limitation, the presence of Hazardous Materials or the condition of the soil, its geology, the presence of known or unknown seismic faults, or the suitability of the Site for the development purposes intended hereunder. From and after the date on which Developer completes grading with respect to any Phase of the Site as evidenced by certification by the City's Building Official, and to the extent that Developer does not object in writing to the Environmental Condition of such Phase within ten (10) days following completion of such grading, the Developer shall waive, release and discharge forever the Agency and the City, and their respective employees, officers, agents and representatives, from all present and future claims, demands, suits, legal and administrative proceedings and from all liability for damages, losses, costs, liabilities, fees and expenses, present and future ("Claim or Liability"), arising out of or in any way connected with the Site Condition as it relates to such Phase, except (i) arising out of the willful misconduct of the Agency or its employees, officers, agents or representatives; or (ii) if and to the extent the Developer can demonstrate to a court of competent jurisdiction that the Agency and/or City were the direct and proximate cause of the Site Condition which is the subject matter of the Claim or Liability, including, without limitation, attorneys' fees; or (iii) for Agency's obligations under Section 206.3 of the Agreement. Upon the effectiveness of the release contemplated by this Section, the parties acknowledge that the Agency's ownership would not be the direct and/or proximate cause of any Site Condition if such Site Condition was in existence at the time of the Agency's acquisition and continued during the Agency's ownership. In the event that Developer objects to the Environmental Condition as described above, Developer may elect (at the time it objects to the Environmental Condition) to accept such Environmental Condition, in which event the Agency shall reimburse Developer for its actually incurred costs of any Remedial Work undertaken by Developer to remediate the disapproved Environmental Condition; provided, however, that the maximum amount of such reimbursement shall be equal to the portion of the Remedial Work Expenditure Cap not previously expended pursuant to Section 206.3 of the Agreement. In the event of such election, Developer shall submit to Agency a description of the Remedial Work performed, together with copies of invoices and/or such other evidence as reasonably necessary to substantiate such costs and expenses, and Agency shall reimburse Developer within ten (10) days of its receipt of such materials, subject to the cap set forth hereinabove. If Developer does not elect to accept such Environmental Condition in its notice objecting to such Environmental Conditions, Agency may, within thirty (30) days of such written objection, elect in writing to either remediate the Environmental Condition to the extent required to satisfy Developer's objection or terminate this Agreement as to the applicable portion of the Site (but not as to any other Phase of the Site which has closed prior to such termination), in which case Developer shall reconvey the applicable portion of the Site to the Agency and neither party shall have any rights or obligations with respect to the other in connection with such ATTACHMENT NO. 3-3 D O C S O G 1400673 v 141200272-0001 portion of the Site. Notwithstanding the foregoing, the termination of this Agreement pursuant to this Section 4 with respect to any Phase will not result in the termination of the Agreement with respect to any other portion of the Site already Conveyed to the Developer. The Developer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." The Developer waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code. 5 Upon the Closing of any Phase, the Developer shall take all reasonable precautions to prevent the release into the environment of any Hazardous Materials in violation of law which are located in, on or under the portion of the Site associated with the Agency Parcels. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In 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, removal and disposal of Hazardous Materials. 6. Following delivery and recordation of this Grant Deed, the Developer shall notify the Agency, and provide to the Agency a copy or copies, of all environmental permits, disclosures, applications, entitlements or inquiries relating to the portion of the Agency Parcels, including notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self-reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks. The Developer shall report to the Agency, as soon as possible after each incident, any unusual or potentially important incidents with respect to the Environmental Condition of the portion of the Site included within the Agency Parcels. In the event of a release of any Hazardous Materials into the environment in violation of law, the Developer shall, as soon as possible after the release, furnish to the Agency a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request, the Developer shall furnish to the Agency a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Agency Parcels including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 7. Upon the Closing, Developer agrees to indemnify, defend and hold Agency harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorney's fees), resulting from, arising out of, or based upon the Site Condition, including without ATTACHMENT NO. 3-4 DOCSOC/ 1400G73v 141200272-0001 limitation (i) the release, use, generation, discharge, storage or disposal by Developer or by any individual or entity for which Developer bears the legal liability including, but not limited to, officers, agents, employees or contractors of Developer (collectively, the "Developer Parties") of any Hazardous Materials in violation of Environmental Laws during the period of the Developer's ownership of the applicable Phase of the Site, on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Phase of the Site by Developer or any of Developer Parties during the period of the Developer's ownership of the Phase of the Site, and/or (ii) the violation, or alleged violation, by Developer or any of Developer Parties of any Environmental Laws relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Site during the period of the Developer's ownership of the applicable Phase of the Site. This indemnity shall include, without limitation, any damage, liability, fine, penalty, cost or expense arising from or out of any claim, action, suit, or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment with respect to the applicable Phase of the Site. 8. Developer shall indemnify, defend and hold harmless Agency and City, their respective officers, agents, employees and volunteers from and against any and all loss or damage, expenses, injuries, death to any person, damage to real or personal property, claim, demand, suit, action, judgment, settlement, reasonable attorney's fees, costs, or proceeding of any kind arising out of Developer's actions and obligations pursuant to this Agreement, Developer's implementation of this Agreement, Developer's securing of financing, design development drawings, the engineering, construction, reconstruction, structural integrity of the Project, maintenance of Project, operation and subsequent sale of the Project, including but not limited to: (a) latent material defects in construction of the Project; (b) any construction defect in the Project; (c) personal injury, including death, of the employees, agents, officers, and/or volunteers of Developer, Developer Parties, and/or any subcontractors, independent contractors, partners, and/or subsidiaries or third parties in connection with the Project; (d) property damage claims of the employees, agents, officers, and/or volunteers of Developer, Developer Parties, and/or any subcontractors, independent contractors, partners, and/or subsidiaries or third parties in connection with the Project; (e) delay in construction of the Project beyond the dates set forth herein and the Schedule of Performance and subject to force majeure; and (f) the failure to make required real estate disclosures to subsequent buyers of homes on Phase FS. ATTACHMENT NO. 3-5 DOCS001400673v 141200272-0001 Developer's obligation to indemnify as set forth in this Agreement shall extend to loss or damage, expenses, injuries, death to any person, damage to real or personal property, claim, demand, suit, action, judgment, settlement, reasonable attorney's fees, costs, or proceedings of any kind that are discovered or accrue, either before or after the termination of this Agreement. Notwithstanding the foregoing, Developer shall not be required to indemnify and hold harmless Agency or the City for liability attributable to the active negligence of, intentional misconduct by, or breach of this Agreement by Agency or the City or any of their boards, officers, employees, representatives or agents. 9. Developer certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies, and all subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, sexual orientation, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964,42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Section 12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and all other anti- discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. The Developer shall allow representatives of the Agency access to its employment records related to this Agreement during regular business hours to verify compliance with these provisions when so requested by the Agency. 10. Except to the extent exempt therefrom, the Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on each Phase of the Site attributable to periods subsequent to Closing for such Phase, subject to the Developer's right to contest in good faith any such taxes. Following the Closing for any Phase, the Developer shall remove or have removed any levy or attachment made on any Phase of the Site or any part thereof, or assure the satisfaction thereof within a reasonable time. The Developer may apply for property tax abatement from the payment of all property taxes or assessments during the period of its ownership on any interest in or to the Site or any part thereof. 11. The Developer shall carry out the design, construction, development and operation of the Developer Improvements in conformity with all applicable laws, including all applicable state labor standards, City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City's Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq., and any other applicable Governmental Requirements. DOCSOM400673 v 14/200272-0001 ATTACHMENT NO. 3-6 12. Developer shall carry out the construction through completion of the Project and the overall development of the Site in conformity with all applicable federal, state and local labor laws and regulations, including, without limitation, if applicable, the requirements to pay prevailing wages under federal law (the Davis Bacon Act, 40 U.S.C. Section 3141, et seq., and the regulations promulgated thereunder set forth at 29 CFR Part 1 (collectively, "Davis Bacon")) and California law (Tabor Code Section 1720, et seq.). Notwithstanding the foregoing, (a) the Agency hereby acknowledges and agrees that nothing in this Agreement (or any of the documents entered into by the Agency and the Developer in connection with the transactions contemplated by this Agreement) is intended to impose on the Developer, contractually or otherwise, the obligation to pay prevailing wages under federal, state or local law, and (b) the Agency hereby represents and warrants to the Developer, its successors and assigns, that all funds used by the Agency in connection with this Agreement and the transactions contemplated hereby, including, without limitation, funds used and to be used by the Agency to acquire each and every component of the Site, funds used and to be used to pay for relocation and demolition of existing improvements on the Site, funds used and to be used to fund the Agency Loans and funds used and to be used to fund Homebuyer Assistance Loans, solely constitute moneys from a Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the California Health and Safety Code, all within the meaning of Section 1720(c)(4) of the California Labor Code. The Agency understands and agrees that the Developer will materially rely on the foregoing warranties in its determination as to whether prevailing wages are required pursuant to California law or Davis-Bacon. The parties acknowledge that a financing structure utilizing certain federal and/or state funding sources and financing scenarios not otherwise identified herein may trigger compliance with applicable state and federal prevailing wage laws and regulations. The applicability of federal, 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 the Agency Executive Director. The Developer shall be solely responsible, expressly or impliedly and legally and financially, for determining and effectuating compliance with all applicable federal, state and local public works requirements, prevailing wage laws, labor laws and standards, and, except as provided above, neither the Agency nor City makes 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. The Developer expressly, knowingly and voluntarily acknowledges and agrees that neither the Agency nor City have previously represented to the Developer or to any representative, agent or Affiliate of Developer, or any contractor(s) or any 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 construction undertaken pursuant to this Agreement is (or is not) a "public work," as defined in Section 1720 of the Labor Code or under Davis Bacon. The Developer knowingly and voluntarily agrees that the Developer shall have the obligation to provide any and all disclosures or identifications as required by Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation. If and only if the representation and warranty provided by the Agency to the Developer in this Section 12 remains true, correct and complete in every respect, the Developer shall Indemnify, protect, pay for, defend and hold harmless the Agency, the City and their respective officers, employees, agents and representatives from and against any and all ATTACHMENT NO. 3-7 DOCS00 1400673v 141200272.0001 loss, liability, damage, claim, cost, expense and/or "increased costs" (including reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction (as defined by applicable law) and/or operation of the Project, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (i) the noncompliance by the Developer with any applicable local, state and/or federal law or regulation, including, without limitation, any applicable federal and/or state labor laws or regulations (including, without limitation, if applicable, the requirement to pay state and/or federal prevailing wages); (ii) the implementation of Section 1781 of the Labor Code and/or of Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation; and/or (iii) failure by the Developer to provide any required disclosure or identification as required by Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation. If and only if the representation and warranty provided by the Agency to the Developer in this Section 12 remains true, correct and complete in every respect, it is agreed by the parties that, in connection with the development and construction (as defined by applicable law or regulation) of the Project, including, without limitation, any and all public works (as defined by applicable law or regulation), the Developer shall bear all risks of payment or non- payment of prevailing wages under applicable federal, state and local law or regulation and/or the implementation of Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, and/or any other similar law or regulation. "Increased costs," as used in this Section 12, shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be amended from time to time. The foregoing indemnity shall survive termination of this Agreement and shall continue after completion of the construction and development of the Project by the Developer. 13. Following delivery and recordation of this Grant Deed and during the construction, the Developer shall use all reasonable efforts to not allow to be placed on the Agency Parcel or any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting the Agency parcel or the Developer Improvements or any portion thereof by reason of Developer's predevelopment, development and/or construction activity, the Developer shall within thirty (30) days of such recording or service or within five (5) days of the Agency's demand whichever last occurs: (a) pay and discharge the same; or (b) affect the release thereof by recording and delivering to the Agency a surety bond in sufficient form and amount, or otherwise; or (c) provide the Agency with other assurance which the Agency deems, in its reasonable discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of Agency from the effect of such lien or bonded stop notice. The covenants established in this Grant Deed shall, without regard to technical classification and designation, be binding for the benefit and in favor of Agency and its successors and assigns, and shall remain in effect in perpetuity. ATTACHMENT NO. 3-8 DOCS00 1400673Y 141200272-0001 [Signature block begins on follow page.] DOCSOC/l 400673v 14/200272-0061 ATTACHMENT NO. 3-9 AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic By: Cynthia Y. Nelson Executive Director ATTEST: Maria D. Huizar, Clerk of the Council APPROVED AS TO FORM: Stradling Yocca Carlson & Rauth, Agency Special Counsel [Signature block continues on next page.] ATTACHMENT NO. 3-10 DOC SOG 1400673 v 141206272-0001 DEVELOPER: SANTA ANA STATION DISTRICT, LLC, a California limited liability company By: The Related Compariies of California, LLC, a California limited liability company, its member By: William A. Witte, President By: Griffin Realty Corporation, a California corporation, its member By: Roger N. Torriero, President ATTACHMENT NO. 3-11 DOCSOGf 400b73v141200272-0001 EXHIBIT A LEGAL DESCRIPTION OF SITE EXHIBIT A TO ATTACHMENT NO. 3 DOCSOC/I 400673v 141200272.0001 STATE OF CALIFORNIA } } ss. COUNTY OF ) On before me, Notary Public, (Print Name of Notary Public) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/shelthey executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT O Individual ? Corporate Officer 'fide(s) Title Or Type Of Document ? Partner(s) ? Limited ? General ? Attorney-In-Fact ? Trusiee(s) ? Guardian/Conservator NumbcrOfPagcs ? Other: Signer is representing: Name Of Person(s) Or Endiy(ies) Date Of Documents Signer(s) Otter Than Named Above DOC SOC/ I 400673v I N200272-0001 STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, Notary Public, (Print Name of Notary Public) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER ? Individual ? Corporate Officer Title(s) ? Partner(s) ? Limited ? General ? At(orney-In-Fact ? Trustee(s) ? Guardian/Conservator ? Other: DESCRIPTION OF ATTACHED DOCUMENT Tide Or Type Of Document Number of Pages Signer is representing: Plume Of Person(s) Or Entity(is) Date orpocumems Signer(s) Other Than Named Above DOCS001400673v 14/200272-0401 ATTACHMENT NO.4 BUDGET PHASE RS Santa Ana - Station District For-Sale Profarrna ApA116, 2010 xm land Anw 220 ?a Produd7yp6 Townhorom Dem2y 14.66 un11a pex at18 Htom ew SEA" ut Is C4 u o YaRw Xbaa= S F Per PIBn1 1366 3Bd26BA 15 760000 - 250,000 1m75 44.36% f 5 2,200000 276 177A2 26,04% P51n 3 - BFO 1386 3 B Sft 3 6 000 300 000 216.30 10.65% 1- && - Kin 1 36e 3 BWZSB2- 3 MAW 220,0W 160.62 7.81% Flan 2 • A*Mble 1 650 3 Bd/L560 2 490 000 245 D00 15606 5.60% 3- 386 3Bd12.SSa 1 000 0000 197.37 3 4d 9 g ,y..,,,,•`^f+'?+'+-w...w.. ym .,,.r..ouo ..r -,,LL9,`?iiau.uuu_' Lot Pramkw s 0 TOFAIM mm BAS0,000 264,003 213% 185 S2 100.00% Ofta cAm0uclllOn 2 003 740 92,617 WOO 35.07% 1 000 6000 , 227% IFX9W 6 000 500 14s 0. 5% $9d M&Wm 169.000 5,2a1 3.71 2.66% DR Tmm 40000 1250 0.88 0.47% vonwft -1 123.000 4,000 281 1-61% IrerlOa 169 060 5.751 &71 200% Con 159,000 5,231 3.71 200% O?rlrvc 253,6W 7,W22 5.56 100% 4,154 w 130,153 91,73 4923% ' FOOn and Po6>n u 500 2 041 1.&1 1,00% C061 Of C.8 0R2 2-95766 7362 6.49 3,50% M*ICmAiR adFinaclrvo Ftaa71n6rng 360,280 l%= a34 460% TOTAL C0370F SALES 7,134r o 221,103 160A7 64.A1% GROSS MARGIN 1,315,610 41959 28.65 Isirm CaMn17alO dM CO6ir 263.5 00 T .W 1 &656 3100% aed Mark81 126 760 3 g01 7-151 1.6071 fades 54400 1700 1.79 - 0. Total Sa10n6 f G&A Caab 414,660 13,657 9,63 5.00% 960'650 29,777 19.32 MAT% ATTACHMENT NO. 4-1 DOCSOG1400673 v 14/200272-0001 rmonaa ?ar,""wi ? een nnn PHASE R-1 Y!C41T7 a MAGINXIIAMDETMEMUON i--u AaOions.Dha1K-Fads 2-70-ens-100101010 W D-gyp-o rw- tA R.la+r ?.dr danrrel. PK%sd m 3$y10 K i0AiA1[ 71-h+ RAC TCAC B-dIK %FL?b mDOV>fsdl ACQM=CN CUM 2ecEsw pd- 11 O% 0 00cA00D>iiftM - 3400D 0% 0 TO]:N.AD?103R1Ti00417 S40W O% D norz 1a0P1AL F7.E7 .Luib?ea?Y 1.000.000 100% I,OOROD7 OOrPes9av>,l' l0lmrdbR 70,OOp 100% 7600D 797wAROi YA1-iEFJ L010.070 0% LQ74Mow Fm ANDF391DT7 7.mum IW% 7x12 am CO.-(3TRi1C mfao TO 0 on p 0% D OS2a 0q ? .700. IOWO 50x000 UE&d . cy >7micA Pb.- Tv x0.000 01A 0 Sa [s>Rvsmm 1: 04004 I= )=No ndiq F-ffi ).771= I= 7?nmw LaOief; lay-9fi Anr 07=000 100K 970,OOp R.W.MW ffft - 7.11D.73 100!{ 7,719,7T7 OAKL--0-fia 34,00!7 37011 7'O.WD RKa Ltie • ®a 0.1 Tr1) vul5m 0 a?.r71?t7ee, awn IOW1 v1A'72 Caos-mr O?ese-i K7M 10771 0+1.134 Car3`C?r P.& 741.01 100% ToAm 03%mdor L? 7!1.000 167% 21,+,m CeertDOfd Bfal9tyrn 0 lom 0 Cnrotrv?oey a?,473 100% Ogpn Re+ldx0s13"a -Nmoc 0 107% 0 c==wd -1A--.1.a 0 10010 0 TOTALcMZTRDC710NQ07i? 10.1k10 0% 37.lAdm FQi1?YCD0Ot7O11! A=CQ Ca 0 0% 0 019LA .ft. SOA00 IWM 30AO7 om9mdmrmc2.a MAW 10011 7100 L7?a L-Pon 17;000 IO0% 12L000 ??^ P/eed u SO)A00 IOD% sola0 PoK LYSrI IVAN 0% 0 Frt-?ImCm 73AOO 04 0 21m 1,F o 70.000 D% 0 Bled mm> cs 0 O% 0 TCACF - 07.000 m 0 mm Fb - ao 0 O% 0 TOTAL FLYAItMM MISTS I wam afx 7Q000 CrMIMCCOU FbWhW? lTov-a flee 21=007 lom yp,000 ,f I Cb 110.000 0% 0 L-W r- 100.000 "m 006000 Pvmv T- MAW 73% 17,000 000 and cmFx7 IOOA00 1074 100,000 N-An 4XIM 100% 47000 Ameo?OlAWlll? 11=000 00% 373.000 Oe.dsp omm.d lpo 000 70% 7mv- DndslsrFw 1,00=000 707{ 700.00D Omr0710lRpre 16+.707 0% 0 WrALO711y>ACOS, 1719.201 0% S.11t.000 7OFA4D6YFSAPNOCCOM, LSQO14750 !40!!.00 1TDFALMM -C BASIS TOTALFIA3I3RYDUCDON(AS+oO[t A4-Yd7brmbwBop1Aso (1=124000) TOTAL ARQ[BttfDINAnAMW sT a EBASS UAKM 1100C.- Am A* rt u0% TOTALADYSMDELxm a n,m3 Him.- AppOmwo Fl a 100% TDTAL0jf7A1 11Adt7 17,9(1,0,{0 7o?87at Aetrda 0% O TOTAL. ADAMM QVI4.MoLl9S t7fJ7,010 ATTACHMENT NO. 4-2 DOCSOG1400673v 141200272-0001 PHASE R-2 DLl [1APHLY7 Cb01S i7alr'9' ° BLS D6Q118C-'f?IIOlI 9da AaasOtlrDhOla17Tlew a T 39 oft-IM4"Ia ISa Dnalapm" PnW-1.6 Lm" C-"Wm Of ew-1. Padd m 576710 a IQ,11 A16 111m1d MAC TCAC BoAln %101?b OSdON DaL ACQUMOMCOM r.m.b-Prim 10 0% O p.?.??p X000 O% o TOTALAg7XMI761COM l400D Ml 0 Mrs=O1taL yza! A +re ip%bout-6 610,010 SOOK 67%000 Qtr pFmedaytOOOn83y 74000 100% 74000 IMALVLO E39ONALFM 770000 O% 77%00D rm Asti F Mmm 1,144009 IONIC 1.110J100 [;Q.?yTy1=o" ccm a 0% O b -"m 6 a% o OCk:* Sa4? 100% laopoo u'4y FM-ar,F=-k Rma. TV z4= 0% a Si 0Ituw.0:m VA= 10016 91gOm FKI?a2A10TSn a 10031 0 L>mdK7901`/O1omsAww 717.000 lam Mm Ra9pa?lsaams T,9q,6S1 lom kmAn cow ]am a Frs1 ON, • 9?A ?-L 711,7 0 O% o CIm4a1 C-56" 1SS w 100% S"A" +-Olckod M AM 100% 177_0 p]pg 2KW l00% 7XIM [>oraaQlmOae.-w lOL,2T7 100% ]01271 Qea..6-Dm6 plpGd;b a 100% O Ltaelo MO Y 3aI¢71 Iamb IC= Doea1[q OOSmae-S:mOC 0 l0ma 0 oae 4m"mq= 0 100% 0 1aTALC061105C17O11C07T5 itol?ud O% d"%? m k11C m=c 0011] A.q"MLMCa® 0 0% 0 fy 1?,TCSaO !01000 SmK Sg070 pnw,ySr LaKC? 75%000 lam TAM Ca100atimL"r.d 67A00 10011 0.600 Do rACmP.W tics 207,900 1W% W7.a00 Fve.pllpOpc7m lSsd 111.000 0% 0 l?-?IcmC® 77.0(0 0% O PO¢10at Lm F- 73,0(D OR 0 Oar! Feo Qc 0 OK 0 TC{CJI- y;000 0% 0 &am Tls Cae 0 as 0 TVTALfvI;. 9?a D0070 LT3ti000 O% ].070.000 clumcom lmiligp n.nM& Eq*-ft 0 I Om1 O L4k7CyCSr 110000 071 0 lim 10.1000 3O% 74900 P1g?OTae 7%000 75% lima Adlcmco=+ioq 104000 100% f040m Poh1eM 17AM 100% 17)m &AawscaIA afL- 204000 l0l3 164000 Dndpr Uah:d rAWD W% 704000 DOW.EwFafl mom Y1'K 794001 aa-ambllt? Kim OK a TOTALOnmEctIM 7,16mm OK 1.72;700 TOTALosVZLQVWZ-TC0M 11;60%2C6 f11,6ad231 !TOTALS `M eDA ,3 TUTALDALS AEDUCrON(A=cdaa AQadTk+VILURaia LSrO CIJCAOOp3 TOTALDSQ]rs7TT67L91ADXZM VAU=1LLY1 7.196235 Fkh CM Ara A! =c LIM TOTALADMMM •'+'?7LL1m 9ass,ln Aall--bb Pwbn lm% TQTALQUIF>F RAm3 9?37.752 7001 Ck.& R-k 0% 0 TOTAL ADAI".,TM QUALW e7-D 1=3 9.31%312 ATTACHMENT NO. 4-3 DOCSOG 1400673v 141200272-0001 ATTACHMENT NO.5 SCOPE OF DEVELOPMENT PHASE FS: Project Description Phase FS consists of 32 for-sale single family homes including a combination of attached row homes and single family detached homes. The development will be constructed on 2.20 acres on six scattered sites identified on the Site Map as "Lot A," "Lot B," "Lot C," Lot D," "Lot E,1' and "Lot F." One unit on each of Lots A-F will be reserved to be affordable to a Moderate Income homebuyer. The Moderate Income units will be deed restricted for affordability to qualified homebuyers. Phase FS is designed as 2 story row homes using at-grade wood frame construction with all parking provided on site in detached garage structures and 2 story single family detached homes using at-grade wood frame construction with all parking provided on site in detached garage structures. Parking is provided to satisfy requirements of the Transit Zoning Code. Additional Properties 911 Brown, 609, 604, and 602 E. Fifth, and 409 and 411 Minter have been identified as Additional Properties with respect to Phase FS. Should the Agency acquire or gain control of any or all of these parcels within the timeframe contemplated by the Agreement, development would be expanded to include up to an additional 7 residential units (including code required parking) on by expanding the Phase FS design concept to the Additional Properties. Signs All signage on the premises shall be designed to meet applicable zoning codes. Landscaping Project landscaping shall be designed to maximize opportunities for on-site storm water detention in areas not utilized for buildings, driveways and parking. Landscape elements may include planters, terraces, trees, decorative walls, screenings and paving elements. Planted areas will be equipped with permanent water sprinkler systems to ensure proper maintenance. In addition to landscaping, common open space is to include amenities such as barbeques, benches and/or enhanced paving, where physically feasible. Final landscape plan is subject to Agency review and approval. ATTACHMENT NO. 5-1 DOCSOM 400673v 141200272-0001 Utilities/Public Improvements Developer shall be responsible for utility relocation or installation on the premises and hookups to sewers, drains, water and gas distribution lines, electric, telephone and CATV lines, and for hookup to all other public utility lines. Phase FS will include curb, gutter and sidewalk replacement around the periphery of the project site where needed and all necessary dedications and improvements to establish 17" x 17" comer cutoffs and wheelchair ramps at street intersections. Phase FS shall also include installation of any needed water laterals as well as sewer improvements as required by the Land Use Approvals. Sustainability Phase FS shall be designed to achieve a Certified LEED level of design and construction as established by the US Green Building Council LEED for Homes program. The LEED for Home program will insure: Indoor Environmental Quality - the homes are designed to maximize fresh air indoors and minimize exposure to toxins and pollutants; Energy Efficiency - the homes will use less energy through the life of a house; Water Efficiency - homes will use innovative strategies to reduce a home's water use and to find creative ways to reuse water; Site Selection - the homes are close to schools, shopping, work and transit; Site Development - homes will avoid destructive construction practices and have landscaping and other elements that protect the land where the home sits; Materials Selection - homes will use responsibly obtained materials everywhere possible; Residents' Awareness - homes will stands as an example to the community of a well-built home and encourages others to live the same; and Innovation - innovations will be used to increase a home's performance, taking into account local and regional needs and promoting durability for a long-lasting, comfortable home. Included Features • Stainless steel under-counter kitchen sink • Tile kitchen countertops Kitchen • Delta faucet or equal • Phone line • 1/3 hp garbage disposal Appliances • Whirlpool Stainless Steel/Black package ATTACHMENT NO. 5-2 DOC SOG 1400673 v 14/200272-0001 • Standard HVAC system • Schlage interior chrome hardware or equal Throughout • Dual glazed Low-E windows . Standard craftsmen style maple cabinets throughout or equal 12x12 tile at entry • Energy-efficient water heater Garage 1 Exterior • Rain gutters at front Standard garage door openers with remotes Family Room • Phone /data & cable lines Secondary Bedrooms • Phone /data & cable lines Bath • Fiberglass tub/shower combo • Culture marble in vanity DOCSOC1400673Y 141200272-0001 ATTACHMENT NO. 5-3 PHASE R-1: Protect Description Phase R-1 consists of 74 multi-family residential units designed to provide affordable rental housing for families, with one unit reserved for a full-time, on-site property manager. The development will be constructed on approximately 2.44 acres on the block bounded by Santa Ana Boulevard, Lacy Street, Sixth Street, and Minter Street. All units in Phase R-I will have long term affordability covenants restricting tenancy to qualifying households. In addition to the residential units, the project includes on-site management offices, interior resident community space and ground floor retail on the corner of Lacy and Sixth Streets. A portion of the community space may be made available for child care facilities consistent with Section 345.3 of the Agreement. The project is designed with an interior, at-grade parking podium that is wrapped with two-story townhomes along the majority of the street frontage. Additional townhome units are arranged atop the podium around interior courtyard spaces. The project will include 23 3-Bedroom and 51 2-Bedroom units. Residential parking will be located within the at-grade podium. Guest and retail parking is provided on site at grade along Sixth Street. All parking is provided on site in ratios that satisfy the requirements of the Transit Zoning Code. Segura Parcels/Additional Property The Segura Parcels have been included in the Phase R-1 Conceptual Site Plan. The only Additional Property in Phase R-1 is identified as 607 E. Sixth Street. Should the Agency acquire this parcel within the timeframe contemplated by the Agreement, the parking and site landscaping may be reconfigured to integrate such Additional Property into the Site Plan. Overall development program and parking ratios would not be affected by this reconfiguration. Signs All signage on the premises shall be designed to meet applicable zoning codes. Landscaping Project landscaping shall be designed to maximize opportunities for on-site storm water detention in areas not utilized for buildings, driveways and parking. Landscape elements may include planters, terraces, trees, decorative walls, screenings, barbeques, benches, and paving elements. Planted areas will be equipped with permanent water sprinkler systems. Final landscape/outdoor amenity plan will be subject to Agency review and approval. ATTACHMENT NO. 5-4 Utilities/Public Imvrrovements Phase R-1 will include utility connections and hookups to sewers, drains, water and gas distribution lines, electric and telephone lines. The project will include curb, gutter and sidewalk replacement around the periphery of the project site where needed and all necessary dedications and improvements to establish 17" x 17" comer cutoffs and wheelchair ramps at street intersections. Phase R-1 may also include sewer, street, and water main improvements as required by project Land Use Entitlements. Amenities Phase R-I will have an on-site resident manager and property management offices on site. It will include a community room and on-site laundry facilities. Multiple courtyard areas will be provided as common outdoor space atop the parking podium. Ground floor units will have stoop/porch areas oriented to the street. Public Art -- See Section 305.2. Child Care Facilities -- See Section 305.3. Retail Spaces -- See Section 305.4. Sustainability Phase R-1 will include several key sustainability features to ensure efficient use of natural resources. These may include use of water efficient fixtures in bathrooms and kitchens, use of low or no-VOC primers, sealants and adhesives, use of natural ventilation where feasible and/or use of recycled building materials. ATTACHMENT NO. 5-5 DOCSOC11400673Y 141200272-0041 PHASE R-2: Proiect Description Phase R-2 consists of 38 multi-family residential units designed to provide affordable rental housing for families, with one unit reserved for a full-time, on-site property manager. The unit mix includes 12 3-Bedroom and 26 2-Bedroom units. Phase R-2 will be constructed on approximately 1.88 acres on three scattered sites identified on the Site Map as "Lot 2" "Lot 3" and "Lot 4." All units in Phase R-2 will have long term affordability covenants restricting tenancy to qualifying households. Phase R-2 is designed as at-grade wood frame construction including a mix of two-story attached townhomes and single story flats. Parking is provided in a combination of detached and "tuck under" garages. All parking is provided on site in ratios that satisfy the requirements of the Transit Zoning Code. Additional Property 812 E. Santa Ana is a property adjacent to the "Lot 4" parcel which has been identified as an Additional Property with respect to Phase R-2. Should the Agency acquire this parcel within the timeframe contemplated by the Agreement, Phase R-2 would be expanded to include up to an additional 4 residential units (including code required parking) on the "Lot 4" parcel by expanding the Phase R-2 design concept to the Additional Property. Suns All signage on the premises shall be designed to meet applicable zoning codes. Landscapine Project landscaping shall be designed to maximize opportunities for on-site stormwater detention in areas not utilized for buildings, driveways and parking. Landscape elements may include planters, terraces, trees, decorative walls, screenings, barbeques, benches, and paving elements. Planted areas will be equipped with permanent water sprinkler systems to ensure proper maintenance. Final landscape/outdoor amenity plan will be subject to Agency review and approval. Utiiities/Public Improvements Project will include utility connections and hookups to sewers, drains, water and gas distribution lines, electric and telephone lines. The project will include curb, gutter and sidewalk replacement around the periphery of the project site where needed and all necessary dedications and improvements to establish 17" x 17" corner cutoffs and wheelchair ramps at street intersections. Phase R-2 may also include sewer, street, and water main improvements as required by project Land Use Approvals. ATTACHMENT NO. 5-6 D OC S QG 144067 3 v 14/20027 2- 0001 Amenities Phase R-2 will contain three on-site laundry facilities (one for each of three scattered sites). Phase R-2 residents will have access to the community room and any programming and services provided in Phase R-1. Units will have individual porches/patios for private open space as well as landscaped and hardscaped common open space areas on each of the three sites. Public art will be provided either on site or off site consistent with the terms in the Agreement. Sustainability The project will include several key sustainability features to ensure efficient use of natural resources. These may include use of water efficient fixtures in bathrooms and kitchens, use of low or no-VOC primers, sealants and adhesives, use of natural ventilation where feasible and/or use of recycled building materials. ATTACHMENT NO. 5-7 DOCSOC/1400673v 14/200272-0001 ATTACHMENT NO. S RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: } } } Attention: ) This document is exempt from the payment of a recording fee pursuant to Government Code Section 27383. RELEASE OF CONSTRUCTION COVENANTS This CITY OF below. RELEASE OF CONSTRUCTION COVENANTS (the "Release") is made as of ,20- by the COMMUNITY REDEVELOPMENT AGENCY OF THE SANTA ANA, a public body corporate and politic (the "Agency"), in favor of (the "Developer"), as of the date set forth RECITALS A. The Agency and the Developer have entered into that certain Disposition and Development Agreement (the "DDA") dated , 2010, concerning the redevelopment of certain real property situated in the City of Santa Ana, California as more fully described in Exhibit "A" attached hereto and made a part hereof. B. As referenced in Section 313 of the DDA, the Agency is required to furnish the Developer or its successors with a Release of Construction Covenants upon completion of construction of the Developer Improvements (as defined in Section 100 of the DDA), which Release is required to be in such form as to permit it to be recorded in the Recorder's office of Orange County. This Release is conclusive determination of satisfactory completion of the construction and development required by the DDA and the Grant Deed. C. The Agency has conclusively determined that such construction and development has been satisfactorily completed. NOW, THEREFORE, the Agency hereby certifies as follows: 1. The Developer Improvements to be constructed by the Developer with respect to Phase have been fully and satisfactorily completed in conformance with the DDA. 2. Nothing contained in this instrument shall modify in any other way any other provisions of the DDA_ ATTACHMENT NO. 6-1 DO C S O G 1400673 v 14/200272-0001 above. ATTEST: Maria D. Huizar, Clerk of the Council APPROVED AS TO FORM: Stradling Yocca Carlson & Rauth, Agency Special Counsel IN WITNESS WHEREOF, the Agency has executed this Release as of the date set forth AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic By. Cynthia J. Nelson Executive Director EXHIBIT 6-2 DOCSOC11400673YI41200272-0001 EXHIBIT A LEGAL DESCRIPTION OF SITE EXHIBIT A TO ATTACHMENT NO. 6 DOCSOC1400673v 14200272-0001 STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, Notary Public, (Print Name of Notary Public) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT ? Individual ? Corporate Officer Tide(s) Title Or Type Of Document ? Partner(s) ? Limited ? General ? Attorney-In-Fact ? Trustee(s) ? Guardian/Conservator Number Of Pages ? Other: Signer is representing: Name of Petson(s) Or En tity(ies) Date Of Docurnems Signers) Other Than flamed Above DOCSOC(l400673v 14/200272-0001 ATTACHMENT NO.7 RECORDING REQUESTED BY, AND WHEN RECORDED MAIL TO- Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92702 Attn: Executive Director This document is exempt from payment of a recording fee pursuant to Government Code Sections 27383 and 6103. REGULATORY AGREEMENT THIS REGULATORY AGREEMENT 2010, by and between AGENCY OF THE CITY OF SANTA ANA, "Agency"), and (the "Agreement") is entered into as of the COMMUNITY REDEVELOPMENT a public body, corporate and politic (the (the "Developer"). RECITALS A. Developer has acquired from the Agency certain real property located within the City of Santa Ana, as particularly described in the Legal Description attached hereto as Exhibit A, which is incorporated herein by reference (the "Site"). B. Developer desires to construct a multifamily affordable housing development, which will consist of a minimum of (,?