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Home My WebLink AboutVISTA DEL RIO PARTNERS, L.P.ch r x x. pi G x �o w' G A- 2009 -214 Recording Requested By This Document was Norwc DPS Norwa First American Title CcmpanY Recorded in Official Records, Orange County FREE RECORDING REQUESTED PURSUANTTom Daly, Clerk- Recorder TO GOVERNMENT CODE SECTION 6103 & 27381il1lIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIINO FEE When Recorded Mail to: 2012000162993 04:30pm 03/21/12 48 404 Al2 163 City of Santa Ana, acting as Successor Agency 0.00 0.00 0.00 0.00 486.00 0.00 0.00 0.00 to the Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza (M -37) P.O. Box 1988 Santa Ana, California 92702 Attention: Executive Director 37,L7gZ9 -Z_ 2- LOAN AGREEMENT by and among the CITY OF SANTA ANA AND THE CITY OF SANTA ANA ACTING AS SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA And VISTA DEL RIO HOUSING PARTNERS LP, Dated: March 14, 2012 TABLE OF CONTENTS Page 1. DEFINITIONS AND INTERPRETATION ................................................ ..............................2 1.1 Defined Terms ............................................................................... ............................... 2 1.2 Singular and Plural Terms ............................................................. .............................10 1.3 References and Other Terms .......................................................... .............................10 1.4 Exhibits Incorporated ..................................................................... .............................10 2. [ RESERVED] ............................................................................................. .............................10 3. SCOPE OF WORK/ PROJECT BUDGET ................................................ .............................10 4. [ RESERVED] ............................................................................................. .............................10 5. LOANS: ................................................................................................................................... 11 5.1 City /HOME Loan ......................................................................... ............................... 11 5.2 Agency Loan ................................................................................ ............................... 11 5.3 Other Terms and Conditions of the Loans ..................................... .............................12 6. CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS .............. .............................12 6.1 Conditions Precedent ..................................................................... .............................12 6.2 Disbursement Procedures for Loans .............................................. .............................13 6.3 First Disbursement ....................................................................... ............................... 14 6.4 Termination for Failure of Condition ............................................. .............................14 6.5 Any Disbursement ......................................................................... .............................14 6.6 Final Disbursement ........................................................................ .............................15 6.7 Waiver of Conditions ..................................................................... .............................15 6.8 Disbursement Requests .................................................................. .............................15 6.9 Manner of Disbursement ................................................................ .............................16 6.10 Cost Overruns ................................................................................ .............................16 6.11 Cost Savings ................................................................................... .............................16 6.12 Retainage ........................................................................................ .............................17 6.13 Waiver of Disbursement Conditions .............................................. .............................17 6.14 Modification of Disbursement Conditions and Procedures ........... .............................17 6.15 Closing Costs and Fees .................................................................. .............................17 7. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY................................................................................................ .............................17 7.1 Use Covenants and Restrictions ..................................................... .............................17 7.2 Affordable Gross Starting Rents (Less Reasonable Utility Allowance) ..................... 18 7.3 Rental Vouchers ............................................................................. .............................19 7.4 Rent Increases .............................................................................. ............................... 20 8. [ RESERVED.] ............................................................................................ .............................20 9. GENERAL PROVISIONS AND WARRANTIES .................................... .............................20 9.1 Formation, Qualification and Compliance ..................................... .............................20 9.2 Execution and Performance of Loan Documents ......................... .............................21 9.3 Financial and Other Information .................................................... .............................21 9.4 No Material Adverse Change ....................................................... ............................... 22 9.5 Tax Liabil ity ................................................................................... .............................22 9.6 Governmental Requirements ......................................................... .............................22 9.7 Rights of Others ........................................................................... ............................... 22 9.8 Litigation ........................................................................................ .............................22 9.9 Bankruptcy ..................................................................................... .............................22 9.10 Information Accurate ..................................................................... .............................22 9.11 Conflicts of Interest ........................................................................ .............................22 9.12 Nonliability of City Officials and Employees ................................ .............................23 9.13 No Assignment ............................................................................... .............................23 9.14 Applicable Law .............................................................................. .............................23 9.15 Third Parties ................................................................................. ............................... 23 9.16 Control of Property ...................................................................... ............................... 23 10. CONDITIONS FOR CONSTRUCTION ................................................... .............................23 10.1 Permits and Approval s ................................................................... .............................23 10.2 Commencement and Completion of Construction ......................... .............................23 10.3 Change Orders ............................................................................... .............................23 10.4 Entry and Inspection ...................................................................... .............................24 10.5 Compliance with Section 3 Clause ................................................ .............................24 10.6 Construction Information ............................................................... .............................25 10.7 Protection Against Liens ................................................................ .............................25 11. FEDERAL (HOME PROGRAM) AND STATE REDEVELOPMENT COVENANTS.......................................................................................... ............................... 26 11.1 [intentionally Omitted] .................................................................. .............................26 11.2 Qualification as Affordable Housing ............................................. .............................26 11.3 Tenant and Participant Protection ................................................ ............................... 26 11.4 [Intentionally Omitted] .................................................................. .............................26 11.5 Handicapped Accessibility ............................................................. .............................26 11.6 Use of Debarred, Suspended, or Ineligible Participants ................ .............................26 11.7 Maintenance of Drug -Free Workplace .......................................... .............................26 11.8 Lead -Based Paint ........................................................................... .............................26 11.9 Affirmative Marketing ................................................................... .............................26 11.10 Equal Opportunity and Fair Housing ............................................. .............................26 11.11 Property Standards ......................................................................... .............................27 11.12 [Intentionally Omitted] .................................................................. .............................27 11.13 Other Program Requirements ...................................................... ............................... 27 11.14 Request for Disbursements of Funds ............................................. .............................27 11.15 Eligible Costs ................................................................................. .............................27 11.16 Records and Reports ...................................................................... .............................27 11.17 Reserved ......................................................................................... .............................27 11.18 Conflict of Interest ....................................................................... ............................... 27 11.19 Monitoring ................................................................................... ............................... 27 11.20 Recertification of Tenant Income ................................................ ............................... 27 11.21 Other HOME Program Requirements .......................................... ............................... 28 11.22 Controlling Covenants ................................................................... .............................28 12. MAINTENANCE, MANAGEMENT, OPERATION, PRESERVATION AND REPAIROF PROPERTY .......................................................................... .............................28 12.1 Maintenance ................................................................................... .............................28 12.2 Compliance with Laws .................................................................. .............................28 ii iii 12.3 Taxes and Impositions ................................................................... .............................29 12.4 [Intentionally omitted] ................................................................... .............................29 12.5 Project Operating Budget ............................................................... .............................29 12.6 Replacement Reserve Account .................................................... ............................... 30 13. NONDISCRIMINATION COVENANTS ................................................. .............................30 13.1 Obligation to Refrain from Discrimination .................................. ............................... 30 13.2 Nondiscrimination in Employment ................................................ .............................30 13.3 Statutory Nondiscrimination Covenants ........................................ .............................30 13.4 In Affordable Housing Restrictions ............................................... .............................31 14. ENVIRONMENTAL MATTERS .............................................................. .............................32 14.1 Representation and Warranty ......................................................... .............................32 14.2 Compliance with Environmental Laws .......................................... .............................32 14.3 Presence of Hazardous Materials ................................................. ............................... 32 14.4 Notice of Environmental Matters ................................................. ............................... 32 14.5 Environmental Indemnification by the Vista Del Rio ................. ............................... 32 15. OTHER AFFIRMATIVE COVENANTS .................................................. .............................33 15.1 Existence ........................................................................................ .............................33 15.2 Protection of Lien ........................................................................ ............................... 33 15.3 Notice of Certain Matters ............................................................. ............................... 33 15.4 Further Assurances ......................................................................... .............................33 15.5 Annual Audited Financial Statements ............................................ .............................34 15.6 Audits and Access to Records ........................................................ .............................34 15.7 Termite Inspection Report ........................................................... ............................... 34 16. OTHER NEGATIVE COVENANTS ........................................................ .............................34 16.1 Default on Senior Loan .................................................................. .............................34 16.2 Transfers of Interest in Property or Agreement ........................... ............................... 34 17. [ RESERVED] ............................................................................................. .............................36 18. INDEMNIFICATION .............................................................................. ............................... 36 18.1 Nonliability of Successor Agency and City ................................... .............................36 18.2 Indemnity ..................................................................................... ............................... 37 18.3 Reimbursement of City and Successor Agency ............................. .............................38 19. INSURANCE, CASUALTY AND CONDEMNATION ......................... ............................... 38 19.1 Policies Required ........................................................................... .............................38 19.2 City Attorney and /or City Risk Manager May Modify .................. .............................39 19.3 Claims and Proceedings ................................................................. .............................39 19.4 Delivery of Proceeds to City /Successor Agency ........................... .............................39 19.5 Application of Casualty Insurance Proceeds ............................... ............................... 39 19.6 Method of Disbursement and Undisbursed Funds ......................... .............................40 19.7 Failure to Satisfy Conditions ......................................................... .............................40 19.8 Restoration ..................................................................................... .............................40 19.9 Condemnation; Treatment of Compensation ................................. .............................40 19.10 Waiver of Subrogation ................................................................... .............................41 20. DEFAULTS AND REMEDIES ................................................................. .............................41 20.1 Events of Default ......................................................................... ............................... 41 20.2 Remedies Upon Default ................................................................. .............................42 iii 20.3 Cumulative Remedies: No Waiver ................................................ .............................43 Exhibit B - 21. MISCELLANEOUS ................................................................................... .............................44 Exhibit C - 21.1 Obligations Unconditional and Independent .................................. .............................44 City /HOME Loan Note 21.2 Notices ......................................................................................... ............................... 44 21.3 Survival of Representations and Warranties .................................. .............................45 Scope of Work/Budget 21.4 [Intentionally Omitted] .................................................................. .............................45 21.5 Binding Effect; Assignment of Obligations ................................... .............................45 21.6 Prior Agreements; Amendments; Consents ................................... .............................45 21.7 Governing Law .............................................................................. .............................45 21.8 Severability of Provisions .............................................................. .............................45 21.9 Headings ...................................................................................... ............................... 45 21.10 Conflicts ......................................................................................... .............................45 21.11 Time of the Essence ..................................................................... ............................... 46 21.12 Conflict of Interest ......................................................................... .............................46 21.13 Warranty Against Payment of Consideration .............................. ............................... 46 21.14 Nonliability of City and Successor Agency Officials and Employees .......................46 21.15 Plans and Data ................................................................................ .............................46 21.16 Authority to Enter Agreement ....................................................... .............................46 21.17 Subsequent Approvals ................................................................... .............................46 21.18 City, Successor Agency and Authority Approvals and Actions .... .............................46 EXHIBIT LIST Exhibit A - Legal Description of Property Exhibit B - Affordability Restrictions on Transfer of Property Exhibit C - City /HOME Loan Deed of Trust Exhibit D - City /HOME Loan Note Exhibit E - Agency Loan Deed of Trust Exhibit F - Agency Loan Note Exhibit G - Scope of Work/Budget Exhibit H - Marketing Plan iv LOAN AGREEMENT This LOAN AGREEMENT (the "Agreement') dated, for identification purposes only, as of March _, 2012, is made and entered into by and among the CITY OF SANTA ANA, acting as successor agency to the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic (the "Successor Agency "), the CITY OF SANTA ANA, a charter city and municipal corporation (referred to herein separately as the "City "), and VISTA DEL RIO HOUSING PARTNERS LP, a California limited partnership ( "Vista Del Rio "), with reference to the following: RECITALS: A. City has received an allocation of funds from the United States Department of Housing and Urban Development ( "HUD ") under the HOME Program to be used in accordance with applicable HOME Regulations (as those terms are defined below); B. Among the purposes of the HOME Program are (1) to expand the supply of decent, safe, sanitary, and affordable housing, with primary attention to rental housing, for very low- income and low- income Americans; and (2) to provide participating jurisdictions, on a coordinated basis, with the various forms of federal housing assistance, including capital investment, mortgage insurance, rental assistance, and other federal assistance, needed (a) to promote the development of partnerships among the federal government, states and units of general local government, private industry, and nonprofit organizations able to utilize all available resources to provide more of such housing, and (b) to expand the capacity of nonprofit Community Housing Development Organizations to develop and manage decent, safe, sanitary and affordable housing; C. The Successor Agency is authorized by the Community Redevelopment Law of the State of California (Health and Safety Code sections 33000 et seq.) ( "CRL ") to expend funds to increase the supply of very low and low- income housing available at affordable housing costs; D. In part to further this goal, the Successor Agency has created the Merged Project Area, within the City (the "Project Area "), and adopted a Redevelopment Plan for the redevelopment of the Project Area. In accordance with Section 33334.2, et seq., of the CRL, Successor Agency sets aside a portion of the tax increment revenues it receives from the Merged Project Area in a separate low and moderate housing fund, which Successor Agency uses for the construction, preservation, and rehabilitation of affordable housing for low income households; E. Vista Del Rio has entered into an agreement (the "Disposition and Development Agreement' as amended by the "First Amendment to Disposition and Development Agreement', "Second Amendment to Disposition and Development Agreement, and "Third Amendment to Disposition and Development Agreement; collectively, the "DDA ") with the Successor Agency to acquire and develop approximately 3.2 acres of real property, within the Project Area, located generally at 1600 West Memory Lane in the City of Santa Ana, California, and legally described in Exhibit A attached hereto (the "Property "). The loans referenced herein shall assist Vista Del Rio with the cost of construction of said Property that is improved with a multifamily residential housing development. F. In furtherance of the HOME Program, the CRL, and the Redevelopment Plan, Vista Del Rio has applied to City and Successor Agency for loans with which to: DOCSOC /1475221 v10/200272 -0004 I . provide deeper affordability for a longer tern, as well as acquire and develop the Property, and; 2. thereafter to maintain, operate and professionally manage the Property as decent, safe, sanitary and affordable rental housing. G. City desires to make a loan to Vista Del Rio pursuant to the terms and conditions set forth herein in order to make possible the construction of the Property, thereby eliminating blight while expanding the supply of decent, safe, sanitary and affordable housing. H. Successor Agency desires to make a loan to Vista Del Rio pursuant to the terms and conditions set forth herein in order to make possible the construction of the Property, thereby eliminating blight while expanding the supply of decent, safe, sanitary and affordable housing. I. If there is any discrepancy between Federal and State guidelines with regard to any of the terms and conditions contained herein, the more stringent shall apply. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, City and Vista Del Rio agree as follows: 1. DEFINITIONS AND INTERPRETATION 1.1 Defined Terms. All capitalized terms used herein, including, without limitation, in the Recitals above and in all other Project Documents, unless otherwise expressly defined, are defined where first used in this Agreement and /or as set forth in this Article 1. In the event of a conflict between the definitions set forth in the DDA, as amended, and the definitions set forth in this Agreement, the definitions set forth in this Agreement shall control. "Affordable Housing" means housing operated in accordance with the requirements of 24 CFR 92.252 and the rents governed by California Health and Safety Code Section 50052.5. "Affordable Rent" means the monthly rents that are set forth in more detail in Section 7 of this Agreement. "Affordability Restrictions on Transfer of Property" means that certain Affordability Restrictions on Transfer of Property, which contains the covenants and restrictions pertaining to the operation, maintenance, and management of the Project as Affordable Housing for a term of not fewer than 55 years, which covenants and restrictions shall run with the land, to be executed by the Successor Agency, the City, and Vista Del Rio and recorded against the Property in the Official Records of the County. The Affordability Restrictions on Transfer of Property and the legally required notice thereof are attached hereto as Exhibit B and incorporated herein. "Agency Loan" means a loan in the original principal amount of up to FOUR HUNDRED SIXTY -NINE THOUSAND DOLLARS ($469,000.00) to be made to Vista Del Rio by the Successor Agency solely from tax increment moneys set aside in Successor Agency's low and moderate income housing fund. "Agency Loan Deed of Trust" means the deed of trust to be recorded against the Property in the Official Records of the County, in substantially the form attached hereto as Exhibit E, 2 DOCSOCn475221v10/200272 -0004 which shall be executed by Vista Del Rio pursuant to Section 5.2.2 in order to secure the Agency Loan Note. "Agency Loan Note" means that certain promissory note in the original principal amount of up to FOUR HUNDRED SIXTY -NINE THOUSAND DOLLARS ($469,000.00) in substantially the form attached hereto as Exhibit F, which shall be executed by Vista Del Rio in favor of Successor Agency to evidence the obligation of Vista Del Rio to repay the Agency Loan. "Area Median Income" and °`AMI" means the median income for the Orange County, California PMSA as most recently determined by HUD. "Authority" means the Santa Ana Housing Authority, a public body, corporate and politic. "Building Permit" means the grading and building permit(s) issued by City and required for the Construction. "Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday on which Santa Ana City Hall is open to the public for the conduct of City affairs. "Calendar Year" means each consecutive twelve (12) month period from January 1 to December 30. "City" means the City of Santa Ana, California, a charter city and municipal corporation. "City" shall also refer to the Successor Agency where the context dictates, to the effect that Successor Agency shall have all the rights granted to the City hereunder other than the right to receive repayment of the City /HOME Loan. "City/HOME Loan" means a loan in the original principal amount of up to ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00) to be made to Vista Del Rio by City from HOME Program funds pursuant to Article 5 of this Agreement. "City/HOME Loan Deed of Trust" means the deed of trust to be recorded against the Property in the Official Records of the County, in substantially the form attached hereto as Exhibit C, which shall be executed by Vista Del Rio pursuant to Section 5.1.2 in order to secure the City/HOME Loan Note. "City/HOME Loan Note" means that certain promissory note in the original principal amount of up to ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00) in substantially the form attached hereto as Exhibit D, which shall be executed by Vista Del Rio in favor of City to evidence the obligation of Vista Del Rio to repay the City /HOME Loan. "Close of Escrow" shall mean the date upon which the Deeds of Trust are recorded in the Official Records of the County. "Closing Statement" means the final statement of Vista Del Rio's Escrow account for the purchase of the Property pursuant to the DDA. DOCSOC /1475221 v] 0/200272 -0004 "Construction" means the demolition and construction activities required to construct the 41 residential unit, multi - family project specified in City Site Plan Review No. 2009- 02. "Construction Contract" means each and every contract between Vista Del Rio, the General Contractor, and /or any subcontractor for the construction of the Improvements, or any part thereof, including construction of any on -site or off -site improvements included in the Scope of Development, the land use entitlement approved by the City. The Construction Contract between Vista Del Rio and the General Contractor shall be for a fixed fee to complete all work to be performed or caused to be performed by the General Contractor under such Construction Contract. Each Construction Contract shall be reviewed and reasonably approved (or disapproved) by Executive Directors, with each contract to include: (i) a full recitation of Section 3 and the Section 3 Clause with an express acknowledgement and agreement by the General Contractor and each subcontractor, as applicable, to fully comply with the Section 3 Clause, (ii) an express acknowledgement and agreement by the General Contractor and each subcontractor, as applicable, that as a condition precedent to the final payment under its contract, the General Contractor or subcontractor, as applicable, shall provide written evidence, in form reasonably satisfactory to the Executive Directors and /or HUD, that it and all its subcontractor(s) have complied with the Section 3 Clause in completing the development of the Project, and (iii) reference to all other applicable federal regulations and laws based on the final federal funding sources, if any, to which such General Contractor or subcontractor, as applicable, must comply in undertaking the construction and development of the Project; provided it is understood by the parties that it is and shall remain primarily the Vista Del Rio's obligation to obtain and submit all required Section 3 Clause documentation. The Construction Contract shall include any and all provisions required by the CRL, the Section 8 requirements and the HOME Regulations, as applicable. "Construction Lender" means the maker of the Construction Loan. "Construction Loan" means that certain construction loan from the Construction Lender to Vista Del Rio. "County" means the County of Orange, California. "Deeds of Trust" means the Agency Loan Deed of Trust and the City /HOME Loan Deed of Trust. "DDA" means that Disposition and Development Agreement entered into by the Community Redevelopment Agency of the City of Santa Ana, as predecessor in interest to the City of Santa Ana, acting as Successor Agency, Authority and Vista Del Rio and dated as of July 20, 2009, as amended by the First Amendment to Disposition and Development Agreement dated as of March 15, 2010, that Second Amendment to Disposition and Development Agreement dated as of December 20, 2010, and that Third Amendment to Disposition and Development Agreement dated as of March 21, 2011. "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, but not limited to: (i) sections 25115, 25117, 25122.7,or 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter- 4 DOCSOC /1475221 v 10/200272 -0004 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) Section 311 of the Clean Water Act (33 U.S.C. section 1317), (vi) Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. section 6901, etseq. (42 U.S.C. section 