} units (the "Housing Project"), and to make available and rent the apartment units within the Housing Project (the "Housing Units') to extremely and very low income persons at an affordable rent. The Housing Project is sometimes referred to herein as the "Project." C. Developer and Agency_ have entered intoa Disposition and Development Agreement (the "DDA") dated as of 2010. Subject to the terms and conditions therein, the Developer has agreed to acquire the Site and construct and operate the Housing Project, the Agency has agreed to provide financial assistance to Developer, and the Developer has agreed to matte available and lease all of the Housing Units to Extremely and Very Low Income Households, all at an Affordable Rent (as those terms are defined herein). The execution and recording of this Agreement is a requirement of the DDA. NOW, THEREFORE, the parties hereto agree as follows: l.. Number of Affordable Rental Units. Developer covenants and agrees to make available, restrict occupancy to, and rent the Rental Units at an affordable rent pursuant to Section S below, as follows: ATTACHMENT NO. 7-1 DO CS OO 1400673 v 141200272-0001 (a) of the two (2) bedroom Rental Units in Phase R-1 to Very Low Income Households at an Affordable Rent; twenty (20) of the two (2) bedroom Rental Units in Phase R-2 to Very Low Income Households at an Affordable Rent; (b) (____) of the two (2) bedroom Rental Units in Phase R-1 to Extremely Low Income Households at an Affordable Rent; five (5) of the two (2) bedroom Rental Units in Phase R-2 to Extremely Low Income Households at an Affordable Rent; (c) (_) of the three (3) bedroom Rental Units in Phase R-1 to Very Low Income Households at an Affordable Rent; nine (9) of the three (3) bedroom Rental Units in Phase R-2 to Very Low Income Households at an Affordable Rent; and (d) (___) of the three (3) bedroom Rental Units in Phase R-1 to Extremely Low Income Households at an Affordable Rent; three (3) of the three (3) bedroom Rental Units in Phase R-2 to Extremely Low Income Households at an Affordable Rent. 2. Duration of Affordability Requirements. The Rental Units shall be subject to the requirements of this Agreement for the later of (i) fifty-five (55) years from the date of the City's issuance of a certificate of occupancy for the applicable Phase or (ii) repayment in full of the Promissory Note (as defined in the DDA). 3. Selection of Tenants. The Developer shall be responsible for the selection of tenants for the Rental Units in compliance with lawful and reasonable criteria, as set forth in this Agreement and the Management Plan which is required to be submitted and approved by the Agency pursuant to Section 9. 4. Household Income Requirements. Following the initial lease-up of the Rental Units in each of Phase R-1 and Phase R-2, and annually thereafter, the Developer shall submit to the Agency, at the Developer's expense, a summary of the income, household size and rent payable by each of the tenants of the Rental Units of such Phase. At the Agency's request, the Developer shall also provide to the Agency completed income computation and certification forms, in a form reasonably acceptable to the Agency, for any such tenant or tenants. The Developer shall obtain, or shall cause to be obtained by the Property Manager, a certification from each household leasing a Rental Unit demonstrating that such household is a Very Low Income Household or Extremely Low Income Household, as applicable, and meets the eligibility requirements established for the Rental Unit. The Developer shall verify, or shall cause to be verified by the Property Manager, the income certification of the household. S. Affordable Rent. The maximum Monthly Rent chargeable for the Rental Units shall be annually determined in accordance with the following requirements. The Monthly Rent for the Rental Units to be rented to Extremely Low Income Households shall not exceed the requirements of TCAC and the Monthly Rent for the Rental Units to be rented to Very Low Income Households shall not exceed the more restrictive of (i) TCAC or (ii) the amount set forth in Section 50053(b)(2) of the California Health and Safety Code. For purposes of this Agreement, "Monthly Rent" means the total of monthly payments charged to and paid by tenants or by any other source (e.g. Section 8 vouchers) for (a) use and occupancy of each Rental Unit and land and facilities associated therewith, (b) any ATTACHMENT NO. 7-2 DOC SOG 1400673v 141200272-0001 separately charged fees or service charges assessed by the Developer which are required of all tenants, other than security deposits, (c) a reasonable allowance for an adequate level of service of utilities not included in (a) or (b) above, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuels, but not including telephone service, and (d) possessory interest, taxes or other fees or charges assessed for use of the land and facilities associated therewith by a public or private entity other than the Developer. In the event that all utility charges are paid by the landlord rather than the tenant, no utility allowance shall be deducted from the rent. "Monthly Rent" does not include optional payments by tenants for optional services provided by the Developer or the Property Manager. 6. Occupancy Limits. The maximum occupancy of the Rental Units shalt not exceed more than such number of persons as is equal to the sum of the number of bedrooms in the unit, multiplied by two (2), plus one (1). For the two (2) bedroom units, the maximum occupancy shall not exceed five (5) persons. For the three (3) bedroom units, the maximum occupancy shall not exceed seven (7) persons. 7. Marketing Program. The Developer shall prepare and obtain Agency Executive Director's approval, which approval shall not be unreasonably withheld, of a marketing program for the leasing of the Rental Units within each Phase (the "Marketing Program"). The leasing of the Rental Units shall be marketed in accordance with the approved Marketing Program as the same may be amended from time to time with Agency Executive Director's prior written approval, which approval shall not unreasonably be withheld. The Developer shall provide the Agency with periodic reports with respect to the leasing of the Rental Units. The Marketing Program shall contain a Lottery and Wait List/Preference List for initial lease-up only. The Developer shall be responsible to organize, schedule and coordinate a lottery drawing to select potential tenants for the Rental Units for initial lease-up only, which shall be open to the public. The lottery shall take place not less than 90 days prior to completion of the applicable Phase of the Rental Units. Preference in the lottery, so long as not inconsistent with federal and State law (including, without limitation, all fair housing laws, rules and regulations), shall be given as follows: (1) Any persons who have been displaced from their residences due to programs or projects implemented by the Agency within the Station District; and (2) Other households who live or work in Santa Ana. Subject to all fair housing laws, rules, and regulations, all categories shall receive preference in the order listed. The requirements of this Section 401.7 shall only apply to the extent that the number of applicants for Rental Units exceeds the number of Rental Units available for lease upon initial lease-up. For the purpose of the lottery drawing, the lottery will be divided by those who have claimed a preference and those who do not. All lottery forms will be drawn and numbered to create a complete list of alternate applications. The Developer shall provide written notification to lottery participants informing them of the results and their priority number. This priority number represents the order with ATTACHMENT NO. 7-3 DoCSOGI 400673v 141200272-0001 which prospective tenants will be reviewed for final determination of eligibility. If a household who was selected claimed a preference but could not verify such preference, then that participant will be deemed ineligible and the next selected participant will be notified. 8. Maintenance. The Developer shall maintain each Phase of the Rental Portion of the Project, or cause same to be maintained in a decent, safe and sanitary manner, and in accordance with the standard of maintenance of affordable housing apartment units within Orange County, California. If at any time the Developer fails to maintain each Phase of the Rental Portion of the Project in accordance with this Agreement and such condition is not corrected within five (5) days after written notice from the Agency with respect to graffiti, debris, and waste material, or thirty (30) days after written notice from the Agency with respect to general maintenance, landscaping and building improvements, then the Agency, in addition to whatever remedy it may have at law or in equity, shall have the right to enter upon such Phase and perform all acts and work necessary to protect, maintain, and preserve the such Phase, and to attach a lien upon such Phase, or to assess such Phase in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the Agency and/or costs of such cure, including a reasonable administrative charge, which amount shall be promptly paid by the Developer to the Agency upon demand. 9. Management Plan; Property Management. For each Phase of the Rental Portion of the Project, the Developer shall submit for the reasonable approval of the Agency a "Management Plan" which sets forth in detail the Developer's property management duties, a tenant selection process and crime prevention program, the procedures for the collection of rent, the procedures for eviction of tenants, the rules and regulations of the Rental Portion of the Project and manner of enforcement, a standard lease form, an Operating Budget, the identity of the manager of the Rental Portion of the Project (the "Property Manager"), and other matters relevant to the management of the Rental Portion of the Project. The management of the Rental Portion of the Project shall be in compliance with the Management Plan which is approved by the Agency. The Agency hereby approves Related Management Company, L.P. as the Property Manager for each Phase of the Rental Portion. If the Agency determines that the performance of the Property Manager as to a particular Phase is deficient based upon the standards set forth in the Management Plan and in this Agreement, the Agency shall provide notice to the Developer of such deficiencies, and the Developer shall use its best efforts to correct such deficiencies. In the event that such deficiencies have not been cured within the time set forth in Section 501, the Agency shall have the right to require the Developer to immediately remove and replace the Property Manager for such Phase with another property manager or property management company which is reasonably acceptable to the Agency, which is not related to or affiliated with the Developer, and which has not less than five (5) years experience in property management, including significant experience managing housing facilities of the size, quality and scope of the applicable Phase of the Rental Portion of the Project. 10. Monitoring and Recordkeeping. Throughout the Affordability Period, Developer shall comply with all applicable recordkeeping and monitoring requirements set forth in Health and Safety Code Section 33418 and shall annually complete and submit to the Agency a report, prior to January 30th of each year, for each Phase of the Rental Portion which includes ATTACHMENT NO. 7-4 D O G S OG 14 0067 3 v 141200272-0001 the name, address, income and age of each occupant of a Rental Unit, the bedroom count and Monthly Rent for such Rental Unit. The Agency agrees that the Developer may submit reporting forms prepared and submitted in connection with any other similar reporting requirement, including reports prepared for tax credit compliance, to the extent those forms contain the information required hereunder. Representatives of the Agency shall be entitled to enter each Phase of the Rental Portion of the Project, upon at least seventy-two (72) hours, prior written notice, to monitor compliance with this Agreement, to inspect the records, and to conduct an independent audit or inspection of such records. The Developer agrees to cooperate with the Agency in making each Phase of the Rental Portion of the Project available for such inspection or audit. The Developer agrees to maintain records in a businesslike manner, and to maintain such records for the term of this Agreement. 11. Successors and Assigns. This Agreement shall run with the land, and all of the terms, covenants and conditions of this Agreement shall be binding upon the Developer and the Agency and the permitted successors and assigns of the Developer and the Agency. Whenever the term "Developer," or "Agency" is used in this Agreement, such term shall include any other successors and assigns as herein provided. 12. No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the Agency and its successors and assigns, and Developer and its successors and assigns, and no other person or persons shall have any right of action hereon. 13. Partial Invalidity. If any provision of this Agreement shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. 14. Governing Law. This Agreement and the documents and other instruments given pursuant hereto shall be construed in accordance with and be governed by the laws of the State of California. Any references herein to particular statutes or regulations shall be deemed to refer to successor statutes or regulations, or amendments thereto. 15. Amendment. This Agreement may not be changed orally, but only by agreement in writing signed by Developer and the Agency. 16. Definitions. Any word, term or phrase not specifically defined in this Agreement shall have the same meaning as ascribed to it in the DDA. [Signature block begins on follow page.] ATTACHMENT NO. 7-5 D O C S O C/ ! 4 0067 3 v] 412002 7 2-0001 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date and year set forth above. AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic By: Cynthia J. Nelson Executive Director ATTEST: Maria D. Huizar, Clerk of the Council APPROVED AS TO FORM: Stradling Yocca Carlson & Rauch, Agency Special Counsel [Signature block continues on next page.] ATTACHMENT NO. 7-6 DOCSOG 1400673v 141200272-0001 DEVELOPER: SANTA ANA STATION DISTRICT, LLC, a California limited liability company By: The Related Companies of California, LLC, a California limited liability company, its member By: William A. Witte, President By: Griffin Realty Corporation, a California corporation, its member By: Roger N. Torriero, President ATTACHMENT NO. 7-7 DOCSOC/1400673v 141200272-0001 EXHIBIT A LEGAL DESCRIPTION OF RENTAL PORTION OF PROJECT EXHIBIT A TO ATTACHMENT NO.7 DOC5OC11400673v 14!200272-000 I } STATE OF CALIFORNIA ss. COUNTY OF } On before me, Notary Public, (Print Name of Notary Public) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of Califomia that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER ? Individual ? Corporate Officer Title(s) ? Partner(s) ? Limited ? General ? Attorney-In•Faci ? Trustee(s) 0 Guardian/Conservator ? Other: DESCRIPTION OF ATTACHED DOCUMENT 'fide or Type Of Document [Number Of Pages Signer is representing: /dame Of Person(s) or Entity(ics) Date OrpocumenLs Signer(s) Other Than Named Abovc DO CSOC/ 1400673 v l 41200272-0001 STATE OF CALIFORNIA ) ) S5. COUNTY OF ) On before me, Notary Public, (Print Name of Notary Public) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT ? Individual ? Corporate Officer Title(s) Title OrType Of Document ? Partner(s) ? Limited ? General ? Attorney-In-Fact ? Trustee(s) ? Guardian/Conservator Number Of Pages ? Other; Signer is representing: Name Of Person(s) Or Entity(ics) Date Of Documents Signer(s) Other Than Namcd Above D OC S OC/ 140057 3 v 14/200272-0401 ATTACHMENT NO. SA $1,500,000 , 201 Santa Ana, California FOR VALUE RECEIVED, (the "Borrower"), promises to pay to the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic (the "Agency"), or order, at the Agency's office at 20 Civic Center Plaza, Santa Ana, California 92701, or such other place as the Agency may designate in writing, the sum of One Million Five Hundred Thousand Dollars ($1,500,000) (the "Note Amount"), in currency of the United States of America, which at the time of payment is lawful for the payment of public and private debts. 1. Agreement. This Promissory Note (the "Note") is given in accordance with that certain Disposition and Development Agreement executed by the Agency and Santa Ana Station District, LLC, dated as of June 7, 2010 (the "Agreement"). A portion of the rights and obligations of Santa Ana Station District, LLC under the Agreement was subsequently assigned to Borrower. The rights and obligations of the Borrower and the Agency under this Note shall be governed by the Agreement and by the additional terms set forth in this Note. Capitalized terms not defined herein shall have the meaning ascribed to such term in the Agreement. In the event of any inconsistencies between the terms of this Note and the terms of the Agreement or any other document related to the Note Amount, the terms of this Note shall prevail. 2. Interest. The Note Amount shall bear simple interest at the rate of three percent (3%) per annum, calculated from the latest date any amount hereunder is required to be paid. 3. Repayment of Note Amount. The Note Amount shall be payable from the "Profit-Sharing Amount," as defined and determined herein. Borrower shall give written notice to the Agency, not later than one hundred twenty (120) days after the sale of the last For-Sale Unit (as defined in the Agreement), which shall include a statement of the "Net Profit," "Gross Sales Proceeds," the "For-Sale Units Development Cost," and "For-Sale Units Development Profit," as these terms are defined below, and a calculation of the Profit Sharing Amount. Within thirty (30) days of its receipt of Borrower's written notice, Agency shall deliver to Borrower written notice of its acceptance of Borrower's calculations of the Profit Sharing Amount, or Agency's challenge of Borrower's calculations of the Profit Sharing Amount and request for a certified audit of Profit Sharing Amount by an auditor chosen by Agency and reasonably acceptable to Borrower, at Agency's sole cost. Borrower agrees to cooperate with such audit, and shall be permitted to review and respond to the preliminary results of such audit before the audit is issued in final form. If an audit is performed, the Profit Sharing Amount shall be as determined by the results of such audit, If it is determined that a Profit Sharing Amount is owed to the Agency, payment shall be made to the Agency no later than thirty (30) days after the Agency's written acceptance of Borrower's calculations of the Profit Sharing Amount, or the delivery of the final results of the audit, as applicable. In the event that the Profit Sharing PRONUSSORY NOTE (Phase FS Agency Loan) ATTACHMENT NO. 8A-1 DOC S OC! 1400b73 v 14 (20027 2-000 l Amount is less than the Note Amount, upon payment in full of the Profit Sharing Amount to the Agency the Note Amount shall be reduced to zero and shall be deemed paid in full. 4. Definitions. "Profit Sharing Amount" shall mean twenty-five percent (25%) of the "Net Profit," if Net Profit is a positive number. "Net Profit" means the "Gross Sales Proceeds" of the For-Sale Units, less the "For-Sale Units Development Cost," and less the "For-Sale Units Development Profit." "Gross Sales Proceeds" means the sum of the base sales prices for the For-Sale Units, plus the "Net Options and Upgrades Proceeds," as defined herein. a. "Net Options and Upgrades Proceeds" is defined as the difference between the price paid by the purchasers of the For-Sale Units for "Options and Upgrades" ("Gross Options and Upgrades Proceeds"), less the "Options and Upgrades Costs" for the For-Sale Units. b. "Options and Upgrades" means any of those fixtures and improvements to the For-Sale Units which are not reflected in the For-Sale Units Development Cost and are in excess of the base For-Sale Unit. C. "Options and Upgrades Costs" is defined as the costs actually incurred by the Borrower to pay third parties for the "Options and Upgrades" to the For-Sale Units, including the charges paid by the Borrower to the Borrower's general contractor(s) and/or subcontractors for the purchase and/or installation of "Options and Upgrades", and the price of "Options and Upgrades" paid by the Borrower directly to a product manufacturer or distributor, but only if the Borrower purchases "Options and Upgrades" products directly from a manufacturer or distributor, and then only pays the contractors/subcontractors to install the "Options and Upgrades" products. "For-Sale Units Development Cast" means the total actual cost to the Borrower of planning, designing, financing, constructing, and developing Phase FS (in accordance with the plans and specifications to be acted upon by the Agency as provided in the Agreement) through the issuance of the Certificate of Occupancy for each of the For-Sale Units, and the costs of conveying the completed For-Sale Units to homebuyers. Any such costs paid to parties related to Borrower shall be limited to the costs that would have been payable to unrelated parties for the equivalent goods and services. The For-Sale Units Development Cost shall include, but not be limited to, the following: • Grading and site preparation; • Onsite and offsite improvements paid by Borrower (other than those paid with the proceeds of the Agency Phase FS Loan); • Construction costs for the For-Sale Units and related improvements; A general contractor fee not to exceed two and one-half percent (2.5%) of all construction costs; • Performance and completion bond premiums; ATTACHMENT NO. 8A-2 DOCS001400673v 14/200272-0001 • Architectural, engineering, design and reproduction fees; • Consulting and professional fees paid to third parties with respect to the Agreement and the construction of Phase FS; • Development, permit and inspection fees charged by any public agency incurred and paid by the Borrower; • An overhead fee payable to the Borrower which shall not exceed three percent (3%) of the gross sales prices of the For-Sale Units and other project revenue; • Construction loan fees and points; • Repayment of construction loan principal, interest and contingent interest; • Repayment of equity loans and contributions, including principal, interest and preferred returns; • Permanent loan fees and points payable by the Borrower; • Other fees and costs of construction loans and equity financing; • Property taxes, insurance costs, security costs, utility costs and maintenance expenses incurred during the construction period; • Homeowners' association dues payable by the Borrower; • Sales commissions payable to the Borrower's agents and brokers (not to exceed 2%) and cooperating buyers' agents and brokers for the sale of the For-Sale Units; + Other reasonable and actual costs of conveying the For-Sale Units to homebuyers, including escrow fees, title insurance fees, taxes and fees imposed with respect to the sale of the For-Sale Units; • Builder's warranty reserve fiends not to exceed $4,000 per For-Sale Unit; and • Any other actual costs to the Borrower of planning, designing, financing, constructing and developing Phase FS which have not been paid by the Agency or other parties. "For-Sale Units Development Profit" shall mean twelve percent (12%) of the sum of (i) the total base sales prices for the For-Sale Units, plus (ii) the Gross Options and Upgrades Proceeds for the For-Sale Units. This amount shall be paid to and/or retained by the Borrower prior to the payment of the Profit Sharing Amount, if any, to the Agency hereunder. For the purpose of facilitating the calculation the For-Sale Units Sales Proceeds, Gross Options and Upgrades Proceeds, and Net Options and Upgrades Proceeds, the purchase and sale agreement for each For-Sale Unit shall delineate the base sales price and the price charged to the buyer for Options and Upgrades. 5. Security. This Note is secured by a Deed of Trust (the "Deed of Trust") dated as of the same date as this Note. The Deed of Trust shall be recorded in second priority and shall be subordinate only to the deed of trust securing Borrower's construction financing for the Project as approved by Agency pursuant to the Agreement. The Deed of Trust shall provide for a partial reconveyance of the Deed of Trust in connection with the sale of each individual For- Sale Unit. Agency understands that the Deed of Trust will be fully reconveyed prior to the payment made pursuant to Section 3 hereof. 6. No>nrecourse. Until the full reconveyance of the Deed of Trust, this Note shall constitute a nonrecourse obligation of Borrower, and neither Borrower nor any of its members shall have any personal liability for payment or performance of this Note. In the event of a ATTACHMENT NO. 8A-3 DOCSOC/1400673v 14/200272-0001 default hereunder which occurs prior to the full reconveyance of the Deed of Trust, the Agency's sole recourse shall be to proceed against the collateral described in the Deed of Trust. After the full reconveyance of the Deed of Trust, Agency may enforce its rights hereunder in any manner permitted by applicable law. 7. Waivers a. Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time at the Agency's sole discretion and that the Agency may accept security in consideration for any such extension or release any security for this Note at its sole discretion all without in any way affecting the liability of Borrower. b. No extension of time for payment of this Note made by agreement by the Agency with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part. C. The obligations of Borrower under this Note shall be absolute and Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reasons whatsoever. d. Borrower waives presentment, demand, notice of protest and nonpayment, notice of default or delinquency, notice of acceleration, notice of costs, expenses or leases or interest thereon, notice of dishonor, diligence in collection or in proceeding against any of the rights of interests in or to properties securing of this Note, and the benefit of any exemption under any homestead exemption laws, if applicable. e. No previous waiver and no failure or delay by Agency in acting with respect to the terms of this Note or the Deed of Trust shall constitute a waiver of any breach, default, or failure or condition under this Note, the Deed of Trust or the obligations secured thereby. A waiver of any term of this Note, the Deed of Trust or of any of the obligations secured thereby must be made in writing and shall be limited to the express written terms of such waiver. 8. Attorneys' Fees and Costs. Borrower agrees that if any amounts due under this Note are not paid when due, to pay in addition, all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed. 9. Joint and Several Obligation. This Note is the joint and several obligation of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their heirs, successors and assigns. 10. Amendments and Modifications. This Note may not be changed orally, but only by an amendment in writing signed by Borrower and by the Agency. 11. Agency May Assign. Agency may, at its option, assign its right to receive payment under this Note without necessity of obtaining the consent of the Borrower. ATTACHMENT NO. $A-4 DOCSO J14{10673Y141200272-0001 12. Borrower Assignment Prohibited. In no event shall Borrower assign or transfer any portion of this Note without the prior express written consent of the Agency, which consent shall not unreasonably be withheld, except pursuant to a transfer which is permitted or approved pursuant to the terms of the Agreement. 13. Terms. Any terms not separately defined herein shall have the same meanings as set forth in the Agreement. 14. Acceleration and Other Remedies. Upon: (a) the occurrence of an event of Default as defined in the Agreement and delivery of notice and expiration of the cure period described therein, or (b) Borrower selling, contracting to sell, giving an option to purchase, conveying, leasing, further encumbering, mortgaging, assigning or alienating the Borrower's interest in Phase FS (other than the sale of completed For-Sale Units to individual homebuyers or as otherwise permitted or approved pursuant to the Agreement), whether directly or indirectly, whether voluntarily or involuntarily or by operation of law, or any interest in Phase FS, or suffering its title, or any interest in Phase FS to be divested, whether voluntarily or involuntarily, without the consent of the Agency or as otherwise approved or permitted under the Agreement, Agency may, at Agency's option, declare the outstanding principal amount of this Note, together with the then accrued and unpaid interest thereon and other charges hereunder, and all other sums secured by the Deed of Trust, to be due and payable immediately, and upon such declaration, such principal and interest and other sums shall immediately become and be due and payable without demand or notice, all as further set forth in the Deed of Trust. All costs of collection, including, but not limited to, reasonable attorneys' fees and all expenses incurred in connection with protection of, or realization on, the security for this Note, may be added to the principal hereunder, and shall accrue interest as provided herein. Agency shall at all times have the right to proceed against any portion of the security for this Note in such order and in such manner as such Agency may consider appropriate, without waiving any rights with respect to any of the security. Any delay or omission on the part of the Agency in exercising any right hereunder, under the Agreement or under the Deed of Trust shall not operate as a waiver of such right, or of any other right. No single or partial exercise of any right or remedy hereunder or under the Agreement or any other document or agreement shall preclude other or further exercises thereof, or the exercise of any other right or remedy. The acceptance of payment of any sum payable hereunder, or part thereof, after the due date of such payment shall not be a waiver of Agency's right to either require prompt payment when due of all other sums payable hereunder or to declare an event of Default for failure to make prompt or complete payment. 15. Successors and Assigns. Whenever "Agency" is referred to in this Note, such reference shall be deemed to include the Community Redevelopment Agency of the City of Santa Ana and its successors and assigns, including, without limitation, any subsequent assignee or holder of this Note. All covenants, provisions and agreements by or on behalf of Borrower, and on behalf of any makers, endorsers, guarantors and sureties hereof which are contained herein shall inure to the benefit of the Agency and Agency's successors and assigns. ATTAMMENT NO. 8A-5 DOCSOG l 400673v 141204272-0001 16. NUscellaneOns. Time is of the essence hereof. This Note shall be governed by and construed under the laws of the State of California except to the extent Federal laws preempt the laws of the State of California. Borrower irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Orange in connection with any legal action or proceeding arising out of or relating to this Note. Borrower also waives any objection regarding personal or in rem jurisdiction or venue. BORROWER: By: Its: ATTACHMENT NO. 8A-6 DOCS00 140G673Y 141200272-o06i ATTACHMENT NO. 8B PROMISSORY NOTE (Phase R-1 Agency Loan and Phase R-2 Agency Loan) i ---- ------- - -9-010 Santa Ana, California FOR VALUE RECEIVED, (the `Borrower"), promises to pay to the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic (the "Agency"), or order, at the Agency's office at 20 Civic Center Plaza, Santa Ana, California 92701, or such other place as the Agency may designate in writing, the sum of Dollars ($ l (the "Note Amount"), in currency of the United States of America, which at the time of payment is lawful for the payment of public and private debts. 1. Agreement. This Promissory Note (the "Note") is given in accordance with that certain Disposition and Development Agreement executed by the Agency and Borrower, dated as of , 2010 (the "Agreement"). The rights and obligations of the Borrower and the Agency under this Note shall be governed by the Agreement and by the additional terms set forth in this Note. Capitalized terms not defined herein shall have the me3aning ascribed to such term in the Agreement. In the event of any inconsistencies between the terms of this Note and the terms of the Agreement or any other document related to the Note Amount, the terms of this Note shall prevail. 2. Interest. The Note Amount shall bear simple interest at the rate of one percent (I%) per annum, from the date hereof. 3. Repayment of Note Amount. The Note Amount shall be paid by the Borrower's annual payment to the Agency of an amount equal to fifty Percent (50%) of the Residual Receipts (as defined below) from operation of Phase R- - of the Rental Portion of the Project (as defined in the Agreement), as determined by a residual receipts calculation from the operation of Phase R- - the preceding calendar year. Annual Residual Receipts payment shall be by the Borrower by cashier's check and shall be delivered on or before one hundred twenty (120) days after the end of the Borrower's fiscal year, of each year during the term of this Note first following the date Phase R-_ of the Project (or any Phase thereof) is placed in service, until the Note Amount and all unpaid interest thereon has been repaid in full. Any remaining portion of the Note Amount shall be due and payable on the earlier to occur of (a) the fifty-eighth (58th) anniversary of the date of the issuance of the Release of Construction Covenants for Phase R-_, or (b) December 31, 2075. Notwithstanding the foregoing, the full Note Amount may be accelerated as set forth in Section 12 hereof. 4. Definitions. As used herein, "Annual Project Revenue" shall mean all gross income and all revenues of any kind from Phase R-_ in a calendar year, including without limitation, rent, Section 8 housing assistance payments, if any, late charges, vending machine income, and any ATTACHMENT NO. 8B-1 D OCS OG 1400673 v 141200272-0401 other revenues of whatever kind or nature from the Phase R- - of the Project, except that security deposits (until applied), interest on security deposits and required reserves, sales proceeds, and the proceeds of loans, refinancings, condemnation, insurance claims, and partner capital contributions, shall not be considered Annual Project Revenue. As used herein, "Applicable Federal Rate" means the interest rate set by the United States Treasury from time to time for the purpose of determining applicable Low Income Housing Tax Credit interest rates published by the Internal Revenue Service in monthly reserve rulings. As used herein, "Debt Service" means regularly scheduled payments of principal and interest made in a calendar year pursuant to the financing obtained for the development and ownership of Phase R-_ which has been approved by the Agency pursuant to the Agreement, and which is senior in lien priority to the Agency Loan, but excluding payments made pursuant to the Promissory Note. As used herein, "Capital Replacement Reserve" shall mean a reasonably required reserve not to exceed $250 per unit per year (or such greater amount as may be required by lenders or investors for Phase R--), to be used for the purpose of replacing capital items. On or before one hundred twenty (120) days after the end of the Borrower's fiscal year, of each year commencing in the year after the issuance of the Release of Construction Covenants for Phase R-_, the Borrower shall annually provide the Agency an audited financial statement for Phase R- - and a Residual Receipts Report, in the form attached to the Agreement as Attachment No. 10, which shall describe in detail the Annual Project Revenue, Debt Service, Operating Expenses, Capital Replacement Reserve (including deposits therein and expenditures therefrom), and Residual Receipts for that year for Phase R-_. The Borrower shall also submit to the Agency, on or before one hundred twenty (120) days after the end of the Borrower's fiscal year, of each year commencing in the year of the issuance of the Release of Construction Covenants for t Phase R-_, annual audited financial statements with respect to the Project that have been reviewed by an independent certified public accountant, together with an expressed written opinion of the certified public accountant that such financial statements present the financial position, results of operations, and cash flows fairly and in accordance with generally accepted accounting principles. "Operating Budget" and "Annual Budget" shall mean the annual operating budget for each Phase of the Project that sets forth the projected Operating Expenses for the upcoming year that is subject to and shall be submitted for review and approval by Executive Director, in his/her reasonable discretion, each year during the Affordability Period pursuant to Section 401.9 of the Agreement. "Operating Expenses" shall mean actual, reasonable and customary (for comparable high quality rental housing developments in Orange County) costs, fees and expenses directly incurred, paid, and attributable to the operation, maintenance and management of each Phase of the Rental Portion of the Project in a calendar year, and which is reasonably consistent with the annual Operating Budget for each Phase approved by Agency pursuant to 401.9 of the Agreement, including: painting, cleaning, repairs, alterations, landscaping, utilities, ATTACHMENT NO. 8B-2 DOCS00 1400673v 14/200272-0001 refuse removal, certificates, permits and licenses, sewer charges, real and personal property taxes, assessments, insurance, security, advertising and promotion, janitorial services, cleaning and building supplies, purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishings, fees and expenses of property management, fees and expenses of accountants, attorneys and other professionals, the cost of social services and other housing supportive services provided at the Project consistent with Developer's approved Tax Credit Applications to TCAC for Phase R-' i, repayment of any completion or operating loans made to Developer, and other actual, reasonable and customary operating costs and capital costs which are directly incurred and paid by Developer, but which are not paid from or eligible to be paid from the Capital Replacement Reserve or any other reserve accounts for the applicable Phase. To the extent the Operating Expenses for a Phase are not reasonably consistent with the annual Operating Budget for a given year, the Agency Executive Director shall reasonably review and approve to confirm such Operating Expenses are reasonable and actually incurred; provided, no approval shall be required for emergency expenditures reasonably necessary or appropriate to preserve life, limb, or property. Operating Expenses shall exclude all of the following: (i) salaries of employees of Developer or Developer's general overhead expenses, or expenses, costs and fees paid to an Affiliate of Developer, to the extent any of the foregoing exceed the expenses, costs or fees that would be payable in a bona fide arms' length transaction between unrelated parties in the Orange County area for the same work or services; (ii) any amounts paid directly by a tenant of the Rental Portion of the Project to a third party in connection with expenses which, if incurred by Developer, would be Operating Expenses; (iii) optional or elective payments with respect to financing approval pursuant to Section 316.1 of the Agreement (the "Primary Loan") (unless made with the consent of the Executive Director in her reasonable discretion); (iv) expenses, expenditures, and charges of any nature whatsoever arising or incurred by Developer prior to completion of the applicable Phase of the Rental Portion of the Project with respect to the development, maintenance and upkeep of the applicable Phase of the Rental Portion of the Project, or any portion thereof, including, without limitation, all costs and capitalized expenses incurred by Developer in connection with the acquisition of the Site from the Agency (e.g. not leasing to low income tenants), all predevelopment and preconstruction activities conducted by Developer in connection with the Rental Portion of the Project, including, without limitation, the preparation of all plans and the performance of any tests, studies, investigations or other work, and the construction of the Rental Portion of the Project and any on-site or off-site work in connection therewith; (vi) depreciation, amortization, and accrued principal and interest expense on deferred payment debt; and (vii) any Partnership Related Fees to the extent they are not paid as capitalized expenses. "Partnership Agreement" means the partnership agreement between the Developer and the Investor Limited Partner. "Partnership Related Fees" shall mean the following fees of each Developer entity, or partners thereof pursuant to the Partnership Agreement, which are actually paid: (i) a general partner(s) (administrative and/or managing partner(s)) partnership management fee payable to the general partner(s) in a cumulative amount not to ATTACHMENT NO. 8B-3 D OC S OU 1400673v 141200272.0001 exceed Twenty-Five Thousand Dollars ($25,000) per year, increased annually by CPI (but in no event by more than CPI); (ii) a limited partner asset management fee payable to the Investor Limited Partner in an amount not to exceed Five Thousand Dollars ($5,000) per year, increased annually by CPI (but in no event by more than CPI); and (iii) an annual audit fee in and for any calendar year. In no event shall the fees for (i) and (ii) above cumulatively exceed Thirty Thousand Dollars ($30,000) in any one year (exclusive of the CPI adjustment allowed per (i) and (ii) above.) In the event insufficient Annual Project Revenues exist to provide for payment of all or part of the specific Partnership Related Fees listed above, no interest shall accrue on the unpaid portions of such Partnership Related Fees, but the unpaid balance will be added to the Partnership Related Fees due in the following year. "Residual Receipts" shall mean Annual Project Revenue for the applicable Phase less the sum of. (i) Operating Expenses; (ii) Debt Service; (iii) Reserve Deposits to the Capital Replacement Reserve; (iv) Partnership Related Fees; (v) unpaid Tax Credit adjustment amounts, if any (after review and reasonable verification by Agency Executive Director of documents provided by Developer showing propriety of such amounts and payments); (vi) repayment of loans, if any, made by the limited partner(s) of Developer, including interest at the Applicable Federal Rate (the propriety of any such loans must be reasonably verified by Agency Executive Director); (vii) property management fee for the Project which remains unpaid after payment of Operating Expenses, if any; (viii) Deferred Developer Fee for the Project which remains unpaid, if any, including interest at the Applicable Federal Rate, if applicable, and subject to Section 203, et seq.; (ix) Repayment of outstanding development and operating loans, if any, made by the administrative and/or managing general partners and/or the Guarantors to the Project, including interest at the Applicable Federal Rate (the propriety of any such loans pursuant to the terms of the Partnership Agreement must be reasonably verified by Agency Executive Director); ATTACHMENT NO. 8B-4 DOCS00I400573v14/200272-000 f (x) Capital contributions to the project, if any, made by the general partners or managing member, as applicable, of Developer that were used to pay the Developer Fee. 5. Security. This Note is secured by a Deed of Trust (the "Deed of Trust") dated as of the same date as this Note. 6. Nonrecourse. This Note shall constitute a nonrecourse obligation of Borrower. Neither Borrower, nor any of its partners (general or limited) shall have any personal liability for payment or performance of this Note. In the event of a default hereunder, the Agency's sole recourse shall be to proceed against the collateral described in the Deed of Trust. 7. Waivers a. Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time at the Agency's sole discretion and that the Agency may accept security in consideration for any such extension or release any security for this Note at its sole discretion all without in any way affecting the liability of Borrower. b. No extension of time for payment of this Note made by agreement by the Agency with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part. C. The obligations of Borrower under this Note shall be absolute and Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reasons whatsoever. d. Borrower waives presentment, demand, notice of protest and nonpayment, notice of default or delinquency, notice of acceleration, notice of costs, expenses or leases or interest thereon, notice of dishonor, diligence in collection or in proceeding against any of the rights of interests in or to properties securing of this Note, and the benefit of any exemption under any homestead exemption laws, if applicable. e. No previous waiver and no failure or delay by Agency in acting with respect to the terms of this Note or the Deed of Trust shall constitute a waiver of any breach, default, or failure or condition under this Note, the Deed of Trust or the obligations secured thereby. A waiver of any term of this Note, the Deed of Trust or of any of the obligations secured thereby must be made in writing and shall be limited to the express written terms of such waiver. 8. Attorneys' Fees and Costs. Borrower agrees that if any amounts due under this Note are not paid when due, to pay in addition, all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed. ATTACHMENT NO. 8B-5 DOCS00 1400673Y 141200272-0001 9. Joint and Several Obligation. This Note is the joint and several obligation of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their heirs, successors and assigns. 10. Amendments and Modifications. This Note may not be changed orally, but only by an amendment in writing signed by Borrower and by the Agency. 11. Agency May Assign. Agency may, at its option, assign its right to receive payment under this Note without necessity of obtaining the consent of the Borrower. 12. Borrower Assignment Prohibited. In no event shall Borrower assign or transfer any portion of this Note without the prior express written consent of the Agency, which consent shall not unreasonably be withheld, except pursuant to a transfer which is permitted or approved pursuant to the terms of the Agreement. 13. Terms. Any terms not separately defined herein shall have the same meanings as set forth in the Agreement. 14. Acceleration and Other Remedies. Upon: (a) the occurrence of an event of Default as defined in the Agreement and delivery of notice and expiration of the cure period described therein, or (b) Borrower selling, contracting to sell, giving an option to purchase, conveying, leasing, further encumbering, mortgaging, assigning or alienating the Borrower's interest in Phase R- - (other than as permitted or approved pursuant to the Agreement), whether directly or indirectly, whether voluntarily or involuntarily or by operation of law, or any interest in Phase R-_t, or suffering its title, or any interest in Phase R-_ to be divested, whether voluntarily or involuntarily, without the consent of the Agency or as otherwise approved or permitted under the Agreement, Agency may, at Agency's option, declare the outstanding principal amount of this Note, together with the then accrued and unpaid interest thereon and other charges hereunder, and all other sums secured by the Deed of Trust, to be due and payable immediately, and upon such declaration, such principal and interest and other sums shall immediately become and be due and payable without demand or notice, all as further set forth in the Deed of Trust. All costs of collection, including, but not limited to, reasonable attorneys' fees and all expenses incurred in connection with protection of, or realization on, the security for this Note, may be added to the principal hereunder, and shall accrue interest as provided herein. Agency shall at all times have the right to proceed against any portion of the security for this Note in such order and in such manner as such Agency may consider appropriate, without waiving any rights with respect to any of the security. Any delay or omission on the part of the Agency in exercising any right hereunder, under the Agreement or under the Deed of Trust shall not operate as a waiver of such right, or of any other right. No single or partial exercise of any right or remedy hereunder or under the Agreement or any other document or agreement shall preclude other or further exercises thereof, or the exercise of any other right or remedy. The acceptance of payment of any sum payable hereunder, or part thereof, after the due date of such payment shall not be a waiver of Agency's right to either require prompt payment when due of all other sums payable hereunder or to declare an event of Default for failure to make prompt or complete payment. ATTACHMENT NO. 8B-6 DOCSOC/ 1400673v 14/200272-0001 15. Successors and Assigns. Whenever "Agency" is referred to in this Note, such reference shall be deemed to include the Community Redevelopment Agency of the City of Santa Ana and its successors and assigns, including, without limitation, any subsequent assignee or holder of this Note. All covenants, provisions and agreements by or on behalf of Borrower, and on behalf of any makers, endorsers, guarantors and sureties hereof which are contained herein shall inure to the benefit of the Agency and Agency's successors and assigns. 16. Miscellaneous. Time is of the essence hereof. This Note shall be governed by and construed under the laws of the State of California except to the extent Federal laws preempt the laws of the State of California. Borrower irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Orange in connection with any legal action or proceeding arising out of or relating to this Note. Borrower also waives any objection regarding personal or in rem jurisdiction or venue. BORROWER: By: Its: ATTACHMENT NO. 8B-7 DOCSOG 1400573 v 141200272-0001 ATTACHMENT NO.9 RECORDING REQUESTED BY, ) AND WHEN RECORDED MAIL TO: ) Community Redevelopment Agency ) of the City of Santa Ana ) 20 Civic Center Plaza ) Santa Ana, California 92702 } Attn: Executive Director 1 This document is exempt from payment of a recording fee pursuant to Government Code Sections 27383 and 6103. DEED OF TRUST AND ASSIGNMENT OF RENTS THIS DEED OF TRUST AND ASSIGNMENT OF RENTS is made as of the day of ' ., 2010, by and among ("Trustor" ), whose address is ("Trustee") whose address is and the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic ("Beneficiary"), whose address is 20 Civic Center Plaza, Santa Ana, California 92701. FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, the property located in the City of Santa Ana, County of Orange, State of California, that is described in Exhibit A, attached hereto and by this reference incorporated herein (the "Property"); TOGETHER WITH all rents, issues, profits, royalties, income and other benefits derived from the Property (collectively, the "rents"), provided that so long as Trustor is not in default hereunder, it shall be permitted to collect rents and operate the Property; TOGETHER WITH all interests, estates or other claims, both in law and in equity which Trustor now has or may hereafter acquire in the Property and the rents; TOGETHER WITH all easements, rights-of-way and rights used in connection therewith or as a means of access thereto, including, without limiting the generality of the foregoing, all tenements, hereditaments and appurtenances thereof and thereto; TOGETHER WITH any and all buildings and improvements now or hereafter erected thereon, and all property of the Trustor now or hereafter affixed to or placed upon the Property, including, without limitation, all fixtures, attachments, appliances, furnishings, equipment and machinery (whether fixed or movable) and other articles (including, in each instance, ATTACHMENT NO. 9-1 DOCS001400673v 14/240272-4001 improvements, restorations, replacements, repairs, additions, accessions or substitutions thereto or therefor); TOGETHER WITH all leasehold estate, right, title and interest of Trustor in and to all leases or subleases covering the Property or any portion thereof now or hereafter existing or entered into, and all right, title and interest of Trustor thereunder, including, without limitation, all cash or security deposits, advance rentals, and deposits or payments of similar nature; TOGETHER WITH all right, title and interest of Trustor in and to all options to purchase or lease the Property or any portion thereof or interest therein, and any greater estate in the Property owned or hereafter acquired; TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Property, and any and all sidewalks, alleys and strips and gores of land adjacent to or used in connection with the Property; TOGETHER WITH all the estate, interest, right, title, other claim or demand, of every nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all deposits made with or other security given by Trustor to utility companies, the proceeds from any or all of such property, including the Property, claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by any proceeding or purchase in lieu thereof of the whole or any part of such property, including without limitation, any awards resulting from a change of grade of streets and awards for severance damages; All of the foregoing, together with the Property, is herein referred to as the "Security." FOR THE PURPOSE OF SECURING: 1. Repayment of that certain promissory note in the principal sum of $ dated , 2010 ("Promissory Note") in favor of Beneficiary. 2. Performance of all covenants and obligations of Trustor under that certain "Regulatory Agreement" between Trustor and Beneficiary, of even date herewith. 3. Payment and performance of all covenants and obligations of Trustor under that certain "Disposition and Development Agreement" between Trustor and Beneficiary, of even date herewith. 4. Payment and performance of all covenants and obligations of Trustor under this Deed of Trust. ATTACHMENT NO. 9-2 DOCSOG 1400673v 14/200272-0001 ARTICLE I DEFINITIONS 1. The term "Expiration Date" means the date upon which the Promissory Note has been paid in full, and all other obligations the performance of which is secured by this Deed of Trost have been satisfied. 2. "Property" means the real property referred to in Exhibit A attached hereto. "Security" means the Property and all appurtenant improvements. ARTICLE R MAINTENANCE AND MODIFICATION OF THE PROPERTY AND SECURITY; RELEASE UPON PAYMENT Section 2.1 Maintenance and Modification of the Property by Trustor. The Trustor agrees that at all times prior to the Expiration Date, the Trustor will, at the Trustor's own expense, maintain and preserve the Property. Section 2.2 Release of Security. Upon its receipt of the repayment of all amounts due under the Promissory Note, and all other obligations the performance of which is secured by this Deed of Trust have been satisfied, the Beneficiary shall, upon the request of the Trustor, deliver to the Trustor such instruments as are reasonably necessary to confirm the release of the Security from the lien of this Deed of Trust. ARTICLE III REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE TRUSTOR Section 3.1 Defense of the Title. The Trustor covenants that it is lawfully seized and possessed of title in fee simple to the Property, that it has good right to sell, convey or otherwise transfer or encumber the same, and that the Trustor, for itself and its successors and assigns, warrants and will forever defend the right and title to the foregoing described and conveyed property unto the Beneficiary, its successors and assigns, against the claims of all persons whomsoever, excepting only encumbrances approved by the Beneficiary. Section 3.2 Inspection of the Property. The Trustor covenants and agrees that at any and all reasonable times and upon reasonable notice, the Beneficiary and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right, without payment of charges or fees, to inspect the Property. ATTACHMENT NO. 9-3 DOCS00140067304/200272.0001 ARTICLE IV EVENTS OF DEFAULT AND REMEDIES Section 4.1 Events of Default Defined. The occurrence of any failure of the Trustor to pay the Promissory Note or to otherwise perform an obligation the performance of which is secured by this Deed of Trust, and the continuation of such failure for a period of thirty (30) business days as to monetary obligations and sixty (60) business days as to non-monetary obligations (or such additional time as may be reasonably necessary provided that Trustor commences cure within such sixty (60) day period and thereafter diligently prosecutes such cure to completion), after written notice specifying such failure and requesting that it be remedied shall have been given to Trustor from the Beneficiary, shall be an "Event of Default" or a "Default" under this Deed of Trust. Section 4.2 Acceleration of Maturity. If an Event of Default shall have occurred and be continuing, then the entire indebtedness secured hereby shall, at the option of the Beneficiary, immediately become due and payable without notice or demand which are hereby expressly waived, and no omission on the part of the Beneficiary to exercise such option when entitled to do so shall be construed as a waiver of such right. Section 4.3 The Beneficiary's Right to Enter and Take Possession. If an Event of Default shall have occurred and be continuing, the Beneficiary may: (a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Property and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value, marketability or rentability of the Property, or part thereof or interest therein, increase the income therefrom or protect the Security hereof and, with or without taking possession of the Property, sue for or otherwise collect the rents, issues and profits thereof, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including attorneys' fees, upon any indebtedness secured hereby, all in such order as Beneficiary may determine. The entering upon and taking possession of the Property, the collection of such rents, issues and profits and the application thereof, as aforesaid, shall not cure or waive any Default or notice of Default hereunder or invalidate any act done in response to such Default or pursuant to such notice of Default and, notwithstanding the continuance in possession of the Property or the collection, receipt and application of rents, issues or profits, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, the Agreement or by law upon occurrence of any Event of Default, including the right to exercise the power of sale. Trustor requests that a copy of any Notice of Default and a copy of any Notice of Sale hereunder be mailed to Trustor if at its address given herein; (b) Commence an action to foreclose this Deed of Trust, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor's interest in the property to be sold, ATTACHMENT NO. 9-4 DOCSOC/1400673 v 141200272-0001 which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of the County in which the Property is located; or (d) Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to the Property, including any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. Section 4.4 Foreclosure By Power of Sale. Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust (and the deposit of which shall be deemed to constitute evidence that the amount of the Promissory Note is immediately due and payable), and such receipts and evidence of any expenditures made that are additionally secured hereby as Trustee may require. (a) Upon receipt of such notice from the Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Default and Election to Sell as then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and after Notice of Sale having been given as required by law, sell the Property, at the time and place of sale fixed by it in said Notice of Sale, either as a whole or in separate lots or parcels or items as Trustee shall deem expedient and in such order as it may determine, at public auction to the highest bidder, for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale, and Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers. (b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of sale to payment of: (i) the Promissory Note; (ii) all other sums then secured hereby; and (iii) the remainder, if any, to the person or persons legally entitled thereto. __ (c) Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter,_ and without further _notice make such sale at the_ time fixed by the"] ast postponement, or may, in its discretion, give a new notice of sale. Section 4.5 Receiver. If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of right and without further notice to Trustor or anyone claiming under Security, and without regard to the then value of the Property or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment. Any such receiver or receivers shall have all the powers and duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and shall DOCSOCI1400673 v 141200272-0001 ATTACIRVIENT NO. 9-5 continue as such and exercise all such powers until the date of confirmation of sale of the Property, unless such receivership is sooner terminated. Section 4.6 Remedies Cumulative. No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of Trust is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given hereunder or now or hereafter existing at law or in equity. Section 4.7 No Waiver. (a) No delay or omission of the Beneficiary to exercise any right, power or remedy accruing upon any Default shall exhaust or impair any such right, power or remedy, or shall be construed to be a waiver of any such Default or acquiescence therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary. No consent or waiver, expressed or implied, by the Beneficiary to or of any breach by the Trustor in the performance of the obligations hereunder shall be deemed or construed to be a consent to or waiver of obligations of the Trustor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or impair any rights, powers or remedies consequent on any breach or Default by the Trustor. (b) If the Beneficiary (i) grants forbearance or an extension of time for the payment of any sums secured hereby, (ii) takes other or additional security or the payment of any sums secured hereby, (iii) waives or does not exercise any right granted herein, or in the Agreement, (iv) releases any part of the Security from the lien of this Deed of Trust, or otherwise changes any of the terms, covenants, conditions or agreements of this Deed of Trust or the Agreement, (v) consents to the filing of any map, plat or replat affecting the Security, (vi) consents to the granting of any easement or other right affecting the Security, or (vii) makes or consents to any agreement subordinating the lien hereof, any such act or omission shall not release, discharge, modify, change or affect the original liability under this Deed of Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co- signer, endorser, surety or guarantor (unless expressly released); nor shall any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in the event of any Default then made or of any subsequent Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby. In the event of the sale or transfer by operation of law or otherwise of all or any part of the Property, the Beneficiary, without notice, is hereby authorized and empowered to deal with any such vendee or transferee with reference to the Security (or a part thereof) or the indebtedness secured hereby, or with reference to any of the terms, covenants, conditions or agreements hereof, as fully and to the same extent as it might deal with the Trustor and without in any way releasing or discharging any liabilities, obligations or undertakings of the Trustor. Section 4.8 Suits to Protect the Security. The Beneficiary shall have power (upon ninety (90) days notice to the Trustor) to (a) institute and maintain such suits and proceedings as ATTACHMENT NO. 9-6 DOCSOG1400673v 1412002720001 it may deem expedient to prevent any impairment of the Security (and the rights of the Beneficiary as secured by this Deed of Trust) by any acts which may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its interest (as described in this Deed of Trust) in the Security and in the rents, issues, profits and revenues arising therefrom, and (c) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the security thereunder or be prejudicial to the interests of the Beneficiary. Section 4.9 Trustee May File Proofs of Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Trustor, its creditors or its property, the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of the Beneficiary allowed in such proceedings for the entire amount due and payable by the Trustor under this Deed of Trust at the date of the institution of such proceedings and for any additional amount which may become due and payable by the Trustor hereunder after such date. ARTICLE V MISCELLANEOUS Section 5.1 Amendments. This instrument cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver, change, discharge or termination is sought. Section 5.2 Reconveyance by Trustee. Upon written request of Beneficiary stating that all sums and other obligations secured hereby have been paid or performed, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee shall reconvey to Trustor, or to the person or persons legally entitled thereto, without warranty, any portion of the Property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in any reconveyance may be described as "the person or person legally entitled thereto." Section 5.3 Attorneys' Fees. In the event that any parties hereto resort to legal action in order to enforce the provisions of this Deed of Trust or defend such suit, the prevailing party shall be entitled to receive reimbursement from the non-prevailing party for all reasonable attorneys' fees and all other costs incurred in commencing or defending such suit. Section 5.4 Notices. Whenever Beneficiary, Trustor or Trustee shall desire to give or serve any notice, demand, request or other communication with respect to this Deed of Trust, each such notice, demand, request, or other communication shall be in writing and shall be effective only if the same is delivered by personal service or mailed by registered or certified mail, postage prepaid, return receipts requested, or by telegram, addressed to the address set forth in the first paragraph of this Deed of Trust. Any party may at any time change its address for ATTACHMENT NO. 9-7 oOCSoG 1400673v 14/200272-0001 such notices by delivering or mailing to the other parties hereto, as aforesaid, a notice of such change. Section 5.5 Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Section 5.6 Captions'. The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust. Section 5.7 Invalidity of Certain Provisions. Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or partially secured portion of the debt, and all payments made on the debt, whether voluntary or under foreclosure or other enforcement action or procedure, shall be considered to have been first paid on and applied to the full payment of that portion of the debt which is not secured or partially secured by the lien of this Deed of Trust. Section 5.8 No Merger. If title to the Property shall become vested in the Beneficiary, this Deed of Trust and the lien created hereby shall not be destroyed or terminated by application of the doctrine of merger and, in such event, Beneficiary shall continue to have and enjoy all of the rights and privileges of Beneficiary under this Deed of Trust. In addition, upon foreclosure under this Deed of Trust pursuant to the provisions hereof, any leases or subleases then existing and affecting all or any portion of the Security shall not be destroyed or terminated by application of the law of merger or as a matter of law or as a result of such foreclosure unless Beneficiary or any purchaser at any such foreclosure shall so elect. No act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any lease or sublease unless Beneficiary or such purchaser shall give written notice of termination to such tenant or subtenant. Section 5.9 Governing Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. Section 5.10 Gender and Number. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter and vice versa, if the context so requires. Section 5.11 Nondisturbance Agreement. In the event of any foreclosure of this Deed of Trust or a transfer in lieu of foreclosure, Beneficiary or other transferee shall recognize and not disturb the possession, tenancy, leasehold estate and rights of all tenants and occupants of the Property or any portion thereof, and shall honor and abide by all of the terms, covenants and conditions of each lease for the remaining balance of the term or extension thereof with the same force and effect as if Beneficiary or such other transferee were the original lessor under the lease; provided, however, that the tenant is not in default under its lease and Beneficiary or such other transferee shall not be (a) liable for any damage, loss or expense arising from any act or omission ATTACHMENT NO. 9-8 DOCSOCJ 1400673v 141200272-0001 of any prior lessor (including Trustor) under any lease, (b) subject to any offsets, abatements, rent reductions or defenses which the tenant may be entitled to assert against any prior lessor (including Trustor) under any lease, or (c) liable or responsible for or with respect to the retention, application and/or return to the tenant of any security deposit paid to any prior lessor (including Trustor) under any lease, whether or not still held by any prior lessor (including Trustor), unless and until Beneficiary or such other transferee has actually received for its own account as lessor under the lease the full amount of such security deposit or a credit therefor. Each tenant and occupant of the Property shall, upon any foreclosure of this Deed of Trust or transfer in lieu of foreclosure, be bound to Beneficiary or such other transferee under all of the terms, covenants and conditions of the tenant's lease for the remaining balance of the term thereof or extension thereof, with the same force and effect as if Beneficiary or such other transferee were the original lessor under such lease, and the tenant shall attorn to Beneficiary or such other transferee as its lessor, such attornment to be effective and self-operative without the execution of any further instruments by either party, immediately upon the tenant's receipt of written notice from Beneficiary or such other transferee or from Trustor that title to the Property has vested in Beneficiary or such other transferee. Rent paid by a tenant or occupant to the transferee after receipt of such notice shall be considered to be rental payment under the lease. IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first above written. TRUSTOR: By: ATTACHMENT NO. 9-9 DOCSOC/1400673v 14/200272.0001 EXHIBIT A LEGAL DESCRIPTION OF PHASE R OF PROJECT EXHIBIT A TO ATTACHMENT NO.9 DOCSOG 1400673041200272-0401 STATE OF CALIFORNIA COUNTY OF On personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) islare subscribed to the within instrument and acknowledged to me that helshe/they executed the same in his/her/their authorized capacity(ies), and that by his/herltheir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER ? Individual ? Corporate Officer Title(s) ? Partner(s) ? Limited ? General ? A(torney-In-Fact ? Trustee(s) ? Guardian/Conservator ? Other: Signer is representing: Name Of Person(s) Or Entity(ics) DESCRIPTION OF ATTACHED DOCUMENT Title Or Type Of Document Number OF Pages Date Of Documents Signer(s) Other Than Named Above } } ss. } ,before me, ,Notary Public, (Print Name of Notary Public) D O C S O C1l 40067 3 v 14/200272-4001 ATTAURVIENT NO. 10 ATTACHMENT 10 RESIDUAL RECEIPTS CALCULATIONS PreVious Year Operating Income Rent Payments' Interest Earnings Additional Income Total Operating Income Operating Expenses Propety Management Expenses Administrative Expenses" Maintenance Payroll & Expenses utility Expenses Taxes Insurance a Rental Expenses Total Operating Expenses 111. Partnership Expenses Partnership Management Fee Asset Management Fee Total Partnership Expenses Current Year Budget Budget Actual Difference Includes rent paid from all sources including Section 8 rental assistance. 2 Excluding earnings on capital reserves and tenant security deposits. 5 Includes laundry, vending machine, application fees, tenant forfeited deposits, and fines levied against tenants. { Includes employee salaries; accounting and bookeeping; legal; compliance monitoring; and collection losses. 5 Includes real estate and payroll taxes, 6 Includes property and Ilability Insurance; fidelity bond insurance; workees compensation insurance; and health Insurance and employee benefits. ATTACHMENT NO. 10-1 DOCSOG1400673v 14/200272-0001 ATTACHMENT NO. 11 FORM OF HOIVIEBUYER LOAN AGREEMENT THIS HOMEBUYER LOAN AGREEMENT (this "Agreement") is made as of 20 by and between (the "Homebuyer") and the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic (the "Agency"). RECITALS A. The Agency is a community redevelopment agency duly organized and existing under the California Community Redevelopment Law, Health & Safety Code Section 33000, et seq., ("CRL") and has been authorized to transact business and exercise the power of a community redevelopment agency pursuant to action of the City Council ("City Council") of the City of Santa Ana ("City"). B. The Homebuyer has entered into a purchase and sale agreement (the "Purchase Agreement") with (the "Seller" or "Developer") to purchase certain real property improved with a single family house thereon. Such real property is commonly known as , Santa Ana, California, and more particularly described in Exhibit "A" attached hereto and incorporated herein (the "Property"). C. The Agency is engaged in activities necessary and appropriate to carry out the Redevelopment Plan (the "Redevelopment Plan") for the Merged Redevelopment Project (the "Project Area") which was adopted by the City Council by Ordinance Nos. 2662-2667 adopted by the City Council of the City of Santa Ana (the "City") on September 30, 2004. D. Pursuant to Section 33334.2, et seq. of the CRL, the Agency has deposited funds into its Low and Moderate Income Housing Fund (the "Housing Fund") for the purpose of providing subsidies to, or for the benefit of, persons and families of Low and Moderate Income in order to assist them in obtaining housing within the community. E. The Property has been constructed pursuant to a "Disposition and Development Agreement" between the Agency and ., dated as of .2010. Developer has assumed the obligations under the Disposition and Development Agreement with respect to the Phase FS (single family homes), as defined therein, pursuant to an Assignment and Assumption Agreement with The Disposition and Development Agreement requires the Developer to sell the Property to a "Moderate Income Household" at an "Affordable Housing Cost," as those terms are defined in California Health & Safety Code Sections 50052.5 and 50093 and the implementing regulations thereto in Title 25, California Code of Regulations, Section 6910, et seq. F. The Disposition and Development Agreement requires the Agency to enter into this Agreement to establish a subordinate loan secured by a second trust deed to the Homebuyer, ATTACHMENT NO. 11-1 Form of Homebuyer Loan Agreement DOCSOC/1400673v141200272-000 f and for the Homebuyer to agree that the Property may only be marketed and sold and re-sold (or otherwise transferred in whole or in part) to other qualified Moderate Income Households at an Affordable Housing Cost for a forty-five (45) year period conforming to Health & Safety Code Section 33000, et seq., in particular Section 33334.2, et seq. (the "Program"). The Agency has elected, pursuant to Health and Safety Code Section 33334.3(f)(1)(B) to permit sales of the Property prior to the expiration of the forty-five year period for a price in excess of an Affordable Housing Cost pursuant to an adopted program which protects the Agency's investment of moneys from the Low and Moderate Income Housing Fund, through a schedule of equity sharing that permits retention by the Homebuyer of a portion of those excess proceeds. G. The Homebuyer requires financial assistance to purchase the Property and would not be able to purchase the Property without such assistance. The Homebuyer is a person or family whose income is less than Moderate Income, as such term is defined by California Health & Safety Code Section 50093. H. The Homebuyer represents and warrants to the Agency that the Homebuyer and the Homebuyer's immediate family/household members intend to reside in the Property as their principal residence at all times during the period of the Homebuyer's ownership of the Property. 1. The Agency wishes to lend and the Homebuyer wishes to borrow from the Agency funds in the form of a forty-five (45) year loan (the "Homebuyer Assistance Loan") secured by a subordinate lien deed of trust to assist the Homebuyer to pay a portion of the purchase price, down payment, and/or closing costs necessary to buy the Property pursuant to the Program and subject to the terms and conditions set forth herein. The principal balance of the Homebuyer Assistance Loan will be forgiven in the event that the Homebuyer (including its permitted assignees and transferees) has complied with all of the terms and conditions of this Agreement during the Affordability Period. J. For a period (the "Affordability Period") commencing upon the date on which the Homebuyer acquires fee title to the Property (the "Homebuyer Assistance Loan Date") and terminating on the forty-fifth (45th) anniversary thereof (the "Affordability Period Termination Date"), the Property may only be transferred to another eligible, qualified Moderate Income Household at an Affordable Housing Cost ("Eligible Persons and Families"). Homebuyer may, in Homebuyer's sole discretion, opt to transfer the Property at a price in excess of an Affordable Housing Cost during the Affordability Period pursuant to Section 1.f. hereof, upon payment of an equity sharing amount to the Agency hereunder. NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Parties hereto agree as follows: 1. Homebuyer Assistance Loan; Promissory Note. 1.1 Homebuyer Assistance Loan. The Agency loans to the Homebuyer and the Homebuyer borrows from the Agency the amount of Dollars ($-_ (the "Homebuyer Assistance Loan Amount"), subject to the conditions and restrictions set forth herein and those set forth in the Promissory Note, Agency Deed of Trust, Notice of Affordable Restrictions, Affordable Housing Resale Restriction, and Disclosure ATTACHMENT NO. 11-2 Form of Homebuyer Loan Agreement DoCS00 1400673x14/200272-0001 Statement (as those terms are hereinafter defined). The Developer and the Homebuyer have opened an escrow (Escrow No. r ! with ; escrow/title company) for Homebuyer's acquisition of the Property (the "Escrow") and the Agency shall be an additional party to the Escrow in connection with the Homebuyer Assistance Loan. 1.2 Promissory Note. The Homebuyer shall execute, as maker, and deliver to the Agency, a promissory note in favor of the Agency, as holder, substantially in the form of Exhibit 'B" that is attached hereto and incorporated herein by this reference (the "Note" or "Promissory Note"). As more particularly provided in the Note, the essential terms and conditions of the Homebuyer Assistance Loan are as follows: a. Term. The term of the Note shall be forty-five (45) years from the Homebuyer Assistance Loan Date (the "Term'). b. Note Amount. The sums due and payable pursuant to the terms and provisions of the Note consist of both the Homebuyer Assistance Loan Amount and the Contingent Equity Participation Amount, as both terms are herein defined (collectively, the "Note Amount'). As one component of the Note Amount, the Homebuyer shall pay to the Agency the principal amount of ' Dollars ($ ?, with zero percent (0%) interest thereon, subject to subsection (c) below. C. Contingent Equity Participation Amount. As a second component of the Note Amount, the Homebuyer shall pay to the Agency, together with the whole of the Homebuyer Assistance Loan Amount, the "Contingent Equity Participation Amount" if required by Section 3. d. Homebuyer Assistance Loan Amount; Interest Deferred Until Acceleration. The Homebuyer Assistance Loan Amount shall accrue zero percent (0%) interest unless and until an event of acceleration occurs as set forth in Section 1.2(f), in which event a "Contingent Equity Participation Amount" shall become due and payable by the Homebuyer if required by Section 3. e. Homebuyer Assistance Loan Amount; Time of Payment and Forgiveness. No repayment of the Homebuyer Assistance Loan Amount shall be required unless and until the Note Amount becomes due and payable, as provided in subparagraph (f) below. L Acceleration. The whole of the Note Amount and all other payments due hereunder shall become due and be immediately payable to the Agency by the Homebuyer upon the occurrence of any one of the following events of acceleration: (i) The Homebuyer sells or transfers the Property (or any part thereof) by any means, including, without limitation, the lease, the rental, the exchange or other disposition of the Property or any interest therein, whether voluntary or involuntary, except (A) a sale of the Property to an eligible, qualified Moderate Income Household at an Affordable Housing Cost with the Agency's prior written approval accomplished in strict conformity with Section 4, or (B) the transfer of the Property solely as a result of the marriage, divorce, ATTACHMENT NO. 11-3 Form of Homebuyer Loan Agreement DOCSOC/ 1400673v 14/200272-0001 incompetence or death of one or more individuals constituting the Homebuyer, so long as the transferee(s) give written notice supported by reasonable evidence of such event to the Agency within thirty (30) days of its occurrence and the transferee(s) assume(s) the Homebuyer's obligations under this Agreement, by execution of an assignment and assumption agreement to be provided by the Agency, or (C) a sale or transfer which under federal law would not, by itself, permit the Agency to exercise a due on sale or due on encumbrance clause; (ii) The Homebuyer refinances any purchase money first lien or other permitted encumbrance to which the Agency Deed of Trust (as hereinafter defined) is subordinate (each such lien, a "First Lien") for a loan amount in excess of the then current loan balance secured by such lien or encumbrance and loan closing costs; and/or (iii) The Homebuyer (and all co-signors and co-mortgagors, if any) fails to own and occupy the Property as their principal residence pursuant to Section 7 or is in Ownership Default (defined in Section 18) under this Agreement. At the request of the Homebuyer, and for a specific occasion, the Agency may, in its sole and absolute discretion, in writing waive the requirements of this subparagraph (f) and defer repayment and/or extend the term of the Note. Any waiver or deferment shall be on a case by case basis, and no future rights for waiver or deferment shall arise or be implied. Notwithstanding the foregoing, the Homebuyer may, upon prior written approval by the Agency, refinance any First Lien for a loan amount equal to or less than the then current loan balance secured by such First Lien. g. Homebuyer Assistance Loan Repayment. If there is an event of acceleration prior to the forty-fifth (45th) Anniversary of the date of the Promissory Note, the Homebuyer shall repay the Homebuyer Assistance Loan in accordance with this subparagraph (g). In the event that no event of acceleration occurs prior to the forty-fifth (45th) Anniversary of the date of the Promissory Note, the full amount of the Promissory Note shall be forgiven, and there shall be no further obligations hereunder. (i) Note Amount Due In Full. The whole of the Note Amount shall be due in full when an event of acceleration occurs. After paying all costs and fees relating to the transaction, if any (such as escrow fees, transfer taxes, recording fees, brokerage commissions and similar costs), the proceeds of any such transaction (or, in the case of any event of acceleration other than a sale, the appraised value of the Property) shall be distributed or applied in the following order of priority: (A) Repayment of the First Lien; (B) Repayment of other pre-approved subordinate lien(s), if any, as and in the lien recording priority that such lien(s) were approved by the Executive Director pursuant to Sections 1.2(i) and 14; (C) Repayment to the Agency of the Homebuyer Assistance Loan Amount; and ATTACHMENT NO. 11-4 Form of Homebuyer Loan Agreement D OCS aC/1400673v141200272-0001 (D) Payment of the Contingent Equity Participation Amount, if any. h. Security for Homebuyer Assistance Loan. The obligation of the Homebuyer to repay the Homebuyer Assistance Loan pursuant to this Agreement, as evidenced by the Promissory Note, shall be secured by a subordinate deed of trust and rider thereto encumbering the Property, substantially in the form of Exhibit "C" that is attached hereto and incorporated herein by this reference (the "Agency Deed of Trust"). The Agency Deed of Trust shall be executed by the Homebuyer, as trustor, in favor of the Agency, as beneficiary. i. Subordination. Subject to the subordination provisions set forth herein and in the Note and the Affordable Housing Resale Restriction, the Agency Deed of Trust shall be subordinate only to the First Lien mortgage obtained by the Homebuyer and, if applicable, other loan(s) as approved by the Executive Director, including lien instruments that secure other homebuyer purchase money and/or downpayment assistance, including without limitation City, State of California, or federal affordable housing programs. j. Prepayment of Homebuyer Assistance Loan. The Homebuyer may prepay the Homebuyer Assistance Loan to the Agency, provided that any prepayment must be in full and not in part. Prepayment shall be treated in the same manner as refinancing of the Property. In any event, the Affordable Housing Resale Restriction shall continue in full force and effect, notwithstanding such prepayment. k. Assumption of Homebuyer Assistance Loan and Promissory Note. The Homebuyer Assistance Loan and the Promissory Note may be assumed by a subsequent qualified Moderate Income Household, as purchaser of the Property, but only in accordance with the terms and conditions set forth in Section 4. 1. Joint and Several. The undersigned, if more than one person, shall be jointly and severally liable under this Agreement for the repayment of the Homebuyer Assistance Loan. m. Homebuyer's Waivers. The Homebuyer waives any rights to require the Agency to: (i) demand payment of amounts due (known as "presentment"), (ii) give notice that amounts due have not been paid (known as "notice of dishonor") and (iii) obtain an official certification of nonpayment (known as "protest"). 2. Notice to Agency. The Homebuyer (or the Homebuyer's heirs following the death of the Homebuyer) agrees to notify the Agency not less than sixty (60) days prior to (i) the opening of escrow for the sale of the Property, (ii) the signing of any agreements or documents related to the transfer, including, without limitation, lease, exchange or other disposition of any interest in the Property, (iii) any proposed refinancing of any First Lien or (iv) the close of the Homebuyer's probate estate. Nothing in this Section 2, however, shall be construed to authorize the Property to be leased or rented. 3. Contingent Equity Participation Amount. If an event of acceleration occurs as described in Section 1.2(f) and the Homebuyer is not selling the Property pursuant to Section 4, ATTACHMENT NO. 11-5 Form of Homebuyer Loan Agreement D OCS OC1140067 3 v 141200272-0001 the Homebuyer shall pay to the Agency the whole of the Homebuyer Assistance Loan Amount and the "Contingent Equity Participation Amount," as hereinafter described. If the Homebuyer is selling the Property to an Eligible Person and Family at an Affordable Housing Cost with the Agency's prior written approval, in accordance with the requirements of Section 4 hereof, then no Contingent Equity Participation Amount shall be required hereunder in connection with such sale. 3.1 Calculation of Contingent Equity Participation Amount. The "Contingent Equity Participation Amount" means an amount equal to a percentage share of the appreciation of the Property determined by multiplying a variable percentage factor (the "Variable Applicable Factor") by the difference between the Sales Price and the Purchase Price (as those terms are hereinafter defined). a. Variable Applicable Factor Calculation. The Variable Applicable Factor shall be calculated by dividing the Agency's total initial equity contribution (the "Agency Contribution") by the sum of the Agency Contribution plus the Homebuyer's Contribution. In other words, the Agency Contribution shall be the numerator, and the sum of the Agency Contribution plus the Homebuyer Contribution shall be the denominator of a fraction that equals a percentage that is the Variable Applicable Factor (subject to Section 3.1(a)(i)). Variable Applicable Factor = Agency Contribution Agency Contribution + Homebuyer Contribution For example, if the Agency Contribution equals $30,000 and the Homebuyer Contribution equals $250,000, the Variable Applicable Factor would equal 10.7% ($30,000 divided by the sum of $30,000 plus $250,000). 10.7% (Variable Applicable Factor) = $30,000 (Agency Contribution) $30,000 (Agency Contribution) + $250,000 (Homebuyer Contribution) = ($284,000) (i) The "Agency Contribution" is the sum of the following amounts contributed by the Agency to the purchase price of the Property: (i) the principal amount of the Homebuyer Assistance Loan, i.e., the Affordable Housing Cost Subsidy (as hereinafter defined); and (ii) the principal amount(s) of any other loan(s) or subsidy(ies) provided by the Agency. (ii) The "Homebuyer Contribution" is the sum of the following amounts contributed by the Homebuyer to the purchase price of the Property: (i) the principal amount of the First Lien purchase money mortgage; (ii) the Homebuyer's cash down payment ATTACHMENT NO. 11-6 Form of Homebuyer Loan Agreement DOCSOG 1400673v 141204272-0001 plus the Homebuyer's portion of closing costs; and (iii) the original principal amount of loans(s) or other subsidy(ies) secured by Homebuyer, (excluding any other than loan(s) or subsidy(ies) provided by the Agency (as set forth in the definition of Agency Contribution)) and applied by the Homebuyer towards the purchase of the Property. (iii) The "Purchase Price" is the original purchase price paid by the Homebuyer (or the Homebuyer as the qualified successor owner of the Property) to the seller of the Property (the "Seller") (generally this amount shall be equal to the original fair market value of the Property at the time of the initialloriginal sale of the Property by the Developer to the Homebuyer) for the Seller's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. Subject to the provisions set forth hereinbelow, the value of Qualified Capital Improvements shall be added to the Purchase Price when calculating the Contingent Equity Participation Amount. (iv) The "Sales Price" is the price to be paid by the prospective buyer (who is not a qualified Moderate Income Household) of the Property (the "Buyer") to the Homebuyer (or the Homebuyer as the qualified successor owner of the Property) for the Homebuyer's interest in the Property, exclusive of reasonable escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The Sales Price shall be established in conformity with Section 3.5(a) hereof. In the event of the Homebuyer's refinancing, failure to occupy, or default, the "Sales Price" shall be established by appraisal paid for by the Homebuyer in conformity with Section 3.5(b). (v) The "Affordable Housing Cost Subsidy" is the amount deemed to be a subsidy from the Agency provided to the Homebuyer by making the Property available for purchase at a price that constitutes an Affordable Housing Cost for the Homebuyer as a Moderate Income Household. The Affordable Housing Cost Subsidy equals the difference between the appraised fair market value of the Property and the Affordable Housing Cost of the Property. 3.2 Using the Variable Applicable Factor to Determine the Contingent Equity Participation Amount. The Contingent Equity Participation Amount is calculated by multiplying the Variable Applicable Factor by the difference between the Sales Price and the Purchase Price. For example, if the Variable Applicable Factor equals 10.7%, the Contingent Equity Participation Amount would then equal 10.7% (Variable Applicable Factor) x (Sales Price minus the Purchase Price). a. In the above example, if the Sales Price (to occur upon resale not conforming to Section 4) equals $380,000 and the Purchase Price equals $280,000, the Contingent Equity Participation Amount would equal $10,700 (10.7% x ($380,000 minus $280,000)). 10.7% (Variable Applicable Factor) x $100,000 (Sales Price -Purchase Price] _ $10,700 (Contingent Equity Participation Amount). b. Calculation of Contingent Equity Participation Amount for Subsequent Homebuyers. If pursuant to Section 4, a Buyer has fully assumed the Homebuyer's obligations ATTACHMENT NO. 11-7 Form of Homebuyer Loan Agreement DOCSOCJ1400673v 14/200272-0001 under this Agreement, the Note, the Agency Deed of Trust, the Notice of Affordable Restrictions and the Affordable Housing Resale Restriction, and thereafter the new Buyer, as the successor Homebuyer, defaults and causes an event of acceleration to occur, the Contingent Equity Participation Amount to be paid by such Buyer shall be calculated by multiplying the Variable Applicable Factor, established in Section 3.l(a), by the difference between the Sales Price, established in conformity with Section 3.5, and the Purchase Price. C. No Appreciation or Depreciation in Value of Property. If an event of acceleration occurs at a time when the Property has not appreciated or the value of the Property has depreciated (the Sales Price is less than the Purchase Price), then no Contingent Equity Participation Amount is due by the Homebuyer to the Agency. 3.3 Qualified Capital Improvements. The value of any Qualified Capital Improvements completed by the Homebuyer during the Homebuyer's ownership of the Property shall be added to the Purchase Price when calculating the Contingent Equity Participation Amount only if, not later than thirty (30) days prior to the event of acceleration causing the Contingent Equity Participation Amount to become immediately due and payable pursuant to Section 1.2(f), the Homebuyer submits the following to the Agency: (i) an itemized list of the Qualified Capital Improvements, (ii) reliable proof of completion of the Qualified Capital Improvements (as evidenced by final building permits, a certificate of completion or original paid invoices or construction contracts), and (iii) an appraisal from a certified appraiser, in form and substance reasonably acceptable to the Executive Director, the conclusion of which is that the Qualified Capital Improvements have added the stated amount to the fair market value of the Property. If, within (30) days of receipt of the information concerning the Qualified Capital Improvements, the Agency questions the claimed increase in the value of the Property by reason of said Qualified Capital Improvements, the Agency and the Homebuyer may, by mutual agreement, establish the value of the Qualified Capital Improvements or the Agency may require an appraisal of the Property, at the Homebuyer's expense, by a second independent certified appraiser appointed by the Agency to determine the fair market value of the Qualified Capital Improvements. 3.4 Credit to Homebuyer. Notwithstanding the foregoing provisions of this Section 3, calculation of the Contingent Equity Participation Amount is subject to a superior right of the Homebuyer to receive credit in calculation of the Purchase Price for money paid by the Homebuyer post-acquisition and during the term of the Homebuyer's ownership of the Property for installment payments of mortgage principal, pursuant to the First Lien actually made by the Homebuyer, in addition to the fair market value of Qualified Capital Improvements consistent with the requirements of Section 3.3. 3.5 Determination of Sales Price; Appraisal. a. Upon Sale of the Property. In the event of a proposed sale of the Property by the Homebuyer that does not conform to Section 4, and not less than thirty (30) days after the Agency receives actual notice of the opening of escrow in connection therewith, the Agency may elect to appoint a certified, independent appraiser to conduct an appraisal of the ATTACHMENT NO. 11-8 Form of Homebuyer Loan Agreement DOCSOCI 14006730 41200272-0001 Property, at the Homebuyer's expense, to assist the Agency in determining if the Sales Price is at or near the fair market value of the Property at such time. If the Sales Price is determined by the appraisal to be three percent (3%) or more below the fair market value of the Property as estimated in said appraisal, then the "Sales Price" for purposes of determining the Contingent Equity Participation Amount shall be the fair market value of the Property established in said appraisal. b. Upon Refinancing/Failure to Occupy/Default. In the event of refinancing, failure to occupy all of the Property in accordance with Section 7, or default or breach of any provision of this Agreement that causes acceleration and the Contingent Equity Participation Amount to become immediately due and payable, the "Sales Price" for purposes of determining the Contingent Equity Participation Amount shall be determined by an appraisal of the Property. The Agency shall appoint a certified independent appraiser to conduct an appraisal of the Property, at the Homebuyer's expense. The Homebuyer agrees that in such event the Contingent Equity Participation Amount shall be the Variable Applicable Factor multiplied by the difference between the Purchase Price and Sales Price as established by the appraised value of the Property at the time of such refinancing, failure to occupy, or default of this Agreement. Amount. 3.6 Homebuyer's Acknowledgment of Contingent Equity Participation HOMEBUYER ACKNOWLEDGES AND AGREES THAT UPON AND/OR UPON ANY OTHER EVENT OF ACCELERATION AS SET FORTH IN SECTION 1.2(f) HEREOF, HOMEBUYER SHALL PAY TO AGENCY (IN ADDITION TO THE AGENCY LOAN AMOUNT), A CONTINGENT EQUITY PARTICIPATION AMOUNT EQUAL TO A PERCENTAGE SHARE OF THE APPRECIATION OF THE PROPERTY AS CALCULATED PURSUANT TO THIS SECTION 3. HOMEBUYER'S INITIALS: 4. Sale of Property to Moderate Income Household at Affordable Housing Cost. 4.1 Forty-Five (45) Year Affordability Requirements. During the Affordability Period, the Property may be sold only to Eligible Persons and Families at an Affordable Housing Cost with the Agency's prior written approval. These requirements shall be set forth in an Affordable Housing Resale Restriction (Conditions, Covenants, and Restrictions Affecting Real Property and the Resale, Ownership, Occupancy, Maintenance, and Other Matters Related to Real Property), in the form that is attached hereto as Exhibit "D" and incorporated herein by this reference. The Affordable Housing Resale Restriction permits Homebuyer, in Homebuyer's sole discretion, through an event of acceleration pursuant to Section 11, to transfer the Property at a price in excess of an Affordable Housing Cost during the Affordability Period, upon payment of the Contingent Equity Participation Amount as set forth in Section 3 hereof. ATTACHMENT NO. 11-9 Form of Homebuyer Loan Agreement DOCSOCJ I440573vl4/200272-0401 4.2 Verification of Prospective Buyer's Income. In order to verify the prospective Buyer's status as a Moderate Income Household, the Homebuyer shall submit or cause the proposed Buyer to submit to the Agency the identity of the proposed Buyer and adequate information evidencing the income and household size of the proposed Buyer. a. Gross income and net income of the prospective Buyer's household shall be determined in accordance with Health & Safety Code Section 50093 and the provisions of Sections 6914 and 6916 of Title 25 of the California Code of Regulations. The prospective Buyer shall submit a certification that such Buyer is a Moderate Income Household and meets the eligibility requirements established for the Property and that the Property will be sold at an Affordable Housing Cost by Homebuyer to such prospective Buyer. (i) Income information shall be submitted together with the notice of proposed sale in accordance with Section 2 not less than thirty (30) days prior to the opening of escrow for the proposed sale and shall include original or true copies of pay stubs, income tax records or other financial documents in order that the Agency may review the household income of the proposed Buyer to determine whether the proposed Buyer is a Moderate Income Household and whether the Property is to be transferred to such Buyer at an Affordable Housing Cost. If the Agency is unable to verify Buyer's income as provided herein prior to the proposed sale, then the Buyer's income shall be deemed to exceed the maximum allowable income limit for Eligible Persons and Families. 4.3 Affordable Housing Cost. The Property shall be resold by the Homebuyer to the Buyer at an "Affordable Housing Cost" that shall mean the pricing for Moderate Households and shall be calculated pursuant to California Health & Safety Code Section 50052.5, the implementing regulations of Sections 6920, 6924 and 6930 of Title 25 of the California Code of Regulations for Moderate Income Households, 5. Release of Affordability. After the Affordability Period Termination Date, the Property shall no longer be subject to the affordability requirements of this Agreement and the Affordable Housing Resale Restriction, and the Homebuyer may sell or transfer the Property to any person, regardless of the person's income status, at the Property's fair market value. 6. Maintenance of Property. The Homebuyer shall maintain the interior of the Property (a) in a clean, safe and presentable manner, (b) consistent with community standards, (c) in a manner which will uphold the value of the Property, (d) in accordance with the maintenance requirements of the Affordable Housing Resale Restriction, (e) in accordance with the Santa Ana Municipal Code and the Uniform Housing Code, and (t) in accordance with any and all covenants and agreements established by any homeowner's association or other regulatory entity recognized by area property owners. The Homebuyer shall not allow the Property to accumulate debris, or allow inoperable or abandoned vehicles on the Property, or allow any other unsightly or dangerous conditions on the Property. The covenants for the maintenance of the Property shall run with the Property and shall remain in effect until the Affordability Period Termination Date. The Homebuyer and the Agency shall execute and record the Affordable Housing Resale Restriction against the Property in the Official Records of Orange County, California. The Homebuyer also agrees to comply with all applicable federal, state and local laws. ATTACHMENT NO. 11-10 Form of Homebuyer Loan Agreement D OC S O G 1400673 v 141240272-0001 7. Occupancy Standards. The Property shall be used as the principal personal residence of the Homebuyer and the Homebuyer's immediate family and for no other purpose. The Homebuyer shall not enter into an agreement for the rental or lease of all or any part of the Property. The Homebuyer shall not rent out a room or rooms in the Property. The Homebuyer may request a temporary waiver of the foregoing requirement in the event of extreme hardship requiring the Homebuyer to move to another geographical area or to less expensive housing, including, for example and without limitation, transfer of job location, loss of job, or unexpected major expenses. The Agency may approve or disapprove such request in its sole discretion, and may require as a condition of approval that the Homebuyer only rent the Property to Eligible Persons and Families, subject to the maximum affordable rent limit applicable to Moderate Income Households as set forth in Health & Safety Code Section 50053. The Homebuyer shall, upon demand by the Agency, submit to the Agency an affidavit of occupancy verifying the Homebuyer's compliance with this Section 7. Such affidavit may be required by the Agency on an annual basis. 