6903, (vii) Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. section 9601 etseq., or (viii) any state or federal lien or "superlien" law, any environmental cleanup statute or regulation, or any permit, approval, authorization, license, variance or permission required by any governmental authority having jurisdiction. "Escrow" means Escrow No. 3727429. "Escrow Holder" means First American Title Company in Santa Ana, California. "Event of Default" has the meaning set forth in Section 20.1. "Executive Directors" means, collectively, the City Manager of the City and /or the Executive Director of the Successor Agency, and /or the Executive Director of the Authority, and /or the authorized designee(s) of either of them. "Extremely Low Income" means an adjusted income which does not exceed thirty percent (30 %) of the Area Median Income for the Orange County, California PMSA, adjusted for household size, as annually published by HUD. "General Contractor" means the general contractor to be hired by Vista Del Rio to engage and supervise the subcontractors in the performance and completion of the construction of the Improvements and all other on -site and off -site improvements required to be constructed in connection with the Project, all in accordance with the Scope of Development, and the land use entitlement to be approved by City. The General Contractor shall be reasonably acceptable to and approved by the Executive Directors, in their reasonable discretion. The parties acknowledge that the General Contractor will not be performing actual construction work for any portion of the Project, but instead shall hire subcontractors, subject to all applicable federal, state and local laws, rules and regulations, including without limitation the HOME Regulations, Section 8 Requirements, Section 3, the CRL, and all other applicable Governmental Requirements. "General Partner(s)" means the General Partners of Vista Del Rio. "Governmental Authority" means any governmental or quasi - governmental agency, board, bureau, commission, department, court, administrative tribunal or other instrumentality or authority, and any public utility. "Governmental Requirements" means all applicable laws, ordinances, statutes, codes, rules, regulations, orders, and decrees of the United States, the State of California, the County, the City, or any other political subdivision with jurisdiction over property within the City including the Authority, and of any other political subdivision, agency, or instrumentality exercising jurisdiction over the Successor Agency, Vista Del Rio or Property, including all applicable federal, state, and local occupation, safety and health laws, rules, regulations and standards, applicable state and labor standards, applicable prevailing wage requirements, the City zoning and development 5 DOCSOC /1475221 v 10/200272 -0004 standards, City permits and approvals, building, plumbing, mechanical and electrical codes, as they apply to work undertaken pursuant to this Agreement, and all other provisions of the City and its Municipal Code (as they apply to work undertaken pursuant to this Agreement), and the Unruh Civil Rights Act, Civil Code § 51 et seq. "Grant Deed" means a grant deed for the conveyance of the Property to Vista Del Rio in a form reasonably acceptable to Vista Del Rio and the Executive Directors. "HAP Contract" shall mean, collectively, the initial "Agreement to Enter into Housing Assistance Payments Contract" (such contract may be referred to as the "AHAP ") and the initial Housing Assistance Payments Contract to be entered into by and between Authority and Vista Del Rio expressly subject to all Section 8 Requirements and other applicable federal laws and regulations and pursuant to which Authority will agree to provide Project Based Section 8 assistance to a specified number of Units at the Project in accordance with the DDA, as amended. Pursuant and subject to HR3221, enacted July 30, 2008, the HAP Contract is expected to be for a term of effectiveness of fifteen (15) years, expressly subject to all Section 8 Requirements. Renewals, if any, of the HAP Contract by HUD (and Authority) beyond the first 15 years thereof are and shall remain subject to the sole and absolute discretion of the Executive Directors and the Section 8 Requirements, and all provisions of this Agreement, including Section 7.3, et seq. Notwithstanding anything to the contrary set forth herein or in any other Project Document, the Partnership Agreement, the Senior Loan Documents, or any other document or instrument entered into by Vista Del Rio, Authority and /or any third party(ies) relating to the Project or the Property, nothing set forth in any such instruments shall modify, amend, or alter be construed or deemed to modify, amend or alter any provision or term of the HAP Contact. "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) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317), (ix) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 etseq.,(42 U.S.C, section 6903) or (x) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. section 9601 et seq. "HOME Compliance Period" means the later to occur of (a) twenty (20) years from the later to occur of (1) issuance of the Release of Construction Covenants or (2) the date on which City reports the Construction of the Project is complete to HUD; or (b) payment in full of all of principal and all accrued interest on the HOME Loan. 6 DOC SOC/ 1475221 v 10/200272 -0004 "ROME Program" shall mean the Title II of the Cranston - Gonzalez National Affordable Housing Act, as amended, specifically the HOME Investment Partnership Act, 42 U.S.C. §12701, et seq. and the implementing HOME Regulations at 24 CFR §92.1, et seq., as such law now exists and as it may hereafter be amended, to the extent applicable to the Project. "HOME Regulations" shall mean the implementing regulations of the HOME Program set forth at 24 CFR §92.1, et seq. as such regulations now exist and as they may hereafter be amended, to the extent applicable to the Project. Vista Del Rio covenants hereunder to comply with the CRL, the Section 8 requirements, and all applicable HOME Regulations in the performance of this Agreement and the other Project Documents, whichever are more restrictive. In implementation of these requirements, this Agreement, the Project, and all eligible contributions and expenditures hereunder shall conform to the following: a. The housing developed hereunder does and shall qualify as affordable housing under 24 CFR §92.252 because each Unit shall be rented at an Affordable Rent to households whose annual income is in compliance with the HOME Regulations; and b. This Agreement serves as the written agreement that imposes and enumerates (by meeting or exceeding) all of the affordability requirements from 24 CFR §92.252; the property standards requirements of 24 CFR §92.251; and income determinations made in accordance with 24 CFR §92.203. "HOME Units" shall mean eleven (11) of the Units which shall be designated as HOME Units and shall be subject to all applicable HOME Regulations. All HOME Units shall be "Low HOME" units pursuant, to the HOME Regulations. The HOME Units shall be "fixed" HOME Units, such that the specific Units designated as HOME Units shall not change. Vista Del Rio shall designate eleven (11) of the Units as HOME Units, subject to approval by the Executive Directors and in accordance with this paragraph, the HOME Program, and the HOME: Regulations. "HUD" means the United States Department of Housing and Urban Development and any successors or assigns thereof. "Improvements" means all improvements and fixtures now and hereafter comprising any portion of the Property, including, without limitation, landscaping, trees and plant materials; and offsite improvements (including, without limitation, streets, curbs, storm drains, and adjacent street lighting). "Indemnitees" means City, Successor Agency, and Authority and their past and present elected officials,, officers, employees, attorneys, contractors, elective and appointive boards and commissions, representatives, agents, and volunteers.. "Limited Partner" means the Limited Partners of Vista Del Rio, and their successors and assigns. "Loan Documents" means, collectively, this Agreement, the Notes, the Deeds of Trust, the Affordability Restrictions on Transfer of Property, and any other agreement, document, or instrument that the City or Successor Agency requires in connection with the execution of this Agreement or from time to time to effectuate the purposes of this Agreement. 7 Doc SOC/ 1475221 v 10/200272 -0004 "Loans" means the City /HOME Loan and the Agency Loan. "Notes" means the City /HOME Loan Note and the Agency Loan Note. "Partnership Agreement" means that certain First Amended and Restated Agreement of Limited Partnership of Vista Del Rio Housing Partners LP, to be executed at the Closing, as such agreement may be amended in the future with the approval of the Executive Directors. "Portable Voucher" shall mean Section 8 tenant -based vouchers, certificates of family participation under 24 CFR part 882 (Rental Certificate Program), rental vouchers under 24 CFR part 887 (Rental Voucher Program), and comparable documents evidencing participation in a program pursuant to the HOME Investment Partnership Act, 42 U.S.C. §12701, etseq. and the implementing regulations located at 24 CFR part 92, as such now exist and as may hereafter be amended, or other tenant -based rental assistance programs. "Project" means the acquisition, construction, operation, maintenance, and management of the Property as Affordable Housing in accordance with the Scope of Work, this Agreement and the other Project Documents. "Project Based Section 8" shall mean housing choice vouchers held by the City and /or Authority pursuant to annual and /or multi -year contribution contract(s) with HUD, which may be used to assist specific housing units as authorized by and subject to Section 8(0)(13) of the U.S. Housing Act of 1937, 42 U.S.C. Section 1437f(o)(13), and the implementing regulations set forth at 24 CFR Part 983, and HR3221, enacted July 30, 2008. Pursuant to Section 311.7 of the DDA, Authority has agreed to provide eight (8) Project Based Section 8 vouchers as assistance for an equal number of Units, subject to: (1) all Section 8 Requirements, (2) the fulfillment or waiver of the Agency's Conditions Precedent, including without limitation Vista Del Rio securing financing in accordance with Section 311 of the DDA, and (3) the provisions of Section 311.7 of the DDA. In all events, Authority's obligation to provide Project Based Section 8 assistance to the Project is expressly conditioned upon the satisfactory completion of environmental review and the Authority's receipt of a release of federal funds from HUD. Accordingly: Notwithstanding any provision of this Agreement, the parties hereto agree and acknowledge that this Agreement does not constitute a commitment of federal funds, and that such commitment of funds or may occur only upon satisfactory completion of environmental review and receipt by Authority and /or City, as applicable, of a release of funds from the U.S. Department of Housing and Urban Development under 24 CFR Part 58. The parties further agree that the provision of any federal funds to the Project is conditioned on Authority's and /or City's, as applicable, determination to proceed with, modify or cancel the Project Based Section 8 funding based on the results of a subsequent environmental review. The parties hereto are further prohibited from undertaking or committing any federal funds to physical or choice - limiting actions, including property acquisition, demolition, movement, rehabilitation, conversion, repair or construction prior to the environmental clearance; the parties understand that the violation of this provision may result in the denial of any federal funds under this Agreement. 8 DOCSOC/1 47522 1 v10/200272 -0004 "Project Budget" means the line -item budget for the Project attached hereto as Exhibit G, as modified from time to time in accordance with this Agreement. "Project Costs" means all costs of any nature incurred in connection with the Project in accordance with generally accepted accounting principles. "Project Documents" means this Agreement, the Disposition and Development Agreement, and the other Loan Documents, the Affordability Restrictions, the Agreement to enter into Housing Assistance Payments Contract and Housing Assistance Payments Contract to be entered into by the Authority and Vista Del Rio in connection with the Authority's provision of Project Based Section 8 (defined in the DDA) assistance to Project, and all other documents, agreements and instruments to be executed by Vista Del Rio in furtherance of the Project. "Property" means the approximately 2.74 acres of real property, within the Project Area, located generally at 1600 West Memory Lane in the City of Santa Ana, California. The Property is more fully described in the "Legal Description" of the Property attached hereto as Exhibit A and incorporated herein by reference. "Release of Construction Covenants" means the Release of Construction Covenants described in Section 310 of the DDA, a form of which is attached to the DDA as Attachment No. 6. "Section 504" means section 504 of the federal Rehabilitation Act of 1973, codified at 29 U.S.C. § 701 et seq., and its implementing regulations located at 24 CFR Part 8. "Section 8 Requirements" means Section 8(0)(13) of the U.S. Housing Act of 1937, 42 U.S.C. Section 1437f(o)(13), and the implementing regulations set forth at 24 CFR Part 983. "Senior Lender" means JPMorgan Chase Bank, N.A. or any other holder of the Senior Loan Note(s). "Senior Loan" shall mean the senior loan being made by the Senior Lender, concurrent to the Loans for payment of a portion of the Construction costs incurred by Vista Del Rio relating to the Project, as approved by the Executive Directors, and shall include any subsequent loan that refinances the initial Senior Loan. "Senior Loan Deed of Trust" means the deed of trust securing the Senior Loan by encumbering the Property. "Senior Loan Documents" means, collectively, the loan agreement governing the Senior Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and any other agreement, document or instrument that the Senior Lender requires in connection with the Senior Loan, all of which shall be subject to the approval of the Executive Directors. "Senior Loan Note" means the promissory note evidencing the Senior Loan from the Senior Lender. "Successor Agency" means the City of Santa Ana, acting as Successor Agency to the Community Redevelopment Agency of the City of Santa Ana, a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under the CRL. 9 DOCSOC /1475221v 10/200272 -0004 The principal office of the Successor Agency is located at 20 Civic Center Plaza, Santa Ana, California, 92702. Successor Agency shall also refer to the City where the context dictates, to the effect that City shall have all rights granted to the Successor Agency hereunder. "Term" the terms and conditions contained herein shall remain in effect for fifty -five (55) years, from the date the Release of Construction Covenants is recorded against the Property in the Official Records of the County. "Units" means the forty (40) for -rent, multi- family residential units (excepting the single manager's unit) in the Project. "Very Low Income" means an adjusted income which does not exceed fifty percent (50 %) of the Area Median Income for the Orange County, California PMSA, adjusted for household size, as annually published by HUD. "Vista Del Rio" means Vista Del Rio Housing Partners LP, a California limited partnership, and its successors and assigns. "Vista Del Rio's Representative" shall mean the Chief Executive Officer of the General Partner of Vista Del Rio or his/her designee. 1.2 Sineular and Plural Terms. Any defined term used in the plural in this Agreement or any other Loan Document shall refer to all members of the relevant class and any defined term used in the singular shall refer to any number of the members of the relevant class. 1.3 References and Other Terms. Any reference to this Agreement or any Loan Document shall include such document both as originally executed and as it may from time to time be modified. References herein to Articles, Sections and Exhibits shall be construed as references to this Agreement unless a different document is named. References to subparagraphs shall be construed as references to the same Section in which the reference appears. The term "document" is used in its broadest sense and encompasses agreements, certificates, opinions, consents, instruments and other written material of every kind. The terms "including" and "include" mean "including (include) without limitation." 1.4 Exhibits Incorporated. All attachments and exhibits to this Agreement, as now existing and as the same may from time to time be modified, are incorporated herein by this reference. 2. [RESERVED] 3. SCOPE OF WORK/ PROJECT BUDGET A Scope of Work and Project Budget for the Property are attached hereto as Exhibit G. Any material change to the Scope of Work and /or Project Budget requested by Vista Del Rio shall be subject to the prior written approval of the Executive Directors. The design and Construction of the Project shall at all times comply with the DDA, the Scope of Development, the Scope of Work, the Project Budget, Section 504, the CRL, the HOME Regulations, the Section 8 Requirements, and all applicable Environmental Laws and Governmental Requirements. 4. [RESERVED] 10 DOCSOC/ 1475221 v 10/200272-0004 5. LOANS: 5.1 City /HOME Loan. 5.1.1 Amount and Purpose. Subject to the terms and conditions of this Agreement, City agrees to make a loan of HOME Program funds to Vista Del Rio in the original principal amount of up to ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00) (the "City /HOME Loan ") for the Construction of the Project. 5.1.2 City/HOME Note and Deed of Trust. The City /HOME Loan shall be evidenced by the City /HOME Loan Note in substantially the form attached hereto as Exhibit C. The City /HOME Loan shall be secured by the City /HOME Loan Deed of Trust in substantially the form attached hereto as Exhibit B. The City /HOME Loan Deed of Trust shall be a deed of trust encumbering the Property, subordinate only to the Senior Loan(s) made to Vista Del Rio. 5.1.3 City/HOME Loan Terms. The terms and conditions of the City /HOME Loan are as set forth in the City /HOME Loan Note which is a residual receipts note. The City /HOME Loan Note shall be subordinate only to the Senior Loan, and shall continue in full force and effect for the entire HOME Compliance Period. 5.1.4 Use of City/HOME Loan Proceeds. Proceeds of the City /HOME Loan shall be used only for costs incurred by Vista Del Rio to construct the Improvements as set forth in the approved Project Budget. 5.1.5 Construction Interest Savings. Section 505.1 of the Disposition and Development Agreement is hereby deleted from the and shall not apply to repayment of the City /HOME Loan. 5.2 Agency Loan. 5.2.1 Amount and Purpose. Subject to the terms and conditions of this Agreement, Successor Agency agrees to make the Agency Loan to Vista Del Rio from tax increment money in the original principal amount of up to FOUR HUNDRED SIXTY -NINE THOUSAND DOLLARS ($469,000.00) (the "Agency Loan ") for the Construction of the Project. The Agency Loan does not include the $100,000 reimbursement to be made by the Successor Agency to Vista Del Rio pursuant to Section 201 of the DDA for the extra costs incurred by Vista Del Rio for the construction of the entry -way to the Project in excess of City Municipal Code requirements. 5.2.2 Agency Note and Deed of Trust. The Agency Loan shall be evidenced by the Agency Loan Note in substantially the form attached hereto as Exhibit F. The Agency Loan shall be secured by the Agency Loan Deed of Trust in substantially the form attached hereto as Exhibit E. The Agency Loan Deed of Trust shall be a deed of trust encumbering the Property, subordinate to the Senior Loan(s) and the City/HOME Loan made to Vista Del Rio. 5.2.3 _Agency Loan Terms. The terms and conditions of the Agency Loan are as set forth in the Agency Loan Note which is a residual receipts note. The Agency Loan Note shall be subordinate only to the Senior Loan and the City /HOME Loan, and shall continue in full force and effect until the Agency Loan is repaid in full. 11 DOCS OC/ 1475221 v 10/200272 -0004 5.2.4 Use of Agency Loan Proceeds. Proceeds of the Agency Loan shall be used only for costs incurred by Vista Del Rio to construct the Improvements as set forth in the approved Project Budget. 5.3 Other Terms and Conditions of the Loans. 5.3.1 The Agency Loan Note and City /HOME Loan Note shall become immediately due and payable, in the event of any of the following: (a) failure to complete the Project within the time set forth in the Schedule of Performance subject to Force Majeure or other extensions as allowed in this Agreement; (b) violation of any of the use covenants and restrictions contained in this Agreement, the Affordability Restrictions on Transfer of Property, or any other Project Document after the expiration of any applicable notice and cure periods; or (c) an Event of Default by Vista Del Rio under this Agreement or any other Project Document which is not timely cured after expiration of any applicable notice and cure periods pursuant to the terms of this Agreement or the applicable Project Document. 6. CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS 6.1 Conditions Precedent. City's and Successor Agency's respective obligations to disburse any amount of the Loans and Authority's obligation to provide Project Based Section 8 assistance to the Project is subject to the satisfaction, or waiver by the Executive Directors, of the following conditions precedent: (a) Loan Documents. Vista Del Rio shall have delivered to the Escrow Holder, signed by the authorized officer or officers of Vista Del Rio, with such signature(s) acknowledged where necessary, each of the following documents: (i) the DDA; (ii) the Grant Deed; (iii) the City /HOME Loan Note; (iv) the City /HOME Loan Deed of Trust; (v) the Agency Loan Note; (vi) the Agency Loan Deed of Trust; and (vii) The Affordability Restrictions on Transfer of Property. (b) Title Insurance. Successor Agency and City shall each have received a 2006 ALTA Lender's loan policy of title insurance, or evidence of a commitment therefore satisfactory to City, issued by First American Title Insurance Company and in form and substance satisfactory to City, together with all endorsements and binders required, naming City and Successor Agency as the insured, in a policy amount of not less than the amount of the Loans, showing Vista Del Rio as the 12 DOC SOC/ 1475221 v 10/200272 -0004 fee owner of the Property and insuring the Deeds of Trust to be valid priority liens on the Property. The Notes and Deeds of Trust shall be subordinate to the Senior Loan Note and Senior Loan Deed of Trust. The Affordability Restrictions on Transfer of Property shall take priority over the Loan Documents pursuant to City /Successor Agency's request. (c) Affordability Restrictions on Transfer of Property. Vista Del Rio shall have delivered to the Escrow Holder, in the form attached hereto as Exhibit B, the Affordability Restrictions on Transfer of Property pursuant to which, among other things, Vista Del Rio agrees that the Property shall be used only for decent, safe, sanitary and affordable rental housing pursuant to the affordability requirements of Code of Federal Regulations ( "CFR ") section 92.252 or 92.254 and California Health and Safety Code sections 50052.5 and 33334.3, as applicable, and all other applicable provisions of the HOME Program, the CRL, and the Section 8 Requirements. (d) Documents Recorded. This Loan Agreement, the Grant Deed, the Deeds of Trust and the Affordability Restrictions on Transfer of Property shall have been recorded in the Official Records of the County. (e) Request for Notice. For the benefit of City and Successor Agency, Escrow Holder shall have recorded a request for notice of default of the Senior Loan (the "Request for Notice of Default "). (f) Insurance. City shall have received evidence satisfactory to the City Attorney and /or Risk Manager that all of the policies of insurance required by Section 19 of this Agreement are in full force and effect. (g) Representations and Warranties. The representations and warranties of Vista Del Rio contained in this Agreement and the other Loan Documents shall be correct as of the Close of Escrow as though made on and as of that date, and if requested by the Executive Directors, City and Successor Agency shall have received a certificate to that effect signed by Vista Del Rio's Representative. (h) No Default. No Event of Default by Vista Del Rio shall have occurred, and no event shall have occurred which, with the giving of notice or the passage of time or both, would constitute an Event of Default by Vista Del Rio under this Agreement, and if requested by the Executive Director, City shall have received a certificate to that effect signed by Vista Del Rio's Representative. 6.2 Disbursement Procedures for Loans. The Loan proceeds shall be disbursed to finance the construction of the Project. The Loan proceeds shall not be used for any purpose other than for development related costs incurred by Vista Del Rio, including developer's fee and soft costs related to development of the Project, all in accordance with the approved Project Budget, with such costs all subject to the prior review by the Executive Directors. All disbursements shall be made as payments and/or reimbursements to Vista Del Rio for costs actually and reasonably incurred by Vista Del Rio for the construction of the Improvements in accordance with the Project Budget, based on detailed invoices and /or bills received from the General Contractor, materials suppliers, consultants and subcontractors that have performed work on the Project, and in accordance with the Intercreditor Agreement by and among the Successor Agency, City, Vista Del Rio, and Senior Lender, to be executed at the Closing. No portion of the Loans shall be disbursed prior to the Close of Escrow. Subject to satisfaction of all Conditions Precedent set forth herein, including submittal of 13 DOC SOC/ 1475221 v 10/200272 -0004 detailed invoices and bills documenting costs incurred, as described above, proceeds of the Loans may be disbursed to Vista Del Rio to reimburse Vista Del Rio for Construction costs incurred prior to the Close of Escrow. Vista Del Rio, Successor Agency and City shall agree on a draw request schedule to ensure that the Successor Agency and City are provided with frequent updates regarding the status of the construction of the Improvements, the status of expenditures in accordance with the Project Budget, and the status of invoices submitted by and payments to the General Contractor, suppliers, consultants, and subcontractors performing work at the Project. 6.3 First Disbursement. City's and Successor Agency's obligation to make the first disbursement of the proceeds of the Loans is subject to satisfaction of the following conditions precedent: (a) General Contractor. If the Executive Directors have not yet approved the General Contractor, the Executive Directors shall have approved the identity and qualifications of the General Contractor. (b) Construction Contract. If the Executive Directors have not yet approved the Construction Contract, the Executive Directors shall have approved the Construction Contract. 6.4 Termination for Failure of Condition. If (a) any of the conditions set forth herein are not timely satisfied or waived by the Executive Directors and after the expiration of any applicable notice and cure periods, and (b) neither City nor Successor Agency are in default under this Agreement, City and Successor Agency may terminate this Agreement without any further liability on its part by giving written notice of termination to Vista Del Rio. Upon the giving of such notice, all principal, interest and other amounts owing under the Notes shall be immediately due and payable, regardless of any other specified due date. 6.5 Any Disbursement. City's and Successor Agency's obligation to make any disbursement of the proceeds of the Loans (including the first and final disbursements) is subject to the satisfaction of the following conditions precedent: (a) Satisfactory Progress. The Executive Directors shall be satisfied, based on their own inspections or other reliable information, that the Construction is progressing satisfactorily in conformance with all applicable laws and other requirements (including HOME regulations). (b) Condition of Title. Either (i) the Executive Directors reasonably believe that no event has occurred since the Close of Escrow that would give rise to a colorable claim against the Property (e.g., a mechanic's lien) superior to the claim of City and Successor Agency against the Property with respect to the subject disbursement, or (ii) City and Successor Agency must have received, at Vista Del Rio's expense but payable out of the Construction Proceeds, from the title insurer who issued City's and Successor Agency's LP -10 Title Policies, all endorsements thereto then reasonably required by the Executive Directors (including, without limitation, CLTA Form 122 — priority of advance endorsements). (c) Representations and Warranties. The representations and warranties of Vista Del Rio contained in this Agreement and the other Loan Documents shall be correct in all material respects as of the date of the disbursement as though made on and as of that date. 14 DOCSOC/ 1475221 v 10/200272-0004 (d) No Default. No Event of Default by Vista Del Rio shall remain uncured and no event shall have occurred which, with the giving of notice or the passage of time or both, would constitute an Event of Default by Vista Del Rio. 6.6 Final Disbursement. City's and Successor Agency's obligation to disburse that portion of the proceeds of the Loans retained pursuant to Section 6.12 is subject to the satisfaction of the following additional conditions precedent: (a) Construction Complete. The construction of the Project shall be complete. (b) Certificate of Completion and Release of Construction Covenants. Any portion of the construction requiring inspection or certification by any Governmental Authority shall have been inspected and certified as complete. Vista Del Rio shall request that the Building Department issue a Certificate of Completion pursuant to the City's normal procedures and requirements, a copy of which shall be delivered to the Executive Directors, in order for final disbursement to occur. In addition, the Successor Agency shall have issued to Vista Del Rio the Release of Construction Covenants pursuant to Section 310 of the DDA. (c) Lien Free. At least one of the following shall have occurred: (i) Thirty -five (35) days shall have passed since the recording of a valid notice of completion for the construction, and no mechanic's or material man's lien shall be outstanding; or (ii) Ninety -five (95) days shall have passed since actual completion of the construction, and no mechanic's or materialman's lien shall be outstanding, or Vista Del Rio shall have bonded over any such lien to Executive Directors' reasonable satisfaction. 