8. Income Certification. The Homebuyer has submitted an application and additional information verifying income eligibility to the Developer and the Agency prior to execution of this Agreement. The Homebuyer represents, warrants, and declares under penalty of perjury to the Agency that all information the Homebuyer has provided and will provide in the future to the Developer and the Agency is and will be true, correct and complete. The Homebuyer acknowledges that the Agency is relying upon the Homebuyer's representations as to income, household size, assets and other information to determine whether the Homebuyer is a Moderate Income Household and the Agency would not have entered into this Agreement if the Homebuyer did not so qualify. In the event that the Agency discovers that any of such information is materially untrue, the Agency may declare the Homebuyer Assistance Loan and the Contingent Equity Participation Amount, if any, immediately due and payable. 9. Monthly Housing Cost Information. The Homebuyer's anticipated Monthly Housing Costs at the time of this Agreement, and at the time of Homebuyer's acquisition of the Property, must not exceed Affordable Housing Cost, determined as follows: 9.1 Affordable Housing Cost - Moderate Income Household. The Homebuyer (and all successors thereto during the 45-year Affordability Period) shall be a Moderate Income Household as defined in Health & Safety Code Sections 50052.5 and 54093 (or successor statutes) and the implementing regulations thereto promulgated by the Housing and Community Development Department of the State of California. "Affordable Housing Cost" means the purchase price for Moderate Income Households pursuant to California Health & Safety Code Section 50052.5, the implementing regulations of Sections 6920, 6924 and 6930 of Title 25 of the California Code of Regulations for Moderate Income Households, 10. Co-Signers and Co-Mortgagors. The income of individuals who sign only the Note ("co-signers") and individuals who sign both the Note and the grant deed ("co- mortgagors") will be included for determining whether the Homebuyer is a Moderate Income Household. All such co-signers and co-mortgagors must be part of the Homebuyer's household and must reside in the Property. Non-occupants of the Property may not serve as co-signers or co-mortgagors, nor may such individuals hold title to or any other property interest in the Property. ATTACHMENT NO. 11-11 Form of Homebuyer Loan Agreement DOCSOCJ1400673v 141200272-0001 11. Married Sole and Separate Property. An individual taking title to the Property as contemplated by this Agreement is subject to special requirements because of California community property laws and Federal tax laws. If the Homebuyer is legally separated, or has filed for divorce and a legal property disposition agreement exists between the Homebuyer and the Homebuyer's spouse, a quitclaim deed from the Homebuyer's spouse and a copy of the property disposition agreement may be required by the Agency. In the absence of an existing legal property disposition agreement between the Homebuyer and the Homebuyer's spouse, as a condition of approval of the Homebuyer Assistance Loan, a quitclaim deed, a special agreement and a release of interest signed by both the Homebuyer and the Homebuyer's spouse, after consultation with an attorney, may be required by the Agency. Additionally, if the Homebuyer's spouse is to reside in the Property, the combined income of the Homebuyer and the Homebuyer's spouse must be included in the income test for eligibility under the Program. 12. Loan Servicing. The Agency may contract with an outside organization to originate and service the Homebuyer Assistance Loan. 13. Homebuyer Financing. The Homebuyer shall obtain First Lien purchase money mortgage financing which is a fixed rate and fully amortizing loan for its acquisition of the Property from a reputable institutional lender reasonably acceptable to the Agency (the "Lender"). The Homebuyer shall at all times during the term of Homebuyer Assistance Loan comply with all requirements of the Lender, including without limitation, loan underwriting standards, minimum down payment requirements, private mortgage insurance requirements, homebuyer education requirements, and tax and insurance impound requirements. In addition, not less than three percent (3%) of the purchase price of the Property shall be paid in cash from the Homebuyer's own resources and not from the proceeds of a loan secured by a lien on the Property, and gifts and seller concessions may not be used to meet this requirement, except as otherwise permitted by the Lender. The total amount of the First Lien mortgage loan and Homebuyer Assistance Loan (in addition to other affordable housing loans or grants described in Section 3.1) shall not exceed the sum of the fair market value of the Property at the time of the Homebuyer's purchase of the Property and non-recurring closing costs. 14. Subordination. Except as provided otherwise herein, the provisions of this Agreement, the Notice of Affordability Restrictions, the Agency Deed of Trust, and the Affordable Housing Resale Restriction, and the obligations therein, shall be subordinate only to the First Lien on the Property held by the Lender and, if applicable, other loan(s) as approved by the Executive Director, including lien instruments that secure other homebuyer purchase money and/or downpayment assistance, including without limitation City, State of California, or federal affordable housing programs, which liens shall not impair the rights of the Lender, or the Lender's assignee or successor in interest or the Agency, if applicable, to exercise their remedies under the First Lien in the event of default under the First Lien by the Homebuyer. Such remedies under the First Lien include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. If title to the Property is transferred by foreclosure or acceptance of a deed in lieu of foreclosure, or assignment of the First Lien to the Secretary of the Department of Housing and Urban Development, this Agreement and the Agency Deed of Trust shall be automatically terminated and shall have no further effect as to the Property or any transferee thereafter. However, in no event shall this Agreement, the Agency Deed of Trust, and the Affordable Housing Resale Restriction, be subordinate to any First Lien on the Property ATTACHMENT NO. 11-12 Form of Homebuyer Loan Agreement DOC S OC/1400673 r 14200272-0001 securing a loan with provisions which allow negative amortization, or to refinancing of the First Lien for a loan amount in excess of the sum of the then current loan balance secured by the First Lien and loan closing costs. 14.1 Order of Recording. The Homebuyer agrees it shall instruct the Escrow Agent for the acquisition of the Property by the Homebuyer that the order of recording in the escrow for the purchase of the Property by Homebuyer shall occur as follows: (1) the Grant Deed, (2) the First Lien; (3) other affordable housing loan(s) as described in Section 3. 1, as permitted by the Executive Director; (4) the Affordable Housing Resale Restriction; (5) Notice of Affordability Restrictions and (6) the Agency Deed of Trust. The Agency shall cause a Request for Notice of Default to be recorded on the Property subsequent to the recordation of the First Lien deed of trust or mortgage requesting a statutory notice of default as set forth in the California Civil Code Section 2924b, and shall cause a request for Notice of Delinquency to be recorded on the Property subsequent to the recordation of the First Lien deed of trust or mortgage. 15. Indemnification. The Homebuyer shall pay for, defend, indemnify, and hold harmless the Agency and the City and their respective officers, agents, employees, representatives and volunteers from and against any loss, liability, claim or judgment relating in any manner to the Property or this Agreement. The Homebuyer shall remain fully obligated for the payment of property taxes, liens, and assessments related to the Property. There shall be no reduction in taxes for the Homebuyer, nor any transfer of responsibility to the Agency to make such payments, by virtue of the Homebuyer Assistance Loan. 16. Insurance. The Homebuyer shall maintain, during the term of the Homebuyer Assistance Loan, an all-risk property insurance policy insuring the Property in an amount equal to the full replacement value of the structures on the Property. The policy shall name the Agency and the City as loss payees and shall contain a statement of obligation on behalf of the carrier to notify the Agency of any material change, cancellation or termination of coverage at least thirty (30) days in advance of the date of such material change, cancellation or termination. The Homebuyer shall transmit a copy of the certificate of insurance and loss payee endorsement to the Agency within thirty (30) days of the effective date of this Agreement, and upon request by the Agency, the Homebuyer shall transmit to the Agency further copies of the certificate of insurance and a loss payee endorsement. The copy of the certificate of insurance and loss payee endorsement shall be transmitted to the Agency at the address set forth in Section 29. The form, content, issuer of any certificate of insurance must be reasonably acceptable to the Agency. 17. Defaults. Failure or delay by either party to perform any term or provision of this Agreement which is not cured within thirty (30) days after receipt of notice from the other party constitutes a default under this Agreement; provided, however, that if such default is of the nature requiring more than thirty (30) days to cure, the defaulting party shall avoid default hereunder by commencing to cure within such thirty (30) day period, and thereafter diligently pursuing such cure to completion. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings against the party in ATTACHMENT NO. 11-13 Form of Homebuyer Loan Agreement DOCSOCll400613 v 14/200272-0001 default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Notwithstanding the foregoing, for purposes of acceleration of the Homebuyer Assistance Loan, payment of the Note Amount including the Contingent Equity Participation Amount, or initiation of foreclosure proceedings, there shall be a distinction between the types of default hereunder, including an "Ownership Default" and a "Maintenance Default". 17.1 Ownership Default. The term "Ownership Default" means the failure of the Homebuyer to perform any action or covenant required by the Affordable Housing Resale Restriction related to ownership, owner-occupancy, lien priority, and restrictions on sale and resale of the Property, subject to notice and an opportunity to cure as set forth herein. A default of any obligation secured by the First Lien shall be a cross-default and also constitute an Ownership Default. 17.2 Maintenance Default. The term "Maintenance Default" means the failure of the Homebuyer to perform any action or covenant required by the Affordable Housing Resale Restriction relating to a "Maintenance Deficiency," including the ongoing upkeep, maintenance, and use of the Property in a decent, safe, sanitary, clean, and neighborly manner, subject to notice and an opportunity to cure as set forth herein (and expressly excluding an Ownership Default). 18. Remedies. The Agency shall be entitled to all legal and equitable remedies available under the law upon the default of the terms of this Agreement by the Homebuyer. Such remedies may include, without limitation, (a) specific performance of the terms of this Agreement, (b) disgorgement of any amount of consideration received for the Property that exceeds an Affordable Housing Cost, and/or (c) an order to pay attorneys' fees, as set forth in Section 30. 19. Non-Waiver. Failure to exercise any right the Agency may have or be entitled to, in the event of default hereunder, shall not constitute a waiver of such right or any other right in the event of a subsequent default. 20. Documents. The Homebuyer is aware that the Agency has prepared certain documents to implement the Program and secure repayment of the Homebuyer Assistance Loan. The Homebuyer has reviewed and agrees to execute the following documents in substantially the form as attached hereto prior to receiving the Homebuyer Assistance Loan, and any other documents reasonably required by the Agency or a participating entity to complete the transaction contemplated herein: a. Promissory Note; b. Agency Deed of Trust; C. Affordable Housing Resale Restriction; d. Reimbursement Agreement, substantially in the form of Exhibit "E" attached hereto and fully incorporated by this reference; ATTACHMENT NO. 11-14 Form of Homebuyer Loan Agreement DOCS00 1400573v141200272-0001 e. Disclosure Statement substantially in the form of Exhibit "F" attached hereto and fully incorporated by this reference; and f. Notice of Affordability Restrictions, substantially in the form of Exhibit "G" attached hereto and fully incorporated by this reference. The Homebuyer agrees and acknowledges that the Agency Deed of Trust, the Notice of Affordability Restrictions, and the Affordable Housing Resale Restriction shall be recorded against the Property with the County Recorder of the County of Orange and shall appear of record with respect to and as encumbrances to the Property. The Homebuyer agrees that this Agreement may also be recorded. 21. Further Assurances. The Homebuyer shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as the Agency shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Agreement and making the Homebuyer Assistance Loan. 22. Governing Law. The Homebuyer hereby agrees to comply with all ordinances, rules, and regulations of the City. Nothing in this Agreement is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule, or regulation. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Orange, State of California or in the United States District Court, Central District of California, Santa Ana Division. 23. Amendment of Agreement. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by the Homebuyer and the Agency. 24. Agency May Assign. The Agency may, at its option, assign or pledge its right to receive repayment of the Homebuyer Assistance Loan proceeds without obtaining the consent of the Homebuyer. 25. Homebuyer Assignment Prohibited. In no event shall the Homebuyer assign or transfer any portion of this Agreement without the prior express written consent of the Agency, pursuant to the procedures set forth in Section 4. In the event of an Ownership Default and acceleration of the Homebuyer Assistance Loan, the full amount shall be due, including the Contingent Equity Participation Amount. 26. Relationship of Homebuyer and Agency. The relationship of the Homebuyer and the Agency pursuant to this Agreement is that of debtor and creditor and shall not be, or be construed to be, a joint venture, equity venture, partnership, or other relationship. 27. Monitoring. To the extent permitted by law, the Agency and its designated employees and agents shall have the right to enter the Property at all reasonable times without a warrant for the purpose of monitoring the Homebuyer's compliance with this Agreement. Any such entry shall be made only after reasonable notice to the Homebuyer, which shall mean at least forty-eight (48) hours in all non-emergency situations. Upon receipt of such notice, the Homebuyer agrees to consent to entry by the Agency and to cooperate in making the Property ATTACHMENT NO. 11-15 Form of Homebuyer Loan Agreement DOCS001 400673v 141200272-0001 available for inspection by the Agency. The Homebuyer acknowledges and agrees that if for any reason the Homebuyer fails to consent to such entry or inspection, the Agency may obtain an administrative inspection warrant or take such other legal actions as may be necessary to gain access to and inspect the Property. The Agency shall indemnify and hold harmless the Homebuyer from any costs, claims, damages or liabilities pertaining to any such entry. 28. Notices. Any notices, requests or approvals given under this Agreement from one party to another may be personally delivered or deposited with the United States Postal Service for mailing, postage prepaid, registered or certified mail, return receipt requested to the following address: To Homebuyer: To Agency: Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Attention: Executive Director Either party may change its address for notice by giving written notice thereof to the other party. 29 Attorneys' Fees and Costs. Should either of the parties to this Agreement incur attorneys' fees in seeking the enforcement of this Agreement, whether or not a final court judgment is entered, the prevailing party shall be entitled to reimbursement of its reasonable attorneys' fees and litigation costs, including without limitation expert witness fees, by the other party 30. Entire Agreement. This Agreement, together with all attachments hereto, constitutes the entire understanding and agreement between the Agency and the Homebuyer. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between the Agency and the Homebuyer concerning all or any part of the subject matter of this Agreement. [Signature block begins on follow page.] ATTACHMENT NO. 11-16 Form of Homebuyer Loan Agreement DOCS00I 400673 v 141200272-0001 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth in the first paragraph of this Agreement. HOMEBUYER: By: Printed Name: By: Printed Name: AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic By: Cynthia J. Nelson Executive Director ATTEST: Maria D. Huizar, Clerk of the Council APPROVED AS TO FORM: Stradling Yocca Carlson & Rauth, Agency Special Counsel ATTACHMENT NO. 11-17 Ford of Homebuyer Loan Agreement DOC SOC/ 1400673 v 14/200272-0001 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY [to be inserted] EXHIBIT A TO ATTACHMENT NO. 11 Legal Description of Property DOCSOCI 1400573v 141200272-0001 EXHIBIT "B" PROMISSORY NOTE SECURED BY DEED OF TRUST NOTICE TO MAKER: CONTINGENT EQUITY PARTICIPATION AMOUNT SHALL BE DUE AND PAYABLE IF CERTAIN EVENTS OCCUR $ ' Santa Ana, California Property Address:' City State Zip Code FOR VALUE RECEIVED, the undersigned (the "Maker" or "Homebuyer") promises to pay to the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic (the "Holder" or "Agency") at 20 Civic Center Plaza, Santa Ana, California 92701, or at such other address as the Holder may direct from time to time in writing, the sums specified in the terms and provisions of this Promissory Note as the "Note Amount". 1. Loan Agreement. This Promissory Note Secured by Deed of Trust (this "Note") is made and delivered pursuant to and in implementation of the Homebuyer L_ oan_ Agreement entered into by and between the Holder and the Matter dated , 20 ("Agreement"), a copy of which is on file as a public record with the Holder. The Agreement is incorporated herein by this reference. The Maker acknowledges that but for the execution of this Note, the Holder would not enter into the Agreement or make the loan contemplated therein. Unless definitions of terms have been expressly set out at length herein, each term shall have the same definition as set forth in the Agreement. 2. Term. The term of the Note shall be forty-five (45) years from the Homebuyer Assistance Loan Date ("Term"). 3. Note Amount. The sums due and payable pursuant to the terms and provisions of this Note consist of both the Homebuyer Assistance Loan Amount and the Contingent Equity Participation Amount, as both terms are hereinafter defined (collectively, the "Note Amount"). As one component of the Note Amount, Maker shall pay to the Agency the principal amount of Dollars ($ (the "Homebuyer Loan Amount"), with zero percent (0%n) interest thereon, subject to subsection (a) below. (a) Contingent Equity Participation Amount. As a second component of the Note Amount, the Maker shall pay to the Agency, together with the whole of the Homebuyer Assistance Loan Amount, the Contingent Equity Participation Amount as set forth in Section 7. EXHIBIT B-1 TO ATTACHMENT NO. 11 Promissory Note DOCSOGI400673 v 141200272.0001 4. Homebuyer Assistance Loan Amount; Interest Deferred Until Acceleration. The Homebuyer Assistance Loan Amount shall accrue zero percent (0%) interest unless and until an event of acceleration occurs as set forth in Section 6, in which event a Contingent Equity Participation Amount as described in Section 7 shall become due and payable by the Maker. 5. Homebuyer Assistance Loan Amount; Time of Payment and Forgiveness. No repayment of the Homebuyer Assistance Loan Amount shall be required unless and until the Note Amount becomes due and payable, as provided in subparagraph (f) below. In the event that the Homebuyer Assistance Loan Amount does not become due and payable prior to the forty-fifth (45th) Anniversary of the date of this Promissory Note, the full amount of the Promissory Note shall be forgiven, and there shall be no further obligations hereunder. 6. Acceleration. The whole of the Note Amount and all other payments due hereunder and under the Agreement shall become due and be immediately payable to the Holder by the Maker upon the occurrence of any one of the following events of acceleration: (a) the sale or transfer of the Property (or any part thereof) by any means, including, without limitation, the lease, exchange or other disposition of the Property or any interest therein, whether voluntary or involuntary, except (A) a sale of the Property to a qualified Moderate Income Household at an Affordable Housing Cost with the Agency's prior written approval accomplished in strict conformity with Section 4 of the Agreement, or (B) the transfer of the Property solely as a result of the marriage, divorce, incompetence or death of one or more individuals constituting the Homebuyer, so long as the transferee(s) give written notice supported by reasonable evidence of such event to the Agency within thirty (30) days of its occurrence and the transferee(s) assume(s) the Homebuyer's obligations under the Agreement, by execution of an assignment and assumption agreement to be provided by the Agency, or (C) a sale or transfer which under federal law would not, by itself, permit the Agency to exercise a due on sale or due on encumbrance clause; (b) the Maker refinances any purchase money lien or encumbrance to which the Agency Deed of Trust is subordinate (each such lien, a "First Lien") for a loan amount in excess of the then current loan balance secured by such lien or encumbrance and loan closing costs; and/or (c) the Maker (and all co-signors and co-mortgagors, if any) fails to own and occupy the Property as their principal residence pursuant to Section 7 of the Agreement or is in Ownership Default as defined in Section 18 of the Agreement. At the request of the Maker, and for a specific occasion, the Holder may, in its sole and absolute discretion, in writing waive the requirements of these subparagraphs and defer repayment and/or extend the term of this Note. Any waiver or deferment shall be on a case by case basis, and no future rights for waiver or deferment shall arise or be implied. Notwithstanding the foregoing, the Maker may, upon prior written approval by the Holder, refinance any First Lien for a loan amount equal to or less than the then current loan balance secured by such First Lien. EXHIBIT B-2 TO ATTACHMENT NO. 11 Promissory Note DOCSOC/ 1400673041200272-0001 7. Contingent Equity Participation Amount. If an event of acceleration occurs as described in Section 6, and the Maker is not selling the Property pursuant to Section 4 of the Agreement, the Maker shall pay to the Holder, the whole of the Homebuyer Assistance Loan Amount and the "Contingent Equity Participation Amount," as hereinafter defined. If the Homebuyer is selling the Property to an Eligible Person and Family at an Affordable Housing Cost with the Agency's prior written approval, in accordance with the requirements of Section 9 hereunder and Section 4 of the Agreement, then no Contingent Equity Participation Amount shall be required hereunder in connection with such sale. (a) Calculation of Contingent Equity Participation Amount. The "Contingent Equity Participation Amount" means an amount equal to a percentage share of the appreciation of the Property determined by multiplying a variable percentage factor (the "Variable Applicable Factor") by the difference between the Sales Price and the Purchase Price (as those terms are hereinafter defined). (b) Variable Applicable Factor Calculation. The Variable Applicable Factor shall be calculated by dividing the Agency's total initial equity contribution (the "Agency Contribution") by the sum of the Agency Contribution plus the Homebuyer's contribution (the "Homebuyer Contribution"). In other words, the Agency Contribution shall be the numerator, and the sum of the Agency Contribution plus the Homebuyer Contribution shall be the denominator of a fraction that equals a percentage that is the Variable Applicable Factor (subject to Section (7(b)(i)). Variable Applicable Factor = Agency Contribution Agency Contribution + Homebuyer Contribution For example, if the Agency Contribution equals $30,000 and the Homebuyer Contribution equals $250,000, the Variable Applicable Factor would equal 10.7% ($30,000 divided by the sum of $30,000 plus $250,000). 10.7% (Variable Applicable Factor) = $30,000 (Agency Contribution) $30,000 (Agency Contribution) + $250,000 (Homebuyer Contribution) = ($280,000) (i) The "Agency Contribution" is the sum of the following amounts contributed by the Agency to the purchase price of the Property (i) principal amount of the Homebuyer Assistance Loan, i.e., the Affordable Housing Cost Subsidy (as hereinafter defined); and (ii) the principal amount(s) of any other loan(s) or subsidy(ies) provided by the Agency. (ii) The "Homebuyer Contribution" is the sum of the following amounts contributed by the Homebuyer to the purchase price of the Property: (i) the principal amount of the First Lien loan; (ii) the Homebuyer's cash down payment plus the Homebuyer's portion of closing costs; and (iii) the original principal amount of loans(s) or other subsidy(ies) EXHIBIT B-3 TO ATTACHMENT NO. I 1 Promissory Note DOCSOG t 400673v 14/200272-0001 secured by the Homebuyer, (excluding and other than loan(s) or subsidy(ies) provided by the Agency (as set forth in the definition of the Agency Contribution)) and applied by the Homebuyer towards the purchase of the Property. (iii) The "Purchase Price" is the original purchase price paid by the Homebuyer (or the Homebuyer as the qualified successor owner of the Property) to the seller of the Property (the "Seller") (generally this amount shall be equal to the original fair market value of the Property at the time of the initial/original sale of the Property by the Developer to the Homebuyer) for the Seller's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. Subject to the provisions set forth hereinbelow, the value of Qualified Capital Improvements shall be added to the Purchase Price when calculating the Contingent Equity Participation Amount. (iv) The "Sales Price" is the price to be paid by the prospective buyer (who is not a qualified Moderate Income Homebuyer) of the Property (the "Buyer") to the Homebuyer (or the Homebuyer as the qualified successor owner of the Property) for the Homebuyer's interest in the Property, exclusive of reasonable escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The Sales Price shall be established in conformity with Section 7(1)(i). In the event of the Homebuyer's refinancing, failure to occupy, or an Ownership Default, the "Sales Price" shall be established in conformity with Section 7(l)(ii). (v) The "Affordable Housing Cost Subsidy" is the amount deemed to be a subsidy from the Agency provided to the Homebuyer by making the Property available for purchase at a price that constitutes an Affordable Housing Cost for Homebuyer as a Moderate Income Household. The Affordable Housing Cost Subsidy equals the difference between the appraised fair market value of the Property as of the date of the Agreement and the Affordable Housing Cost. (c) Exception Calculation. Notwithstanding the above, the Variable Applicable Factor shall equal the greater of fifty percent (50%) or the Variable Applicable Factor calculated pursuant to Section 7(b); provided however, in the event Maker receives a First Lien loan from the California Finance Agency or a First Lien loan the source of proceeds of which are from tax exempt bonds, then the Variable Applicable Factor shall equal the Variable Applicable Factor percentage calculated pursuant to Section 7(b). (d) Using the Variable Applicable Factor to Determine the Contingent Equity Participation Amount. The Contingent Equity Participation Amount is calculated by multiplying the Variable Applicable Factor by the difference between the Sales Price and the Purchase Price. For example, if the Variable Applicable Factor equals 10.7%, the Contingent Equity Participation Amount would then equal 10.7% (Variable Applicable Factor) x (Sales Price minus the Purchase Price). In the above example, if the Sales Price (to occur upon resale not conforming to Section 4 of the Agreement) equals $380,000 and the Purchase Price equals $284,000, the Contingent Equity Participation Amount would equal $10,700 (10.7% x ($380,000 minus $280,000)). EXHIBIT B-4 TO ATTACHMENT NO. 11 Promissory Note D OC S OC/ 1400573 v 14/20027 2-0001 10.7% (Variable Applicable Factor) x $100,000 (Sales Price - Purchase Price) = $10,700 (Contingent Equity Participation Amount). (e) Calculation of Contingent Equity Participation Amount for Subsequent Homebuyers. If pursuant to Section 4 of the Agreement and Section 9 of this Note, a Buyer has fully assumed the Homebuyer's obligations under the Agreement, this Note, the Agency Deed of Trust, Notice of Affordability Restrictions and the Affordable Housing Resale Restriction, and thereafter the new Buyer, as the successor Homebuyer, is in Ownership Default which causes an event of acceleration to occur, the Contingent Equity Participation Amount to be paid by such Buyer shall be calculated by multiplying the Variable Applicable Factor, established in Section 7(b), by the difference between the Sales Price, established in conformity with Section 7(I), and the Purchase Price. (f) No Appreciation or Depreciation in Value of Property. If an event of acceleration occurs at a time when the Property has not appreciated or the value of the Property has depreciated (the Sales Price is less than the Purchase Price), then no Contingent Equity Participation Amount is due by Maker to Holder. (g) Qualified Capital Improvements. The value of any Qualified Capital Improvements completed by Maker during Maker's ownership of the Property shall be added to the Purchase Price when calculating the Contingent Equity Participation Amount only if, not later than thirty (30) days prior to the event of acceleration causing the Contingent Equity Participation Amount to become immediately due and payable pursuant to Section 6, the Maker submits the following to the Holder: (i) an itemized list of the Qualified Capital Improvements, (ii) reliable proof of completion of the Qualified Capital Improvements (as evidenced, e.g., by final building permits, a certificate of completion or original paid invoices or construction contracts), and (iii) an appraisal from a certified appraiser, in form and substance reasonably acceptable to the Executive Director, the conclusion of which is that the Qualified Capital Improvements have added the stated amount to the fair market value of the Property. If, within thirty (30) days of receipt of the information concerning the Qualified Capital Improvements, the Holder questions the claimed increase in the value of the Property by reason of said Qualified Capital Improvements, the Holder and the Maker may, by mutual agreement, establish the value of the Qualified Capital Improvements or the Holder may require an appraisal of the Property, at the Maker's expense, by a second independent certified appraiser appointed by the Holder to determine the fair market value of the Qualified Capital Improvements. (h) Credit to Maker. Notwithstanding the foregoing provisions of this Section 7, calculation of the Contingent Equity Participation Amount is subject to a superior right of the Maker to receive credit in calculation of the Purchase Price for money paid by the Maker post acquisition and during the term of the Maker's ownership of the Property for installment payments of mortgage principal, pursuant to the First Lien actually made by the EXHIBIT B-5 TO ATTACHMENT NO. 11 Promissory Note DOCSOC/ 1400b73v 141200272.0001 Maker, in addition to the fair market value of Qualified Capital Improvements consistent with the requirements of Section 7(g) hereof. (I) Determination of Sales Price; Appraisal. (i) Upon Sale of the Property. In the event of a proposed sale of the Property by the Homebuyer that does not conform to Section 9 and not less than thirty (30) days after the Holder receives actual notice of the opening of escrow in connection therewith, the Holder may elect to appoint a certified, independent appraiser to conduct an appraisal of the Property, at the Maker's expense, to assist the Holder in determining if the Sales Price is at or near the fair market value of the Property at such time. If the Sales Price is determined by the appraisal to be three percent (3%) or more below the fair market value of the Property as estimated in said appraisal, then the "Sales Price" for purposes of determining the Contingent Equity Participation Amount shall be the fair market value of the Property established in said appraisal. (ii) Upon Refmancing/Failure to Occupy/Default. In the event of refinancing, failure to occupy the Property in accordance with Section 7 of the Agreement, or an Ownership Default or breach of any provision of the Agreement which causes the Contingent Equity Participation Amount to become immediately due and payable, the "Sales Price" for purposes of determining the Contingent Equity Participation Amount shall be determined by an appraisal of the Property. The Holder shall appoint a certified independent appraiser to conduct an appraisal of the Property, at the Maker's expense. The Maker agrees that in such event the Contingent Equity Participation Amount shall be the Variable Applicable Factor multiplied by the difference between the Purchase Price and "Sales Price" as established by the appraised value of the Property at the time of such refinancing, failure to occupy, or default under the Agreement. 8. Maker's Acknowledgment of Contingent Equity Participation Amount. MAKER ACKNOWLEDGES AND AGREES THAT UPON SALE, TRANSFER OR REFINANCING OF THE PROPERTY THAT DOES NOT COMPLY WITH SECTION 9, AND/OR UPON ANY OTHER DEFAULT THAT CAUSES AN EVENT OF ACCELERATION AS SET FORTH IN SECTION 6 HEREOF, MAKER SHALL PAY TO HOLDER (IN ADDITION TO THE AGENCY LOAN AMOUNT), A CONTINGENT EQUITY PARTICIPATION AMOUNT EQUAL TO A PERCENTAGE SHARE OF THE APPRECIATION OF THE PROPERTY AS CALCULATED PURSUANT TO SECTION 7. MAKER/HOMEBUYER'S INITIALS: 9. Sale to Moderate Income Household at Affordable Housing Cost. During the Affordability Period, the Note will not become due and payable, and no Contingent Equity Participation Amount shall be required hereunder in connection with such sale, if the Maker sells EXHIBIT B-6 TO ATTACHMENT NO. I l Promissory Note DOGS OG 1400673 0 41200272-000 1 or otherwise conveys the Property to Eligible Persons and Families, and the purchaser assumes this Note and the Agreement by an assignment and assumption agreement which is reasonably acceptable to the Holder. 