6.7 Waiver of Conditions. The conditions set forth pertaining to City's or Successor Agency's obligation to make disbursements of the proceeds of the Loans are for City's and Successor Agency's benefit only and the Executive Directors may waive all or any part of such rights by written notice to Vista Del Rio. 6.8 Disbursement Requests. The proceeds of the Loans shall be disbursed on a line- item by line -item basis in accordance with the Project Budget and subject to the conditions in this section. In no event shall City or Successor Agency have any obligation to disburse any amount for any item in excess of the amount allocated to such item in the Project Budget. Disbursements shall be made only upon Vista Del Rio's written request in the form of a Disbursement Request showing all costs which Vista Del Rio intends to fund with such disbursement, itemized in such detail as City or Successor Agency may reasonably require, accompanied in each case by (a) invoices and lien releases satisfactory to City or Successor Agency, including in any event partial lien releases executed by each contractor and subcontractor who has received any payment for work performed, and (b) all other documents and information reasonably required by City and Successor Agency. Disbursement Requests shall be submitted no less than ten (10) Business Days prior to the date of the requested disbursement, and shall not be submitted more often than monthly. Prior to each disbursement by City or Successor Agency of proceeds of the Loans, Vista Del Rio shall deliver to City and /or Successor Agency and to the Construction Lender a draw request ( "Draw Request "), and all required supporting information as set forth in the Loan Documents or as 15 DOC SOC/ 1475221 v 10/200272 -0004 otherwise reasonably required by City, Successor Agency, or the Construction Lender in order to provide information for evaluating the requested disbursement pursuant to customary construction lending practices of institutional lenders in Southern California. City, Successor Agency, and the Construction Lender shall notify the others and Vista Del Rio of approval or disapproval of each Draw Request within five (5) business days after receipt of the Draw Request, using the Bank's "Disbursement/Change Order Approval Notice ". City, Successor Agency, and the Construction Lender shall have the right, but not the obligation, to discontinue processing Draw Requests unless and until receipt of notification from the other of approval or disapproval of each outstanding Draw Request. 6.9 Manner of Disbursement. City and Successor Agency may make any disbursement by check payable to Vista Del Rio; or on a voucher basis; or by check payable jointly to Vista Del Rio and any contractor, subcontractor or other claimant; or directly to any such claimant; or by any other means reasonably selected by City, or Successor Agency, as applicable. 6.10 Cost Overruns. In the event that, at any time and for any reason, (a) the actual cost reasonably estimated by City, Successor Agency, or Vista Del Rio to be required to complete all hatters included in any line item by $10,000.00 in the Project Budget exceeds the amount allocated to that line item in the Project Budget, (b) Construction costs for any matters not covered by a specific line item have been or will be incurred in excess of $10,000.00, or (c) the undisbursed portion of the proceeds of the Loans is or may be insufficient to pay all Construction costs that may be payable under the Loan Documents or otherwise in connection with the Construction, Vista Del Rio shall, within ten (10) days after it receives written notice thereof from City or Successor Agency of any of the foregoing matters, do one or more of the following: (a) provide satisfactory evidence to City and /or Successor Agency that Vista Del Rio has previously paid such excess or otherwise provided for such insufficiency (collectively, the "Excess Cost") with funds from a source other than the Loans; (b) reallocate sufficient funds to pay the Excess Cost from funds allocated to "Contingency" in the Project Budget; provided, however, that the Executive Directors' reasonable consent to any such reallocation shall be required; or (c) deposit an amount equal to the Excess Cost in a non - interest bearing account (the "Overrun Account ") with the Construction Lender from which withdrawals may be made only with the consent of the Executive Directors but which will be exhausted prior to any further disbursement for any line item, so that any resulting surplus in any line item of the Project Budget will then be reallocated to the line item(s) in which the Excess Costs are expected to be incurred. Neither Successor Agency nor City shall have any obligation to make further disbursements until Vista Del Rio has paid or otherwise provided for the overrun as required above. Amounts deposited by Vista Del Rio in the Overrun Account for any Excess Costs shall be disbursed by the Construction Lender prior to the disbursement of any remaining proceeds of the Loans. 6.11 Cost Savings. Upon completion of and disbursement for all matters covered by any line items in the Project Budget, any remaining undisbursed amounts allocated to that line item shall be reallocated to "Contingency" and thereafter be available for disbursement in accordance with the terms of this Agreement. 16 DOC SOC/ 1475221 v 10/200272 -0004 6.12 Retainage. City and Successor Agency will withhold a Retainage of 10% from each Disbursement for each of the Construction cost line items of the Project Budget until all conditions to the final disbursement of Construction costs have been satisfied. City shall not retain funds for building materials purchased by Vista Del Rio for which Vista Del Rio supplies documentation to City proving payment in full or for soft costs. 6.12.1 Holdback. The retainage otherwise available for disbursement shall be subject to a holdback of one hundred twenty -five percent (125 %) of the estimated cost (as determined by the Executive Directors) for "punch- list" items. Such holdback will be released when all punch -list items have been completed to the satisfaction of City and Successor Agency. 6.13 Waiver of Disbursement Conditions. Unless City otherwise agrees in writing, the making by City of any disbursement with knowledge that any condition to such disbursement is not fulfilled shall constitute a waiver of such condition only with respect to the particular disbursement made, and such condition shall be condition to all further disbursements until fulfilled. 6.14 Modification of Disbursement Conditions and Procedures. The Executive Directors shall have the authority to modify the disbursement conditions and procedures set forth herein in order to conform them to the payment provisions of the approved Construction Contract. 6.15 Closing Costs and Fees. Vista Del Rio shall pay (a) all escrow fees and charges, (b) all recording fees and charges on any document recorded pursuant to this Agreement, and (c) the premium for the City's and Successor Agency's policies of title insurance required hereunder. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY 7.1 Use Covenants and Restrictions. A. Vista Del Rio agrees and covenants, which covenants shall run with the land and bind Vista Del Rio, its successors, its assign and every successor in interest to the Property that Vista Del Rio will make all Units on the Property available solely to Extremely Low Income and Very Low Income households at Affordable Rents. The HOME Regulations applicable to the eleven (11) HOME Units shall be enforced during the entire HOME Compliance Period. Upon expiration of the HOME Compliance Period, the City and Successor Agency will enforce affordability of said units with the same income and rent restrictions as the other units, pursuant to the requirements of Section 50052.5 of the Health and Safety Code and the CRL. Vista Del Rio further covenants and agrees that the Property shall be developed, operated, managed and maintained in accordance with Specific Development No. 83; Amendment Application 08 -11, as approved by the City of Santa Ana Planning and Building Successor Agency and by the Santa Ana City Council pursuant to Ordinance No. NS -2790 of the City of Santa Ana, adopted August 3, 2009. B. The Project shall consist of forty income restricted units (and one unrestricted manager's unit). There shall be eleven (1.1) HOME Units. The eleven HOME Units will be fixed units and shall be distributed throughout the complex with comparable amenities to the other Units. C. At initial lease up, all households selected to rent and occupy the HOME Units shall be Very Low Income households and all households selected to rent and occupy the remaining units shall be Extremely Low Income and Very Low Income households, in accordance 17 D O CS OC/ 1475221 v 10/200272 -0004 with the schedule set forth in Section 7.2 below. All rental increases shall be in conformance with federal and state law and approved by the Executive Directors. D. The rent charged for the on -site property manager's unit shall not be restricted. E. Affordable Rents charged to tenants shall be governed by California Health and Safety Code Sections 50052.5, 50053(b)(1), and 50053(b)(2), and as provided in the HOME Regulations 24 CFR section 92.2, whichever is less. 7.2 Affordable Gross Starting Rents (Less Reasonable Utilitv Allowance). Initial rents may be recalculated to allowable rental amounts at the time of initial lease -up following completion of Construction in accordance with any changes in allowable rent and income tables as published by HUD and the State of California, Department of Housing and Community Development. A. Successor Aeency and HOME Units Successor Agency, City, and Vista Del Rio agree that the breakdown of unit affordability for the Units shall be as follows, under this Agreement: The rents charged at the Project must comply with the lowest and most restrictive of the following standards: 1. The calculation methodology defined in (i) Section 50053(b)(1) for Extremely Low Income Households, or (ii) Section 50053(b)(2) for Very Low Income Households; 2. The rents published for Low Income Housing Tax Credit (Tax Credit) projects by the California Tax Credit Allocation Committee (TCAC); and 3. With respect to the HOME Units, the Low HOME rents published by HUD. Successor Agency, City, and Vista Del Rio agree that effective 2011 the initial maximum gross monthly Affordable Rents and the breakdown of unit affordability for the Extremely Low Income Units shall be as follows: Studio Extremely Low Units One Bedroom Extremely Low Units Two Bedroom Extremely Low Units # of Units # of Max. Gross (Successor HOME units Monthly Rents* Agency) 4 2 $485 8 2 $519 2 2 $623 Successor Agency, City, and Vista Del Rio agree that the Year 2011 initial maximum gross monthly Affordable Rents and the breakdown of unit affordability for the Very Low Income Units shall be as follows: IEN DOC SOC/ 1475221 v 10/200272 -0004 Studio Very Low Units One Bedroom Very Low Units Two Bedroom Very Low Units # of Units # of HOME Max. Gross (Successor units Monthly Rents* Agency) M $813 $871 $1,046 *Utilities Allowances must be deducted from the Maximum Gross Monthly Affordable Rent. The applicable utilities allowances are determined periodically by the Authority. Maximum Gross Monthly Rents shall be recalculated following issuance of a Release of Construction Covenants but prior to the time of initial lease -up in accordance with any changes in allowable rent and income tables as published by HUD and the State of California, and shall be as approved by the Executive Directors in writing in accordance with this Section. Such Maximum Gross Monthly Rents charged to the first tenants of the 40 Assisted Units shall constitute the Initial Rental Schedule. 7.3 Rental Vouchers. (a) In the event Vista Del Rio rents a Unit to a household holding a Portable Voucher, the rental agreement (or lease agreement, as applicable) between Vista Del Rio, as landlord, and the tenant shall expressly provide that the monthly rent charged shall be the Affordable Rent required hereunder for the Unit (not Section 8 Rent, as defined below) and that the rent collected directly from such tenant holding a portable rental voucher shall be not more than 30% of the tenant's actual gross income pursuant to the applicable voucher program regulations; i.e., the rent charged to such tenant under the rental agreement shall be the Affordable Rent chargeable hereunder and not fair market rent for the area or rent determined by a rent - reasonableness review performed in accordance with all applicable statutes and regulations applicable to Project Based Section 8 assistance ( "Section 8 Rent "), including without limitation Section 8(o)(13) of the U.S. Housing Act of 1937, 42 U.S.C. Section 1437f(o)(13), and the implementing regulations set forth at 24 CFR Part 983 (collectively, "Section 8 Program Regulations "), as would otherwise be permitted under the applicable Portable Voucher program. Thus, the subsidy payment to Vista Del Rio under any Portable Voucher shall not exceed the difference between thirty percent (30 %) of the tenant's actual gross income and Affordable Rent chargeable for the applicable Unit hereunder (and under the Affordability Restrictions). (b) The parties acknowledge that Vista Del Rio and Authority intend to enter into the HAP Contract and that the Senior Lender is anticipated to underwrite a Senior Loan based in part on the Project Based Section 8 subsidy to the Project under the HAP Contract, including payments thereunder equal to the difference between 30% of each tenant household's actual gross income and Section 8 Rent. In the event that, during the Term hereof, a new Housing Assistance Payments Contract is proposed to be entered into (or is entered into) with respect to any Units at the Project not already receiving Project Based Section 8 assistance under the HAP Contract (or those Units, after expiration of the HAP Contract), Vista Del Rio shall cause the rental agreement (or lease agreement, as applicable) for each Unit receiving Project Based Section 8 assistance pursuant to such new Housing Assistance Payments Contract (but not the HAP Contract) to provide that the monthly rent charged under such rental agreement (or lease agreement, as applicable) shall not exceed the Affordable Rent required hereunder for the Unit (not Section 8 Rent). Thus, the subsidy payment to 19 DOC SOC/ 1475221 v 10/200272 -0004 Vista Del Rio under any project -based rental voucher (other than with respect to the subsidy pursuant to the HAP Contract) shall not exceed the difference between thirty percent (30 %) of the tenant's actual gross income and Affordable Rent chargeable for the applicable Unit hereunder (and under the Regulatory Agreement). (c) Vista Del Rio hereby acknowledges and agrees that, upon completion of construction of the Project and leasing of the Units to Extremely Low Income and Very Low Income households pursuant to this Agreement, the DDA and the Affordability Restrictions, Vista Del Rio will have received governmental subsidies from Authority, City, Successor Agency and TCAC (through the Tax Credits allocated to the Project) in exchange for Vista Del Rio's agreement to limit the rents charged to tenants of the Project to an Affordable Rent and Vista Del Rio further acknowledges and agrees that, except for the HAP Contract payments with respect to 8 Assisted Units, which are part of the approved financing for the Project, acceptance of additional governmental rental subsidies (without the consent of the Executive Director) resulting in total, cumulative rent payments to Vista Del Rio in excess of an Affordable Rent for any of the Units at the Project would constitute an unjustified windfall to Vista Del Rio at the expense of Authority and the federal and state governments. Further, with respect to the HOME Units, the HOME Regulations prohibit application of any Project Based Section 8 assistance, Portable Voucher, or other rental subsidy that, cumulatively with the rent to be paid by the tenant household, exceeds an Affordable Rent calculated pursuant to the HOME Regulations. 7.4 Rent Increases. On an annual basis, the Executive Directors shall provide Vista Del Rio with the maximum allowable schedule of Affordable Rents for the Property in accordance with changes in allowable rent and income tables published by HUD and the State of California, provided however that the rent for the HOME units shall in no event be higher than the rent for the equivalent Successor Agency assisted Unit. In no event shall Vista Del Rio charge any tenant more than the Affordable Rents prescribed for the Units pursuant to this Agreement and as directed by the Executive Directors. 8. [RESERVED.] 9. GENERAL PROVISIONS AND WARRANTIES As a material inducement to City and Successor Agency to enter into this Agreement, Vista Del Rio represents and warrants as follows: 9.1 Formation, Qualification and Compliance. Vista Del Rio (a) is a limited partnership, validly existing and in good standing under the laws of the State of California, (b) has all requisite authority to conduct its business and own and lease its properties, and (c) is qualified and in good standing in every jurisdiction in which the nature of its business makes qualification necessary or where failure to qualify could have a material adverse effect on its financial condition or the performance of its obligations under the Loan Documents. Vista Del Rio is in compliance with all Governmental Requirements applicable to its business and has obtained all approvals, licenses, exemptions and other authorizations from, and has accomplished all filings, registrations and qualifications with, any Governmental Authority that are necessary for the transaction of its business. 20 DOCSOC/ 1475221 v 10/200272 -0004 9.2 Execution and Performance of Loan Documents. 9.2.1 Vista Del Rio has all requisite authority to execute and perform its obligations under the Loan Documents. 9.2.2 The execution and delivery of Vista Del Rio of, and the performance by Vista Del Rio of its obligations under, each Loan Document has been authorized by all necessary action and does not and will not: (a) require any consent or approval not heretofore obtained of any person having any interest in Vista Del Rio; (b) violate any provision of, or require any consent or approval not heretofore obtained under, any articles of incorporation, by -laws or other governing document applicable to Vista Del Rio; (c) result in or require the creation of any lien, claim, charge or other right of others of any kind (other than under the Loan Documents) on or with respect to any property now or hereafter owned or leased by Vista Del Rio; (d) violate any provision of any law presently in effect; or (e) constitute a breach or default under, or permit the acceleration of obligations owed under, any contract, loan agreement, lease or other agreement or document to which Vista Del Rio is a party or by which Vista Del Rio or any of its property is bound. 9.2.3 Vista Del Rio is not in default, in any respect that is materially adverse to the interests of City or Successor Agency under the Loan Documents or that would have any material adverse effect on the financial condition of Vista Del Rio or the conduct of its business, under any law, contract, lease or other agreement or document described in sub - paragraph (d) or (e) of the previous subsection. 9.2.4 Other than for building permits relating to the Project, no approval, license, exemption or other authorization from, or filing, registration or qualification with, any Governmental Authority is required which has not been previously obtained in connection with: (a) the execution of Vista Del Rio of, and the performance by Vista Del Rio of its obligations under, the Loan Documents; and (b) the creation of the liens described in the Loan Documents. 9.3 Financial and Other Information. To the best of Vista Del Rio's knowledge, all financial information furnished to City and Successor Agency with respect to Vista Del Rio in connection with the Loans (a) is complete and correct in all material respects as of the date of preparation thereof, (b) accurately presents the financial condition of Vista Del Rio, and (c) to the extent applicable, has been prepared in accordance with generally accepted accounting principles consistently applied or in accordance with such other principles or methods as are reasonably acceptable to City. To the best of Vista Del Rio's knowledge, all other documents and information furnished to City and Successor Agency with respect to Vista Del Rio, in connection with the Loans, are correct and complete insofar as completeness is necessary to give the City accurate knowledge of 21 DOCSOG1475221v 1 0/200272 -0004 the subject matter. To the best of Vista Del Rio's knowledge Vista Del Rio has no material liability or contingent liability not disclosed to City and Successor Agency in writing and there is no material lien, claim, charge or other right of others of any kinds (including liens or retained security titles of conditional vendors) on any property of Vista Del Rio not disclosed in such financial statements or otherwise disclosed to City and Successor Agency in writing. 9.4 No Material Adverse Change. There has been no material adverse change in the condition, financial or otherwise, of Vista Del Rio since the dates of the latest financial statements furnished to City and Successor Agency. Since those dates, Vista Del Rio has not entered into any material transaction not disclosed in such financial statements or otherwise disclosed to City and Successor Agency in writing. 9.5 Tax Liability. Vista Del Rio has filed all required federal, state and local tax returns and has paid all taxes (including interest and penalties, but subject to lawful extensions disclosed to City and Successor Agency in writing) other than taxes being promptly and actively contested in good faith and by appropriate proceedings. Vista Del Rio is maintaining adequate reserves for tax liabilities (including contested liabilities) in accordance with generally accepted accounting principles or in accordance with such other principles or methods as are reasonably acceptable to City and Successor Agency. 9.6 Governmental Requirements. Vista Del Rio is in compliance with all laws relating to the Property/Project and all Governmental Authority approvals, including zoning, land use, planning requirements, and requirements arising from or relating to the adoption or amendment of, any applicable general plan, subdivision and parcel map requirement; environmental requirements, including the requirements of the California Environmental Quality Act and the National Environmental Policy Act and the preparation and approval of all required environmental impact statements and reports; use, occupancy and building permit requirements; public utilities requirements, and any other Governmental Requirements applicable to the Property or the Project. 9.7 Rights of Others. Vista Del Rio is in compliance with all covenants, conditions, restrictions, easements, rights of way and other rights of third parties relating to the Property. 9.8 Litigation. There are no material actions or proceedings pending or, to the best of Vista del Rio's knowledge, threatened against or affecting Vista ,Del Rio or any property of Vista Del Rio before any Governmental Authority, except as disclosed to City in writing prior to the execution of this Agreement. 9.9 Bankruotev. To the best of Vista Del Rio's knowledge, no attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against Vista Del Rio, nor are any of such proceedings contemplated by Vista Del Rio. 9.10 Information Accurate. To the best of Vista Del Rio's knowledge, all information, regardless of its form, conveyed by Vista Del Rio to City and Successor Agency, by whatever means, is accurate, correct and sufficiently complete to give City and Successor Agency true and accurate knowledge of its subject matter, and does not contain any misrepresentation or omission. 9.11 Conflicts of Interest. No member, official or employee of the City or Successor Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such 22 DOCSOC /1475221v 10/200272 -0004 member, official or employee participate in any decision relating to this Agreement which affects his /her personal interests or the interests of any corporation, partnership or association in which he /she has a direct or indirect financial interest. The Vista Del Rio warrants that it neither has paid nor given, nor will pay or give, any third party any money or other consideration for obtaining this Agreement. 9.12 Nonliability of City Officials and Employees. No member, official or employee of the City or Successor Agency shall be personally liable to the Vista Del Rio in the event of any default or breach by the City or Successor Agency or for any amount which may become due to Vista Del Rio or on any obligations under the terms of this Agreement. 9.13 No Assignment. Vista Del Rio expressly acknowledges and agrees that the City and Successor Agency have only agreed to assist Vista Del Rio as a means by which to induce the construction and development of the Property/Project. Accordingly, Vista Del Rio further expressly acknowledges and agrees that this Agreement is a personal right of Vista Del Rio that is neither negotiable, transferable, nor assignable except as set forth in Section 16.2. 9.14 Applicable Law. This Agreement shall be interpreted, governed and enforced under federal and state laws. 9.15 Third Parties. The Authority is an intended third party beneficiary of this Agreement, with full rights (but no obligation) to enforce all terms, provisions and covenants contained herein. This Agreement is made for the sole benefit of Vista Del Rio, the City, the Successor Agency, the Authority, and their successors and assigns, and no other person or persons shall have any rights or remedies under or by reason of this Agreement or any right to the exercise of any right or power of the City or Successor Agency hereunder or arising from any default by Vista Del Rio, nor shall the City, Successor Agency or Authority owe any duty whatsoever to any claimant for labor performed or materials furnished in connection with the Construction of the Property. 9.16 Control of Property. The parties acknowledge that neither the Successor Agency nor City has at anytime participated in any manner in the management or operation of the Property, and will not so participate at any time hereafter. 10. CONDITIONS FOR CONSTRUCTION 10.1 Permits and Approvals. Vista Del Rio shall diligently obtain all Permits, including all grading and building permits, licenses, approvals, exemptions and other authorizations of Governmental Agencies required in connection with the construction and development of the Property /Project. 10.2 Commencement and Completion of Construction. The construction shall be considered complete for purposes of this Agreement only when (a) all work described has been completed and fully paid for, and (b) all work requiring inspection or certification by Governmental Authority has been completed and all requisite certificates, approvals and other necessary authorizations (including required final certificates of completion) have been obtained. 10.3 Change Orders. The Construction Contract shall not be modified except pursuant to change orders. All change orders: 23 DOC SOC/ 1475221 v 10/200272 -0004 (a) shall be in writing, numbered in sequence, signed by Vista Del Rio and submitted to City prior to the proposed effectiveness thereof and accompanied by any working drawings and a written narrative of the proposed change. (b) shall be subject to the Executive Directors' and the Construction Lender's prior written approval. 10.4 Entry and Inspection. At all times prior to completion of the construction, upon reasonable notice, City or Successor Agency and their respective agents shall have (a) the right of free access to the Property and all sites away from the Property where materials for the construction are stored, (b) the right to inspect all labor performed and materials furnished for the construction, and (c) the right to inspect and copy all documents pertaining to the construction. 10.5 Compliance with Section 3 Clause. Section 3 of the Housing and Urban Development act of 1968, 12 U.S.C. 1701 u, as amended by Section 915 of the Housing and Community Development Act of 1992 requires that economic opportunities generated by HUD financial assistance for housing and community development programs be targeted toward low- and very low- income persons. Whenever HUD assistance generates opportunities for employment or contracting, state and local grantees, as well as other recipients of HUD housing assistance funds must, to the greatest extent feasible, provide these opportunities to low- and very low- income persons and to businesses owned by or employing low- and very low- income persons. Section 3 applies to projects for which HUD's share of project costs exceeds $200,000 and contracts and subcontracts awarded on projects for which HUD's share or project costs exceeds $200,000 and the contractor subcontract exceeds $100,000. For purposes of this Section 3 Clause and compliance thereto, whenever the word "contractor" is used it shall mean and include, as applicable, the Vista Del Rio, and its contractor and subcontractor(s), if any. The particular text to be utilized in any and all contracts of any contractor doing work covered by Section 3 shall be in substantially the form of the following, as reasonably determined by the Successor Agency, or as directed by HUD or its representative, and shall be executed by the applicable contractor under penalty of perjury: "(a) The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 170lu ( "Section 3 "). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD- assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low -and very low- income persons [inclusive of Very Low Income Persons, Very Low Income Households, and Very Low Income Tenants served by the Project], particularly persons who are recipients of HUD assistance for housing. (b) The parties to this contract agree to comply with HUD's regulations in 24 CFR Part 135, which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the Part 135 regulations. (c) The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of 24 DOCSOC/ 1475221 v 10/200272 -0004 the contractor's commitments under this Section 3 clause, and will post copies of notices in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number of job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of person(s) taking applications for each of the position; and the anticipated date the work shall begin. (d) The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR Part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations 24 CFR Part 135. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR Part 135. (e) The contractor will certify that any vacant employment positions, including training positions, that are filled (a) after the contractor is selected but before the contract is executed, and (b) with persons other than those to whom the regulations of 24 CFR Part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR Part 135. (f) Noncompliance with HUD's regulations in 24 CFR Part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts." After the foregoing Section 3 Clause, there shall be a signature block for the contractor, as applicable, the following text shall be included immediately above the signature block: "The contractor /provider by his /her signature affixed hereto declares under penalty of perjury that contractor has read the requirements of the Section 3 Clause and accepts all its requirements contained therein for all of his /her operations related to this contract " To the extent applicable, Vista Del Rio shall comply and /or cause compliance with Section 3 Clause requirements for the Project. For example, when and if Vista Del Rio or its contractor(s)/subcontractor(s) hire(s) full time employees, rather than volunteer labor or materials, Section 3 is applicable and all disclosure and reporting requirements apply. 10.6 Construction Information. From time to time during the course of the construction, but in no event more often than monthly, within ten (10) Business Days following Successor Agency or City's written demand therefore, Vista Del Rio shall furnish requested reports of project costs, progress schedules and contractors' costs breakdowns for the construction, itemized as to trade description and item, showing the name of the contractor(s) and /or subcontractor(s), and including such indirect costs as real estate taxes, legal and accounting fees, insurance, architects' and engineers' fees, loan fees, interest during construction and contractors' overhead. 10.7 Protection Against Liens. Vista Del Rio shall diligently file a valid Notice of Completion upon completion of the construction, diligently file a notice of cessation in the event of a cessation of labor on the construction for a period of thirty (30) days or more, and take all actions reasonably required to prevent the assertion of claims of lien against the Property. In the event that any claim of lien is asserted against the property or any stop notice or claim is asserted against the 25 Doc SOG 1475221 v 10/200272 -0004 Successor Agency or the City by any person furnishing labor or materials to the Property, Vista Del Rio shall immediately give written notice of the same to City and Successor Agency and shall, promptly and in any event within ten (10) Business Days after written demand therefor, (a) pay and discharge the same, (b) effect the release thereof by delivering to City and Successor Agency a surety bond complying with the requirement of applicable laws for such release, or (c) take such other action as City or Successor Agency may require to release City and /or Successor Agency from any obligation or liability with respect to such stop notice or claim. 11. FEDERAL (HOME PROGRAM) AND STATE REDEVELOPMENT COVENANTS 11.1 [Intentionally Omitted] 11.2 Oualification as Affordable Housing. As more particularly provided in the Affordability Restrictions on Transfer of Property, Vista Del Rio shall use, manage and operate the Property in accordance with the requirements of 24 CFR 92.252 and California Health and Safety Code section 50052.5 so as to qualify the housing on the Property as Affordable Housing with affordable rents. 11.3 Tenant and Participant Protection. Vista Del Rio shall comply with the requirements of 24 CFR 92.253. 11.4 [Intentionally Omitted] 11.5 Handicapped Accessibility. Vista Del Rio shall comply with (a) Section 504 of the Construction Act of 1973, and implementing regulations at 24 CFR 8C governing accessibility of projects assisted under the HOME Program; and (b) the Americans with Disabilities Act of 1990, and implementing regulations at 28 CFR 35 -36 in order to provide handicapped accessibility with respect to all Units at the Project. 11.6 Use of Debarred, Suspended, or Ineligible Participants. Vista Del Rio shall comply with the provisions of 24 CFR 24 relating to the employment, engagement of services, awarding of contracts, or funding of any contractor or subcontractor during any period of debarment, suspension, or placement in ineligibility status. 11.7 Maintenance of Drug -Free Workplace. Vista Del Rio shall certify that Vista Del Rio will provide a drug -free workplace in accordance with 24 CFR 84.13. 11.8 Lead -Based Paint. Vista Del Rio shall comply with the requirements, as applicable of the Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 4821 -4846) and implementing regulations at 24 CFR 35. 11.9 Affirmative Marketing. Vista Del Rio shall implement and perform such affirmative marketing procedures and requirements for the Property (24 CFR 92.351) in compliance with the City's adopted Program (a copy of which is attached hereto and incorporated herein as Exhibit H). 11.10 Equal Opportunity and Fair Housing. Vista Del Rio shall carry out the Construction and perform its obligations under this Agreement in compliance with all of the state and federal laws and regulations regarding equal opportunity and fair housing described in 24 CFR 92.350. Vista Del Rio must also follow the requirements of Health and Safety Code section 33435. 26 DOCSOC /1475221 v10/200272 -0004 11. 11 _Property Standards. Vista Del Rio shall cause the Property to meet the housing quality standards set forth in 24 CFR 882.109, as well as all applicable local, state and federal codes and ordinances, including zoning ordinances. Vista Del Rio shall also cause the Property to meet the current edition of the Model Energy Code published by the Council of American Building Officials. 11.12 [Intentionally Omitted] 11.13 Other Program Requirements. Vista Del Rio shall carry out each activity in compliance with all federal laws and regulations described in subpart H of 24 CFR 92, except that Vista Del Rio does not assume City's responsibilities for environmental review in 24 CFR 92.352 or the intergovernmental review process in 24 CFR 92.359. 11.14 _Request for Disbursements of Funds. Notwithstanding anything contained in this Agreement to the contrary, Vista Del Rio may not request disbursements of funds under this Agreement until the funds are needed for payment of eligible costs and all applicable Conditions Precedent are satisfied. The amount of each request shall be limited to the amount needed to reimburse Vista Del Rio for Vista Del Rio's actual expenditures, as described in Article 6, et seq. 11.15 Eligible Costs. Vista Del Rio shall use HOME Program funds only to pay costs defined as "eligible costs" pursuant to 24 CFR 92.206. 11.16 Records and Reports. Vista Del Rio shall maintain and from time to time submit to City or Successor Agency such records, reports and information as the Executive Directors may reasonably require in order to permit City and Successor Agency to meet the record keeping and reporting requirements required of it pursuant to 24 CFR 92.508. 11.17 Reserved. 11.18 Conflict of Interest. Vista Del Rio shall comply with and be bound by the conflict of interest provisions set forth at 24 CFR 570.611, as well as state regulations pertaining to conflict of interest. 11.19 Monitoring. Vista Del Rio shall allow the City to conduct annual inspections of the HOME Units on the Property as required by the Program after the date of construction completion, with reasonable notice. Vista Del Rio shall cure any defects or deficiencies found by the City while conducting such inspections within thirty (30) days of written notice thereof, or such longer period as is reasonable within the sole discretion of the City. Health and Safety Code section 33418 requires that the Successor Agency monitor, on an ongoing basis, any affordable housing. 11.20 Recertification of Tenant Income. (a) Vista Del Rio shall take all necessary steps to review the income of all tenants prior to renting to them, as well as reviewing current tenants on an annual basis, in accordance with HOME regulations and guidelines. Every fifth (5th) year, Vista Del Rio shall require new original income documents to be submitted by tenants. Tenants in HOME Units whose incomes no longer comply with federal income guidelines shall have their rents adjusted in accordance with federal HOME guidelines (24 CPR 92.252- 92.253) and the regulations governing projects receiving federal Low Income Housing Tax Credits. 27 DOCSOC/1475221v10/200272 -0004 (b) HOME Units continue to qualify as affordable housing despite a temporary non - compliance caused by increases in the incomes of existing tenants if actions satisfactory to HUD are being taken to ensure that all vacancies are filled in accordance with this section until the non- compliance is corrected. 11.21 Other HOME Program Requirements. Vista Del Rio shall comply with all other applicable requirements of the HOME Program, the Section 8 Requirements, and the CRL. 11.22 Controlling Covenants. If there is a discrepancy between State and Federal law with regard to any of the aforementioned covenants, the more stringent shall apply. 12. MAINTENANCE, MANAGEMENT, OPERATION, PRESERVATION AND REPAIR OF PROPERTY 12.1 Maintenance. Vista Del Rio shall, at its sole cost and expense, maintain or cause to be maintained the interior and exterior of the Project and all Units thereof and the Property in a decent, safe and sanitary manner, in accordance with the HUD Housing Quality Standards (HQS) and the maintenance standards required by Section 92.251 of the HOME Regulations, and in accordance with the standard of maintenance of first class apartments within Orange County, California. None of the Units in the Project shall at any time be utilized on a transient basis, nor shall the Property or any portion thereof ever be used as a hotel, motel, dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium or rest home, or be converted to condominium ownership. If at any time Vista Del Rio fails to maintain the Project or the Property in accordance with this Agreement and such condition is not corrected within five (5) Business Days after written notice from City or Successor Agency with respect to graffiti, debris, and waste material, or thirty (30) days after written notice from City or Successor Agency with respect to general maintenance, landscaping and building improvements, then City and Successor Agency, in addition to whatever remedy they may have at law or at equity, shall have the right to enter upon the applicable portion of the Project or the Property and perform all acts and work necessary to protect, maintain, and preserve the Project and the Property, and to attach a lien upon the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by City and Successor Agency and /or costs of such cure, including a reasonable administrative charge, which amount shall be promptly paid by Vista Del Rio to City or Successor Agency, as applicable, upon demand. The liens created under this Section shall be subject and subordinate to the lien of the mortgage or deed of trust encumbering the Property (or any part of the Property) for the Construction Loan and the Senior Loan approved pursuant to the terms of this Agreement. The City and /or Successor Agency shall inspect the Property annually after the date of issuance of the Release of Construction Covenants as described in Section 310 of the DDA and Vista Del Rio shall cooperate with the City and Successor Agency to make the Property and all Units thereon available for such inspection. 12.1.1 Alterations and Repair. Vista Del Rio shall not remove, demolish or materially alter any Improvement without City's prior consent, except to make non - structural repairs which preserve or increase the Property's value, and shall promptly restore, in a good and professional manner, any Improvement (or other aspect or portion of the Property) that is damaged or destroyed from any cause. 12.2 Compliance with Laws. Vista Del Rio shall comply with all laws and requirements of Governmental Authority (including, without limitation, all requirements relating to the obtaining 28 DOC SOC/ 1475221 v 10/200272 -0004 of Governmental Authority approvals), all Governmental Authority approvals, all rights of third parties, and all Governmental Requirements, that are applicable or relate to Vista Del Rio, the Property, or Vista Del Rio's business thereon. 12.3 Taxes and Impositions. Vista Del Rio shall pay, prior to delinquency, all of the following (collectively, the "Impositions "): (a) all general and special real property taxes and assessments imposed on the Property; (b) all other taxes and assessments and charges of every kind that are assessed upon the Property (or upon the owner and /or operator of the Property) and that create or may create a lien upon the Property (or upon any personal property or fixtures used in connection with the Property), including, without limitation, non - governmental levies and assessments pursuant to applicable covenants, conditions or restrictions; and (c) all license fees, taxes and assessments imposed on City or Successor Agency (other than City's income or franchise taxes) which are measured by or based upon (in whole or in part) the amount of the obligations secured by the Property. If permitted by law, Vista Del Rio may pay any Imposition in installments (together with any accrued interest). 12.3.1 Right to Contest. Vista Del Rio shall not be required to pay any Imposition so long as (a) its validity is being actively contested in good faith and by appropriate proceedings, (b) Vista Del Rio has demonstrated to City's reasonable satisfaction that leaving such Imposition unpaid pending the outcome of such proceedings could not result in conveyance of the Property in satisfaction of such Imposition or otherwise impair City and Successor Agency's interests under the Loan Documents, and (c) Vista Del Rio has furnished City with a bond or other security satisfactory in an amount not less than 100% of the applicable claim (including interest and penalties). 12.3.2 Evidence of Payment. Upon demand by City or Successor Agency from time to time, Vista Del Rio shall deliver to City or Successor Agency, within thirty (30) days following the due date of any Imposition, evidence of payment reasonably satisfactory to City. 12.3.3 Books and Records. Vista Del Rio shall maintain complete books of account and other records reflecting its operations (in connection with any other businesses as well as with respect to the Property), in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with such other principles or methods as are reasonably acceptable to City, in accordance with 24 CFR 92.508. 12.4 [Intentionally omitted] 12.5 Project Operating Budget. Prior to the Closing, and annually thereafter not later than 60 days prior to the beginning of the next Calendar Year, Vista Del Rio shall submit a projected operating budget and cash flow ( "Operating Budget ") to the Executive Directors. The Operating Budget and cash flow shall be in a form that is reasonably acceptable to the Executive Directors. Vista Del Rio must promptly deposit all revenue received with respect to the Project directly into a segregated, interest - bearing depository account established exclusively for the Project ( "Project Operating Account "). Withdrawals from the Project Operating Account may be made only in accordance with the provisions of this Agreement and the Operating Budget approved annually by the Executive Directors, as it may be revised from time to time with City and Successor Agency approval. Vista Del Rio may make withdrawals from the Project Operating Account solely for the payment of Project expenses and Project fees included in the approved Operating Budget. Withdrawals from the Project Operating Account for other purposes may be made only with the prior written approval of the Executive Directors. Further, Vista Del Rio shall obtain the prior written 29 DOCSOC/ 1475221 v 10/200272 -0004 approval of the Executive Directors for any expenditure from the Project Operating Account that exceeds by ten percent (10 %) or more the amount set forth for the applicable line item in the Operating Budget and /or for any expenditure that would, cumulatively with all prior expenditures in the applicable year, exceed the total approved annual Operating Budget for the Project by ten percent (10 %) or more. 12.6 Replacement Reserve Account. Vista Del Rio must establish or cause to be established a segregated interest - bearing replacement reserve depository account ( "Replacement Reserve Account ") concurrently with the conversion of the construction Senior Loan to a permanent Senior Loan. Vista Del Rio must make monthly deposits from project income into the Replacement Reserve in accordance with Vista Del Rio's Budget, as amended from time to time. Vista Del Rio may withdraw funds from the Replacement Reserve Account solely to fund capital improvements for the Project, such as replacing or repairing structural elements, furniture, fixtures or equipment of the Project that are reasonably required to preserve the Project. Vista Del Rio may not withdraw funds from the Replacement Reserve Account for any other purpose without the prior written approval of the City and Successor Agency. 13. NONDISCRIMINATION COVENANTS 13.1 Obligation to Refrain from Discrimination. Vista Del Rio covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Vista Del Rio itself or any person claiming under or through him 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, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. 13.2 Nondiscrimination in Employment. Vista Del Rio 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, age, pregnancy, childbirth or related medical condition, medical condition 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 applicable anti - discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. 13.3 Statutory Nondiscrimination Covenants. Except to the extent preferences are permitted or required by this Agreement, Vista Del Rio 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 30 DOCSOC/1475221 v10/200272 -0004 Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. Vista Del Rio shall refrain from restricting the rental, sale or lease of the Property or any portion thereof on the basis of any of the characteristics listed above. Vista Del Rio shall also comply with the equal opportunity and fair housing requirements set forth in Section 92.350 of the HOME Regulations. The foregoing covenants shall run with the land. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 13.3.1 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." 13.3.2 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." 13.3.3 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." 13.4 In Affordable Housine Restrictions. The foregoing covenants shall (a) be included in the Affordability Restrictions on Transfer of Property, (b) run with the land, and (c) remain effective for the Term hereof. 31 Doc SOC/ 1475221 v 1 0/200272 -0004 14. ENVIRONMENTAL MATTERS 14.1 _Representation and Warranty. Except as disclosed in writing to the City, Vista Del Rio has no knowledge (a) of the presence on, under or about the Property, now or in the past, of any Hazardous Materials, or of the transportation to or from the Property of any Hazardous Materials, (b) that asbestos or polychlorinated biphenyls (PCBs) are contained in or stored on the Property, or (c) that there are any underground storage tanks located in, on or under the Property. 14.2 Compliance with Environmental Laws. Vista Del Rio shall (a) comply with all Environmental Laws and environmental permits applicable to the Construction and /or operation of the Property, (b) immediately pay or cause to be paid all costs and expenses incurred by reason of such compliance, (c) keep the Property free and clear of any environmental claims or liens imposed pursuant to any Environmental Law, (d) obtain and renew all environmental permits required for ownership or use of the Property, and (e) comply with any and all Governmental Requirements relating to Hazardous Materials with respect to the Construction and /or operation of the Project. 14.3 Presence of Hazardous Materials. Vista Del Rio shall not, and shall not permit anyone else to, generate, use, treat, store, handle, release, or dispose of Hazardous Materials on the Property, or transport or permit the transportation of Hazardous Materials to or from the Property except for de minimis quantities used at the Property in compliance with all applicable Environmental Laws and required in connection with the routine operation and maintenance of the Property. 14.4 Notice of Environmental Matters. Vista Del Rio shall immediately advise City in writing of any of the following: (a) any pending or threatened environmental claim against Vista Del Rio or the Property, (b) any condition or occurrence that (i) results in noncompliance with any applicable Environmental Law, (ii) could reasonably be anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use or transferability of the Property under any Environmental Law, or (iii) could reasonably be anticipated to form the basis of an environmental claim against the Property or Vista Del Rio. 14.5 Environmental Indemnification by the Vista Del Rio. Vista Del Rio hereby agrees, at Vista Del Rio's sole expense, to defend (using counsel satisfactory to Successor Agency and City), indemnify, assume all responsibility for, and save and hold the Indemnitees 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 (i) the release, use, generation, discharge, storage or disposal of any Hazardous Materials in violation of Environmental Laws during the period of the Vista Del Rio's ownership of the Property, on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Property by Vista Del Rio during the period of the Vista Del Rio's ownership of the applicable Property, or (ii) the violation, or alleged violation 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 Property during the period of the Vista Del Rio's ownership of the Property. 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. 32 DOC SOC/ 1475221 v 10/200272 -0004 15. OTHER AFFIRMATIVE COVENANTS While any obligation of Vista Del Rio under the Notes or Deeds of Trust remain outstanding, the following provisions shall apply, except to the extent that Executive Directors otherwise consent in writing: 15.1 Existence. Vista Del Rio's managing general partner shall maintain its existence in good standing under the laws of the State of California and Vista Del Rio shall provide documentation of such status annually to the City. 15.2 Protection of Lien. Vista Del Rio shall maintain the lien of the Deeds of Trust as a valid second and third priority deed of trust on the Property and take all actions, and execute and deliver to City and Successor Agency all documents, reasonably required by the Executive Directors from time to time in connection therewith. 15.3 Notice of Certain Matters. Vista Del Rio shall give notice to City, within ten (10) days of Vista Del Rio's learning thereof, of each of the following: (a) any filed litigation or claim affecting or relating to the Project or Property and involving an amount in excess of $5,000; and any litigation or claim that might subject Vista Del Rio or any general partner to liability in excess of $5,000, whether covered by insurance or not; (b) any dispute between Vista Del Rio and a Governmental Authority relating to the Property/Project, the adverse determination of which might materially affect the Property /Project; (c) any change in Vista Del Rio's principal place of business; (d) any aspect of the Improvements that is not in substantial conformity with the plans or code; (e) any Event of Default or event which, with the giving of notice or the passage of time or both, would constitute an Event of Default; (f) any material default by Vista Del Rio or any other party under any Senior Loan document, or the receipt by Vista Del Rio of any notice of default under any Senior Loan document; (g) the creation or imposition of any mechanics' or materialmans' lien or other lien against the Property which might materially affect the Property; and /or (h) any material adverse change in the financial condition of Vista del Rio. 15.4 Further Assurances. Vista Del Rio shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to City all documents, and take all actions, reasonably required by City from time to time to confirm the rights created or now or hereafter intended to be created under the Loan Documents; to protect and further the validity, priority and enforceability of the Deeds of Trust; to subject to the Deeds of Trust any property intended by the terms of any Loan Document(s) to be covered by the Deeds of Trust or otherwise to carry out the purposes of the Loan Documents and the transactions contemplated thereunder. 33 DOCSOC/ 1475221 v 10/200272 -0004 15.5 Annual Audited Financial Statements. Vista Del Rio shall deliver to City, within one hundred twenty (120) days after the end of each Calendar Year, (a) an audited financial statement prepared by a certified public accountant for Vista Del Rio as of the end of such Calendar Year and a certified public accountant reviewed statement of profit and loss for Vista Del Rio and for Vista Del Rio's operations in connection with the Property /Project for such Calendar Year, together with all supporting schedules, (b) a certificate of such certified public accountant that such documents were reviewed by such certified public accountant in accordance with generally accepted accounting principles and otherwise comply with generally accepted accounting principles review requirements, and (c) a certificate of Vista Del Rio's chief financial officer that such documents: (i) were prepared in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with such other principles or methods as are reasonably acceptable to City, (ii) fairly represent Vista Del Rio's financial condition, (iii) show all material liabilities, direct and contingent, and, (iv) fairly represent the results of Vista Del Rio's operations. Vista Del Rio shall also provide the City with any other annual audit reports issued by or for the benefit of other monitoring agencies. 15.6 Audits and Access to Records. Vista Del Rio agrees that City, Successor Agency, HUD, the Comptroller General of the United States or any of their authorized representatives shall have the right of access, upon reasonable notice, to any books, documents, papers, or other records of Vista Del Rio which are pertinent to this Agreement in order to make audits, examinations, abstracts, excerpts or transcripts. Vista Del Rio will maintain all books and records pertaining to this Agreement for a period of not less than five (5) years after all matters pertaining to this Agreement (i.e., audit, disputes or litigation) are resolved in accordance with applicable federal or state laws, regulations or policies, and when a period of affordability or recapture applies to Vista Del Rio's activities, for a period of not less than five (5) years after the affordability or recapture period ends. 15.7 Termite Inspection Report. Vista Del Rio shall deliver a termite report pertaining to the Property /Project to the City every fifth (5th) year beginning January 2013. 16. OTHER NEGATIVE COVENANTS While any obligation of Vista Del Rio under the Notes or Deeds of Trust remains outstanding, the following provisions shall apply, except to the extent that Executive Directors otherwise consent in writing: 16.1 Default on Senior Loan. Vista Del Rio shall not default on any of the Senior Loan Documents, provided however, that Vista Del Rio shall have such period as is provided in the Senior Loan Documents during which to effectuate a cure. 16.2 Transfers of Interest in Property or Agreement. 16.2.1 Prohibition. The qualifications and identity of Vista Del Rio are of particular concern to the Successor Agency and City. It is because of those qualifications and identity that Successor Agency and City have entered into this Agreement and the other Project Documents with Vista Del Rio. Therefore, for the period commencing upon the date of this Agreement and until the expiration of the Term hereof, no voluntary or involuntary successor in interest of Vista Del Rio shall acquire any rights or power under this Agreement, nor shall Vista Del Rio make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Property or the Improvements thereon (collectively, "Transfer ") 34 DOCSOC/ 1475221x10/200272.0004 without prior written approval of the Successor Agency and City, except as expressly set forth herein. Any proposed total or partial Transfer without Successor Agency and City approval shall constitute a Default pursuant to Article 20, et seq., hereof. 16.2.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, Successor Agency and City approval of a Transfer shall not be required in connection with any of the following: (a) Any Transfer to an entity or entities in which Vista Del Rio directly or indirectly retains a minimum of fifty -one percent (51 %) of the ownership or beneficial interest and retains management and control of the transferee entity or entities. (b) The conveyance or dedication of any portion of the Property to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Improvements. (c) Any requested assignment for financing purposes (subject to such financing being considered and approved by the Successor Agency pursuant to Section 311 of the DDA), including the grant of a deed of trust to secure the funds necessary for construction and permanent financing of the Improvements. (d) Removal of the investor limited partner of Vista Del Rio upon the expiration of the fifteen (15) year tax credit compliance period applicable to the Project. (e) A Transfer of a General Partner's interest in Vista Del Rio when made in connection with the exercise by the Limited Partner of its rights upon a default by a General Partner under the Partnership Agreement or upon a General Partner's withdrawal in violation of the Partnership Agreement, so long as the removal and substitution of the defaulting General Partner is made within thirty (30) days of such default or, if such removal and substitution cannot reasonably be completed within thirty (30) days, so long as the Limited Partner commences to take action to remove and substitute the General Partner with a reasonable period and thereafter diligently proceeds to complete such substitution. (t) Any Transfer of the Property to the Managing General Partner or the Goodwill Special Limited Partner pursuant to the right of first refusal or to the Managing General Partner or the Goodwill Special Limited Partner pursuant to the purchase option, as provided for in the Partnership Agreement. (g) Any sale, transfer or other disposition of an interest in the Limited Partner. (h) Any sale, transfer or other disposition of the Limited Partner's interest in Vista Del Rio as allowed by the Partnership Agreement. In the event of a Transfer by Vista Del Rio described above not requiring the City's or Successor Agency's prior approval, Vista Del Rio nevertheless agrees that at least thirty (30) days prior to such assignment it shall give written notice to Successor Agency /City of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement all of Vista Del Rio's obligations set forth in this Agreement. Upon the satisfaction of said obligations and the Transfer, the assignor shall be released from all obligations to 35 DOCSOC/ 1475221 v 10/200272 -0004 the Successor Agency and City hereunder (except obligations to indemnify the Successor Agency and City pursuant to Section 14.5 and Article 18, et seq., of this Agreement). 16.2.3 Successor Agency /City Consideration of Requested Transfer. Successor Agency and City agree that they will not unreasonably withhold, condition or delay approval of a request for approval of a Transfer made pursuant to this Section 16.2, provided Vista Del Rio delivers written notice to the Successor Agency /City requesting such approval. Such notice shall be accompanied by sufficient evidence regarding the proposed assignee's or purchaser's development and /or operational qualifications and experience, and its financial commitments and resources, in sufficient detail to enable the Successor Agency to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 16.2 and as reasonably determined by the Successor Agency /City. The Successor Agency /City shall evaluate each proposed transferee or assignee on the basis of its development and /or qualifications and experience in the construction of facilities similar to the Improvements, and its financial commitments and resources, and may reasonably disapprove any proposed transferee or assignee, during the period for which this Section 16.2 applies, which the Successor Agency /City determines does not possess equal or better qualifications than the transferring developer. An assignment and assumption agreement in a form satisfactory to the Successor Agency /City's legal counsel shall also be required for all proposed assignments. Within fifteen (15) days after the receipt of Vista Del Rio's written notice requesting Successor Agency approval of an assignment or transfer pursuant to this Section 16.2, the Successor Agency /City shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, the Successor Agency /City 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, Vista Del Rio shall promptly furnish to the Successor Agency /City such further information as may be reasonably requested and the Successor Agency and City shall approve or disapprove the requested Transfer within fifteen (15) days after receipt of all such requested information. 