9.1 Affordable Housing Cost - Moderate Income Household. The Maker has qualified as and each eligible and qualified successor-in-interest to the Maker shall be a person or family of Moderate Income. The term "Affordable Housing Cost" as used herein and for each Moderate Income Homebuyer (and all successors thereto during the Affordability Period) shall be as defined in Health & Safety Code Section 50052.5 (or its successor statute) and the implementing regulations thereto promulgated by the Housing and Community Development Department of the State of California; provided, however, that the term Affordable Housing Cost shall include Monthly Housing Cost as defined in Section 6924 of Title 25 of the Regulations. Notwithstanding the provisions of this Section 9.1, if the Property is sold during the Affordability Period by the Maker to a Moderate Income Household, and the Sales Price does not exceed an "Affordable Housing Cost" to such Buyer, then so long as the Maker is not in default (either Ownership Default and/or Maintenance Default) of the Agreement, this Note may be assumed by the eligible Buyer by an assignment and assumption agreement which is reasonably acceptable to the Holder. Upon the effective date of such assignment and assumption, the assigning Maker shall no longer be liable for any further obligations under the Agreement or this Note that accrue after the date of such assignment and assumption. In order to verify the Buyer's status as a Moderate Income Household, the Maker shall submit to the Holder the identity of the proposed Buyer and adequate information evidencing the income and household size of the proposed Buyer. Said income information shall be submitted together with the notice of proposed sale pursuant to Section 2 of the Agreement not less than thirty (30) days prior to opening of escrow for the proposed sale and shall include original or true copies of pay stubs, income tax records or other financial documents in order that the Holder may verify the household income of the proposed Buyer to determine whether the Buyer is a Moderate Income Household, and whether the Property is being transferred to such Buyer at an Affordable Housing Cost. If the Holder is unable to verify the Buyer's income as provided herein prior to the proposed sale, then the Buyer's income shall be deemed to exceed the maximum allowable income limit for Eligible Persons and Families. 10. Security for Note. This Note shall be secured by a subordinate deed of trust and rider thereto of even date herewith encumbering the Property (the "Agency Deed of Trust"), executed by the Maker, as trustor, in favor of the Holder, as beneficiary. 11. Prepayment of Note. The Maker may prepay this Note to the Holder, provided that any prepayment must be in full and not in part. Prepayment shall be treated in the same manner as refinancing of the Property. In any event, the Affordable Housing Resale Restrictions shall continue in full force and effect, notwithstanding such prepayment. 12. Holder May Assign. The Holder may, at its option, assign its right to receive payment under this Note without necessity of obtaining the consent of the Maker. EXHIBIT B-7 TO ATTACHMENT NO. I1 Promissory Note DOCSOG 1400673v 141200272.0001 13. Maker Assignment Prohibited. In no event shall the Maker assign or transfer any portion of this Note, the Note Amount and/or the Agreement without the prior express written consent of the Holder, as provided in Section 9. 14. Joint and Several. The undersigned, if more than one, shall be jointly and severally liable hereunder. 15. Attorneys' Fees and Costs. In the event that any action is instituted to enforce payment under this Note, the parties agree the non-prevailing party shall be responsible for and shall pay to the prevailing party all court costs and all attorneys' fees incurred in enforcing this Note. 16. Amendments. This Note may not be modified or amended except by an instrument in writing expressing such intention executed by the parties sought to be bound thereby, which writing must be so firmly attached to this Note so as to become a permanent part thereof. 17. Maker's Waivers. The Maker waives any rights to require the Holder to: (a) demand payment of amounts due (known as "presentment"), (b) give notice that amounts due have not been paid (known as "notice of dishonor"), and (c) obtain an official certification of nonpayment (known as "protest"). 18. Notice. Any notice that must be given to the Maker under this Note shall be given by personal delivery or by mailing it by certified mail addressed to the Maker at the Property address above or such other address, as Maker shall direct from time to time in writing. Failure or delay in giving any notice required hereunder shall not constitute a waiver of any default or late payment, nor shall it change the time for any default or payment. Any notice to the Holder shall be given by certified mail at the address stated above. 19. Successors Bound. This Note shall be binding upon the parties hereto and their respective heirs, successors and assigns. 20. Effect of Foreclosure. If title to the Property is transferred by foreclosure or acceptance of a deed in lieu of foreclosure, or assignment of the First Lien to the Secretary of the Department of Housing and Urban Development, the Agreement, the Affordable Housing Resale Restriction executed pursuant to the Agreement, Notice of Affordability Restrictions and the Agency Deed of trust shall be automatically terminated and shall have no further effect as to the Property or any transferee thereafter. [Signature block begins on follow page.] EXHIBIT B-8 TO ATTACHMENT NO. 11 Promissory Note DOCSOC/ 1400673v 14/200272-0001 IN WITNESS WHEREOF, Maker has executed this Note as of the date set forth below. MAKER and HOMEBUYER: By: Printed Name: By: Printed Name: EXHIBIT B-9 TO ATTACHMENT NO. 11 Promissory Note D OCSOG 1400673v 141200272-0001 EXHIBIT "C" DEED OF TRUST WITH ASSIGNMENT OF RENTS RECORDING REQUESTED BY, AND WHEN RECORDED MAIL TO: Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92702 Attn: Executive Director This document is exempt from payment of a recording fee pursuant to Government Code Sections 27383 and 6103. DEED OF TRUST WITH ASSIGNMENT OF RENTS (SHORT FORM) This DEED OF TRUST is made as of , 20 between , herein called TRUSTOR, whose address is , TITLE COMPANY, herein called TRUSTEE, and the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic, herein called BENEFICIARY. WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Santa Ana, County of Orange, State of California, described as: SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF. together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) that Promissory Note dated , 20_, made by Trustor in favor of Beneficiary, and extensions or renewals thereof, in the principal sum of U.S. $ with interest thereon (including without limitation, interest in the form of shared appreciation as defined in the Promissory Note as the "Contingent Equity Participation Amount"), with the balance of the indebtedness, due and payable on occurrence of an event of acceleration as defined in the Promissory Note, (2) the performance of each agreement of Trustor incorporated by reference or contained herein, and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of EXHIBIT C-1 TO ATTACHMENT NO. I I Deed of Trust with Assignment of Rents DOCSOCI 1400673 Y1 41200272-0001 the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY LOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Like 837 110 Plume 166 1307 Siskiyou 506 762 Atrodor 133 438 Luuo 192 367 Rilrnide 3778 347 Solano 1287 621 Butte 1330 513 Ls Angeles '13878 874 Sadao ento 5039 124 Sonoma 2067 427 Calaveras 185 338 Mndem 911 136 San Beni o 300 405 Stanislaus 1970 56 Colusa 323 391 Mann 1849 122 S. Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 I Mariposa 90 453 S. Fnsscisco A-801 596 Tehsrm 457 183 Del None 101 549 Mendocino 667 99 S.loaquia 2855 283 Trinity 108 595 El Dorado 704 635 Merced 16W 753 S. Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 SanMoteo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 gal Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa CLam 6626 668 Yolo 769 16 7mperin] 1389 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Top 165 672 Nevada 363 94 Shasta 800 633 Kern 3736 690 Orange 7182 18 Sao Diego 1964 149774 Series 5 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B, (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. Trustor EXHIBIT C-2 TO ATTACHMENT NO. 11 Deed of Trust with Assignment of Rents DOCSOCI1400673v141200272-0001 EXHIBIT "A" TO DEED OF TRUST LEGAL DESCRIPTION [to be inserted] EXHIBIT A-1 TO ATTACHMENT NO. 11 To Deed of Trust With Assignment of Rents Legal Description D OC S OC/ 1400673 v 14/200272-0001 EXHIBIT "B" TO DEED OF TRUST DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: (1) To keep said property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. (Z) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary, the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. (4) to pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation thereof, may. make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in EXHIBPf B-1 TO ATTACHMENT NO. I1 To Deed of Trust With Assignment of Rents Non-Recordable Attachment DO CSOC/ 1400673 v 14/200272-0001 exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. (5) To Pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: (1) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such monies received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. (2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. (3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any reap or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. (4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance or any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." (5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's attorneys' fees, upon any indebtedness secured EXHIBIT B-2 TO ATTACHMENT NO. 11 To Deed of Trust With Assignment of Rents Non-Recordable Attachment DOCSOCJ1400673Y 14/200272-0001 hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (5) That upon default Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. (7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. (8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so EXHIBIT B-3 TO ATTACHMENT NO. 11 To Deed of Trust With Assignment of Rents Non-Recordable Attachment DOCS001400673 v14l200272-0001 requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. (9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by trustee. EXHIBIT B-4 TO ATTACHMENT NO. 1 I To Deed of Trust With Assignment of Rents Non-Recordable Attachment DOC SOC/ 1400673v]4/200272-0001 EXHIBIT C DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TOE TRUSTEE The undersigned is the legal owner and holder of the note or notes, and of all other indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed on payment to you of any sums owning owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, and all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated: Please mail Deed of Trust, Note and Reconveyance to Do not lose or destroy this Deed of Trust OR THE NOTE which it secures Both must be delivered to the Trustee for cancellation before reconveyance will be made. DEED OF TRUST with power of sale TRUSTEE EXHIBIT C-1 TO ATTACHMENT NO. 11 To Request for Full Conveyance DOCSOC11400673v 141200272-000 l RIDER TO DEED OF TRUST This RIDER TO DEED OF TRUST is made and delivered pursuant to and in implementation of the Homebuyer Loan Agreement entered by and between the Trustor and the Beneficiary dated , 20("Agreement"), a copy of which is on file as a public record with the Beneficiary at 20 Civic Center Plaza, Santa Ana, California 92701 and is incorporated herein by reference. Unless definitions of terms have been expressly set out at length herein, each term shall have the same definition as set forth in the Agreement. Trustor and Beneficiary further covenant and agree as follows: 1. Acceleration of Payment. The whole of the Note Amount and all other payments due hereunder and under the Agreement shall become due and be immediately payable to the Beneficiary by the Trustor upon the occurrence of any one of the following events of acceleration: (a) the sale or transfer of the Property (or any part thereof) by any means, including, without limitation, the lease, exchange or other disposition of the Property or any interest therein, whether voluntary or involuntary, except (A) a sale of the Property to a qualified Moderate Income Household at an Affordable Housing Cost with the Beneficiary's prior written approval accomplished in strict conformity with Section 4 of the Agreement, or (B) the transfer of the Property solely as a result of the marriage, divorce, incompetence or death of one or more individuals constituting the Trustor, so long as the transferee(s) give written notice supported by reasonable evidence of such event to the Beneficiary within thirty (30) days of its occurrence and the transferee(s) assume(s) the Trustor's obligations under the Agreement, by execution of an assignment and assumption agreement to be provided by the Beneficiary, or (C) a sale or transfer which under federal law would not, by itself, permit the Beneficiary to exercise a due on sale or due on encumbrance clause; (b) the Trustor refinances any purchase money lien or encumbrance to which the Agency Deed of Trust is subordinate (each such lien, a "First Lien") for a loan amount in excess of the then current loan balance secured by such lien or encumbrance and loan closing costs; and/or (c) the Trustor (and all co-signors and co-mortgagors, if any) fails to own and occupy the Property as their principal residence pursuant to Section 7 of the Agreement or is in Ownership Default as defined in Section 18 of the Agreement. At the request of the Trustor, and for a specific occasion, the Beneficiary may, in its sole and absolute discretion, in writing waive the requirements of these subparagraphs. Any waiver or deferment shall be on a case by case basis, and no future rights for waiver or deferment shall arise or be implied. Notwithstanding the foregoing, the Trustor may, upon prior written approval by the Beneficiary, refinance any First Lien for a loan amount equal to or less than the then current loan balance secured by such First Lien. 2. Contingent Equity Participation Amount. In the event the Note Amount becomes due and payable pursuant to Section 1, Trustor shall pay to the Beneficiary the whole of EXHIBIT C-2 TO ATTACHMENT NO. I 1 To Deed of Trust with Assignment of Rents Rider to Deed of Trust D O CS OC/ 1400573 v 14/20027 2-0001 the Homebuyer Assistance Loan Amount and the "Contingent Equity Participation Amount," as hereafter defined. (a) Calculation of Contingent Equity Participation Amount. The "Contingent Equity Participation Amount" means an amount equal to a percentage share of the appreciation of the Property determined by multiplying a variable percentage factor ("Variable Applicable Factor") by the difference between the Sales Price and the Purchase Price (as those terms are hereinafter defined). (b) Variable Applicable Factor Calculation. The Variable Applicable Factor shall be calculated by dividing the Beneficiary's total initial equity contribution which is deemed to have been provided to Trustor based on sale of the Property at an Affordable Housing Cost ("Agency Contribution") by the sum of the Agency Contribution plus the Trustor's contribution ("Homebuyer Contribution"). In other words, the Agency Contribution shall be the numerator, and the sum of the Agency Contribution plus the Homebuyer Contribution shall be the denominator of a fraction that equals a percentage that is the Variable Applicable Factor (subject to Section 2(b)(i)). Variable Applicable Factor = Agency Contribution Agency Contribution + Homebuyer Contribution For example, if the Agency Contribution equals $30,000 and the Homebuyer Contribution equals $250,000, the Variable Applicable Factor would equal 10.7% ($30,000 divided by the sum of $30,000 plus $250,000). 10.7% (Variable Applicable Factor) = $30,000 (Agency Contribution) $30,000 (Agency Contribution) + $250,000 (Homebuyer Contribution) = ($280,000) (i) The "Agency Contribution" is the sum of the following amounts contributed by Beneficiary to the purchase price of the Property: (1) the principal amount of the Homebuyer Assistance Loan Amount; i.e., the Affordable Housing Cost Subsidy; and (ii) the principal amount(s) of any other loan(s) or subsidy(ies) provided by Beneficiary. (ii) The "Homebuyer Contribution" is the sum of the following amounts contributed by Trustor to the purchase price of the Property: (i) the principal amount of the First Lien loan; (ii) the Trustor's cash down payment plus Trustor's portion of closing costs; and (iii) the original principal amount of loans(s) or other subsidy(ies) secured by Trustor, (excluding and other than loan(s) or subsidy(ies) provided by Agency or Beneficiary (as set forth in the definition of Agency Contribution)) and applied by Trustor towards the purchase of the Property. EXHIBIT C-3 TO ATTACHMENT NO. 11 To Deed of Trust with Assignment of Rents Rider to Deed of Trust DOCSOC/ 1400673 v 141200272-000 (iii) The "Purchase Price" is the original purchase price paid by the Trustor (or the Trustor as the qualified successor owner of the Property) to the seller of the Property (the "Seller") for the Seller's interest in the Property (generally which is equal to the fair market value of the Property at date of original purchase), exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. Subject to the provisions set forth hereinbelow, the value of Qualified Capital Improvements shall be added to the Purchase Price when calculating the Contingent Equity Participation Amount. (iv) The "Sales Price" is the price to be paid by the prospective buyer (who is not a qualified Moderate Income Household) of the Property (the "Buyer") to the Trustor (or the Trustor as the qualified successor owner of the Property) for the Trustor's interest in the Property, exclusive of reasonable escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The Sales Price shall be established in conformity with Section 2(h)(i) hereof. In the event of Trustor's refinancing, failure to occupy, or other type of Ownership Default, the "Sales Price" shall be established in conformity with Section 2(h)(ii) hereof. (v) The "Affordable Housing Cost Subsidy" is the amount deemed to be a subsidy the Beneficiary has provided to the Trustor by making the Property available for purchase at a price which constitutes Affordable Housing Cost. The Affordable Housing Cost Subsidy equals the difference between the appraised fair market value of the Property (which appraisal shall be at Beneficiary's cost) as of the date of the Homebuyer Loan Agreement and the Affordable Housing Cost. (i) Exception Calculation. Notwithstanding the above, the Variable Applicable Factor shall equal the greater of fifty percent (50%) or the Variable Applicable Factor calculated pursuant to Section 2(b); provided however, in the event Trustor receives a First Lien loan from the California Housing Finance Agency or a First Lien loan the source of proceeds of which are from tax exempt bonds, then the Variable Applicable Factor shall equal the Variable Applicable Factor percentage calculated pursuant to Section 2(b) hereof. (c) Using the Variable Applicable Factor to Determine the Contingent Equity Participation Amount. The Contingent Equity Participation Amount is calculated by multiplying the Variable Applicable Factor by the difference between the Sales Price and the Purchase Price. For example, if the Variable Applicable Factor equals 10.7%, the Contingent Equity Participation Amount would then equal 10.7% (Variable Applicable Factor) x (Sales Price minus the Purchase Price). In the above example, if the Sales Price equals $380,000 and the Purchase Price equals $280,000, the Contingent Equity Participation Amount would equal $10,700 (10.7% x ($380,000 minus $280,000)). EXHIBIT C-4 TO ATTACHMENT NO. 11 To Deed of Trust with Assignment of Rents Rider to Deed of Trust DOCSOG 14o0b73v 141200272-000 1 10.7% (Variable Applicable Factor) x 100,000 (Sales Price - Purchase Price) = $10,700 (Contingent Equity Participation Amount). (d) Calculation of Contingent Equity Participation Amount for Subsequent Homebuyers. If pursuant to Section 4 of the Agreement, a Buyer has fully assumed the Trustor's obligations under the Agreement, the Note, this Agency Deed of Trust, the Notice of Affordability Restrictions, and the Affordable Housing Resale Restriction, and thereafter the new Buyer, as the successor Homebuyer, is in Ownership Default that causes an event of acceleration to occur, the Contingent Equity Participation Amount to be paid by such Buyer shall be calculated by multiplying the Variable Applicable Factor, established in Section 2(b) above, by the difference between the Sales Price, established in conformity with Section 2(h) hereof, and the Purchase Price. (e) No Appreciation or Depreciation in Value of Property. If an event of acceleration occurs at a time when the Property has not appreciated or the value of the Property has depreciated (i.e., the Sales Price is less than the Purchase Price), then no Contingent Equity Participation Amount is due by the Trustor to the Beneficiary. (f) Qualified Capital Improvements. The value of any Qualified Capital Improvements completed by the Trustor during the Trustor's ownership of the Property shall be added to the Purchase Price when calculating the Contingent Equity Participation Amount only if, not later than thirty (30) days prior to the Event of Acceleration causing the Contingent Equity Participation Amount to become immediately due and payable pursuant to Section 1, Trustor submits the following to the Beneficiary: (i) an itemized list of the Qualified Capital Improvements, (ii) reliable proof of completion of the Qualified Capital Improvements (as evidenced e.g., by final building permits, a certificate of completion or original paid invoices or construction contracts), and (iii) an appraisal from a certified appraiser, in form and substance reasonably acceptable to the Executive Director, the conclusion of which is that the Qualified Capital Improvements have added the stated amount to the fair market value of the Property. If, within (30) days of receipt of the information concerning the Qualified Capital Improvements, the Beneficiary questions the claimed increase in the value of the Property by reason of said Qualified Capital Improvements, the Beneficiary and the Trustor may, by mutual agreement, establish the value of the Qualified Capital Improvements or the Beneficiary may require an appraisal of the Property, at the Trustor's expense, by a second independent certified appraiser appointed by the Beneficiary to determine the fair market value of the Qualified Capital Improvements. (g) Credit to Trustor. Notwithstanding the foregoing provisions of this Section 2, calculation of the Contingent Equity Participation Amount is subject to a superior right of the Trustor, to receive credit in calculation of the Purchase Price for money paid by the Trustor post acquisition and during the term of the Trustor's ownership of the Property for installment payments of mortgage principal, pursuant to the First Lien actually made by the EXHIBIT G5 TO ATTACHMENT NO. 11 To Deed of Trust with Assignment of Rents Rider to Deed of Trust DOCSOC/ 1400673 v 14/200272-0001 Trustor, in addition to the fair market value of Qualified Capital Improvements consistent with the requirements of Section 2(f) hereof. (h) Determination of Sales Price; Appraisal. (i) Upon Sale of the Property. In the event of a proposed sale of the Property by Trustor that does not conform to Section 3 herein, and not less than thirty (30) days after Beneficiary receives actual notice of the opening of escrow in connection therewith, the Beneficiary may elect to appoint a certified, independent appraiser to conduct an appraisal of the Property, at Trustor's expense, to assist Beneficiary in determining if the Sales Price is at or near the fair market value of the Property at such time. If the Sales Price is determined by the appraisal to be three percent (3%) or more below the fair market value of the Property as estimated in said appraisal, then the "Sales Price" for purposes of determining the Contingent Equity Participation Amount shall be the fair market value of the Property established in said appraisal. (ii) Upon Refinancing/Failure to OccupylDefault. In the event of refinancing, failure to occupy the Property in accordance with Section 7 of the Agreement, or an Ownership Default which causes the Note Amount including the Contingent Equity Participation Amount to become immediately due and payable, the "Sales Price" for purposes of determining the Contingent Equity Participation Amount shall be determined by an appraisal of the Property. The Beneficiary shall appoint a certified independent appraiser to conduct an appraisal of the Property, at the Trustor's expense. The Trustor agrees that in such event the Contingent Equity Participation Amount shall be the Variable Applicable Factor multiplied by the difference between the Purchase Price and "Sales Price" as established by the appraised value of the Property at the time of such refinancing, failure to occupy, or other Ownership Default of the Agreement. (i) Trustor's Acknowledgment of Contingent Equity Participation Amount. TRUSTOR ACKNOWLEDGES AND AGREES THAT UPON SALE, TRANSFER, OR REFINANCING OF THE PROPERTY THAT DOES NOT COMPLY WITH SECTION 3 HEREIN, AND/OR UPON ANY OTHER DEFAULT THAT CAUSES AN EVENT OF ACCELERATION AS SET FORTH IN SECTION 1. HEREOF, PRIOR TO THE FORTY-FIFTH (45th) ANNIVERSARY OF THE RECORDATION DATE OF THIS AGENCY DEED OF TRUST, TRUSTOR SHALL PAY TO BENEFICIARY IN ADDITION TO THE AGENCY LOAN AMOUNT, A CONTINGENT EQUITY PARTICIPATION AMOUNT EQUAL TO A PERCENTAGE SHARE OF THE APPRECIATION OF THE PROPERTY AS CALCULATED PURSUANT TO THIS SECTION 2. Trustor's Initials: EXHIBIT C-6 TO ATTACHMENT NO. I 1 To Deed of Trust with Assignment of Rents Rider to Deed of Trust DOCSOC11400673v 141200272-0001 3. Sale to Moderate Income Household. During the Affordability Period, the Note Amount will not become due and payable, and no Contingent Equity Participation Amount shall be required hereunder in connection with such sale, if Trustor sells or otherwise conveys the Property to a Moderate Income Household at an Affordable Housing Cost ("Eligible Persons and Families"), and the purchaser assumes the Note and the Agreement by an assignment and assumption agreement which is reasonably acceptable to the Beneficiary. For the purposes of this Agency Deed of Trust, the Note, and the Agreement, "Moderate Income" and "Moderate Income Households" means moderate income households as defined in Health & Safety Code Section 50093 3.1 Affordable Housing Cost - Moderate Income Household. "Affordable Housing Cost" shall be as defined in Health & Safety Code Section 50052.5 (or its successor statute) and the implementing regulations thereto promulgated by the Housing and Community Development Department of the State of California. Notwithstanding the provisions of this Section 3, if the Property is sold during the Affordability Period by the Trustor to a Moderate Income Household and the Sales Price does not exceed an "Affordable Housing Cost" to such Buyer, then so long as the Trustor is not in default (either Ownership Default or Maintenance Default) of the Agreement, this Note may be assumed by the eligible Buyer by an assignment and assumption agreement which is reasonably acceptable to the Beneficiary. Upon the effective date of such assignment and assumption, the assigning Trustor shall no longer be liable for any further obligations under the Agreement, the Note or the Agency Deed of Trust that accrue after the date of such assignment and assumption. In order to verify the Buyer's status as a Moderate Income Household, the Trustor shall submit to the Beneficiary the identity of the proposed Buyer and adequate information evidencing the income and household size of the proposed Buyer. Said income information shall be submitted together with the notice of proposed sale pursuant the Agreement not less than thirty (30) days prior to opening of escrow for the proposed sale and shall include original or true copies of pay stubs, income tax records or other financial documents in order that the Holder may determine and verify the household income of the proposed Buyer to determine whether the Buyer is a Moderate Income Household, and whether the Property is being transferred to such Buyer at an Affordable Housing Cost. If the Holder is unable to verify the Buyer's income as provided herein prior to the proposed sale, then the Buyer's income shall be deemed to exceed the maximum allowable income limit for Eligible Persons and Families. 4. Subordination. Except as provided otherwise herein, the provisions of the Agreement, the Notice of Affordability Restrictions, this Rider and Agency Deed of Trust, and the Affordable Housing Resale Restriction, and the obligations therein, shall be subordinate only to the First Lien on the Property held by the Lender and, if applicable, other loan(s) as approved by the Executive Director, including lien instruments that secure other homebuyer purchase money and/or downpayment assistance, including without limitation City, State of California, or federal affordable housing programs, which liens shall not impair the rights of Lender, or Lender's assignee or successor in interest or the Agency, if applicable, to exercise their remedies under the First Lien in the event of default under the First Lien by the Homebuyer. Such EXHIBIT C-7 TO ATTACHMENT NO. 11 To Deed of Trust with Assignment of Rents Rider to Deed of Trust DOCS DG t 4 00573 v 14 /200272-0001 remedies under the First Lien include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. If title to the Property is transferred by foreclosure or acceptance of a deed in lieu of foreclosure, or assignment of the First Lien to the Secretary of the Department of Housing and Urban Development, this Agreement and the Agency Deed of Trust shall be automatically terminated and shall have no further effect as to the Property or any transferee thereafter. However, in no event shall this Agreement, the Agency Deed of Trust, and the Affordable Housing Resale Restriction, be subordinate to any First Lien on the Property securing a loan with provisions which allow negative amortization, or to refinancing of the lien of the First Lien for a loan amount in excess of the sum of the then current loan balance secured by the First Lien and loan closing costs. Trustor agrees it shall instruct the Escrow Agent for the acquisition of the Property by Trustor that the order of recording in the escrow for the purchase of the Property by Trustor shall occur as follows: (1) the Grant Deed, (2) the First Lien; (3) other affordable housing loan(s), if applicable; (4) the Affordable Housing Resale Restriction; (5) the Notice of Affordability Restrictions and (6) the Agency Deed of Trust. Agency shall cause a Request for Notice of Default to be recorded on the Property subsequent to the recordation of the First Lien deed of trust or mortgage requesting a statutory notice of default as set forth in the California Civil Code Section 2924b, and shall cause a request for Notice of Delinquency to be recorded on the Property subsequent to the recordation of the First Lien deed of trust or mortgage. IN WITNESS WHEREOF, Trustor has executed this Rider to Deed of Trust as of the date set forth below. TRUSTORMOMEBUYER: By: Printed Name: By: Printed Name: EXHIBIT C-8 TO ATTACHMENT NO. I i To Deed of Trust with Assignment of Rents Rider to Deed of Trust DOCS00 1400673v141200272-000 f EXHIBIT 641)" AFFORDABLE HOUSING RESALE RESTRICTION RECORDING REQUESTED BY, AND WHEN RECORDED MAIL TO: Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92702 Attn. Executive Director This document is exempt from payment of a recording fee pursuant to Government Code Sections 27383 and 6103. AFFORDABLE HOUSING RESALE RESTRICTION (Conditions, Covenants, and Restrictions Affecting Real Property and the Resale, Ownership, Occupancy, Maintenance, and Other Matters Related to Real Property) This AFFORDABLE HOUSING RESALE RESTRICTION ("Restriction") is made as of, --------- 20--- b ("Homebuyer") in favor of the COMMUNITY REDEVELOPMENT CITY OF SANTA ANA, a public body, corporate and politic ("Agency"). RECITALS AGENCY OF THE A. Homebuyer has purchased a single family house located at , Santa Ana, California, as such real property is more particularly described in "Attachment No. 1" attached hereto and incorporated herein ("Property"). B. Homebuyer and Agency have entered into that certain Homebuyer Loan Agreement ("Loan Agreement") dated of even date herewith, which is incorporated herein by reference and a copy of which is on file with Agency at its offices and is a public record, pursuant to which Agency has agreed to cause the Property to be sold to Homebuyer at a Moderate Income Affordable Housing Cost by providing certain financial assistance to Homebuyer ("Homebuyer Assistance Loan") and Homebuyer has agreed to subject the Property to certain conditions, covenants and restrictions. Capitalized terms used herein and not otherwise defined shall have the same meaning as set forth in the Loan Agreement. C. Homebuyer and Agency desire and intend to restrict the Property and the improvements thereon in accordance with this Restriction to preserve its value for the benefit of Homebuyer, its successors and the surrounding neighborhood. D. Homebuyer is a Moderate Income Household, as that term is defined in this Restriction. EXHIBIT D-1 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCS00 1400673v 14/200272-000 1 E. Homebuyer has represented to Agency that Homebuyer and Homebuyer's household intend to reside in the Property as Homebuyer's principal residence at all times during Homebuyer's ownership of the Property. NOW, THEREFORE, for good and valuable consideration, the parties agree as follows: 1. Definitions "Affordability Period" means that period of time commencing upon the Date of this Restriction and terminating on the forty-fifth (45th) anniversary of such date. "Affordable Housing Cost" means the purchase price for Moderate Income Households pursuant to California Health & Safety Code Section 50052.5, the implementing regulations of Sections 6920, 6924 and 6930 of Title 25 of the California Code of Regulations for Moderate Income Households Notwithstanding the provisions of this Restriction, if the Property is sold during the Affordability Period by Homebuyer to a Moderate Income Household, and the Sales Price does not exceed an "Affordable Housing Cost" to such Buyer, then so long as the Maker is not in default (either Ownership Default or Maintenance Default) of the Agreement, this Note may be assumed by the eligible Buyer by an assignment and assumption agreement that is reasonably acceptable to Agency. Upon the effective date of such assignment and assumption, the assigning Homebuyer shall no longer be liable for any further obligations under the Loan Agreement or this Restriction that accrue after the date of such assignment and assumption. In order to verify the Buyer's status as a Moderate Income Household, Homebuyer shall submit to the Agency the identity of the proposed Buyer and adequate information evidencing the income and household size of the proposed Buyer. Said income information shall be submitted together with the notice of proposed sale pursuant to Section 2 of the Loan Agreement not less than thirty (30) days prior to opening of escrow for the proposed sale and shall include original or true copies of pay stubs, income tax records or other financial documents in order that the Agency may determine and verify the household income of the proposed Buyer to determine whether the Buyer is a Moderate Income Household, and whether the Property is being transferred to such Buyer at an Affordable Housing Cost. If the Agency is unable to verify the Buyer's income as provided herein prior to the proposed sale, then the Buyer's income shall be deemed to exceed the maximum allowable income limit for Eligible Persons and Families. "City" means the City of Santa Ana, California, a California municipal corporation, and the City's successors and assigns. "County" means the County of Orange, California. "Date of this Restriction" means the date in the first paragraph of this Restriction. "Default" means the failure of a party to perform any action or covenant required by this Restriction within the time periods provided herein following notice and opportunity to cure. The term default also includes an Ownership Default and a Maintenance Default as more fully defined and described herein. Notwithstanding the foregoing for purposes of acceleration of the Homebuyer Assistance Loan, or initiation of foreclosure proceedings there shall be a distinction EXHIBIT D-2 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction D O C S OC/ 1400673 v 14/20027 2-0001 between the types of default hereunder, including an "Ownership Default" and a "Maintenance Default." The term "Ownership Default" means the failure of Homebuyer to perform any action or covenant required by the Affordable Housing Resale Restriction related to ownership, owner- occupancy, lien priority, and restrictions on sale and resale of the Property subject to the notice and opportunity to cure provisions set forth herein. A default of any obligation secured by the First Lien shall be a cross-default and also constitute an Ownership Default. The term "Maintenance Default" means the failure of Homebuyer to perform any action or covenant required by Restriction relating to a "Maintenance Deficiency," including the ongoing upkeep, maintenance, and use of the Property in decent, safe, sanitary, clean, and neighborly manner, subject to the notice and opportunity to cure provisions set forth herein (and expressly excluding an Ownership Default). "Developer" means , a "First Lien" means the lien of the institution making the purchase money mortgage loan to Homebuyer for the purchase of the Property. "Homebuyer" means the person or persons set forth in the first paragraph of this Restriction, and their successors and assigns. "Legal Description" means the legal description of the Property which is attached hereto as Attachment No. 1 and incorporated herein. "Moderate Income" and "Moderate Income Households" means moderate income households as defined in Health & Safety Code Section 50093. "Notice of Intent to Transfer" means the Notice of Intent to Transfer attached hereto as Attachment No. 2 and incorporated herein by reference. "Permitted Transfer" means any Transfer which is permitted pursuant to Section 4 hereof. "Prohibited Transfer" means any Transfer which is not permitted pursuant to Section 4 hereof. "Property" means that certain real property located at the street address set forth in Recital A and legally described in the Legal Description. "Purchase Agreement" means that certain agreement pursuant to which Homebuyer has agreed to purchase the Property from the Developer. "Reimbursement Agreement" means the Reimbursement Agreement to be executed by Homebuyer in favor of the Agency, in the form attached hereto as Attachment No.4 and incorporated herein. "Request for Approval of Proposed Transferee" means the Request for Approval of Proposed Transferee attached hereto as Attachment No. 2 and incorporated herein. EXHIBIT D-3 TO ATTACHMENT NO. I I Affordable Housing Resale Restriction nocsaa1400673v iai2oo272-0001 "Request for Notice" means the Request for Notice of Default attached hereto as Attachment No. 3 and incorporated herein. "Restriction" means this Affordable Housing Resale Restriction. "Sales Price" means the sum to be paid by a Transferee for the Transfer of the Property. "Transfer" shall mean any sale, assignment, conveyance, lease or transfer, voluntary or involuntary, of any interest in the Property. Without limiting the generality of the foregoing, Transfer shall include (i) a transfer by devise, inheritance or intestacy to a party who does not meet the definition of a Moderate Income Household; (ii) a life estate; (iii) creation of a joint tenancy interest; (iv) a gift of all or any portion of the Property; or (v) any voluntary conveyance of the Property. Transfer shall not include transfer to a spouse in a dissolution proceeding. "Transferee" shall mean any natural person or entity who obtains ownership or possessory rights in the Property pursuant to a Transfer. 