16.2.4 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon Vista Del Rio and its permitted successors and assigns. Whenever the term "Vista Del Rio" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 16.2.5 Assignment by City or Successor Agency. City and Successor Agency may assign or transfer any of their rights or obligations under this Agreement without the approval of the Vista Del Rio. 17. [RESERVED] 18. INDEMNIFICATION 18.1 Nonliability of Successor Agency and City. Vista Del Rio acknowledges and agrees that: (a) The relationship between Vista Del Rio, Successor Agency, and City is and shall remain solely that of borrower and lender, neither City nor Successor Agency undertakes nor assumes any responsibility to review, inspect, supervise, approve (other than for aesthetics) or to inform Vista Del Rio of any matter in connection with the construction, including matters relating to: (i) the performance of the construction work, (ii) architects, contractors, subcontractors and 36 DOCSOC/1475221 v 10/200272 -0004 materialmen, or the workmanship of or materials used by any of them, or (iii) the progress of the construction; and Vista Del Rio shall rely entirely on its own judgment with respect to such matters and acknowledges that any review, inspection, supervision, approval or information supplied to Vista Del Rio by City or Successor Agency in connection with such matters is solely for the protection of City and Successor Agency and that neither Vista Del Rio nor any third party is entitled to rely on it; (b) Notwithstanding any other provision of any Loan Document: (i) the Successor Agency and City are not a partner, joint venture, alter -ego, manager, controlling person or other business associate or participant of any kind with Vista Del Rio and City does not intend to ever assume any such status; (ii) City's and Successor Agency's activities in connection with the Loans shall not be "outside the scope of the activities of a lender of money" within the meaning of California Civil Code Section 3434, as modified or recodified from time to time, and neither City nor Successor Agency intends to ever assume any responsibility to any person for the quality or safety of the Property or Project; and (iii) neither City nor Successor Agency shall be deemed responsible for or a participant in any acts, omissions or decisions of Vista Del Rio; (c) Neither City nor Successor Agency shall be directly or indirectly liable or responsible for any loss or injury of any kind to any person or property resulting from any construction on, or occupancy or use of, the Property or Project, whether arising from: (i) any defect in any building, grading, landscaping or other onsite or offsite improvement; (ii) any act or omission of Vista Del Rio or any of Vista Del Rio's agents, employees, independent contractors, licensees or invitees; or (iii) any accident on the Property or Project or any fire or other casualty or hazard thereon; and (d) By accepting or approving anything required to be performed or given to City or Successor Agency under the Loan Documents, including any certificate, financial statement, survey, appraisal or insurance policy, neither City nor Successor Agency shall be deemed to have warranted or represented the sufficiency or legal effect of the same, and no such acceptance or approval shall constitute a warranty or representation by City or Successor Agency to anyone. 18.2 Indemnity. Vista Del Rio shall defend (by counsel satisfactory to City), indemnify and save and hold harmless the Indemnitees from and against all claims, damages, demands, actions, losses, liabilities, costs and expenses (including, without limitation, reasonable attorneys' fees and court costs) arising from or relating to (i) this Agreement; (ii) the making of the Loans; (iii) a claim, demand or cause of action that any person has or asserts against Vista Del Rio; (iv) any act or omission of Vista Del Rio, any contractor, subcontractor or material supplier, engineer, architect or other person with respect to the Property or Project; or (vi) the ownership, occupancy or use of the Property or Project. Notwithstanding the foregoing, Vista Del Rio shall not be obligated to indemnify City or Successor Agency with respect to the consequences of any act of gross negligence or willful misconduct of City or Successor Agency or any breach by the City or Successor Agency of any Loan Document. Vista Del Rio's obligations under this Section shall survive the cancellation of the Notes, release and reconveyance of the Deeds of Trust, issuance of the Release of Construction Covenants, and termination of this Agreement. 18.2.1 Notwithstanding the foregoing, neither Vista Del Rio, nor any of its partners, shall be personally liable for any indemnification obligation hereunder which would result as the repayment of principal and /or interest under the Loans. 37 DOCSOC/1 47522 1 v1 0/200272-0004 18.3 Reimbursement of City and Successor Agency. In the event of Default, Vista Del Rio shall reimburse City and /or Successor Agency immediately upon written demand for all costs reasonably incurred by City and /or Successor Agency (including the reasonable fees and expenses of attorneys, expert witnesses, accountants, appraisers and other consultants, whether the same are independent contractors or employees of City) in connection with the enforcement of the Loan Documents and all related matters including all claims, demands, causes of action, liabilities, losses, commissions and other costs against which City and Successor Agency are indemnified under the Loan Documents. Such reimbursement obligations shall bear interest from the date occurring twenty (20) days after City or Successor Agency gives written demand to Vista Del Rio and shall be secured by the Deeds of Trust. Such reimbursement obligations shall survive the cancellation of the Notes, release and reconveyance of the Deeds of Trust, issuance of a Release of Construction Covenants, and termination of this Agreement. 19. INSURANCE, CASUALTY AND CONDEMNATION 19.1 Policies Required. While any obligation of Vista Del Rio under the Loan Documents remains outstanding, Vista Del Rio shall maintain at Vista Del Rio's sole expense, with insurers either (i) admitted in California or (ii) are not admitted to California but have an A.M. Best Rating of "A" or above and reasonably approved by the City, the following policies of insurance in form and substance reasonably satisfactory to the City Attorney: (a) worker's compensation insurance and any other insurance required by law in connection with the construction; (b) prior to commencement until following completion of the construction, fire and hazard "all risk" insurance covering 100% of the replacement cost of the Improvements in the event of fire, lightning, windstorm, vandalism, malicious mischief and all other risks normally covered by "all risk" coverage policies in the area where the Property is located; which said insurance shall expressly include damage or loss by flood or storm; (c) upon commencement of the construction and at all times prior to completion of the construction, builder's risk /all risk insurance covering 100% of the replacement cost of all Improvements (including offsite materials) during the course of construction in the event of fire, lightning, windstorm, vandalism, earthquake, malicious mischief and all other risks normally covered by all risk coverage policies in the area where the Property is located; which said insurance shall expressly include damage or loss by flood or storm; (d) general liability insurance in amounts reasonably required by City from time to time, and in no event less than $5,000,000 for "single" occurrence; (e) public liability insurance in amounts reasonably required by City from time to time, and in no event less than $1,000,000 for "single" occurrence; (f) property damage insurance in amounts reasonable required by City from time to time, and in no event less than $1,000,000. (g) any other insurance reasonably required by Successor Agency /City. 38 DOC SOC/ 1475221 v 10/200272 -0004 All such insurance shall provide that it may not be canceled or materially modified without thirty (30) days prior written notice to City and Successor Agency. The policies required under subparagraphs (b) and (c) shall include a "lender's loss payable endorsement" (Form 438BFU) in form and substance satisfactory to City, showing the Successor Agency and the City as loss payees. The Successor Agency and the City shall be named as additional insured(s) in the policies required under subparagraphs (d), (e) and (f). Certificates of insurance for the above policies (and /or original policies, if required by City) shall be delivered within ten (10) days after demand therefore, and prior to start of any construction work. All policies insuring against damage to the Improvements shall contain an agreed value clause sufficient to eliminate any risk of co- insurance. No less than thirty (30) days prior to the expiration of each policy, Vista Del Rio shall deliver to City evidence of renewal or replacement of such policy reasonably satisfactory to City Attorney and /or City Risk Manager. 19.2 City Attorney and /or City Risk Manaeer May Modify. The City Attorney and /or City Risk Manager may modify the type and amounts of insurance (including reasonable increases in policy limits) required pursuant to this Section. 19.3 Claims and Proceedines. Vista Del Rio shall give City and Successor Agency immediate notice of any material casualty to any portion of the Property /Project, whether or not covered by insurance, and of the initiation or threatened initiation of any proceeding for the condemnation or other taking for public or quasi- public use of any portion of the Property (collectively, "Condemnation "), and shall provide City and Successor Agency with copies of all documents which pertain to any such casualty or Condemnation. Vista Del Rio shall take all action reasonably required by the Executive Directors in connection therewith to protect the interests of Vista Del Rio, City, and Successor Agency, and City and Successor Agency shall be entitled (without regard to the adequacy of its security) to participate in any action, claim, adjustment or proceeding and to be represented therein by counsel of its choice. Vista Del Rio shall not settle, adjust, or compromise any claim, action, adjustment or proceeding without the prior written approval of the Executive Directors, which approval shall not be unreasonably withheld or delayed. 19.4 Delivery of Proceeds to City /Successor Agency. In the event that, notwithstanding the "lender's loss payable endorsement" requirement set forth above, the proceeds of any casualty insurance policy described herein are paid to Vista Del Rio, Vista Del Rio shall, subject to any superior rights of the Senior Lender, deliver such proceeds to the Successor Agency and City immediately upon receipt. 19.5 Application of Casualty Insurance Proceeds. Any proceeds collected (the "Proceeds ") under any casualty insurance policy described in this Agreement shall be disbursed to Vista Del Rio as provided below, but only upon fulfillment of each of the following conditions (the "Restoration Conditions ") within ninety (90) days (unless extended by mutual agreement of Vista Del Rio, City, and Successor Agency) following the occurrence of the damage for which the Proceeds are collected: (a) Vista Del Rio shall demonstrate to the Executive Directors' reasonable satisfaction that the Proceeds (together with amounts deposited by Vista Del Rio pursuant to subparagraph (b)) will be adequate to repair the Improvements and to restore the fair market value of the Property, within a time period reasonably determined by the Executive Directors, to at least the value it had immediately prior to sustaining the damage. Such demonstration shall include delivery to City and Successor Agency of (i) plans and specifications reasonably satisfactory to City and 39 DOC SOC/ 1475221 v 10/200272 -0004 Successor Agency, and (ii) a construction contract in form and content, and with a contractor, reasonably satisfactory to City and Successor Agency. (b) To the extent that the Proceeds are insufficient to accomplish the restoration required above, Vista Del Rio shall deliver to City and Successor Agency funds (the "Shortfall Funds ") in the amount of such shortfall, which funds shall be assigned to City and Successor Agency as security for Vista Del Rio's obligation hereunder and held and disbursed in the same manner as the Proceeds. (c) Vista Del Rio shall execute such documents as the Executive Directors require to evidence and secure Vista Del Rio's obligation to use all amounts disbursed for the diligent restoration of the Property. (d) No Event of Default shall remain uncured. 19.6 Method of Disbursement and Undisbursed Funds. Any Proceeds and Shortfall Funds to be disbursed to Vista Del Rio shall be held by Successor Agency/ City and disbursed in accordance with the then customary disbursement procedures and related provisions. Any amounts remaining undisbursed following completion of such restoration shall be returned to Vista Del Rio up to the amount of any Shortfall Funds deposited by Vista Del Rio, and any other amounts remaining shall either be paid to Vista Del Rio or applied by City and Successor Agency against any obligations to City or Successor Agency that are secured by a lien on the Property, as they elect in their sole and absolute discretion. 19.7 Failure to Satisfy Conditions. In the event that Vista Del Rio fails to fulfill the Restoration Conditions within ninety (90) days (unless extended pursuant to Section 19.5) following the date on which the damage occurs, the Proceeds shall be applied by City and Successor Agency against any obligations to City or Successor Agency that are secured by a lien on the Property, and the selection of which such obligations to apply the Proceeds against shall be made by City and Successor Agency in their sole and absolute discretion. 19.8 Restoration. Nothing in this Article 19 shall be construed to excuse Vista Del Rio from repairing and restoring all damage to the Property in accordance with other Loan Document provisions, regardless of whether insurance proceeds are available or sufficient. 19.9 Condemnation; Treatment of Compensation. Subject to any superior rights of Senior Lender, Vista Del Rio hereby assigns to the Successor Agency and City, as security for all obligations to Successor Agency or City secured by a lien on the Property, all amounts payable to Vista Del Rio in connection with any Condemnation, and any proceeds of any related settlement (collectively, "Compensation "). Subject to any superior rights of Senior Lender, Vista Del Rio shall deliver such remaining Compensation to City and Successor Agency immediately upon receipt. If the taking results in a loss of the Property to an extent that, in the reasonable opinion of the Executive Directors, renders or is likely to render the Property not economically viable or if, in the Executive Directors' reasonable judgment Vista Del Rio's security is otherwise impaired, City and Successor Agency may apply the Compensation received due to judgment or settlement in connection with any condemnation or other taking to reduce the unpaid obligations secured in such order as City may determine, and without any adjustment in the amount or due dates of payments due under the Note. If so applied, any award in excess of the unpaid balance of the Note and other sums due to City and Successor Agency shall be paid to Vista Del Rio or Vista Del Rio's assignee. Neither City nor 40 DOC SOC/ 1475221 v 10/200272 -0004 Successor Agency shall have any obligation to take any action in connection with any actual or threatened condemnation or other proceeding. 19.9.1 Notwithstanding the foregoing, as long as the value of City's and Successor Agency's liens are not impaired, any condemnation proceeds may be used by Vista Del Rio for repair and /or restoration of the project. 19.10 Waiver of Subrogation. Vista Del Rio hereby waives all rights to recover against the Successor Agency or the City (or any officer, employee, agent or representative of Successor Agency or City) for any loss incurred by Vista Del Rio from any cause insured against or required by any Loan Document, to be insured against; provided, however, that this waiver of subrogation shall not be effective with respect to any insurance policy if the coverage thereunder would be materially reduced or impaired as a result. Vista Del Rio shall use its best efforts to obtain only policies which permit the foregoing waiver of subrogation. 20. DEFAULTS AND REMEDIES 20.1 Events of Default. Failure by either party to perform any action or covenant required by this Agreement or any other Project Document within the time periods provided herein (or therein) following notice and failure to cure as described hereafter, constitutes a "Default" or "Event of Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the Default complained of Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default if such party within thirty (30) days from receipt of such notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with diligence. Without limiting the generality of the foregoing, the occurrence of any of the following, whatever the reason therefor, shall constitute an Event of Default by Vista Del Rio under this Agreement: (a) Vista Del Rio fails to make any payment of principal or interest under the Notes when due, and such failure is not cured within fifteen (15) Business Days after Vista Del Rio's receipt of written notice that such payment was not received when due; (b) Vista Del Rio fails to perform any other obligation for the payment of money under any Loan Document, and such failure is not cured within fifteen (15) Business Days after Vista Del Rio's receipt of written notice that such obligation was not performed when due; (e) Vista Del Rio fails to perform any obligation (other than the obligations described in subparagraphs (a) and (b) above) under any Loan Document, and such failure is not cured within thirty (30) days after Vista Del Rio's receipt of written notice that such obligation was not performed; provided that, if cure cannot reasonably be effected within such thirty (30) day period, such failure shall not be an Event of Default so long as Vista Del Rio (in any event, within ten (10) days after receipt of such notice) commences to cure, and thereafter diligently (in any event within ninety (90) days after receipt of such notice) prosecutes such cure to completion; (d) Any representation or warranty in any Loan Document proves to have been incorrect in any material respect when made; (e) Vista Del Rio is in default of the Disposition and Development Agreement. 41 DOCSOC /1475221v 10/200272 -0004 (f) The Property is materially damaged or destroyed by fire or other casualty unless Vista Del Rio fulfills the Restoration Conditions set forth in the insurance provisions of this Agreement within ninety (90) days (unless extended pursuant to Section 19.5) and thereafter diligently restores the Property in accordance with this Agreement; (g) Work on the construction ceases for thirty (30) consecutive days for any reason (other than governmental orders, decrees or regulations, acts of God or any other deity, strikes or other causes beyond Vista Del Rio's reasonable control), provided that the same do not, in the aggregate and in the City's reasonable judgment, threaten to delay the completion of the construction beyond the required completion date set forth in this Agreement and the Schedule of Performance; (h) Vista Del Rio is enjoined or otherwise prohibited by any Governmental Authority from constructing and /or occupying the improvements and such injunction or prohibition continues unstayed for sixty (60) days or more for any reason; (i) [intentionally omitted]; 0) Vista Del Rio is dissolved, liquidated or terminated, or all or substantially all of the assets of Vista Del Rio are sold or otherwise transferred without the Executive Directors' prior written consent; (k) Vista Del Rio is the subject of an order for relief by a bankruptcy court, or is unable or admits its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or Vista Del Rio applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or any part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of Vista Del Rio and the appointment continues undischarged or unstayed for ninety (90) days; or Vista Del Rio institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, Construction or similar proceeding relating to it or any part of its property; or any similar proceeding is instituted without the consent of Vista Del Rio and continues undismissed or unstayed for ninety (90) days; or any judgment, writ, warrant of attachment or execution, or similar process is issued or levied against any property of Vista Del Rio and is not released, vacated or fully bonded within ninety (90) days after its issue or levy; or (1) (i) any of the Senior Loan documents is revoked or terminated, in whole or in part and for any reason (except due to repayment of such loans), without the Executive Directors' prior written consent, or (ii) Vista Del Rio defaults or otherwise fails to perform any of its duties or obligations under or in connection with any of the Senior Loan documents, subject to all applicable notice and cure periods, or (iii) any of the Senior Loan documents is amended, supplemented or otherwise modified without City's prior written consent, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary contained herein, City hereby agrees that any cure of any default made or tendered by the Limited Partner shall be deemed to be a cure by Vista Del Rio and shall be accepted or rejected on the same basis as if made or tendered by Vista Del Rio. 20.2 Remedies Upon Default. Upon the occurrence of any Event of Default, City or Successor Agency may, at their respective option and in their absolute discretion, do any or all of the following: 42 DOCSOC/1475221v 10/200272 -0004 (a) By written notice to Vista Del Rio, declare the principal of all amounts owing under the Loan Documents, together with all accrued interest and other amounts owing in connection therewith, to be immediately due and payable, regardless of any other specified due date; provided that any Event of Default described in Section 20.1 (e) shall automatically, without notice or other action on the part of City or Successor Agency, cause all such amounts to be immediately due and payable; (b) In its own right or by a court- appointed receiver, take possession of the Property /Project, enter into contracts for and otherwise proceed with the completion of the construction by expenditure of its own funds; (c) Exercise any of its rights under the Loan Documents and any rights provided by law, including, without limitation, the right to seek specific performance and the right to foreclose on any security and exercise any other rights with respect to any security, all in such order and manner as City or Successor Agency elects in their sole and absolute discretion; and, (d) Suspend or terminate the award of HOME Program funds, if Vista Del Rio fails to comply with any term or condition of such award. (e) Suspend or terminate the award of the tax increment funds or Agency Loan proceeds if Vista Del Rio fails to comply with any term of that award. (f) Authority may suspend or terminate the award of any Project Based Section 8 assistance if Vista Del Rio fails to comply with any term or condition of that award. 20.3 Cumulative Remedies: No Waiver. City's and Successor Agency's rights and remedies under the Loan Documents are cumulative and in addition to all rights and remedies provided by law. The exercise by City or Successor Agency of any right or remedy shall not constitute a cure or waiver of any default, nor invalidate any notice of default or any act done pursuant to any such notice, nor prejudice the Successor Agency or City in the exercise of any other right or remedy. No waiver of any default shall be implied from any omission by City or Successor Agency to take action on account of such default if such default persists or is repeated. No waiver of any default shall affect any default other than the default expressly waived, and any such waiver shall be operative only for the time and to the extent stated. No waiver of any provision of any Loan Document shall be construed as a waiver of any subsequent breach of the same provision. City's or Successor Agency's consent to or approval of any act by Vista Del Rio requiring further consent or approval shall not be deemed to waive or render unnecessary City's or Successor Agency's consent to or approval of any subsequent act. The Successor Agency or the City's acceptance of the late performance of any obligation shall not constitute a waiver by City or Successor Agency of the right to require prompt performance of all further obligations; City's or Successor Agency's acceptance of any performance following the sending or filing of any notice of default shall not constitute a waiver of either party's right to proceed with the exercise of its remedies for any unfulfilled obligations; and City's or Successor Agency's acceptance of any partial performance shall not constitute a waiver by City or Successor Agency of any rights. Notwithstanding anything to the contrary contained in the Loan Documents, the City and the Successor Agency hereby agree that any cure of any default made or tendered by the Limited Partner shall be deemed to be a cure by Vista Del Rio and shall be accepted or rejected on the same basis as if made or tendered by Vista Del Rio. Copies of all notices which are sent to Vista Del Rio under the 43 DOCSOC /1475221 v 10/200272 -0004 terms of the Loan Documents shall also be sent to the Limited Partner at an address to be provided in writing to the City and the Successor Agency by the Limited Partner. 21. MISCELLANEOUS 21.1 Obligations Unconditional and Independent. Notwithstanding the existence at any time of any obligation or liability of City or Successor Agency to Vista Del Rio, or any other claim by Vista Del Rio against City or Successor Agency, in connection with the Loans or otherwise, Vista Del Rio hereby waives any right it might otherwise have (a) to offset any such obligation, liability or claim against Vista Del Rio's obligations under the Loan Documents, or (b) to claim that the existence of any such outstanding obligation, liability or claim excuses the nonperformance by Vista Del Rio of any of its obligations under the Loan Documents. 21.2 Notices. All notices, demands, approvals and other communications provided for in the Loan Documents shall be in writing and be delivered to the appropriate party by personal service or U.S. mail at its address as follows: If to Vista Del Rio: Vista Del Rio Housing Partners LP c/o A Community of Friends 3701 Wilshire Blvd., Suite 700 Los Angeles, California 90010 Attention: Dora Leong Gallo With copies to: Foundation for Affordable Housing V, Inc. 30950 Rancho Viejo Road, Suite 100 San Juan Capistrano, California 92675 Attention: Deborrah Willard Telephone: (949) 443 -9101 Email: deb @ffah.org Enterprise Community Investment, Inc. 10227 Wincopin Circle, Suite 800 Columbia, Maryland 21044 Attention: General Counsel If to City /Successor Agency: City of Santa Ana City Manager (CDA /RDA) 20 Civic Center Plaza (M -37) P. O. Box 1988 Santa Ana, California 92702 With a copy to: City Attorney City of Santa Ana 20 Civic Center Plaza, 7th Floor (M -29) Santa Ana, California 92702 Addresses for notice may be changed as required by written notice to all other parties. All notices personally served shall be effective when actually received. All notices mailed shall be effective three (3) days after deposit in the U.S. Mail, postage prepaid. The foregoing notwithstanding, the 44 DOCSOC /1475221v 10/200272 -0004 non - receipt of any notice as the result of a change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such notice. 21.3 Survival of Representations and Warranties. All representations and warranties in the Loan Documents shall survive the making of the Loans described herein and have been or will be relied on by City notwithstanding any investigation made by either party. 21.4 [Intentionally Omittedl. 21.5 Binding Effect; Assignment of Obligations. This Agreement shall bind, and shall inure to the benefit of, Vista Del Rio, Successor Agency, and City and their respective successors and assigns. Other than as expressly provided to the contrary in this Agreement, Vista Del Rio shall not assign any of its rights or obligations under any Loan Document without the prior written consent of the Executive Directors, which consent may be withheld in the Executive Directors' sole and absolute discretion. Any such assignment without such consent shall, at the Executive Directors' option, be void. 21.6 Prior Agreements; Amendments; Consents. This Agreement (together with the other Loan Documents) contains the entire agreement between the Successor Agency, City and Vista Del Rio with respect to the Loans and the Property, and all prior negotiations, understandings and agreements are superseded by this Agreement and such other Loan Documents. No modification of any Loan Document (including waivers of rights and conditions) shall be effective unless in writing and signed by the party against whom enforcement of such modification is sought, and then only in the specific instance and for the specific purpose given. 21.7 Governing Law. All of the Loan Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of California and Federal law, whichever is more stringent. Vista Del Rio irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Orange or the United States District Court of the Central District of California, as City may deem appropriate, in connection with any legal action or proceeding arising out of or relating to this Agreement or the Loan Documents. Assuming proper service of process, Vista Del Rio also waives any objection regarding personal or in rem jurisdiction or venue. 21.8 Severability of Provisions. No provision of any Loan Document that is held to be unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of the Loan Documents are hereby declared to be severable. 21.9 Headings. Article and section headings are included in the Loan Documents for convenience of reference only and shall not be used in construing the Loan Documents. 21.10 Conflicts. In the event of any conflict between the provisions of this Agreement and those of any other Project Document, this Agreement, unless otherwise expressly provided, shall prevail; however, with respect to any matter addressed in both such documents, the fact that one document provides for greater, lesser or different rights or obligations than the other shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. 45 D O C S OC/ 1475221 v 10/200272 -0004 21.11 Time of the Essence. Time is of the essence under this Agreement and in the performance of every term, covenant, and obligation contained herein. 21.12 Conflict of Interest. No member, official or employee of the Successor Agency or the City shall have any direct or indirect interest in this Agreement, nor participate in any decision relating to the Agreement which is prohibited by law. 21.13 Warranty Against Payment of Consideration. Vista Del Rio warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement. 21.14 Nonliability of City and Successor Agency Officials and Employees. No member, official or employee of City or Successor Agency shall be personally liable to Vista Del Rio, or any successor in interest, in the event of any default or breach by City or Successor Agency or for any amount which may become due to Vista Del Rio or successor, or on any obligation under the terms of this Agreement. 21.15 Plans and Data. Should Vista Del Rio not proceed with the work and construction of the Property, and upon termination of this Agreement for any reason, Vista Del Rio shall deliver to City any and all plans and data concerning the Property /Project, and City or any person or entity designated by City shall have the right to use such plans and data without compensation to Vista Del Rio. Such right of City shall be subject to any right of the preparer of the plans to their use. 21.16 Authority to Enter Agreement. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify the Successor Agency and City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 21.17 Subsequent Approvals. Except where otherwise indicated, all subsequent approvals identified in this Agreement, other than approvals by the City Council of the City of Santa Ana, shall not be unreasonably withheld, delayed or conditioned. 21.18 City, Successor Agency and Authority Approvals and Actions. The City, Successor Agency and Authority shall maintain authority of this Agreement and the authority to implement this Agreement through the Executive Directors. The Executive Directors shall have the authority to make approvals, issue interpretations, waive provisions, and /or enter into amendments of this Agreement on behalf of the City, Successor Agency and Authority so long as such actions do not materially or substantially change the uses or development permitted on the Property, or materially or substantially add to the costs incurred or to be incurred by the City, Successor Agency or Authority as specified herein, and such approvals, interpretations, waivers and /or amendments may include extensions of time to perform as specified in the Schedule of Performance. All other material and /or substantial interpretations, waivers, or amendments shall require the consideration, action and written consent of the City Council, Successor Agency Board and Authority Board. {Signatures appear on following pages} 46 DOCSOC/ 1475221 v 10/200272 -0004 IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be executed on the date set forth at the beginning of this Agreement. SUCCESSOR AGENCY: CITY OF SANTA ANA, ACTING AS SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA By: Francisco Gutierrez Executive Director of Finance and Management Services ATTEST: — 'INAA —/)I IAI zG ✓' Maria D. Huizar, Successorlylegency Secretary APPROVED AS TO FORM By; 4Ve4 Lisa E. Storck Assistant Counsel S -1 DOCSOC/ 1475221 v 10/200272 -0004 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California County of Orange J SS. On March 14, 2012 before me Claudia M. FernandezShaw, Notary Public Date Name and Title of Officer (e.g., "Jane Doe, Notary Public ") personally appeared Francisco Gutierrez CLAUDIA M. FERNANDEZ SHAW Commission # 1875128 Z i `m Notary Public . California z Z " Orange County n MyComm, 'plres Jan 25, 2014 Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person(,° whose namefs) ,We subscribed to the within instrument and acknowledged to me that k0sheftey executed the Sam in x s /rarrei�cir authorized capacity(, and that by jiib /her/their signature on the instrument the personw, or the entity upon behalf of which the persoe) acted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing is true and correct. my and and official seal. r A,- .. Though the information below is not required by law, it may prove valuable to persons relying on the and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: Document 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 Number of Pages: CITY: CITY OF SANTA ANA, a charter city and municipal corporation By: '4C QRm�a .-1 Francisco Gutierrez Executive Director of Finance and Management Services ATTEST: Maria D. Huizar, Clerk D the Council APPROVED AS TO FORM By:-r t t L Lisa E. Storck Assistant City Attorney S -2 DOC SOC/ 1475221 v 10/200272 -0004 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California County of Orange I SS. On March 14, 2012 before me Claudia M. FernandezShaw, Notary Public Date Name and Title of Officer (e.g., "Jane Doe, Notary Public ") personally appeared Francisco Gutierrez Name(s) of Slgnens) CLAUDIA M.FERNANDEZSHIAW Commission # 1875128 < " -® Notary Public • California z Z Orange County n My Comm. Expires Jan 25, 2014 Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person( whose name(o dWa.re- subscribed to the within instrument and acknowledged to me that 4Yshe they executed the Sam in /t3eF/1hei*F a horized capacity(i; and that by ( /het//thLstrsignature(s`� on the instrument the persono, or the entity upon behalf of which the personx acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing is true and correct. my h4nd and official seal. Though the information below is not required by law, it may prove valuable to persons relying on the 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 VISTA DEL RIO HOUSING PARTNERS LP, a California limited partnership By: A Community of Friends, a California nonprofit public benefit corporation Its: Managing General Partner By: W Dorea g Gallo Its: Chief Executive Officer By: Foundation for Affordable Housing V, Inc. a California nonprofit public benefit corporation Its: Administrative General Partner By: Deborrah A. Willard Its: President S -3 DOCSOC /1475221 v 10/200272 -0004 CALIFORNIA ALL - PURPOSE ACKNOWLEDGEMENT STATE OF California )SS COUNTY OF )SS 1'f^- On 9WCk `f� ��I before me, Mary A. Elton , Notary Public, personally appeared 1 O(114A ),E &A-UL -0 who proved to me on the basis of satisfactory evidence be the person(s) whose names i /are subscribed to the within instrument and acknowled d to me that het4pVthey executed the same in hisGOtheir authorized capacity(ies), and that by his he 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. MARY A. ELTON WITNESS my hand and official seal �nn, w VMO'TCA00M 198221 8 pUtlLIOpALIFORNIA flANR CNiY OMM. BXP. UE� Signature J'U'g This area for official notarial seal. CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to persons relying on the documents. • INDIVIDUAL • CORPORATE OFFICER(S) TITLE(S) ❑ PARTNER(S) ❑ LIMITED ❑ GENERAL ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ GUARDIAN /CONSERVATOR ❑ OTHER SIGNER IS REPRESENTING: Name of Person or Entity Name of Person or Entity OPTIONAL SECTION Though the data requested here is not required by law, it could prevent fraudulent reattachment of this form. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW TITLE OR TYPE OF DOCUMENT: NUMBER OF PAGES DATE OF DOCUMENT SIGNER(S) OTHER THAN NAMED ABOVE Doc CALIFORNIA ALL - PURPOSE ACKNOWLEDGEMENT STATE OF California )SS COUNTY OF (} )SS On tV AX CIv J I before me, Mary A. Elton , Notary Public, personally appeared N • who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s is re subscribed to the within instrument and acknowledged to me that h PS) hey executed the same in hitheir authorized capacity(ies), and that by hi to heir signaturn 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. v MARY _A EL70N WITNESS m h n and official se rp Q0_2 COMM.N 1962216 y NOTARY PUFlLIC- CALIFORNIA ONANOE COUNTY MY COMM. FXP, nkC. 26, 2pv91� Signature Mary (0ii " This area for official notarial seal. CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to persons relying on the documents. • INDIVIDUAL • CORPORATE OFFICER(S) TITLE(S) • PARTNER(S) ❑ LIMITED ❑ GENERAL • ATTORNEY -IN -FACT • TRUSTEE(S) • GUARDIAN /CONSERVATOR • OTHER SIGNER IS REPRESENTING: Name of Person or Name of Person or Entity OPTIONAL SECTION Though the data requested here is not required by law, it could prevent fraudulent reattachment of this form. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW TITLE OR TYPE OF DOCUMENT: NUMBER OF PAGES DATE OF DOCUMENT SIGNER(S) OTHER THAN NAMED ABOVE Doc Signing 112008 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Real property in the City of Santa Ana, County of Orange, State of California, described as follows: IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING A PORTION OF THE NORTHEAST QUARTER OF SECTION 2, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS PER MAP RECORDED IN BOOK 51, PAGE 12 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, AS DESCRIBED IN A DEED TO THE NEWBERT PROTECTION DISTRICT, RECORDED OCTOBER 16, 1919 IN BOOK 339 PAGE 382 OF DEEDS IN THE OFFICE OF SAID COUNTY RECORDER MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST NORTHEASTERLY CORNER OF LOT 38 OF TRACT NO. 2887 AS SHOWN ON A MAP FILED IN BOOK 117, PAGES 28 THROUGH 30, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, BEING ALSO THE WESTERLY CORNER OF THAT CERTAIN STRIP OF LAND DEEDED TO THE CITY OF SANTA ANA ON MAY 14, 2002 BY INSTRUMENT NO. 20020400664 OF OFFICIAL RECORDS OF SAID COUNTY, THE SOUTHERLY LINE OF SAID STRIP BEING A TANGENT CURVE, CONCAVE SOUTHERLY AND HAVING A RADIUS OF 867.00 FEET, THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 10° 23' 48 ", AN ARC LENGTH OF 157.32 FEET TO THE END OF SAID CURVE; THENCE SOUTH 69° 55' 32" EAST A DISTANCE OF 77.35 FEET ALONG THE SOUTHERLY LINE OF SAID STRIP; THENCE DEPARTING SAID SOUTHERLY LINE ON A COURSE BEARING SOUTH 200 04'28" WEST A DISTANCE OF 7.00 FEET; THENCE NORTH 69° 55' 32" WEST A DISTANCE OF 28.00 FEET; THENCE SOUTH 62° 04' 28" WEST A DISTANCE OF 13.38 FEET; THENCE SOUTH 140 04' 28" WEST A DISTANCE OF 36.00 FEET; THENCE SOUTH 40° 01' 11" EAST A DISTANCE OF 27.44 FEET; THENCE SOUTH 25° 35' 43" EAST A DISTANCE OF 29.37 FEET TO THE BEGINNING OF A NON - TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIAL BEARING OF SOUTH 390 52' 08" WEST AND A RADIUS OF 42.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 500 45' 00" AN ARC LENGTH OF 37.20 FEET TO THE END OF SAID CURVE; THENCE ALONG A LINE TANGENT TO SAID CURVE SOUTH 000 37' 08" WEST A DISTANCE OF 140.00 FEET; THENCE SOUTH 89° 22' 52" EAST A DISTANCE OF 14.00 FEET TO A POINT ON TIE NORTHWESTERLY LINE OF "PARCEL 1" OF A DOCUMENT RECORDED IN BOOK 9034, PAGE 417, OFFICIAL RECORDS OF SAID COUNTY; THENCE SOUTH 26° 53' 03" WEST A DISTANCE OF 534.66 FEET ALONG THE NORTHWESTERLY LINE OF SAID "PARCEL 1" TO A POINT ON THE EASTERLY LINE OF SAID TRACT 2887; THENCE NORTH 00 37' 08" EAST ALONG SAID EASTERLY LINE A DISTANCE O_ F 802.28 FEET TO THE POINT OF BEGINNING. The area of the described land consisting of 2.740 acres, more or less. A -1 DOC SOC/ 1475221 v 10/200272 -0004 EXHIBIT B AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Santa Ana, acting as successor agency to the Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza (M -37) Santa Ana, CA 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 (1600 West Memory Lane, Santa Ana, CA) (Multi - Family Rental Units) March _, 2012 NOTICE IS HEREBY GIVEN, that the City of Santa Ana, a charter city and municipal corporation, acting as successor agency to the Community Redevelopment Agency of the City of Santa Ana ( "Successor Agency "), to carry out certain obligations under the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.) and the Redevelopment Plan for the Merged Redevelopment Project Areas, has required Vista Del Rio Housing Partners LP, a California limited partnership ( "Owner "), to enter into certain affordability covenants and restrictions entitled Affordability Restrictions on Transfer of Property ( "Restrictions "). The Restrictions shall be recorded with the Orange County Recorder concurrently with this Notice, with reference to certain real property located at 1600 West Memory Lane, Santa Ana, California ( "Property "), designated as Assessor's Parcel No. 101-055-27 and more particularly described in Attachment No. 1, attached hereto and incorporated herein by reference. The affordability covenants and restrictions contained in the Restrictions include without limitation and as further described in the Restrictions: B -1 DOCSOC /1475221 v10/200272 -0004 The Project consists of a forty -one (41) unit rental project with fifteen (15) studio units, twenty -one (21) one - bedroom units, and five (5) two - bedroom units, all but one unit of which will be restricted to rental and occupancy by Extremely Low Income or Very Low Income households paying an Affordable Rent, determined in accordance with the lower and more restrictive of the regulations applicable to federal 9% low and moderate income tax credits and the California Community Redevelopment Law, Health and Safety Code Section 33000, et seq. (and, with respect to four (4) of the studio units, four (4) of the one - bedroom units, and three (3) of the two- bedroom units, which shall be fixed HOME Units, the regulations implementing the HOME Investments Partnership Program ( "HOME Program ") set forth at 24 CFR §92.1, et seq.) Six (6) of the studio units, ten (10) of the one - bedroom units and four (4) of the two - bedroom units are to be restricted to Extremely Low Income households, and all but one (1) of the remaining units at the Project shall be restricted to Very Low Income households for a period of not fewer than 55 years (15 years with respect to the HOME Program requirements). This Notice of Affordability Restrictions on Transfer of Property is being recorded for the purpose of providing notice only and it in no way modifies the provisions of the Restrictions. In the event of any conflict between this Notice and the Restrictions, the terms of the Restrictions shall prevail. The Restrictions have been recorded concurrently herewith and shall remain in effect for not fewer than fifty -five (55) years. This Notice is being recorded in the Official Records of Orange County, California by the Successor Agency in compliance with Health and Safety Code Section 33334.3(f)(3)(B), as amended, and shall be indexed against the Successor Agency and the Owner. [Signatures appear on following pages.] B -2 DOCSOC /1475221 v 10/200272 -0004 IN WITNESS WHEREOF, the parties hereto have caused this Notice of Affordability Restrictions on Transfer of Property to be executed as of the date set forth at the beginning of this Notice. SUCCESSOR AGENCY: CITY OF SANTA ANA, acting as successor agency to the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA ATTEST: Maria D. Huizar Successor Agency Recording Secretary Paul Walters, Interim City Manager AUTHORITY: HOUSING AUTHORITY OF THE CITY OF SANTA ANA, a public body corporate and politic IC Nancy T. Edwards, Interim Executive Director APPROVED AS TO FORM: Lisa E. Storck, Assistant Counsel [Signatures continue on following page.] B -3 DOCS OC/ 1475221 v 10/200272 -0004 [Signatures continue from previous page.] C111,11KID VISTA DEL RIO HOUSING PARTNERS LP, a California limited partnership By: A Community of Friends, a California nonprofit public benefit corporation Its: Managing General Partner IN Dora Leong Gallo Its: Chief Executive Officer By: Foundation for Affordable Housing V, Inc. a California nonprofit public benefit corporation Its: Administrative General Partner By: Deborrah A. Willard Its: President B -4 DOCS OC/ 1475221 v 10/200272 -0004 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Santa Ana, acting as Successor Agency, to the Community Redevelopment Agency of the City of Santa Ana Housing Department M -37 20 Civic Center Plaza, 3rd Floor P.O. Box 1988 Santa Ana, California 92702 SPACE ABOVE THIS LINE FOR RECORDING USE FREE RECORDING REQUESTED [Government Code Section 6103] AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (1600 West Memory Lane, Santa Ana, CA) These AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (the "Restrictions ") are entered into as of March , 2012, by and among and Vista Del Rio Housing Partners LP, a California limited partnership (referred to herein as the "Vista Del Rid'), the City of Santa Ana, a charter city (the "City "), and the Housing Authority of the City of Santa Ana, a public body, corporate and politic (the "Authority ") and the City of Santa Ana, acting as successor agency to the Community Redevelopment Agency of the City of Santa Ana, a public body, corporate and politic (the "Successor Agency "). RECITALS: A. Vista Del Rio is the owner of that certain real property located at 1600 West Memory Lane (the "Property ") located in the City of Santa Ana more particularly described in Exhibit A, which is attached hereto and incorporated herein by this reference. B. For the purpose of providing forty -one (41) residential rental units of housing, forty (40) of which units will be affordable to Extremely Low Income and Very Low Income households (collectively, "Assisted Units "), Vista Del Rio and the City have entered into that certain Loan Agreement, dated and recorded against the Property concurrently herewith (the "Agreement') to which these Restrictions are attached as Exhibit B which, along with all of its attachments, is incorporated herein by this reference (any capitalized term that is not otherwise defined in these Restrictions shall have the meaning ascribed to such term in the Agreement). In addition, the Community Redevelopment Agency of the City of Santa Ana ( "Agency "), the predecessor in interest to the Authority with respect to the Property and Vista Del Rio have entered into that certain Disposition and Development Agreement dated July 20, 2009, the First Amendment to the Disposition and Development Agreement dated March 15, 2010, the Second Amendment to the Disposition and Development Agreement dated December 20, 2010, and the Third Amendment to the Disposition and Development Agreement dated March 21, 2011 (collectively, the "DDA "), which provides for the acquisition of the Property and construction and operation of the Project as Affordable Housing by Vista Del Rio. B -5 DOC SOC/ 1475221 v 10/200272 -0004 C. The Agreement provides, among other things, for the use of the Property for affordable housing with the Assisted Units being restricted to being rented to Extremely Low Income and Very Low Income households. D. The Agreement contains certain provisions relating to the use, operation, management and maintenance of the Property. NOW, THEREFORE, CITY, AUTHORITY, SUCCESSOR AGENCY, AND VISTA DEL RIO COVENANT AND AGREE AS FOLLOWS: 1. COVENANT TO OPERATE AFFORDABLE HOUSING Vista Del Rio covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof) that Vista Del Rio, such successors, and such assigns shall use the Property exclusively to provide affordable housing for Extremely Low Income and Very Low Income households, as provided in these Restrictions, the Agreement, and the DDA. The terms, provisions, and covenants set forth in the Agreement and the DDA are hereby incorporated herein by this reference as if set forth in full herein. 2. RESERVED. 3. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY 3.1 Use Covenants and Restrictions. a. Vista Del Rio agrees and covenants, which covenants shall run with the land and bind Vista Del Rio, its successors, its assign and every successor in interest to the Property that Vista Del Rio will make all Assisted Units on the Property available solely to Extremely Low Income and Very Low Income households at Affordable Rents. The HOME Regulations applicable to the eleven (11) HOME Units shall be enforced during the entire HOME Compliance Period (defined in the Agreement). Upon expiration of the HOME Compliance Period, the City, Authority, and Successor Agency will enforce affordability of said Assisted Units with the same income and rent restrictions as the other Assisted Units, pursuant to the requirements of Section 50052.5 of the Health and Safety Code and the CRL. Vista Del Rio further covenants and agrees that the Property shall be developed, operated, managed and maintained in accordance with Specific Development No. 83; Amendment Application 08 -11, as approved by the City of Santa Ana Planning and Building Agency and by the Santa Ana City Council pursuant to Ordinance No. NS -2790 of the City of Santa Ana, adopted August 3, 2009. b. The Project shall consist of forty (40) income restricted Assisted Units (and one unrestricted manager's unit). There shall be eleven (11) HOME Units. The eleven HOME Units will be fixed units and shall be distributed throughout the complex with comparable amenities to the other Assisted Units. C. At initial lease up, all households selected to rent and occupy the HOME Units shall be Extremely Low and /or Very Low Income households and all households selected to rent and occupy the remaining Assisted Units shall be Extremely Low Income and Very Low Income B -6 DOC SOC/ 1475221 v 10/200272 -0004 households, in accordance with the schedule set forth in Section 3.2 below. All rental increases shall be in conformance with federal and state law and approved by the Executive Director. d. The rent charged for the on -site property manager's unit shall not be restricted. e. Affordable Rents charged to tenants shall be governed by California Health and Safety Code Sections 50052.5, 50053(b)(1), and 50053(b)(2), and as provided in the HOME Regulations 24 CFR section 92.2, whichever is less. 3.2 Affordable Gross Starting Rents (Less Reasonable Utility Allowance). Initial rents may be recalculated to allowable rental amounts at the time of initial lease -up following completion of Construction in accordance with any changes in allowable rent and income tables as published by HUD and the State of California, Department of Housing and Community Development. A. Successor Agency and HOME Units. Successor Agency, City, Authority, and Vista Del Rio agree that the breakdown of unit affordability for the Assisted Units shall be as follows, under this Agreement: The rents charged at the Project must comply with the lowest and most restrictive of the following standards: 1. The calculation methodology defined in (i) Section 50053(b)(1) for Extremely Low Income Households, or (ii) Section 50053(b)(2) for Very Low Income Households; 2. The rents published for Low Income Housing Tax Credit (Tax Credit) projects by the California Tax Credit Allocation Committee (TCAC); and With respect to the HOME Units, the Low HOME rents published by HUD. Successor Agency, City, Authority, and Vista Del Rio agree that effective 2011 the initial maximum gross monthly Affordable Rents and the breakdown of unit affordability for the Extremely Low Income Assisted Units shall be as follows: # of Units (Successor Agency) Studio Extremely Low Units One Bedroom Extremely Low Units Two Bedroom Extremely Low Units # of HOME units Max. Gross Monthly Rents* $485 $519 $623 Successor Agency, City, Authority, and Vista Del Rio agree that effective 2011 the initial maximum gross monthly Affordable Rents and the breakdown of unit affordability for the Very Low Income Assisted Units shall be as follows: B -7 DOCSOC /1475221 v10/200272 -0004 Studio Very Low Units One Bedroom Very Low Units Two Bedroom Very Low Units # of Units # of HOME Max. Gross (Successor units Monthly Rents* Agency) 7 2 $813 8 2 $871 0 1 $1,046 *Utilities Allowances must be deducted from the Maximum Gross Monthly Affordable Rent. The applicable utilities allowances are determined periodically by the Housing Authority of the City of Santa Ana. Maximum Gross Monthly Rents shall be recalculated following issuance of a Release of Construction Covenants but prior to the time of initial lease -up in accordance with any changes in allowable rent and income tables as published by HUD and the State of California, and shall be as approved by the Executive Director in writing in accordance with this Section. Such Maximum Gross Monthly Rents charged to the first tenants of the 40 Assisted Units shall constitute the Initial Rental Schedule. 3.3 Rental Vouchers. (a) In the event Vista Del Rio rents an Assisted Unit to a household holding a Portable Voucher, the rental agreement (or lease agreement, as applicable) between Vista Del Rio, as landlord, and the tenant shall expressly provide that the monthly rent charged shall be the Affordable Rent required hereunder for the Assisted Unit (not fair market rent) and that the rent collected directly from such tenant holding a portable rental voucher shall be not more than 30% of the tenant's actual gross income pursuant to the applicable voucher program regulations; i.e., the rent charged to such tenant under the rental agreement shall be the Affordable Rent chargeable hereunder and not fair market rent for the area, as would otherwise be permitted under the applicable Portable Voucher program. Thus, the subsidy payment to Vista Del Rio under any Portable Voucher shall not exceed the difference between thirty percent (30 %) of the tenant's actual gross income and Affordable Rent chargeable for the applicable Assisted Unit hereunder (and under the Affordability Restrictions). (b) The parties acknowledge that Vista Del Rio and Authority intend to enter into the HAP Contract and that the Senior Lender is anticipated to underwrite a Senior Loan based in part on the Project Based Section 8 subsidy to the Project under the HAP Contract, including payments thereunder equal to the difference between 30% of each tenant household's actual gross income and the fair market rent for the area. In the event that, during the Term hereof, a new Housing Assistance Payments Contract is proposed to be entered into (or is entered into) with respect to any Assisted Units at the Project not already receiving Project Based Section 8 assistance under the HAP Contract (or those Units, after expiration of the HAP Contract), Vista Del Rio shall cause the rental agreement (or lease agreement, as applicable) for each Assisted Unit receiving Project Based Section 8 assistance pursuant to such new Housing Assistance Payments Contract (but not the HAP Contract) to provide that the monthly rent charged under such rental agreement (or lease agreement, as applicable) shall not exceed the Affordable Rent required hereunder for the Assisted Unit (not fair market rent). Thus, the subsidy payment to Vista Del Rio under any project -based rental voucher (other than with respect to the subsidy pursuant to the HAP Contract) shall not exceed the difference B -8 DOCSOC/1475221 v10/200272 -0004 between thirty percent (30 %) of the tenant's actual gross income and Affordable Rent chargeable for the applicable Assisted Unit hereunder (and under the Regulatory Agreement). (c) Vista Del Rio hereby acknowledges and agrees that, upon completion of construction of the Project and leasing of the Assisted Units to Extremely Low Income and Very Low Income households pursuant to this Agreement, the DDA and the Affordability Restrictions, Vista Del Rio will have received governmental subsidies from Authority, City, Successor Agency and TCAC (through the Tax Credits allocated to the Project) in exchange for Vista Del Rio's agreement to limit the rents charged to tenants of the Project to an Affordable Rent and Vista Del Rio further acknowledges and agrees that, except for the HAP Contract payments with respect to 8 Assisted Units, which are part of the approved financing for the Project, acceptance of additional governmental rental subsidies (without the consent of the Executive Director) resulting in total, cumulative rent payments to Vista Del Rio in excess of an Affordable Rent for any of the Assisted Units at the Project would constitute an unjustified windfall to Vista Del Rio at the expense of Authority and the federal and state governments. Further, with respect to the HOME Units, the HOME Regulations prohibit application of any Project Based Section 8 assistance, Portable Voucher, or other rental subsidy that, cumulatively with the rent to be paid by the tenant household, exceeds an Affordable Rent calculated pursuant to the HOME Regulations. 3.4 Rent Increases. On an annual basis, the Executive Director shall provide Vista Del Rio with the maximum allowable schedule of Affordable Rents for the Property in accordance with changes in allowable rent and income tables published by HUD and the State of California, provided however that the rent for the HOME units shall in no event be higher than the rent for the equivalent Assisted Unit. In no event shall Vista Del Rio charge any tenant more than the Affordable Rents prescribed for the Assisted Units pursuant to these Restrictions and as directed by the Executive Director. 4. RENT LIMITATIONS. Vista Del Rio, its successors and assigns shall not charge rents for the Assisted Units in excess of the amounts set forth herein, as adjusted on the basis of the revised schedules of Area Median Income issued from time -to -time by HUD. The Executive Director shall notify Vista Del Rio in writing of the adjusted allowable maximum incomes and rents. 5. MANAGEMENT PLAN. Vista Del Rio shall adopt and include as part of its Management Plan (described in Section 11 below), written tenant selection policies and criteria for the Assisted Units, that meet the following requirements: (a) Are consistent with the purpose of providing housing for Very Low Income households; (b) Are reasonably related to program eligibility and the applicants' ability to perform the obligations of the lease; (c) Give reasonable consideration to the housing needs of households that would have a preference under 42 CFR §906.211 (Federal selection preferences for admission to Public Housing); (d) Provide for: B -9 DOC SOC/ 1475221 v 10/200272 -0004 (i) The selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable; and (ii) The prompt written notification to any rejected applicant of the grounds for any rejection; (e) To the extent allowed by applicable federal, state and local law, provide first priority in the selection of qualified eligible tenants to households that are referred by the City, Authority, or Successor Agency; (f) Carry out the Affirmative Marketing procedures of the City of Santa Ana, which are designed to provide information and otherwise attract eligible persons from all racial, ethnic and gender groups in the housing market area to the Assisted Units. Vista Del Rio, the City and Successor Agency shall cooperate to effectuate this provision prior to the initial renting, or upon occurrence of a vacancy, and the re- renting of any Assisted Units ( 24 CFR 92.351); and (g) The Project shall serve the needs of individuals and families who require special needs housing, specifically persons with disabilities. For purposes of this Section, the term "persons with disabilities" includes, but is not limited to, any physical or mental disability as defined in Government Code Section 12955.3. The Project shall be designed for occupancy by persons with disabilities, by, for example, including design features that makes the Project physically accessible to people with mobility impairments. To the extent permitted by law, Vista Del Rio shall lease each of the forty Assisted Units (not including the manager's unit) to persons with disabilities or to families which include one or more persons with disabilities. 6. RENTAL VOUCHER TENANTS. Vista Del Rio, its successors and assigns, shall not refuse to lease an Assisted Unit to a holder of a rental voucher under 24 CFR part 887 (Housing Choice Voucher Program) or to a holder of a comparable document evidencing participation in a HOME tenant -based assistance program because of the status of the prospective tenant as a holder of such certificate of family participation, rental voucher, or comparable HOME tenant -based assistance document. Total rents charged to such tenants, including the tenant contribution and rental assistance, shall not exceed the allowable rents as described above. 7. LEASE PROVISIONS. Any lease of any of the Assisted Units must be for not less than one year. The lease may not contain any of the following provisions (in which references to "owner" shall mean the Vista Del Rio, its successors or assigns): (a) Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor of the owner in a lawsuit brought in connection with the lease; (b) Agreement by the tenant that the owner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the Assisted Unit after the tenant has moved out of the Assisted Unit. The owner may dispose of this personal property in accordance with state law; (c) Agreement by the tenant not to hold the owner or the owner's agent legally responsible for any action or failure to act, whether intentional or negligent; [on DOC SOC/ 1475221 v 10/200272 -0004 (d) Agreement of the tenant that the owner may institute a lawsuit without notice to the tenant; (e) Agreement by the tenant that the owner may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; (f) Agreement by the tenant to waive any right to a trial by jury; (g) Agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and (h) Agreement by the tenant to pay attorney's fees or other legal costs even if the tenant wins in a court proceeding by the owner against the tenant. The tenant, however, may be obligated to pay costs if the tenant loses. 8. SUCCESSORS AND ASSIGNS. Vista Del Rio, its successors or assigns, must adhere to state law requirements with regard to termination of tenancy. 