2. Restrictions on Sale of Property. Homebuyer covenants and agrees that during the Affordability Period, each subsequent resale of the Property by the then-owner thereof shall be to a Moderate Income Household at an Affordable Housing Cost; provided, however, that Homebuyer, in Homebuyer's sole discretion, may elect to transfer the Property at a price in excess of an Affordable Housing Cost during the Affordability Period thereby causing an acceleration under Section l.f. of the Agreement, in consideration for Homeowner's payment to Agency of the Contingent Equity Participation Amount as set forth in Section 3 of the Agreement. 3. Homebuyer's Representations and Warranties as to the Sale of the Property to Homebuyer. Homebuyer represents and warrants to Agency that the financial and other information which Homebuyer has provided to Agency with respect to Homebuyer's income and the purchase price of the Property was true and correct at the time such information was provided, and remains true and correct as of the Date of this Restriction. 4. Permitted Sales of the Property. Agency hereby permits sales of the Property to proposed Transferees who are Moderate Income Households, and are approved in accordance with this Section 4, provided the Sales Price does not exceed an Affordable Housing Cost to such proposed Transferee ("Permitted Transfers"). In the event that Homebuyer desires to Transfer the Property during the Affordability Period, prior to the Transfer the owner shall notify Agency by delivering a Notice of Intent to Transfer to Agency, which shall indicate the identity of the proposed Transferee who desires to purchase the Property, whether the purchaser is a Moderate Income Household, and whether the sales price is at an Affordable Housing Cost. In addition to Homebuyer's and the proposed Transferee's delivery of the Notice of Intent to Transfer, the following procedure shall apply: a. Notice to Agency. Homebuyer shall send the Notice of Intent to Transfer to Agency at the address set forth in Section 24. b. Qualification of Proposed Transferee. The proposed Transferee shall provide Agency with sufficient information in the form provided by Agency including without EXHIBIT D-4 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCSOC/1400673v 14/200272-0001 limitation, a certification as to the income and family size of the proposed Transferee, for Agency to determine if the proposed Transferee is a Moderate Income Household, and the purchase price is at an Affordable Housing Cost. C. Certificates from Parties. Homebuyer and proposed Transferee each shall certify in writing, in a form acceptable to Agency, that the Transfer shall be closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by Agency and that all consideration delivered by the proposed Transferee to owner has been fully disclosed to Agency. The written certificate shall also include a provision that in the event a Transfer is made in violation of the terms of this Restriction or false or misleading statements are made in any documents or certificate submitted to Agency for its approval of the Transfer, Agency shall have the right to file an action at law or in equity to make the parties terminate and/or rescind the sales contract and/or declare the sale void notwithstanding the fact that the Transfer may have closed and become final as between Homebuyer and Transferee. d. Written Consent of Agency Required Before Transfer. During the Affordability Period, the Property, and any interest therein, shall not be conveyed by any Transfer except with the express written consent of Agency, which consent shall be given only if the Transfer is in accordance with the provisions of this Restriction. This provision shall not prohibit the encumbering of title for the sole purpose of securing financing of the purchase price of the Property. e. Notice of Prohibited Transfer. Within twenty (20) days after receiving notification of a proposed Transfer in accordance with Section 4a., Agency shall determine and give notice to Homebuyer as to whether the proposed Transfer is a Permitted Transfer or Prohibited Transfer, or whether the Transfer would cause an acceleration of the Note under Section 11. of the Agreement and, in which case, upon Homebuyer's payment of the Contingent Equity Participation Amount as set forth in Section 3 of the Agreement such Transfer would be deemed a Permitted Transfer hereunder. In the event that the proposed Transfer is a Prohibited Transfer, such notice to Homebuyer shall specify the nature of the Prohibited Transfer. If the violation is not corrected to the satisfaction of Agency within ten (10) days after the date of the notice, or within such further time as Agency determines is necessary to correct the violation, Agency may declare a Default under this Restriction. Upon the declaration of a Default, Agency may apply to a court of competent jurisdiction for specific performance of this Restriction, for an injunction prohibiting a proposed sale or Transfer in violation of this Restriction, for a declaration that the Prohibited Transfer is void, or for any such other relief as may be appropriate. f. Delivery of Documents. Upon the close of the proposed Transfer, Homebuyer and Transferee, as applicable, shall provide the Agency with a copy of the final sales contract, settlement statement, escrow instructions, all certificates required by this Section 4 and any other documents Agency may request. EXHIBIT D-5 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCSOG1400573v 14!200272-0001 S. Encumbrances. a. Subordination. Except as provided otherwise herein, the provisions of the Loan Agreement, this Restriction, the Notice of Affordability Restrictions and the Agency Deed of Trust and Rider, the obligations herein and therein, shall be subordinate only to the First Lien on the Property and, if applicable, other loan(s) as approved by the Executive Director, including lien instruments that secure other Homebuyer purchase money and/or downpayment assistance, including without limitation City, State of California, or federal affordable housing programs, which liens shall not impair the rights under the First Lien in the event of default under the First Lien by Homebuyer. Such remedies under the First Lien include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. If title to the Property is transferred by foreclosure or acceptance of a deed in lieu of foreclosure, or assignment of the First Lien to the Secretary of the Department of Housing and Urban Development, the Loan Agreement, this Restriction, and Agency Deed of Trust shall be automatically terminated and shall have no further effect as to the Property or any Transferee thereafter. However, in no event shall the Loan Agreement, the Agency Deed of Trust, and this Affordable Housing Resale Restriction, be subordinate to any First Lien on the Property securing a loan with provisions which allow negative amortization, or to refinancing of the lien of the First Lien for a loan amount in excess of the sum of the then current loan balance secured by the First Lien and loan closing costs. b. Request for Notice of Default. Agency may cause a Request for Notice to be recorded on the Property subsequent to the recordation of the First Lien deed of trust or mortgage requesting a statutory notice of default as set forth in California Civil Code Section 2924b. A form of a Request for Notice is attached hereto as Attachment No. 3 and incorporated herein. C. Further Encumbrances. Homebuyer agrees that it shall not record or cause the recordation of any deed of trust ("Further Encumbrance") securing a note having an original principal sum which, when added to the sum of the principal amount(s) of any notes secured by any deeds of trust against the Property as of the date of recordation of the Further Encumbrance, exceeds one hundred percent (140%) of the fair market value of the Property. 6. Reimbursement Agreement. Homebuyer and Agency shall enter into a Reimbursement Agreement, substantially in the form attached hereto as Attachment No. 4 and incorporated herein, which provides that Agency may make payments to cure a default or delinquency on the First Lien, on the condition that Homebuyer agrees to reimburse Agency for any payments made to cure a default or delinquency on the First Lien. Homebuyer's repayment obligations pursuant to the Reimbursement Agreement shall be secured by a subordinate deed of trust which encumbers the Property. In the event that Homebuyer refinances the First Lien, Homebuyer and Agency shall enter into an amendment to the Reimbursement Agreement or a new Reimbursement Agreement. The Transferee of the Property and Agency shall also enter into a new Reimbursement Agreement upon the Transfer of the Property. Agency shall execute such subordination agreements as may be reasonably requested by the holder of a First Lien. 7. Uses. Homebuyer covenants and agrees to devote, use and maintain the Property in accordance with this Restriction. All uses conducted on the Property, including, without EXHIBIT D-6 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction b OCS OCJ 1400673 v 141200272-0001 limitation, all activities undertaken by Homebuyer pursuant to this Restriction, shall conform to all applicable provisions of the Santa Ana Municipal Code, and the recorded documents pertaining to and running with the Property. 8. Nondiscrimination Covenants. Homebuyer covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of, any person or group of persons on account of 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 premises herein conveyed, 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 reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land. All deeds, leases or contracts relating to the Property, or any part thereof, shall contain or be subject to substantially the following non-discrimination or non-segregation 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 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 premises herein conveyed, 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 reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "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 leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts: "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 EXHIBIT D-7 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCS00 1400673v 14/200272-0001 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 premises which are the subject of this Agreement, 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 reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." The covenants established in this Section 8 shall, without regard to technical classification and designation, be binding for the benefit and in favor of Agency and its successors and assigns, and shall remain in effect in perpetuity. 9. Maintenance of Property. Homebuyer shall maintain the improvements and landscaping on the Property in a manner consistent with community standards which will uphold the value of the Property, in accordance with the Santa Ana Municipal Code. Homebuyer also agrees to comply with all applicable federal, state and local laws. a. Exterior Maintenance. Except as to be maintained by the homeowners association, as applicable, all exterior, painted surfaces of any structures located on the Property shall be maintained at all times in a clean and good condition. Any defacing marks shall be cleaned or removed within a reasonable period of time. b. Front and Side Exteriors. Except as to be maintained by the homeowners association, as applicable, Homebuyer shall at all times maintain the front exterior, any visible side exteriors, and yards, if any, in a clean, safe and presentable manner. C. Graffiti Removal. All graffiti and defacement of any type, including but not limited to marks, words and pictures, shall be promptly removed from the Property within two (2) days of the time they were made and any necessary painting or repair completed in a timely and expeditious manner after notice thereof, whichever is less. d. No Nuisance. Homebuyer shall not maintain, cause to be maintained, or allow to be maintained on or about the Property any public or private nuisance, including without limitation, the conduct of criminal activities set forth in the nuisance abatement provisions of the Uniform Controlled Substances Act (Health & Safety Code Sections 11570, et seq.) or the Street Terrorism Enforcement and Prevention Act (Penal Code Sections 186.22 et seq.), or any successor statute or law. 10. Occupancy Standards. The Property shall be used as the principal personal residence of Homebuyer and Homebuyer's immediate family/household and for no other purpose. Homebuyer shall not enter into an agreement for the rental or lease of all or any part of the Property. Homebuyer shall not rent out a room or rooms at the Property. Homebuyer may request a temporary waiver of the foregoing requirement in the event of extreme hardship requiring Homebuyer to move to another geographical area or to less expensive housing, including, for example and without limitation, transfer of job location, loss of job, or unexpected EXHIBIT D-8 TO ATTACHMENT NO. I 1 Affordable Housing Resale Restriction DOCSOM 400673v 141200272-0001 major expenses. Agency may approve or disapprove such request in its sole discretion, and may require as a condition of approval that Homebuyer only rent the Property to Eligible Moderate Income Households at an affordable rent (as defined in Section 50053 of the California Health & Safety Code.) Agency acknowledges that the occupancy standard is occupancy by two (2) persons per living and sleeping area. Homebuyer shall, upon demand by Agency, submit to Agency an affidavit of occupancy verifying Homebuyer's compliance with this Section 10. Such affidavit may be required by Agency on an annual basis. 11. Effect of Violation of the Terms and Provisions of this Restriction. a. In General. The covenants established in this Restriction shall, without regard to technical classification and designation, be binding for the benefit and in favor of Agency, its successors and assigns, as to those covenants which are for its benefit. The covenants contained in this Restriction shall remain in effect for the periods of time specified herein. The covenants against discrimination shall remain in effect in perpetuity. Agency is deemed the beneficiary of the terms and provisions of this Restriction and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Restriction and the covenants running with the land have been provided. This Restriction and the covenants herein shall run in favor of Agency, without regard to whether Agency has been, remains or is an owner of any land or interest therein in the Property or in the Project Area. Agency shall have the right, if the Restriction 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 any other beneficiaries of this Restriction and covenants may be entitled. b. Acceleration. The whole of the Note Amount (as defined in Section 1.2.b. of the Loan Agreement) and all other payments due under the Homebuyer Assistance Loan shall become due and immediately payable to Agency by Homebuyer upon the occurrence of any one of the following events of acceleration: (i) Homebuyer, in Homebuyer's sole discretion, elects to Transfer the Property for a price in excess of an Affordable Housing Cost, and Transfers the Property; (ii) Homebuyer makes a Prohibited Transfer of title to or any interest in the Property in violation of this Restriction; (iii) Homebuyer refinances any lien or encumbrance to which Agency Deed of Trust is subordinate (each such lien, a "First Lien") for a loan amount in excess of the then current loan balance secured by such lien or encumbrance and loan closing costs; (iv) Homebuyer fails to occupy the Property as Homebuyer's principal residence pursuant to Section 7 of the Loan Agreement or is in Default of any other obligation under the Loan Agreement; (v) Homebuyer has an Ownership Default violating any affordable housing terms or provisions of this Restriction. EXHIBIT D-9 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCSOC/ I400673v 141200272-0001 12. Hardship. At the request of Homebuyer, and for a specific occasion, Agency may, in its sole and absolute discretion, in writing waive the requirements of Section 11, subparagraph (b) and defer repayment and/or extend the term of the Note. Any waiver or deferment shall be on a case-by-case basis, and no future rights for waiver or deferment shall arise or be implied. Notwithstanding the foregoing, Homebuyer may, upon written approval by Agency, refinance any First Lien with a fixed rate loan for a loan amount equal to or less than the then current loan balance secured by such First Lien with no reduction in term. 13. Contingent Equity Participation Amount. In the event that the Homebuyer Assistance Loan becomes due and payable pursuant to Section 11(b) above, Homebuyer shall pay to Agency the whole of the Homebuyer Assistance Loan and the "Contingent Equity Participation Amount," as hereinafter defined. (a) Calculation of Contingent Equity Participation Amount. The "Contingent Equity Participation Amount" means an amount equal to a percentage share of the appreciation of the Property determined by multiplying a variable percentage factor ("Variable Applicable Factor") by the difference between the Sales Price and the Purchase Price (as those terms are hereinafter defined). (b) Variable Applicable Factor Calculation. The Variable Applicable Factor shall be calculated by dividing the Agency's total initial equity contribution based on sale of the Property to Homebuyer at an Affordable Housing Cost ("Agency Contribution") by the sum of the Agency Contribution plus Homebuyer's contribution ("Homebuyer Contribution"). In other words, the Agency Contribution shall be the numerator, and the sum of the Agency Contribution plus the Homebuyer Contribution shall be the denominator of a fraction that equals a percentage that is the Variable Applicable Factor (subject to Section (13(b)(i)). Variable Applicable Factor = Agency Contribution Agency Contribution + Homebuyer Contribution For example, if the Agency Contribution equals $30,000 and the Homebuyer Contribution equals $250,000, the Variable Applicable Factor would equal 10.7% ($30,000 divided by the sum of $30,000 plus $250,000). 10.7% (Variable Applicable Factor) = $30,000 (Agency Contribution) $30,000 (Agency Contribution) + $250,000 (Homebuyer Contribution) = ($280,000) (i) The "Agency Contribution" is the sum of the following amounts contributed by Agency to the purchase price of the Property: (i) principal amount of the Homebuyer Assistance Loan Amount, i.e., the Affordable Housing Cost Subsidy (as hereinafter EXHIBIT D-10 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCSOCI1400673v 141200272-0001 defined); and (ii) the principal amount(s) of any other loan(s) or subsidy(ies) provided by Agency. (ii) The "Homebuyer Contribution" is the sum of the following amounts contributed by Homebuyer to the purchase price of the Property: (i) the principal amount of the First Lien purchase money mortgage; (ii) Homebuyer's cash down payment plus Homebuyer's portion of closing costs; and (iii) the original principal amount of loans(s) or other subsidy(ies) secured by Homebuyer, (excluding and other than loan(s) or subsidy(ies) provided by Agency (as set forth in the definition of Agency Contribution)) and applied by Homebuyer towards the purchase of the Property. (iii) The "Purchase Price" is the original purchase price paid by Homebuyer (or Homebuyer as the qualified successor owner of the Property) to the seller of the Property ("Seller") for Seller's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. Subject to the provisions set forth hereinbelow, the value of Qualified Capital Improvements shall be added to the Purchase Price when calculating the Contingent Equity Participation Amount. (iv) The "Sales Price" is the price to be paid by the prospective buyer (who is not a qualified Moderate Income Household) of the Property ("Buyer") to Homebuyer (or Homebuyer as the qualified successor owner of the Property) for Homebuyer's interest in the Property, exclusive of reasonable escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The Sales Price shall be established in conformity with Section 13(h)(i) hereof. In the event of Homebuyer's refinancing, failure to occupy, or default, the "Sales Price" shall be established in conformity with Section 13(h)(ii). (v) The "Affordable Housing Cost Subsidy" is the amount deemed to be a subsidy that Agency has provided to Homebuyer by making the Property available for purchase at a price which constitutes an Affordable Housing Cost. The Affordable Housing Cost Subsidy equals the difference between the appraised fair market value of the Property (which appraisal shall be at Agency's cost) as of the date of the Agreement and the Affordable Housing Cost. (i) Exception Calculation. Notwithstanding the above, the Variable Applicable Factor shall equal the greater of fifty percent (50%) or the Variable Applicable Factor calculated pursuant to Section 13(b); provided however, in the event Homebuyer receives a First Lien loan from the California Housing Finance Agency or a First Lien loan the source of proceeds of which are from tax exempt bonds, then the Variable Applicable Factor shall equal the Variable Applicable Factor percentage calculated pursuant to Section 13(b). (c) Using the Variable Applicable Factor to Determine the Contingent Equity Participation Amount. The Contingent Equity Participation Amount is calculated by multiplying the Variable Applicable Factor by the difference between the Sales Price and the Purchase Price. For example, if the Variable Applicable Factor equals 10.7%, the Contingent Equity Participation Amount would then equal 10.7% (Variable Applicable Factor) x (Sales Price minus the Purchase Price). EXHIBIT D-11 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCS OC/ 1400673v 14/200272.0001 In the above example, if the Sales Price equals $380,000 and the Purchase Price equals $280,000, the Contingent Equity Participation Amount would equal $10,700 (10.7% x ($380,000 minus $280,000)). 10.7% (Variable Applicable Factor) x $100,000 (Sales Price - Purchase Price) = $10,700 (Contingent Equity Participation Amount). (d) Calculation of Contingent Equity Participation Amount for Subsequent Homebuyers. If pursuant to Section 4 of the Loan Agreement, a Buyer has fully assumed Homebuyer's obligations under the Agreement, the Promissory Note, the Agency Deed of Trust, the Notice of Affordability Restrictions, and this Restriction, and thereafter the new Buyer, as the successor Homebuyer, causes an event of acceleration to occur, the Contingent Equity Participation Amount to be paid by such Buyer shall be calculated by multiplying the Variable Applicable Factor, established in Section 13(b), by the difference between the Sales Price, established in conformity with Section 13(h), and the Purchase Price. (e) No Appreciation or Depreciation in Value of Property. If an event of acceleration occurs at a time when the Property has not appreciated or the value of the Property has depreciated (i.e., the Sales Price is less than the Purchase Price), then no Contingent Equity Participation Amount is due by Homebuyer to Agency. (f) Qualified Capital Improvements. The value of any Qualified Capital Improvements completed by Homebuyer during Homebuyer's ownership of the Property shall be added to the Purchase Price when calculating the Contingent Equity Participation Amount only if, not later than thirty (30) days prior to the event of acceleration causing the Contingent Equity Participation Amount to become immediately due and payable pursuant to Section 1l(b), Homebuyer submits the following to Agency: (i) an itemized list of the Qualified Capital Improvements, (ii) reliable proof of completion of the Qualified Capital Improvements (as evidenced e.g., by final building permits, a certificate of completion or original paid invoices or construction contracts), and (iii) an appraisal from a certified appraiser, in form and substance reasonably acceptable to the Executive Director, the conclusion of which is that the Qualified Capital Improvements have added the stated amount to the fair market value of the Property. If, within (30) days of receipt of the information concerning the Qualified Capital Improvements, Agency questions the claimed increase in the value of the Property by reason of said Qualified Capital Improvements, Agency and Homebuyer may, by mutual agreement, establish the value of the Qualified Capital Improvements or Agency may require an appraisal of the Property, at Homebuyer's expense, by a second independent certified appraiser appointed by the Agency to determine the fair market value of the Qualified Capital Improvements. (g) Credit to Homebuyer. Notwithstanding the foregoing provisions of this Section 13, calculation of the Contingent Equity Participation Amount is subject to a superior right of Homebuyer to receive credit in calculation of the Purchase Price for money paid by Homebuyer post acquisition and during the term of Homebuyer's ownership of the Property for installment payments of mortgage principal, pursuant to the First Lien actually made by EXHIBIT D-12 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCSOCI1400573v 141200272.0001 Homebuyer, in addition to the fair market value of Qualified Capital Improvements consistent with the requirements of Section 13(f) hereof. (h) Determination of Sales Price; Appraisal. (i) Upon Sale of the Property. In the event of a proposed sale of the Property by Homebuyer that does not conform to Section 4 herein, and not less than thirty (30) days after Agency receives actual notice of the opening of escrow in connection therewith, the Agency may elect to appoint a certified, independent appraiser to conduct an appraisal of the Property, at Homebuyer's expense, to assist Agency in determining if the Sales Price is at or near the fair market value of the Property at such time. If the Sales Price is determined by the appraisal to be three percent (3%) or more below the fair market value of the Property as estimated in said appraisal, then the "Sales Price" for purposes of determining the Contingent Equity Participation Amount shall be the fair market value of the Property established in said appraisal. (ii) Upon Refinancing/Failure to Occupy/Default. In the event of refinancing, failure to occupy the Property in accordance with Section 14 hereof, or default or breach of any provision of the Loan Agreement which causes the Contingent Equity Participation Amount to become immediately due and payable, the "Sales Price" for purposes of determining the Contingent Equity Participation Amount shall be determined by an appraisal of the Property. Agency shall appoint a certified independent appraiser to conduct an appraisal of the Property, at Homebuyer's expense. Homebuyer agrees that in such event the Contingent Equity Participation Amount shall be the Variable Applicable Factor multiplied by the difference between the Purchase Price and "Sales Price" as established by the appraised value of the Property at the time of such refinancing, failure to occupy, or default of the Agreement. Amount. (i) Homebuyer's Acknowledgment of Contingent Equity Participation HOMEBUYER ACKNOWLEDGES AND AGREES THAT UPON SALE, TRANSFER OR REFINANCING OF THE PROPERTY THAT DOES NOT COMPLY WITH SECTION 4 HEREIN, AND/OR UPON ANY OTHER EVENT OF ACCELERATION AS SET FORTH IN SECTION 11(b) HEREOF, HOMEBUYER SHALL PAY TO AGENCY IN ADDITION TO THE AGENCY LOAN AMOUNT, A CONTINGENT EQUITY PARTICIPATION AMOUNT EQUAL TO A PERCENTAGE SHARE OF THE APPRECIATION OF THE PROPERTY AS CALCULATED PURSUANT TO THIS SECTION 13. HOMEBUYER'S INITIALS: 14. Compliance with Laws; Governing Law. Homebuyer hereby agrees to comply with all applicable ordinances, rules, and regulations of Agency. Nothing herein is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule, or regulation. This EXHIBIT D-13 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DO CSOG1400673v 14/200272-0001 Restriction shall be governed by the laws of the State of California. Any legal action brought under this declaration must be instituted in the Superior Court of the County of Orange, State of California, or in the Federal District Court in the Central District, Santa Ana Division. 15. Indemnification. Homebuyer shall pay for, defend, indemnify and hold harmless Agency and the City and their respective officers, officials, agents, employees, representatives, and volunteers from and against any loss, liability, claim, or judgment relating in any manner to Homebuyer's use of the Property or Homebuyer's violation of this Restriction. Homebuyer shall remain fully obligated for the payment of taxes, liens and assessments related to the Property. There shall be no reduction in taxes for Homebuyer, nor any transfer of responsibility to Agency to make such payments, by virtue of this Restriction. 16. Insurance. Homebuyer shall maintain, during the term of this Restriction, an all-risk property insurance policy insuring the Property in an amount equal to the full replacement value of the structures on the Property. The policy shall contain a statement of obligation on behalf of the carrier to notify the Agency of any material change, cancellation or termination of coverage at least thirty (30) days in advance of the effective date of such material change, cancellation or termination. Homebuyer shall transmit a copy of the certificate of insurance to Agency within thirty (30) days of the effective date of this Restriction, and Homebuyer shall annually transmit to Agency a copy of the certificate of insurance, signed by an authorized agent of the insurance carrier setting forth the general provisions of coverage. The copy of the certificate of insurance shall be transmitted to Agency at the address set forth in Section 24 hereof. The form, content and issuer of any certificate of insurance approved by Agency. 17. Defaults. Failure or delay by either party to perform any term or provision of this Restriction which is not cured within thirty (30) days after receipt of notice from the other party constitutes a default under this Restriction; provided, however, that if such default is of the nature requiring more than thirty (30) days to cure, the defaulting party shall avoid default hereunder by commencing to cure within such thirty (30) day period, and thereafter diligently pursuing such cure to completion. The party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. 18. Non-Waiver. Failure to exercise any right Agency may have or be entitled to, in the event of default hereunder, shall not constitute a waiver of such right or any other right in the event of a subsequent default. 19. Further Assurances. Homebuyer shall execute any further documents consistent with the terms of this Restriction, including documents in recordable form, as Agency shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Restriction. EXHIBrr D-14 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCSOC 11400673v14/200272-0001 20. Governing Law. Homebuyer hereby agrees to comply with all ordinances, rules and regulations of Agency and the City. Nothing in this Restriction is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule or regulation. This Restriction shall be governed by the laws of the State of California. Any legal action brought under this Restriction must be instituted in the Superior Court of the County of Orange, State of California, or in the Federal District Court in the Central District of California, Santa Ana Division. 21. Amendment of Restriction. No modification, rescission, waiver, release or amendment of any provision of this Restriction shall be made except by a written agreement executed by Homebuyer and Agency. 22. Agency May Assign. Agency may, at its option, assign its rights hereunder without obtaining the consent of Homebuyer. 23. Homebuyer Assignment Prohibited. In no event shall Homebuyer assign or transfer any portion of this Restriction without the prior express written consent of Agency, which consent shall be given by Agency only in the event that Agency determines that the assignee or transferee is a Moderate Income Household, that the assignee's or transferee's monthly housing payments are at an Affordable Housing Cost, and that the assignee or transferee has expressly assumed this Restriction by execution of a written assignment document to be provided by Agency. This section shall not affect or diminish Agency's right to assign all or any portion of its rights hereunder. 24. Notices. Any notices, requests or approvals given under this Restriction from one party to another may be personally delivered or deposited with the United States Postal Service for mailing, postage prepaid, registered or certified mail, return receipt requested to the following address: To Homebuyer: To Agency: Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Attention: Agency Executive Director Either party may change its address for notice by giving written notice thereof to the other party. 25. Attorneys' Fees and Costs. In the event that any action is instituted to enforce payment or performance under this Restriction, the parties agree the non-prevailing party shall be EXHIBIT D-15 TO ATTACHMENT NO. I 1 Affordable Housing Resale Restriction DOCS001400673v 141200272-0001 responsible for and shall pay all costs and all attorneys' fees incurred by such prevailing party in enforcing this Restriction. 26. Entire Agreement. This Restriction, together with the Loan Agreement and all attachments thereto and hereto, constitutes the entire understanding and agreement of the parties. This Restriction integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between the Agency and Homebuyer concerning all or any part of the subject matter of this Restriction. [Signature block begins on follow page.] EXHIBIT D-16 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCS001400673v 14nOO272-0001 IN WITNESS WHEREOF, the parties have executed this Restriction as of the date set forth above. HOMEBUYER: By: Printed Name: By: Printed Name: AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic By: Cynthia J. Nelson Executive Director ATTEST: Maria D. Huizar, Clerk of the Council APPROVED AS TO FORM: Stradling Yocca Carlson & Rauth, Agency Special Counsel EXHIBIT D-17 TO ATTACHMENT NO. 11 Affordable Housing Resale Restriction DOCSOC11400673v 141200272-000] ATTACHMENT NO. I TO AFFORDABLE HOUSING RESALE RESTRICTION LEGAL DESCRIPTION OF PROPERTY [to be inserted] ATTACHMENT NO. 1 TO ATTACHMENT NO. i 1 To Affordable Housing Resale Restriction Legal Description of Property DOCSOG1400673v 14/200272.0001 ATTACHMENT NO.2 TO AFFORDABLE HOUSING RESALE RESTRICTION NOTICE OF INTENT TO TRANSFER NOTICE OF INTENT TO TRANSFER MUST BE DELIVERED TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA PRIOR TO PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. From: ("Homebuyer") To: Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92741 Attention: Agency Executive Director Re: Santa Ana, California ("Property") street address) Circle appropriate words: Homebuyer desires to [sell, convey, transfer by inheritance or devise, lease, gift, otherwise transfer) the Property. Proposed Transferee: Income of Proposed Transferee: Household Size of Proposed Transferee: Proposed Transfer Price: If Agency has a program to help locate a Moderate Income purchaser, does Homebuyer want Agency to help look for a Moderate Income purchaser to buy the Property? Yes: No: Date Signature of Homebuyer U daytime telephone number of Homebuyer ATTACHMENT NO. 2 TO ATTACHMENT NO. 11 To Affordable Housing Resale Restriction Notice of Intent to Transfer DOCS OC! 1400673 v 14/200272-0001 ATTACHMENT NO.3 TO AFFORDABLE HOUSING RESALE RESTRICTION RECORDING REQUESTED BY, ) AND WHEN RECORDED MAIL TO: ) Community Redevelopment Agency ) of the City of Santa Ana ) 20 Civic Center Plaza ) Santa Ana, California 92702 ) Attn: Executive Director ) This document is exempt from payment of a recording fee pursuant to Government Code Sections 27383 and 6103. Request for Notice Under Civil Code Section 2924b In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust recorded as Instrument No: on. .20 in Book Pa_ge _, Official Records of Orange County, California, and describing land therein as See Exhibit A attached hereto executed by , as Trustor, in which is named as Beneficiary, and as Trustee, be mailed to COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic, at 20 Civic Center Plaza, Santa Ana, California 92701, Attention: Executive Director and Community Development Director. EXHIBIT C-1 TO ATTACHMENT NO. I 1 To Affordable Housing Resale Restriction Request for Notice Under Civil Code Section 2924b DOCSOG I400673v 14/200272-0001 NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED. By: ATTEST: Maria D. Huizar, Clerk of the Council AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic Cynthia J. Nelson Executive Director EXHIBIT C-2 TO ATTACHMENT NO. 11 To Affordable Housing Resale Restriction Request for Notice Under Civil Code Section 2924b DOCSOGI d00673vl4/200272-0001 EXHIBIT A TO REQUEST FOR NOTICE UNDER CIVIL CODE SECTION 2924b LEGAL DES CRIPTION [to be inserted] EXHIBIT A TO ATTACHMENT NO. 11 To Request for Notice Under Civil Code Section 2924b Legal Description DOCSOG1400573v 141200272.0001 ATTACHMENT NO.4 TO AFFORDABLE HOUSING RESALE RESTRICTION REIMBURSEMENT AGREEMENT This REIMBURSEMENT AGREEMENT, dated as of 2U_ ("Reimbursement Agreement"), is hereby entered into by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body corporate and politic ("Agency"), and ("Homebuyer"). RECITALS A. Homebuyer is purchasing a condominium located at Santa Ana, California ("Property"). B. Agency and Homebuyer have executed an Affordable Housing Resale Restriction ("Restriction") which requires that for a forty-five (45) year period the Property be sold only to a Moderate Income Household at an Affordable Housing Cost, which may result in purchase prices which are substantially less than the current fair market value of the Property. C. Homebuyer is obtaining a loan ("Loan" or "First Lien") from a private lender ("Lender") for a portion of the costs of acquisition of the Property. A description of the Loan is set forth in Exhibit "A" hereto, which is incorporated herein. D. Pursuant to the Restriction, Agency has the right to acquire the Property in the event that it becomes subject to a foreclosure proceeding, and has the right to make payments to cure a default or delinquency on the Loan. E. The right to make payments to cure a default or delinquency on the Loan will be of benefit to Agency by allowing Agency to prevent the foreclosure of the Property, which will prevent the early termination of the Restriction. F. Agency's right to make payments to cure a default or delinquency on the Loan is also of benefit to Homebuyer, by allowing Homebuyer to retain ownership of the Property and to avoid foreclosure. G. Agency desires to obtain the authority to make payments to cure a default or delinquency on the Loan, on the condition that Homebuyer agrees to reimburse Agency for any payments made to cure a default or delinquency on the Loan. In order to induce Agency to obtain the authority to make payments to cure a default or delinquency on the Loan, Homebuyer is willing to agree to reimburse Agency for any payments made to cure a Loan default or delinquency. Homebuyer understands and acknowledges that Agency would not make payments to cure a Loan default or delinquency but for Homebuyer's agreement to make such reimbursements to Agency, as provided herein. ATTACHMENT NO. 4-1 TO ATTACHMENT NO. 11 To Affordable Housing Resale Restriction Reimbursement Agreement DOCS00I 400673v 14!200272-0001 NOW, THEREFORE, in consideration of the mutual covenants herein contained, it is agreed by and between the parties hereto as follows: 1. Cure of Loan Default. Agency hereby has the right, but not the obligation, to make payments to the Lender to fully or partially cure any default or delinquency in payments of the Loan. 2. Reimbursement Obligation of Homebuyer. Homebuyer hereby agrees to reimburse Agency for any and all payments made by Agency to fully or partially cure any default or delinquency in payments of the Loan. Such payments shall be made within thirty (30) days after written demand is made therefor from Agency to Homebuyer. Agency may make such written demand to Homebuyer at any time after making such payments. If such written demand is made by personal delivery of such demand given to Homebuyer, or left at the Property, such demand shall be deemed given immediately upon such delivery. If such written demand is made by reliable overnight delivery service (such as FedEx), such demand shall be deemed given one business day after deposit of the written demand with the overnight delivery service. If such written demand is made by registered or certified U.S. Mail, such demand shall be deemed given three business days after deposit of the written demand with the U.S. Postal Service. 3. Security for Reimbursement. The obligation of Homebuyer to make the reimbursement payments to Agency required under Section 2 shall be secured by a deed of trust which shall encumber Homebuyer's fee title to the Property. Such deed of trust shall be in the form attached hereto as Exhibit "B," which is hereby incorporated herein. Such deed of trust shall be junior and subordinate to the deed of trust which secures the Loan. Homebuyer consents to recordation of such deed of trust in the official records of Orange County, California. 4. Notice of Default and Delinquency. Homebuyer agrees to deliver to Agency a copy of any notice of default or delinquency in repayment of the Loan which Homebuyer receives from or on behalf of the Lender. Such notices shall be delivered to Agency within five (5) days of Homebuyer's receipt of such notice from the Lender. 5. Waivers. a. Homebuyer expressly agrees that any payment due hereunder may be extended from time to time at Agency's sole and absolute discretion and that Agency may accept security in consideration for any such extension or release any security for this Reimbursement Agreement at its sole discretion all without in any way affecting the liability of Homebuyer. b. No extension of time for payment of the amounts due pursuant to this Reimbursement Agreement made by agreement by Agency with any person now or hereafter liable for the payment of this Reimbursement Agreement shall operate to release, discharge, modify, change or affect the original liability of Homebuyer under this Reimbursement Agreement, either in whole or in part. ATTACHMENT NO. 4-2 TO ATTACHMENT NO. 11 To Affordable Housing Resale Restriction Reimbursement Agreement DOCSOCI1400673v 14!200272.0001 C. The obligations of Homebuyer under this Reimbursement Agreement shall be absolute and Homebuyer waives any and all rights to offset, deduct or withhold any payments or charges due under this Reimbursement Agreement for any reasons whatsoever. d. Homebuyer waives presentment, demand, notice of protest and nonpayment, notice of default or delinquency, notice of acceleration, notice of costs, expenses or leases or interest thereon, notice of dishonor, diligence in collection or in proceeding against any of the rights of interests in or to properties securing of this Reimbursement Agreement, and the benefit of any exemption under any homestead exemption laws, if applicable. e. No previous waiver and no failure or delay by Agency in acting with respect to the terms of this Reimbursement Agreement shall constitute a waiver of any breach, default, or failure or condition under this Reimbursement Agreement. A waiver of any term of this Reimbursement Agreement must be made in writing and shall be limited to the express written terms of such waiver. 6. Attorneys' Fees and Costs. Homebuyer agrees that if any amounts due under this Reimbursement Agreement are not paid when due, Homebuyer shall pay, in addition, all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Reimbursement Agreement, whether or not suit is filed. 7. Miscellaneous. a. Term of Agreement. This Reimbursement Agreement shall take effect upon the date set forth in the first paragraph hereof and shall terminate upon the final payment in full of the Loan. b. Successor is Deemed Included in All References to Predecessor. Whenever in this Reimbursement Agreement either Homebuyer or Agency is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Reimbursement Agreement contained by or on behalf of Homebuyer or Agency shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. C. Amendment. Homebuyer and Agency may alter, modify or cancel, or agree or consent to alter, modify or cancel this Reimbursement Agreement by a writing executed by both of them at any time. d. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed to have been received in the manner and to the addresses set forth in Section 24 of the Restriction. e. Further Assurances and Corrective Instruments. Homebuyer and the Agency agree that they shall, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required. ATTACHMENT NO. 4-3 TO ATTACHMENT NO. 11 To Affordable Housing Resale Restriction Reimbursement Agreement DOCSOC/1400673 v14/200272-0001 f. Execution in Counterparts. This Reimbursement Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. g. Applicable Law. This Reimbursement Agreement shall be governed by and construed in accordance with the laws of the State of California. h. Captions. The captions or headings in this Reimbursement Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions of this Reimbursement Agreement. i. Definitions. Any terms used herein but not separately defined herein shall be defined as provided in the Restriction and Homebuyer Loan Agreement, as applicable. [Signature block begins on follow page.] ATTACHMENT NO. 4-4 TO ATTACHMENT NO. 11 To Affordable Housing Resale Restriction Reimbursement Agreement DOC S OC11400b73v 14!200272-0001 IN WITNESS WHEREOF, Homebuyer and Agency have caused this Reimbursement Agreement to be executed by their duly authorized respective officers, all as of the date first above written. HOMEBVYER: By: Printed Name: By: Printed Name: AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic By: Cynthia J. Nelson Executive Director ATTEST: Maria D. Huizar, Clerk of the Council APPROVED AS TO FORM: Stradling Yocca Carlson & Rauth, Agency Special Counsel ATTACHMENT NO. 4-5 TO ATTACHMENT NO. 1 I To Affordable Housing Resale Restriction Reimbursement Agreement DOC S OCl l 400673 l4/200272-0001 EXHIBIT "A" TO REIMBURSEMENT AGREEMENT Name of Homebuyer: Address of Property: Name of Lender: Amount of Loan: EXHIBIT A TO ATTACHMENT NO. 11 To Reimbursement Agreement Affordable Housing Resale Restriction DOGS OG1400673v14/200272-0041 EXHIBIT "B" TO REIMBURSEMENT AGREEMENT RECORDING REQUESTED BY, ) AND WHEN RECORDED MAIL TO: ) Community Redevelopment Agency ) of the City of Santa Ana ) 20 Civic Center Plaza ) Santa Ana, California 92702 ) Attn: Executive Director ) This document is exempt from payment of a recording fee pursuant to Government Code Sections 27383 and 6103. DEED OF TRUST WITH ASSIGNMENT OF RENTS (SHORT FORM) This DEED OF TRUST is made as of _ 20 between , herein called TRUSTOR, whose address is Santa Ana, California 9 , herein called TRUSTEE, and COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic, herein called BENEFICIARY. WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Santa Ana, County of Orange, State of California, described as: SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF. together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of any sums advanced on behalf of Trustor according to the terms of a Reimbursement Agreement of even date herewith made by Trustor and Beneficiary, and extensions or renewals thereof, (2) the performance of each agreement of Trustor incorporated by reference or contained herein, and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county EXHIBIT B-1 TO ATTACHMENT NO. 11 To Reimbursement Agreement Deed of Trust With Assignment of Rents DOCSOM 400673 v 14/200272-0001 recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY 1300K PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plume 166 1307 Siskiyou 506 762 Armdor 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 Leos Angeles T3878 874 Saemmeoto 5039 124 Sonorna 2067 427 Calaveras 185 338 Madera 911 136 San Benito 300 405 StanisLzus 1970 56 Coluss 323 391 Maria 1849 122 S. Bernardino 6213 768 Sutter 655 585 Contra costa 4684 I Mariposa 90 453 S, rmncisco A-804 596 Teltama 457 193 DO Norte 101 549 Mendocino 667 99 S. Joaquin 2855 283 Trinity 108 595 E1 Dorado 703 635 Merced 1660 753 S. Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Marco 4778 175 Tuolumne 177 160 Glean 469 76 M0130 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Munterey 357 239 Santa CLira 6626 663 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 lnyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 LS San Diego 1964 149774 series 5 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B, (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. Trustor Tru stor EXHIBIT B-2 TO ATTACHMENT NO. 11 To Reimbursement Agreement Deed of Trust With Assignment of Rents DOC S OC! 1400b7 3 v ] 4!200272-0001 EXHIBIT A TO DEED OF TRUST SECURING REIMMURSEMENT AGREEMENT LEGAL DESCRIPTION [to be inserted] EXHIBIT A-1 TO ATTACHMENT NO. 11 To Deed of Trust Securing Reimbursement Agreement Legal Description D OC S OC! 1400573 v 141200272-0401 EXHIBIT B DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at Iength therein. A. To protect the security of this Deed of Trust, Trustor agrees: (1) To keep said property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. (2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary, the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. (4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation thereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in EXHIBIT B-I TO ATTACHMENT NO. 1 I To Reimbursement Agreement Deed of Trust Non-Recordable Attachment DOCSOCJ 1400673v 141200272-0001 exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. (5) To Pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: (1) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such monies received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. (2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. (3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. (4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance or any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." (5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's attorneys' fees, upon any indebtedness secured EXHIBIT B-2 TO ATTACHMENT NO. 11 To Reimbursement Agreement Deed of Trust Non-Recordable Attachment DOCSOC11400673v 141200272-0001 hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (6) That upon default Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. (7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. (S) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so EXHIBIT B-3 TO ATTACHMENT NO. I I To Reimbursement Agreement Deed of Trust Non-Recordable Attachment DOCSOG1400673v 14/200272-0401 requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. (9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. EXHIBIT B-4 TO ATTACHMENT NO. 11 To Reimbursement Agreement Deed of Trust Non-Recordable Attachment DOCS001400673 v 14!200272-0001 EXHIBIT C DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO TRUSTEE The undersigned is the legal owner and holder of the note or notes, and of all other indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, and all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated: Please mail Deed of Trust, Note and Reconveyance to Do not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made, DEED OF TRUST with power of sale TRUSTEE EXHIBIT C-I TO ATTACHMENT NO. 11 To Reimbursement Agreement Request for Full Conveyance Non-Recordable Attachment D OC S O C/ 1400673 v 14/20027 2-0001 EXHIBIT "D" PROGRAM DISCLOSURE STATEMENT Uwe (Homebuyer) understand and agree that the provision of financial assistance from the Community Redevelopment Agency of the City of Santa Ana ("Agency") under Agency's Affordable Housing Implementation Program ("Program") is conditional on a number of factors, including, but not limited to. • Uwe are buying a single family home within the City of Santa Ana, which is available to me/us at Affordable Housing Cost pursuant to Health & Safety Code Section 50052.5 • Uwe must qualify as a Moderate Income Household pursuant to and as defined in the California Health & Safety Code Sections 50093. • Uwe must qualify for a first mortgage home loan from an institutional lender acceptable to Developer and Agency. • I/we must pay at least three percent (3%) of the home purchase price from my/our own funds, except as otherwise permitted by the Lender. 0 Uwe must qualify for assistance under the guidelines of the Program. I/We further understand and agree that: I/we will be responsible for repaying the finance assistance provided by Agency. If Uwe comply with all of the requirements of the Program, Uwe will owe no interest on Homebuyer Assistance Loan and the principal amount that Uwe owe to the Agency pursuant to the Program will be forgiven upon the forty-fifth (45th) anniversary of the date of the Promissory Note executed pursuant to the Program. The Homebuyer Assistance Loan Amount and the Contingent Equity Participation Amount will be immediately due and payable upon sale or transfer of the Property or if Uwe refinance our first mortgage home loan without the Agency's written approval or if Uwe no longer occupy the Property as my/our principal residence or Uwe are in default of any obligation under the Loan Agreement which is a part of the Program. Uwe understand that the Contingent Equity Participation Amount is interest on the Homebuyer Assistance Loan, which will provide the Agency a share of the appreciation in the value of the Property if I/we sell, transfer, or refinance the Property. Uwe acknowledge that a Contingent Equity Participation Amount will be payable by me/us upon the occurrence of each and every event as described in Section 1.2(f) of the Loan Agreement. I/we may prevent the Contingent Equity Participation Amount and the principal amount of the Note from becoming due and payable by retaining the Property, or EXHIBIT D-1 TO ATTACHMENT NO. 11 To Affordable Homebuyer Loan Agreement Program Disclosure Statement DOCSOC1140067M 4120027 2-0001 by selling or otherwise conveying the Property to a Moderate Income Household at an Affordable Housing Cost in strict conformity Program requirements. This may restrict the persons to whom we may sell the Property, and may result in a sales price which is less than the fair market value of the Property. For a forty-five (45) year period, the Property may only be transferred to a Moderate Income Household at an Affordable Housing Cost and the Property must be and remain owner-occupied. In my/our sole discretion, I/we may elect to cause an acceleration under the Note by transferring the Property at a price in excess of an Affordable Housing Cost in consideration for paying the Agency the Contingent Equity Participation Amount. * After the forty-five (45) year term of the Homebuyer Assistance Loan, Uwe may sell the Property to any person regardless of their income at the Property's fair market value. I/we have a right to cancel or rescind this loan at any time prior to midnight on the third business day after the Loan Agreement is signed by sending a notice of my/our decision to rescind or cancel Homebuyer Assistance Loan to: Community Redevelopment Agency of the City of Santa Ana 24 Civic Center Plaza Santa Ana, California 92701 Attention: Agency Executive Director • During the term of Homebuyer Assistance Loan, I/we intend to continuously occupy the Property and Uwe shall not rent or lease the Property. • I/we may be responsible for paying an appraisal fee in connection with my/our sale, transfer, or refinance of the Property, or if the Note becomes due and payable because I/we amlare in default of any provisions of the Loan Agreement. • Agency shall not be held responsible for any costs associated with the home Uwe purchase with such assistance including, but not limited to, any loan fees or charges, any charges for appraisals, or any escrow costs or other costs relating to the transfer of the Property. • Agency cannot ensure that information provided by or on my/our behalf will be kept confidential. • Agency shall not be responsible for the selection of a home, the selection of a lender providing funds assisting in the purchase of the home, providing information concerning other public or private sources of loans, or the competitiveness of the terms of the Program. Uwe assume all responsibility for determining whether I/we will inform myself/ourselves as to the availability and terms of other public or private loans. EXHIBIT D-2 TO ATTACHMENT NO. I I To Affordable Homebuyer Loan Agreement Program Disclosure Statement DOCS00 1400573v 14/200272-0001 • Agency shall not be charged with the knowledge of the contents of the documents of my/our primary lender. Agency has caused our purchase of the Property to be at an Affordable Housing Cost for a Moderate Income Household, and thereby provided financial assistance to melus under the Program, which may be considered to be income for purposes of federal or state income taxes and Agency shall not be held responsible for the payment of any taxes which Uwe may incur by virtue of the receipt of such financial assistance. • Our Monthly Housing Costs may not exceed $ per month in order to obtain assistance from the Agency. HOMEBUYER: By: Printed Name: By: Printed Name: EXHIBIT D-3 TO ATTACHMENT NO. 11 To Affordable Homebuyer Loan Agreement Program Disclosure Statement DOCSOC11400673v 14!200272-0001 ATTACHMENT NO. 12 NOTICE OF AFFORDABILITY RESTRICTIONS RECORDING REQUESTED BY, } AND WHEN RECORDED MAIL TO: } } Community Redevelopment Agency } of the City of Santa Ana } 20 Civic Center Plaza } Santa Ana, California 92702 } Attn: Executive Director } This document is exempt from payment of a recording fee pursuant to Government Code Sections 27383 and 6103. NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY This Notice of Affordability Restrictions on Transfer of Property (or "Notice of Affordability Restrictions") is executed and recorded pursuant to Section 33334.3(f)(3)(B) of the California Health & Safety Code as amended by AB 987, Chapter 690, Statutes of 2007 (herein, "Chapter 690"), and affects that certain real property generally located at in the City of Santa Ana, California ("City") as legally described in Exhibit A hereto ("Property"). The Community Redevelopment Agency of the City of Santa Ana, a public body corporate and politic ("Agency"), and ("Homebuyer") have entered into that certain Homebuyer Loan Agreement dated as of 20 ("Homebuyer Loan Agreement"). 7"-"'-" 1. The Homebuyer Loan Agreement provides for affordability restrictions and restrictions on the transfer of the Property, as more particularly set forth in the Homebuyer Loan Agreement. A copy of the Homebuyer Loan Agreement is on file with Agency as a public record and is deemed incorporated herein. Reference is made to the Homebuyer Loan Agreement with regard to the complete text of the provisions of such agreement and all defined terms therein, which provides for affordability restrictions and restrictions on the transfer of the Property. ATTACHNMNT NO. 12- 1 D OCSOC11400b73v 141200272-0001 2. The Homebuyer Loan Agreement generally provides for Agency to lend to Homebuyer and for Homebuyer to borrow from Agency a loan in order to assist Homebuyer's purchase of the Property pursuant to the Program and subject to the terms and conditions set forth herein. For a period commencing upon the date on which Homebuyer acquires fee title to the Property and terminating on the forty-fifth (45th) anniversary thereof, the Property may only be transferred to another eligible, qualified Moderate Income Household at an Affordable Housing Cost; such restrictions are set forth at greater length in a document entitled Affordable Housing Resale Restriction (Conditions, Covenants, and Restrictions Affecting Real Property and the Resale, Ownership, Occupancy, Maintenance, and Other Matters Related to Real Property), substantially in the form of Exhibit "D" to the Homebuyer Loan Agreement ("Affordable Housing Resale Restriction"), which has been entered into by and between Agency and Homebuyer, and which is expected to be recorded substantially concurrently herewith among the Official Records of Orange County, California. The Affordable Housing Resale Restriction and the Homebuyer Loan Agreement are deemed to be incorporated herein by reference. 3. Section 4 of the Affordable Housing Resale Restriction provides as follows: " 4. Permitted Sales of the Property. Agency hereby permits sales of the Property to proposed Transferees who are Moderate Income Households, and are approved in accordance with this Section 4, provided the Sales Price does not exceed an Affordable Housing Cost to such proposed Transferee ("Permitted Transfers"). In the event that Homebuyer desires to Transfer the Property during the Affordability Period, prior to the Transfer the owner shall notify Agency by delivering a Notice of Intent to Transfer to Agency, which shall indicate the identity of the proposed Transferee who desires to purchase the Property, whether the purchaser is a Moderate Income Household, and whether the sales price is at an Affordable Housing Cost. In addition to Homebuyer's and the proposed Transferee's delivery of the Notice of Intent to Transfer, the following procedure shall apply: a. Notice to Agency. Homebuyer shall send the Notice of Intent to Transfer to Agency at the address set forth in Section 24. b. Qualification of Proposed Transferee. The proposed Transferee shall provide Agency with sufficient information in the form provided by Agency including without limitation, a certification as to the income and family size of the proposed Transferee, for Agency to determine if the proposed ATTACHMENT NO. 12-2 DOC800 140G673v 14/200272-0001 Transferee is a Moderate Income Household, and the purchase price is at an Affordable Housing Cost. C. Certificates from Parties. Homebuyer and proposed Transferee each shall certify in writing, in a form acceptable to Agency, that the Transfer shall be closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by Agency and that all consideration delivered by the proposed Transferee to owner has been fully disclosed to Agency. The written certificate shall also include a provision that in the event a Transfer is made in violation of the terms of this Restriction or false or misleading statements are made in any documents or certificate submitted to Agency for its approval of the Transfer, Agency shall have the right to file an action at law or in equity to make the parties terminate and/or rescind the sales contract and/or declare the sale void notwithstanding the fact that the Transfer may have closed and become final as between Homebuyer and Transferee. d. Written Consent of Agency Required Before Transfer. During the Affordability Period, the Property, and any interest therein, shall not be conveyed by any Transfer except with the express written consent of Agency, which consent shall be given only if the Transfer is in accordance with the provisions of this Restriction. This provision shall not prohibit the encumbering of title for the sole purpose of securing financing of the purchase price of the Property. e. Notice of Prohibited Transfer. Within twenty (20) days after receiving notification of a proposed Transfer in accordance with Section 4a., Agency shall determine and give notice to Homebuyer as to whether the proposed Transfer is a Permitted Transfer or Prohibited Transfer, or whether the Transfer would cause an acceleration under the Note under Section 1.f. of the Agreement, in which case, upon Homebuyer's payment of the Contingent Equity Participation Amount as set forth in Section 3 of the Agreement such Transfer would be deemed a Permitted Transfer. In the event that the proposed Transfer is a Prohibited Transfer, such notice to Homebuyer shall specify the nature of the Prohibited Transfer. If the violation is not corrected to the satisfaction of Agency within ten (10) days after the date of the notice, or within such further time as Agency determines is necessary to correct the violation, Agency may declare a Default under this Restriction. Upon the declaration of a Default, Agency may apply to a court of competent jurisdiction for specific performance of this Restriction, for an injunction prohibiting a proposed sale or Transfer in violation of this Restriction, for a declaration that the Prohibited Transfer is void, or for any such other relief as may be appropriate. ATTACHMENT NO. 12-3 DOCSOG 1400673v] 4/20027 2-000 1 L Delivery of Documents. Upon the close of the proposed Transfer, Homebuyer and Transferee, as applicable, shall provide the Agency with a copy of the final sales contract, settlement statement, escrow instructions, all certificates required by this Section 4 and any other documents Agency may request." 4. The restrictions contained in the Affordable Housing Resale Restriction commence upon the date on which Homebuyer acquires fee title to the Property and terminate on the forty-fifth (45th) anniversary thereof. 5. The commonly known addresses for the Property is 1 6. The assessors parcel numbers for the Property is 7. The legal description of the Property is attached hereto as Attachment No. 1 and is incorporated herein by reference. 8. The Affordable Housing Resale Restriction, which includes the affordability restrictions referenced above, is expected to be submitted for recordation in the Office of the Orange County Recorder contemporaneously with this Notice of Affordability Restrictions. 9. This Notice of Affordability Restrictions is intended merely to satisfy the requirements of Chapter 690 of the CRL. The Homebuyer Loan Agreement and the Affordable Housing Resale Restriction both remain in full force and effect and are not amended or altered in any manner whatsoever by this Notice of Affordability Restrictions. 10. Capitalized terms shall have the meaning established under the Homebuyer Loan Agreement (including all Attachments thereto) excepting only to the extent as otherwise expressly provided under this Notice of Affordability Restrictions. 11. Persons having questions regarding this Notice of Affordability Restrictions, the Homebuyer Loan Agreement or the Attachments thereto (including the Affordable Housing Resale Restriction) should contact Agency at its offices (20 Civic Center Plaza, Santa Ana, California 92701, or such other address as may be designated by Agency from time to time). ATTACHMENT NO. 12-4 DOCSOC/ 1400673 v 14/200272-000 l [Signature block begins on follow page.] DOCSOG 1400573v 141200272-0401 ATTACHMENT NO. 12-5 HOMEBUYER: By: Printed Name: By: Printed Name: AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic By: Cynthia J. Nelson Executive Director ATTEST: Maria D. Huizar, Clerk of the Council APPROVED AS TO FORM: Stradling Yocca Carlson & Rauth, Agency Special Counsel ATTACHMENT NO. 12-5 DOCS00 1400673v 14/200272-0001 EXHIBIT A LEGAL DESCRIPTION [to be inserted] EXHIBIT A TO ATTACHMENT NO. 12 DOCSOC/ 1400673v14/200272-0001 ATTACHMENT NO. 13 (LIST OF DEVELOPER'S CONSULTANTS ELIGIBLE TO BE INCLUDED IN THE THIRD PARTY COSTS) 1. LAB Holding, LLC 2. City Ventures 3. William Hezmalhalch Associates, Inc. 4. Patricia Smith, ASLA 5. Fuscoe Engineering, Inc. 6. Green Dinosaur 7. Arelleno & Associates 8. Bocarsly Emden Cowan Esmail & Arndt, LLP 9. Concord Group 10. C & V Consulting 11. Site Design Studio 12. Advanced Utility Design, Inc. The list set forth in this Attachment may be expanded to add additional consultants provided Executive Director of Agency approves in writing Developer's proposed new consultant. ATTACHMENT NO. 13 DOCSOC11400673v 14/200272-0001