9. MAINTENANCE OF PROPERTY. Vista Del Rio shall, at its sole cost and expense, maintain or cause to be maintained the interior and exterior of the Project and all Assisted Units thereof and the Property in a decent, safe and sanitary manner, in accordance with the HUD Housing Quality Standards (HQS) and the maintenance standards required by Section 92.251 of the HOME Regulations, and in accordance with the standard of maintenance of first class apartments within Orange County, California. None of the Assisted Units in the Project shall at any time be utilized on a transient basis, nor shall the Property or any portion thereof ever be used as a hotel, motel, dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium or rest home, or be converted to condominium ownership. If at any time Vista Del Rio fails to maintain the Project or the Property in accordance with this Agreement and such condition is not corrected within five (5) Business Days after written notice from City, Authority, or Successor Agency with respect to graffiti, debris, and waste material, or thirty (30) days after written notice from City, Authority, or Successor Agency with respect to general maintenance, landscaping and building improvements, then City and Successor Agency, in addition to whatever remedy they may have at law or at equity, shall have the right to enter upon the applicable portion of the Project or the Property and perform all acts and work necessary to protect, maintain, and preserve the Project and the Property, and to attach a lien upon the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by City, Authority, and Successor Agency and /or costs of such cure, including a reasonable administrative charge, which amount shall be promptly paid by Vista Del Rio to City, Authority, or Successor Agency, as applicable, upon demand. The liens created under this Section shall be subject and subordinate to the lien of the mortgage or deed of trust encumbering the Property (or any part of the Property) for the Senior Loan approved pursuant to the terms of the DDA. The City, Authority and /or Successor Agency shall inspect the Property annually after the date of issuance of the Release of Construction Covenants as described in Section 310 of the DDA and Vista Del Rio shall cooperate with the City, Authority, and Successor Agency to make the Property and all Assisted Units thereon available for such inspection. Vista Del Rio shall not remove, demolish or materially alter any Improvement without City's prior consent, except to make non - structural repairs which preserve or increase the Property's value, B -11 DOCSOC /1475221 v10/200272 -0004 and shall promptly restore, in a good and professional manner, any Improvement (or other aspect or portion of the Property) that is damaged or destroyed from any cause. 10. NONDISCRIMINATION COVENANTS 10.1 Obligation to Refrain from Discrimination. Vista Del Rio covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Vista Del Rio itself or any person claiming under or through him 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, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. 10.2 Nondiscrimination in Employment. Vista Del Rio 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, age, pregnancy, childbirth or related medical condition, medical condition 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 applicable anti - discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. 10.3 Statutory Nondiscrimination Covenants. Except to the extent preferences are permitted or required by this Agreement, Vista Del Rio 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 Property, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. Vista Del Rio shall refrain from restricting the rental, sale or lease of the Property or any portion thereof on the basis of any of the characteristics listed above. Vista Del Rio shall also comply with the equal opportunity and fair housing requirements set forth in Section 92.350 of the HOME Regulations. The foregoing covenants shall run with the land. 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 B -12 DOC SOC/1475221 v 10/200272 -0004 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 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." 10.4 In Affordable Housing Restrictions. The foregoing covenants shall (a) be included in the Affordability Restrictions on Transfer of Property, (b) run with the land, and (c) remain effective for the Term hereof. 11. MANAGEMENT OF PROJECT. Not later than five (5) business days prior to the execution of the documents, Vista Del Rio shall submit to the Executive Director a Management Plan in a form that is acceptable to the Executive Director, including, but not limited to, the components listed below. Approval of the Management Plan must be obtained from the Executive Director not later than the time for the Closing. Vista Del Rio shall manage the Assisted Units in accordance with the approved Management Plan, including such amendments as may be approved in writing from time to time by the Executive Director, for the term of the income and rent restrictions contained in these Restrictions. The components of the Management Plan shall include: (a) Management Agent. Vista Del Rio shall submit the name and qualifications of the proposed Management Agent. The Executive Director shall approve or disapprove the proposed Management Agent in writing based on the experience and qualifications of the Management Agent. The John Stewart Company is hereby approved as the initial Management Agent. B -13 DOCSOC /1475221 v10/200272 -0004 (b) Management Agreement. Vista Del Rio shall submit a copy of the proposed management agreement specifying the amount of the management fee, and the relationship and division of responsibilities between Vista Del Rio and Management Agent. Such management agreement (including the management fee) shall be reasonably acceptable to the Executive Director. (c) Project Operating Budget. Prior to the Closing, and annually thereafter not later than 60 days prior to the beginning of the next Calendar Year, Vista Del Rio shall submit a projected operating budget and cash flow ( "Operating Budget') to the Executive Director. The Operating Budget and cash flow shall be in a form that is reasonably acceptable to the Executive Director. Vista Del Rio must promptly deposit all revenue received with respect to the Project directly into a segregated, interest - bearing depository account established exclusively for the Project ( "Project Operating Account'). Withdrawals from the Project Operating Account may be made only in accordance with the provisions of the Loan Agreement and the Operating Budget approved annually by the Executive Director, as it may be revised from time to time with City, Authority, and Successor Agency approval. Vista Del Rio may make withdrawals from the Project Operating Account solely for the payment of Project expenses and Project fees included in the approved Operating Budget. Withdrawals from the Project Operating Account for other purposes may be made only with the prior written approval of the Executive Director. Further, Vista Del Rio shall obtain the prior written approval of the Executive Director for any expenditure from the Project Operating Account that exceeds by ten percent (10 %) or more the amount set forth for the applicable line item in the Operating Budget and /or for any expenditure that would, cumulatively with all prior expenditures in the applicable year, exceed the total approved annual Operating Budget for the Project by ten percent (10 %) or more. (d) Tenant Selection Policies. Vista Del Rio shall include in the Management Plan the tenant selection policies in accordance with Section 5, above. If at any time the City, Authority, or Successor Agency determines that the Assisted Units are not being managed or maintained in accordance with the approved Management Plan, Vista Del Rio shall change the Management Agent or the practices complained of, upon receipt of written notice from the Executive Director. The Executive Director may require Vista Del Rio to change management practices or to terminate the management contract and designate and retain a different Management Agent. The management agreement shall provide that it is subject to termination by Vista Del Rio without penalty, upon thirty (30) days prior written notice, at the direction of the Executive Director. Within ten (10) days following a direction of the Executive Director to replace the Management Agent, the Vista Del Rio shall select another Management Agent or make other arrangements satisfactory to the Executive Director or designee for continuing management of the Assisted Units. 12. COVENANTS. The covenants established in these Restrictions and any amendments hereto approved by the City, Authority, Successor Agency and Vista Del Rio shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City, Authority, the Successor Agency, and their respective successors and assigns. These Restrictions shall remain in effect for fifty -five (55) years from the recordation of the Release of Construction Covenants ( "Term "). With the consent of Vista Del Rio, the City, Authority, or Successor Agency may, in its discretion, agree to defer repayment of the Loans or the City, Authority, and Successor Agency may agree to such reasonable modifications to the requirements of these Restrictions, as they may determine are necessary for the continued maintenance and operation of the Assisted Units. The covenants against discrimination shall remain in effect for the Term of these Restrictions. B -14 DOC SOC/ 1475221 v 10/200272 -0004 13. DISBURSEMENT. Vista Del Rio shall not request disbursement of any proceeds of the Loans until the funds are needed to pay eligible costs. The City shall have the right to disapprove any request if the City determines the request is for an ineligible item or is otherwise not in compliance with or inconsistent with the Loan Agreement and these Restrictions [24 CFR 92.504 (c)(10)]. 14. REPORTS. Vista Del Rio shall prepare, maintain and submit to the City and /or the Authority, as appropriate, the following records and reports in compliance with 24 CFR 92.504 (c) (12): a. Annual Reports. Vista Del Rio shall file with the City an Annual Report (herein referred to as the "Annual Report") within one hundred twenty (120) days following the end of each calendar year, commencing with the end of the calendar year (or portion thereof) in which the Real Estate Closing occurs. The Annual Report shall contain a certification by Vista Del Rio as to such information as the City Executive Director may then require, including, but not limited to, the following: (1) The fiscal condition of the Project, including the Annual Budget and Project Cash Flow report required by Section 12.5 of the Loan Agreement which shall include an audited financial statement for the previous calendar year that includes a balance sheet and a profit and loss statement indicating any surplus or deficit in operating accounts (including a calculation of the Residual Receipts available to make payments on the Loans); a detailed itemized listing of income and expenses; and the amounts of any fiscal reserves. Such Annual Budget and audited financial statement shall be prepared in accordance with generally accepted accounting practices, consistently applied (and in accordance with Section 15.5 of the Loan Agreement). (2) Any substantial physical defects in the Project, including a description of any major repair or maintenance work undertaken or needed in the previous and current years. Such statement shall describe what steps Vista Del Rio has taken in order to maintain the Project in a safe and sanitary condition in accordance with applicable housing and building codes and the property standards set forth in 24 CFR 92.251. (3) The occupancy of the Assisted Units indicating the income of each current resident and the current rents charged each resident and whether those rents include utilities, including records that demonstrate that the Project meets the requirements of 24 CFR 92.253 for tenant and participant protection under the HOME Program. (4) General management performance, including tenant relations and other relevant information. (5) Records that demonstrate that the Assisted Units meet the affordability requirements of 24 CFR 92.252, 50052.5 and 50053(b)(1) of the California Health and Safety Code, for the required period of affordability according to section 33334.3 of the California Health and Safety Code. (6) Evidence of a currently paid hazard insurance policy in accordance with the requirements of Section 6 of the Deeds of Trust, with a loss payable endorsement naming the Successor Agency, Authority, and City as a loss payee(s) together with other approved lenders (as their interests may appear), with a "Replacement Cost Endorsement' in amount sufficient to prevent B -15 D O C S O C/ 1475221 v 10/200272 -0004 Vista Del Rio, Successor Agency, Authority, or City from becoming a co- insurer under the terms of the policy, but in any event in an amount not less than 100% of the then full replacement cost, to be determined at least once annually and subject to reasonable approval by the Executive Director. (7) Evidence of a currently paid liability insurance policy, naming the City as additional insured and in a form approved by the City Attorney with coverage as described in the Loan Agreement. (8) Termite reports pertaining to the Property every fifth (5th) year. (9) Such other information as may be reasonably required by the Executive Director or their designee(s). b. Records and Audits. Vista Del Rio shall maintain the following general program records, and make them available for inspection by the City, the State or HUD: (1) records which demonstrate that the project meets the property standard specified in 24 CFR 92.251; (2) records, for each HOME Unit, which demonstrates that the project meets the requirements of 24 CFR 92.252. (3) records which demonstrate compliance with the tenant and participant protections, as specified in 24 Section 29.253; (4) records which demonstrate compliance with the Equal Opportunity and Fair Housing requirements outlined in these Restrictions, including: (A) data on the extent to which each racial and ethnic group and single head of household (by gender of head of household) have applied for, participated in, or benefited from, any program or activity funded in whole or in part with HOME Program funds; (B) documentation of actions undertaken to meet the equal opportunity requirements of 24 CFR 92.350, which implements Section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. § 1701 u); (C) documentation and data on the steps taken to implement Vista Del Rio's outreach programs to minority -owned and women -owned businesses to meet the minority outreach requirements of 24 CFR 92.350; (5) documentation of the steps taken to carry out an affirmative marketing program in accordance with 24 CFR 92.351, if applicable; (6) if applicable, records which demonstrate compliance with the requirements relating to relocation of displaced persons, as described in 24 CFR 92.353. At a minimum, these shall include project occupancy lists identifying the name and address of all persons occupying the project property up until the date of the Real Estate Closing (i.e., the date on which Vista Del Rio obtained site control); (7) records concerning lead -based paint in accordance with 24 CFR 92.355; B -16 DOCSOC /1475221 v10/200272 -0004 (8) if applicable, records which support any requests for waivers of the conflict of interest prohibition as stated in 24 CFR 92.356; (9) records of certifications of contractor qualifications as they relate to the debarment and suspension requirement as stated in 24 CFR 92.357 and 24 CFR Part 24; and (10) any other reports issued by other monitoring agencies. C. All records, accounts, documentation and other materials pertaining to the Project must be retained for the most recent five year period, except that construction records may be retained for five years after the date the Release of Construction Covenants is recorded against the Property and records of individual tenant income verifications, project rents and project inspections must be retained for the most recent five year period, until five years after expiration of the Term hereof. Vista Del Rio shall cooperate with the City to retain all books and records relevant to the Loan Agreement for a minimum of five years after the expiration of the Term of the Loan Agreement and any and all amendments hereto, or for five years after the conclusion or resolution of any and all audits or litigation relevant to the Loan Agreement, whichever is later. The City, the Successor Agency, the State, the Office of the Auditor General of HUD, and /or their representatives shall have unrestricted reasonable access to all locations, books, and records for the purpose of monitoring, auditing, or otherwise examining said locations, books, and records with or without prior notice. d. If so directed by the Successor Agency, Authority, City, the State or HUD upon termination of the Loan Agreement, Vista Del Rio shall cause all records, accounts, documentation and all other materials relevant to the work to be delivered to the Successor Agency, Authority, City, the State or HUD, as depository. e. All records, accounts, documentation and other materials relevant to the Project shall be accessible at any time to the authorized representatives of the Successor Agency, Authority, City, the State or HUD, on reasonable prior notice, for the purpose of examination or audit. f Pursuant to 24 CFR Part 44, the City shall perform an annual audit at the close of each calendar year in which these Restrictions are in effect. Vista Del Rio shall reasonably cooperate with City in performing such audit. 15. THIRD PARTY BENEFICIARY. The Housing Authority of the City of Santa Ana ( "Authority ") is an intended third party beneficiary of the terms and provisions of these Restrictions and the covenants herein, with full right (but no obligation) to enforce the terms, provisions, and covenants contained herein. City, Authority, Successor Agency and Authority are each beneficiaries hereunder, both for and in their own right and for the purposes of protecting the interests of the community and other parties, public or private, for whose benefit these Restrictions and the covenants running with the land have been provided. The City, Authority, and Successor Agency shall have the right if the 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 they or any other beneficiaries of these Restrictions and covenants are entitled. 16. COVENANTS RUN WITH LAND. The covenants and agreements contained herein shall run with the land and not be personal obligations of Vista Del Rio. B -17 Doc SOG 1475221 v 10/200272 -0004 17. TRANSFERS OF INTEREST IN PROPERTY OR AGREEMENT 17.1 Prohibition. The qualifications and identity of Vista Del Rio are of particular concern to the Successor Agency, Authority, and City. It is because of those qualifications and identity that Successor Agency, Authority, and City have entered into the Loan Agreement and the other Project Documents with Vista Del Rio. Therefore, for the period commencing upon the date of the Loan Agreement and until the expiration of the Term hereof, no voluntary or involuntary successor in interest of Vista Del Rio shall acquire any rights or power under the Loan Agreement or these Restrictions, nor shall Vista Del Rio make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Property or the Improvements thereon (collectively, "Transfer ") without prior written approval of the Successor Agency, Authority, and City, except as expressly set forth herein. Any proposed total or partial Transfer without Successor Agency, Authority, and City approval shall constitute a Default pursuant to Article 20, et seq., hereof. 17.2 Permitted Transfers. Notwithstanding any other provision of the Loan Agreement or these Restrictions to the contrary, Successor Agency, Authority, and City approval of a Transfer shall not be required in connection with any of the following: (a) Any Transfer to an entity or entities in which Vista Del Rio directly or indirectly retains a minimum of fifty -one percent (51 %) of the ownership or beneficial interest and retains management and control of the transferee entity or entities. (b) The conveyance or dedication of any portion of the Property to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Improvements. (c) Any requested assignment for financing purposes (subject to such financing being considered and approved by the Successor Agency, Authority, and Authority pursuant to Section 311 of the DDA), including the grant of a deed of trust to secure the funds necessary for construction and permanent financing of the Improvements. (d) Removal of the investor limited partner of Vista Del Rio upon the expiration of the fifteen (15) year tax credit compliance period applicable to the Project. (e) A Transfer of a General Partner's interest in Vista Del Rio when made in connection with the exercise by the Limited Partner of its rights upon a default by a General Partner under the Partnership Agreement or upon a General Partner's withdrawal in violation of the Partnership Agreement, so long as the removal and substitution of the defaulting General Partner is made within thirty (30) days of such default or, if such removal and substitution cannot reasonably be completed within thirty (30) days, so long as the Limited Partner commences to take action to remove and substitute the General Partner with a reasonable period and thereafter diligently proceeds to complete such substitution. (f) Any Transfer of the Property to the Managing General Partner or the Goodwill Special Limited Partner pursuant to the right of first refusal or to the Managing General Partner or the Goodwill Special Limited Partner pursuant to the purchase option, as provided for in the Partnership Agreement. B -18 DOCS OC/ 1475221 v 10/200272 -0004 (g) Any sale, transfer or other disposition of an interest in the Limited Partner. (h) Any sale, transfer or other disposition of the Limited Partner's interest in Vista Del Rio as allowed by the Partnership Agreement. In the event of a Transfer by Vista Del Rio described above not requiring the City's, Authority's, or Successor Agency's prior approval, Vista Del Rio nevertheless agrees that at least thirty (30) days prior to such assignment it shall give written notice to Successor Agency /City /Authority of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement all of Vista Del Rio's obligations set forth in the Loan Agreement and these Restrictions. Upon the satisfaction of said obligations and the Transfer, the assignor shall be released from all obligations to the Successor Agency, Authority, and City hereunder (except obligations to indemnify the Successor Agency, Authority, and City pursuant to Section 14.5 and Article 18, et seq., of the Loan Agreement). 17.3 Successor Agency /Authority /City Consideration of Requested Transfer. Successor Agency, Authority, and City agree that they will not unreasonably withhold, condition or delay approval of a request for approval of a Transfer made pursuant to this Section 17.3, provided Vista Del Rio delivers written notice to the Successor Agency /Authority /City requesting such approval. Such notice shall be accompanied by sufficient evidence regarding the proposed assignee's or purchaser's development and /or operational qualifications and experience, and its financial commitments and resources, in sufficient detail to enable the Successor Agency to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 17.3 and as reasonably determined by the Successor Agency /Authority /City. The Successor Agency /Authority /City shall evaluate each proposed transferee or assignee on the basis of its development and /or qualifications and experience in the construction of facilities similar to the Improvements, and its financial commitments and resources, and may reasonably disapprove any proposed transferee or assignee, during the period for which this Section 17.3 applies, which the Successor Agency /Authority /City determines does not possess equal or better qualifications than the transferring developer. An assignment and assumption agreement in a form satisfactory to the Successor Agency /Authority /City's legal counsel shall also be required for all proposed assignments. Within fifteen (15) days after the receipt of Vista Del Rio's written notice requesting Successor Agency approval of an assignment or transfer pursuant to this Section 17.3, the Successor Agency /Authority /City shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, the Successor Agency /Authority /City 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, Vista Del Rio shall promptly furnish to the Successor Agency /Authority /City such further information as may be reasonably requested and the Authority, Successor Agency and City shall approve or disapprove the requested Transfer within fifteen (15) days after receipt of all such requested information. 17.4 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon Vista Del Rio and its permitted successors and assigns. Whenever the term "Vista Del Rio" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 18. ENFORCEMENT OF AGREEMENTS. The Loan Agreement and all of its attachments shall be enforceable by City, Successor Agency and Authority in accordance with the terms thereof. Each of the Loan Agreement, these Restrictions, the City /HOME Loan Note, the Agency Loan Note, B -19 DOCSOG1475221 v 10/200272 -0004 the City /HOME Loan Deed of Trust, and the Agency Loan Deed of Trust provide a means of enforcement by the City, Authority and the Successor Agency if Vista Del Rio is in breach of its obligations hereunder and thereunder, including liens on the Property, deed restrictions and covenants running with the land [24 CFR 92.504 (c) (13)]. 19. SUBORDINATION OF AFFORDABILITY RESTRICTIONS. In the event the Executive Director finds that an economically feasible method of financing for the construction and operation of the Project without the subordination of the Affordability Restrictions is not reasonably available, Executive Director may agree to subordinate the covenants contained in the Affordability Restrictions to the Senior Loan and /or the Tax Credit Regulatory Agreement, subject to the terms of this Section 19. Each and any subordination agreement evidencing or affirming Successor Agency's, Authority's and City's subordination of the Affordability Restrictions entered into by Successor Agency, Authority, and /or City shall contain written commitments which the Executive Director finds are reasonably designed to protect Successor Agency's, Authority's and City's investment in the Project in the event of default; any such subordination agreement(s) shall contain contractual obligation of such Senior Lender to include, without limitation, the following: (a) concurrent delivery to Successor Agency, Authority, and City of a true copy of each and any notice provided by the Senior Lender for the Project to Vista Del Rio (as its borrower) during the term of the Senior Loan for the Project; (b) a reasonably extended cure period and right to Successor Agency, Authority, and City to cure and assume the Senior Loan, and /or other senior lien(s) for the Project upon the same terms applicable to the approved financing to Vista Del Rio pursuant to the loan documents applicable thereto with such right, but with no obligation, to the Successor Agency, Authority, and City being available both from the date of issuance of any notice of default through and after the recordation of a formal Notice of Default by the Senior Lender for the Project pursuant to applicable California Code of Civil Procedure foreclosure requirements, and (c) a right of Successor Agency, Authority, and City to cure a default on each of the senior loan(s) for the Project prior to foreclosure and after recordation of a Notice of Default pursuant to applicable California Code of Civil Procedure requirements; and such cure rights may also include: (1) a right of Successor Agency, Authority, and City to negotiate with the Senior Lender(s) for the Project after notice of default from the Senior Lender(s) and prior to foreclosure, (2) an agreement that if prior to foreclosure of the Senior Loan for the Project, Successor Agency, Authority, or City takes title to the Property and cures the default on the senior loan(s) for the Project, the Senior Lender(s) will not exercise any right it may have to accelerate the Senior Loan by reason of the transfer of title to Successor Agency, Authority, or City, and (3) a right of Successor Agency, Authority, and City to acquire Vista Del Rio's interest in the Property from Vista Del Rio at any time after a material default on the Senior Loan for the Project. [Signatures appear on following pages.] B -20 DOCSOC/1 47522 1 v10/200272 -0004 IN WITNESS WHEREOF, the parties hereto have caused these Affordability Restrictions on Transfer of Property to be executed as of the date first set forth above. ATTEST: Maria D. Huizar, Secretary APPROVED AS TO FORM C Lisa E. Storck Assistant Counsel SUCCESSOR AGENCY: CITY OF SANTA ANA acting as successor agency to the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic C Paul Walters, Interim City Manager AUTHORITY: HOUSING AUTHORITY OF THE CITY OF SANTA ANA, a public body corporate and politic Nancy T. Edwards, Interim Executive Director [Signature block continues on following page.] B -21 DOC SOC/1475221 v I O/200272 -0004 ATTEST: Maria D. Huizar, Clerk of the Council APPROVED AS TO FORM Lisa E. Storck Assistant City Attorney CITY: CITY OF SANTA ANA, a municipal corporation C Paul Walters, Interim City Manager [Signature block continues on following page.] B -22 DOCSOC/ 1475221 v 10/200272 -0004 VISTA DEL RIO HOUSING PARTNERS LP, a California limited partnership By: A Community of Friends, a California nonprofit public benefit corporation Its: Managing General Partner By: Dora Leong Gallo Its: Chief Executive Officer By: Foundation for Affordable Housing V, Inc. a California nonprofit public benefit corporation Its: Administrative General Partner C Deborrah A. Willard Its: President [End of Signatures.] B -23 DOCSOC/ 1475221 v 10/200272 -0004 EXHIBIT C FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail to: City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, California 92702 Attn: Executive Director CITY/HOME LOAN DEED OF TRUST AND ASSIGNMENT OF RENTS This CITY /HOME LOAN DEED OF TRUST AND ASSIGNMENT OF RENTS (the "Deed of Trust ") is made as of March , 2012, among Vista Del Rio Housing Partners LP, a California limited partnership (the "Trustor "), First American Title Insurance Company, a California corporation (the "Trustee "), and the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the `Beneficiary "). Trustor, in consideration of the promises herein recited and the trust herein created, irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the property located in the City of Santa Ana ( "City "), County of Orange, State of California, described in the attached Exhibit A and more commonly known 1600 West Memory Lane, Santa Ana, California (the "Property "); TOGETHER with all the improvements now or hereafter erected on the property, and all easements, rights, appurtenances and all fixtures now or hereafter attached to the Property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by this Deed of Trust; TOGETHER with the right, power and authority during the continuance of these Trusts, to collect the rents, issues, and profits of the Property, reserving unto the Trustor the right, prior to any default by Trustor in payment of the indebtedness secured by this Deed of Trust or in the performance of any agreement secured by this Deed of Trust, to collect and retain these rents, issues and profits as they become due and payable; and, TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected, or hereafter to be erected, on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefore, whether or not the same are, or shall be C -1 DOCSOC /1475221v 10/200272 -0004 attached to said building or buildings in any manner; and all of the foregoing, together with the Property, is herein referred to as the "Security "; To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever; TO SECURE to the Beneficiary (a) the repayment of the sums evidenced by that certain City /HOME Loan Note secured by Subordinated Deed of Trust to the City of Santa Ana, California, to the Beneficiary executed by Truster, dated concurrently herewith in the principal amount of One Million Five Hundred Thousand Dollars ($1,500,000.00) (the "Loan "); (b) the payment and performance of the covenants and agreements of Truster contained in that certain Loan Agreement dated concurrently herewith and recorded in the official land records of the County of Orange concurrently herewith, by and among Trustor, Beneficiary, and Successor Agency ( "Agreement "), (c) the payment and performance of the covenants and agreements of Trustor contained in the Disposition and Development Agreement dated July 20, 2009, the First Amendment to the Disposition and Development Agreement dated March 15, 2010, the Second Amendment to the Disposition and Development Agreement dated December 20, 2010, and the Third Amendment to the Disposition and Development Agreement dated March 21, 2011, by and among Trustor, Successor Agency and the Housing Authority of the City of Santa Ana (collectively, the "DDA "); (d) the payment and performance of the covenants and agreements of Trustor contained in the Affordability Restrictions on Transfer of Property by and among Successor Agency, Trustor and Beneficiary, dated and recorded concurrently herewith (the "Affordability Restrictions ") and (e) the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and the performance of the covenants and agreements of Trustor contained herein. TRUSTOR AND THE BENEFICIARY COVENANT AND AGREE AS FOLLOWS: 1. The Loan. This Deed of Trust is executed and delivered, along with the Promissory Note, pursuant to and in implementation of the 41 unit special needs affordable multi - family residential project in the aforementioned Agreement and DDA entered into by and between the Beneficiary and Trustor, to benefit the Property, a copy of which is on file as a public record with the Beneficiary. Trustor aclmowledges that but for the execution of this Deed of Trust, the Beneficiary would not enter into the Promissory Note secured by this Deed of Trust. 2. Trustor's Estate. Trustor is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security; that other than this Deed of Trust, the Security is not encumbered except for obligations secured by deeds of trust, or any other security agreement, to secure financing or refinancing for the purchase and development of the Property. 3. Repayment of the Loan. Trustor will promptly repay, when due, the principal and interest, if any, as required by the Promissory Note secured by this Deed of Trust. 4. Subordination. This obligation secured by this Deed of Trust shall be subordinated to any and all obligations secured by deeds of trust, or any other security agreement, to secure financing or refinancing for the purchase and rehabilitation of the Property; subject to and provided that the Beneficiary and such Senior Lender enter into a subordination agreement providing notice and cure rights to Beneficiary that are reasonably acceptable to the Executive Directors and consistent with the requirements of Section 19 of the Affordability Restrictions. C -2 DOC SOC/ 1475221 v 10/200272 -0004 5. Prior Mortgages and Deeds of Trust; Charges; Liens. Truster shall perform all of Trustor's obligations under any mortgage, deed of trust or other security agreement with a lien which has priority over this Instrument, including Trustor's covenants to make payments when due. Trustor will pay all taxes, assessments and other charges, fines and impositions attributable to the Security which may attain a priority over this Deed of Trust, by Truster making any payment, when due, directly to the payee thereof. Truster will promptly furnish to the Beneficiary all notices of amounts due under this paragraph, and in the event Trustor makes payment directly, Trustor will promptly discharge any lien which has priority over this Deed of Trust; provided that Trustor will not be required to discharge the lien of the Deed of Trust securing any senior lender or any other lien described in this paragraph so long as Trustor will agree in writing to the payment of the obligation secured by such lien in a manner acceptable to the Beneficiary, or will, in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof. 6. Hazard Insurance. Truster will keep the Security insured by such insurance policies in such amounts and for such periods as called for in the Agreement. All insurance policies and renewals thereof will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of any senior lender and the Beneficiary as their interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Truster shall promptly furnish to the Beneficiary, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the Beneficiary or its designated agent. The Beneficiary, or its designated agent, may make proof of loss if not made promptly by Trustor. The Beneficiary shall receive 30 days' advance notice of cancellation of any insurance policies required under this Section. Unless the Beneficiary and Trustor otherwise agree in writing, insurance proceeds, subject to the rights of any senior lender, will be applied to restoration or repair of the Security damaged, provided such restoration or repair is economically feasible and the security of this Deed of Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the security of this Deed of Trust would be impaired, again, subject to the rights of any senior lender, the insurance proceeds will be used to repay the grant under this Deed of Trust, with the excess, if any, paid to Trustor. If the Security is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its designated agent within 30 days from the date notice is mailed by either of them to Trustor that the insurance carrier offers to settle a claim for insurance benefits, the Beneficiary, or its designated agent, is authorized to collect and apply the insurance proceeds at the Beneficiary's option either to restoration or repair of the Security or to repay the Loan. If the Security is acquired by the Beneficiary, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the Beneficiary to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition subject to the rights of any senior lender. 7. Preservation and Maintenance of Security. Trustor will keep the Security in good repair and will not commit waste or permit impairment or deterioration of the Security. 8. Protection of the Beneficiary's Security. If Trustor fails to perform the covenants and agreements contained in this Deed of Trust or if any action or proceeding is commenced which materially affects the Beneficiary's interest in the Security, including, but not limited to, default C -3 DOCSOC /1475221 v 10/200272 -0004 under this Deed of Trust securing any senior lender, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the Beneficiary, at the Beneficiary's option, upon notice to Trustor, may make such appearances, disburse such sums and take such action as it determines necessary to protect the Beneficiary's interest, including, but not limited to, disbursement of reasonable attorneys' fees and entry upon the Security to make repairs. Any amounts disbursed by the Beneficiary pursuant to this paragraph, with interest thereon, will become an indebtedness of Trustor secured by this Deed of Trust. Unless Trustor and the Beneficiary agree to other terms of payment, such amount will be payable upon notice from the Beneficiary to Trustor requesting payment thereof, and will bear interest from the date of disbursement at the rate payable from time to time on outstanding principal under the Promissory Note unless payment of interest at such rate would be contrary to applicable law, in which event such amounts will bear interest at the highest rate permissible under applicable law. Nothing contained in this paragraph will require the Beneficiary to insure any expense or take any action hereunder. 9. Inspection. The Beneficiary may make, or cause to be made, reasonable entries upon and inspections of the Security during normal business hours; provided that the Beneficiary will give Trustor reasonable notice of inspection. 10. Forbearance by the Beneficiary Not a Waiver. Any forbearance by the Beneficiary in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by the Beneficiary will not be a waiver of the Beneficiary's right to accelerate the maturity of the indebtedness secured by this Deed of Trust. It. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively. 12. Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the Beneficiary and Trustor subject to the provisions of this Deed of Trust. 13. Joint and Several Liability. All covenants and agreements of Trustor shall be joint and several. 14. Notice. Except for any notice required under applicable law to be given in another manner, (a) any notice to Trustor provided for in this Deed of Trust will be given by certified mail, return receipt requested, addressed to Trustor at Vista Del Rio Housing Partners LP, c/o Foundation for Affordable Housing V, Inc.,30950 Rancho Viejo Road, Suite 1.00, San Juan Capistrano, CA 92675, with a copy to Enterprise Community Investment, Inc., 10227 Wincopin Circle, Suite 800, Columbia, Maryland 21044, Attention: General Counsel, and (b) any notice to the Beneficiary will be given by certified mail, return receipt requested, to the Beneficiary at 20 Civic Center Plaza, P.O. Box 1988, Santa Ana, California 92702, Attention: City Manager, or at such other address as the Beneficiary may designate by notice to Trustor as provided above. Notice shall be effective as of the date received by the Beneficiary as shown on the return receipt. 15. Governing Law. This Deed of Trust shall be governed by the laws of the State of California. C -4 DOCSOC/1475221 v1 0/200272-0004 16. Severability. In the event that any provision or clause of this Deed of Trust or the Promissory Note conflicts with applicable law, such conflict will not affect other provisions of this Deed of Trust or the Promissory Note which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust and the Promissory Note are declared to be severable. 17. Captions. The captions and headings in this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 18. Default in Foreclosure; Remedies. Upon Trustor's breach of any covenant or agreement of Trustor in this Deed of Trust or the Promissory Note secured by this Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this Deed of Trust, or any default under any other agreement the performance of which is secured by this Deed of Trust, the Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustor notice thereof specifying: (1) The breach; (2) the action required to cure such breach; (3) a date not less than 30 days from the date the notice is received by Trustor as shown on the return receipt, by which such breach is to be cured provided, however, that if such default is not reasonably susceptible to being cured within 30 days, Trustor shall have a reasonable period to cure the defect so long as Trustor is diligently prosecuting the cure to completion; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Security. The notice will also inform Truster of Trustor's right to reinstate after acceleration and the right to bring a court action to assert the non - existence of default or any other defense of Trustor to acceleration and sale. If the breach is not cured on or before the date specified in the notice or such longer period as provided above, the Beneficiary, at the Beneficiary's option, may: (a) declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by California law; (b) 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 Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of the Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or any part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (c) commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (d) deliver to the Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924, et seq., as amended from time to time; or (e) exercise all other rights and remedies provided herein, in the instruments by which Trustor acquires title to 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. The Beneficiary shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees. C -5 DOC SOC/ 1475221 v 10/200272 -0004 Notwithstanding anything to the contrary contained in this Deed of Trust, the City hereby agrees that any cure of any default made or tendered by the Limited Partner shall be deemed to be a cure by Truster and shall be accepted or rejected on the same basis as if made or tendered by Trustor. Copies of all notices which are sent to Trustor under the terms of this Deed of Trust shall also be sent to the Limited Partner at an address to be provided in writing to the City by the Limited Partner. 19. Trustor's Right to Reinstate. Notwithstanding the Beneficiary's acceleration of the sums secured by this Deed of Trust, Trustor will have the right to have any proceedings begun by the Beneficiary to enforce this Deed of Trust discontinued at any time prior to 5 days before sale of the Security pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of ajudgment enforcing this Deed of Trust if. (a) Trustor pays the Beneficiary all sums which would be then due under this Deed of Trust and no acceleration under the Promissory Note has occurred; (b) Trustor cures all breaches of any other covenants or agreements Trustor contained in this Deed of Trust and the Covenants; (c) Trustor pays all reasonable expenses incurred by the Beneficiary and the Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust and the Covenants, and in enforcing the Beneficiary's and the Trustee's remedies, including, but not limited to, reasonable attorneys' fees; and (d) Trustor takes such action as the Beneficiary may reasonably require to assure that the lien of this Deed of Trust, the Beneficiary's interest in the Security and Trustor's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred. 20. 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. Trustee is not obligated to notify any party to this Deed of Trust of pending sale under any other deed of trust or any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 21. Reconveyance. Upon payment or forgiveness of all sums secured by this Deed of Trust and expiration of the Term of the Agreement and the Term of the Affordability Restrictions, the Beneficiary will request the Trustee to reconvey the Security and will surrender this Deed of Trust and the Promissory Note to the Trustee. The Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. 22. Substitute Trustee. The Beneficiary, at the Beneficiary's option, may from time to time remove the Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 23. Request for Notice. Trustor requests that copies of the notice of default and notice of sale be sent to Trustor at the address set forth in Section 14 above. 24. Nonrecourse Liability. Neither Trustor nor any general partner of Trustor shall have any personal liability under the Loan Agreement, Promissory Note, and this Deed of Trust and any judgment, decree or order for payment of money obtained in any action to enforce the obligation of Trustor to repay the Loan evidenced by such documents shall be enforceable against Trustor only to the extent of Trustor's interest in the Property. C -6 DOCS OC/ 1475221 v 10/200272 -0004 25. Third Party Beneficiaries. Successor Agency and the Housing Authority of the City of Santa Ana are third party beneficiaries of Beneficiary's rights hereunder, with full right (but no obligation) to enforce the terms and exercise the remedies provided to Beneficiary hereunder. IN WITNESS WHEREOF, Truster has executed this City /HOME Loan Deed of Trust and Assignment of Rents as of the date first written above. " Trustor" VISTA DEL RIO HOUSING PARTNERS LP, a California limited partnership By: A Community of Friends, a California nonprofit public benefit corporation Its: Managing General Partner By: Dora Leong Gallo Its: Chief Executive Officer By: Foundation for Affordable Housing V, Inc. a California nonprofit public benefit corporation Its: Administrative General Partner By: Deborrah A. Willard Its: President C -7 D O G S OC/ 1 475221 v1 0/200272-0004 EXHIBIT D CITY/HOME LOAN NOTE SECURED BY SUBORDINATED DEED OF TRUST TO THE CITY OF SANTA ANA, CALIFORNIA $1,500,000.00 March , 2012 Santa Ana, California 1. Principal Amount of City/HOME Loan For value received, Vista Del Rio Housing Partners LP, a California limited partnership ( "Borrower "), promises to pay to the order of the City of Santa Ana ( "City "), at 20 Civic Center Plaza, 3rd Floor, Santa Ana, California 92702, or at such other place as the City may from time to time designate in writing, or to the assignee of the City, the principal sum of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00) or so much thereof as shall be disbursed hereunder, with three percent interest (3.0 %). In implementation of the acquisition and development of that certain real property in the City, described in the Loan Agreement as the "Property," commonly known as 1600 West Memory Lane, Santa Ana, California, and operation of the Property as affordable rental housing for Extremely Low Income and Very Low Income households, (a) the City of Santa Ana, acting as successor agency to the Community Redevelopment Agency for the City of Santa Ana ( "Successor Agency "), the Housing Authority of the City of Santa Ana and Borrower have heretofore entered into that certain Disposition and Development Agreement dated July 20, 2009, the First Amendment to the Disposition and Development Agreement dated March 15, 2010, the Second Amendment to the Disposition and Development Agreement dated December 20, 2010, and the Third Amendment to the Disposition and Development Agreement dated March 21, 2011 (collectively, the "DDA "); (b) City, Successor Agency and Borrower have entered into that certain "Loan Agreement" dated concurrently herewith and recorded against the Property (the Loan Agreement and DDA are collectively referred to herein as the "Agreement "), and (c) the City of Santa Ana ( "City "), Successor Agency and Borrower have entered into those certain Affordability Restrictions on Transfer of Property, dated concurrently herewith and recorded against the Property ( "Affordability Restrictions "). This Note is made pursuant to, entitled to the benefits of and referred to as the City /HOME Loan Note in the Loan Agreement. This Note is secured by that certain City /HOME Loan Deed of Trust and Assignment of Rents between Borrower and City, dated concurrently herewith ( "City /HOME Loan Deed of Trust'). This Note, the Loan Agreement, the Affordability Restrictions, the Agency Enhanced Entryway Note, the Agency Enhanced Entryway Loan Deed of Trust, the Agency Loan Note, the Agency Loan Deed of Trust, the Agency Transfer Note, and the City /HOME Loan Deed of Trust are sometimes collectively referred to herein as the "Loan Documents." The Loan Documents and the rights and responsibilities of Borrower thereunder inure to the benefit of the City, Successor Agency and the Housing Authority of the City of Santa Ana. Any capitalized term which is not otherwise defined herein shall have the meaning ascribed to such term in the Loan Agreement. D -1 DOCSOC /1475221 v 10/200272 -0004 2. Definitions. For the purpose of calculating the payments to be made by Borrower to City pursuant to this Note, the following terms shall have the following respective meanings: "City/HOME Loan" shall mean the loan evidenced by this Note. "Calendar Year" means each consecutive twelve (12) month period from January 1 to December 30. "Closing Costs" shall mean: (a) In the case of a Sale, reasonable brokerage commissions payable to a broker as a result of the Sale, which shall not in any event exceed the customary amount charged -for similar transactions in the immediate market place, costs of title insurance premiums, documentary stamp taxes, escrow fees, recording charges, loan repayment charges and other costs reasonably incurred with respect to the Property, in each case actually paid by Borrower as a condition of the Sale. (b) In the case of a Refinancing, the reasonable and necessary costs of completing such Refinancing, including, without limitation, loan fees, loan repayment charges, costs of title insurance premiums, escrow fees, recording fees and attorneys' fees. "Gross Revenues" shall mean all revenues and receipts of every kind actually received by Borrower from operating the Property, and all parts thereof, including, but not limited to, income from both cash and credit transactions, rental from leased and /or subleased spaces and parking fees and charges (but not including security deposits and other tenant deposits, except to the extent such deposits are forfeited to the Borrower under the tenant's lease). Gross Revenues also includes any casualty insurance proceeds in excess of those used to restore the Property and any rental interruption insurance proceeds. Any credit consideration shall be included in Gross Revenues at the time cash proceeds (principal, interest and/or other) are received. Borrower shall establish and maintain accounts for the Gross Revenues (the "`Project Accounts ") that are segregated from revenues and income received by Borrower from all other projects. Gross Revenues shall also include all interest earned on the Project Accounts. Gross Revenues shall not include loan proceeds or capital contributions. "Operating Expenses" shall mean the sum of the following: (c) scheduled payments of principal and interest and all other charges relating to the Senior Loan(s); (d) all other actual, reasonable cash operating costs and expenses, calculated on an annual basis, that are directly attributable to managing and operating the Property, including, without limiting the generality of the foregoing, the following: costs and expenses for real and personal property taxes, special assessments or similar charges; water, fuel, electricity and other utilities; heating, ventilation and air conditioning expenses; labor; supplies; tools; equipment; insurance; advertising and marketing; accounting and legal fees; brokerage commissions and other leasing expenses; reasonable reserves for all anticipated expenses as approved by the City; and other such items constituting operation, maintenance and repair costs actually paid by the Borrower, subject to the following conditions: D -2 DOCSOC/ 1475221 v 10/200272 -0004 (i) Depreciation and amortization expenses shall not be considered Operating Expenses, except as otherwise provided herein. (ii) Any expenses, compensation or fees paid to any affiliate of Borrower shall only be included as Operating Expenses to the extent they are not in excess of the reasonable expenses, compensation or fees which would be payable to unrelated third parties in arms - length transactions for similar services in the Santa Ana, California area. (e) a management fee equal to $55 per unit a month (increasing by CPI): (f) deposits into required reserves (g) payments due on any deferred Developer Fees; (h) Any other expenses necessary to meet Senior Lender requirements and requirements of Borrower's Limited Partner, or its assignee, as set forth in Borrower's Partnership Agreement. "Project" shall mean the acquisition, development, operation, maintenance, and management of the Property as affordable housing by Borrower pursuant to the Agreement. "Property" shall mean the real property located at 1600 West Memory Lane, Santa Ana, California, described in the City /HOME Loan Deed of Trust. "Refinancing" shall mean changing the then existing financing on the Property by, without limitation, modifying the interest rate and /or the term of the existing Senior Loan, increasing or reducing the amount of the existing Senior Loan, paying off the existing Senior Loan and obtaining a new Senior Loan. "Refinancing Proceeds" shall be disbursed as set forth in Section 7 hereof. "Residual Receipts" shall mean the Gross Revenues from the Property for each year, less deductions for Operating Expenses applicable to each such year less [Items 1 -7 on Exhibit A-4] of the Partnership Agreement, to the extent not already deducted as an Operating Expense. "Sale" shall mean any transfer, assignment, conveyance or lease (other than to a tenant for occupancy) of the Property or any portion thereof, or any interest therein by the Borrower, and includes, except as permitted under Section 16.2.2 of the Loan Agreement, any transfer, assignment or sale of any partnership interest in the Borrower by an individual or entity which is a general or limited partner in the Borrower, or any interest by any individual or entity which holds an interest in any such general or limited partner in the Borrower, which brings the cumulative total of all such direct and indirect transfers, assignments and sales during the term of this Note to more than thirty- five percent (35 %) of the ownership interests in the Borrower, and any such transfer, assignment or sale of a direct or indirect partnership interest thereafter. Sale includes a sale in condemnation or under threat thereof. Sale does not include dedications and grants of easements to public and private utility companies of the kind customary in real estate development. "Sale Proceeds" shall mean the proceeds received by Borrower in connection with any Sale. D -3 D O C S OC/ 1475221 v 10/200272 -0004 "Senior Loan" shall mean the senior loan being made by JP Morgan Chase Bank, N.A., concurrent to the City /HOME Loan for payment of a portion of the Construction costs incurred by Vista Del Rio relating to the Project, as approved by the Executive Director, and shall include any subsequent loan that refinances the initial Senior Loan. "Term" shall mean the term for repayment of this Note, which shall commence on the date of this Note and end on the fifty -fifth (55th) anniversary of the date the Release of Construction Covenants is recorded against the Property ( "Maturity Date "). 3. City/HOME Loan Repayment. Borrower shall make payments to the City as provided in Sections 5 (Residual Receipts), 7 (Refinancing Proceeds), 8 (Sale Proceeds) and 10 (Accelerated Loan Repayment). 4. Reserved. 5. Annual Citv/HOME Loan Renavment. a. Borrower shall make a City /HOME Loan payment to the City annually, in the amount of the lesser of the outstanding balance due under this Note or the City's Percentage of Residual Receipts, as provided in this Section 5. b. Within one hundred twenty (120) days after the close of the initial Calendar Year following the year the Project is placed -in- service and on or before the 120th day of each Calendar Year thereafter, the Borrower shall submit to the City audited financial statements including a detailed statement of Gross Revenues and Operating Expenses attributable to the Property for the applicable Calendar Year, along with a computation of the amount of the Residual Receipts applicable to such Calendar Year with which to make a City /HOME Loan payment then due. C. The Borrower shall pay to the City seventy -five percent (75 %) of the Residual Receipts ( "City's Percentage of Residual Receipts ") as payment of principal and interest under the City /HOME Loan. The remaining twenty five percent (25 %) of the Residual Receipts shall remain with the Borrower. Pursuant to the Loan Agreement, the Borrower has also received a loan of tax increment funds from the Successor Agency in the original principal amount of $469,000 ( "Agency Loan "). The City's Percentage of Residual Receipts for each year shall be applied to repay the amounts owing under this Note and the amounts owing under the Agency Loan, as follows: 24% of the City's Percentage of Residual Receipts will be applied to repay the Agency Loan and 76% of the City's Percentage of Residual Receipts will be applied to repay amounts owing under this Note. Upon repayment in full of all amounts owing under the Agency Loan, the entire City's Percentage of Residual Receipts shall be allocated to repayment of the amounts owing hereunder in accordance with Section 13.a. hereof. d. The Residual Receipts payment shall be made not later than one hundred fifty (150) days after the close of the Calendar Year. 6. Reserved. D -4 DOCSOC /1475221 v10/200272 -0004 7. City/HOME Loan Repayment from Refinancing Proceeds. The Borrower shall make a City /HOME Loan payment to the City from every Refinancing that occurs during the term of this Note not to exceed the outstanding balance of principal and interest on this Note, to the extent of the City's Percentage of the Refinancing Proceeds (if any), as follows: the cash proceeds from such Refinancing shall be applied first to pay Closing Costs; next, the amount necessary to pay in full the balance remaining on the Senior Loan; next, the Borrower shall pay to the City fifty percent (50 %) of the Refinancing Proceeds ( "City's Percentage of the Refinancing Proceeds ") to the extent of the outstanding balance on this Note. The remaining Refinancing proceeds shall remain with Borrower. Such payment shall be due on the date of such Refinancing, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the City /HOME Loan. The City shall not be required to reconvey the lien of the City /HOME Loan Deed of Trust if Refinancing Proceeds are insufficient to repay the City /HOME Loan in full. While any amounts owing under the Agency Loan remain unpaid, the City's Percentage of the Refinancing Proceeds shall be allocated between repayment of this Note and the Agency Loan Note in the same manner as the City's Percentage of Residual Receipts as described in Section 5.c. 8. City/HOME Loan Repayment from Sale Proceeds. The Borrower shall make a City /HOME Loan payment, not to exceed the outstanding balance of principal and interest on this Note, to the City from any Sale that occurs during the term of the City /HOME Loan, to the extent of the City's Percentage of the Sale Proceeds, as follows: gross sale proceeds are applied first to pay Closing Costs, next to pay in full the balance remaining on the Senior Loan; next the Borrower shall pay to the City fifty percent (50 %) of the total Sale Proceeds ( "City's Percentage of the Sale Proceeds "), not to exceed the outstanding amount of principal and interest due on this Note. This fifty percent (50 %) represents the total payment due under this Note with respect to the applicable Sale. The remaining Sale Proceeds shall remain with Borrower. Such payment shall be due on the date of such Sale, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the City/HOME Loan. The City shall not be required to reconvey the lien of the City /HOME Deed of Trust if Sale Proceeds are insufficient to repay the City /HOME Loan in full. While any amounts owing under the Agency Loan remain unpaid, the City's Percentage of the Sale Proceeds shall be allocated between repayment of this Note and the Agency Loan Note in the same manner as the City's Percentage of Residual Receipts as described in Section 5.c. 9. Buy Out Option. In the event that there is a decision to sell the Property, the Goodwill Special Limited Partner of Borrower shall be given the first right of refusal or the General Partner may exercise the purchase option pursuant to the Borrower's Partnership Agreement (and any amendments thereto). If neither of these options or the right of first refusal are exercised by the Goodwill Special Limited Partner or the General Partner of Borrower, then the City shall have the second right of refusal, subject to the terms and conditions of Section 42(i)(7) of the Internal Revenue Code. Such provisions shall be included in the Partnership Agreement. D -5 DOCSOC/1 47522 1 v10/200272 -0004 10. Accelerated City /HOME Loan Pavment. The full principal amount outstanding plus accrued but unpaid interest thereon, shall be due and payable on the earlier to occur of the following: a. Sale or Refinancing of the Property as provided further in Section 15 hereof; unless: (i) in the case of a Sale in which the Sale Proceeds are insufficient to repay in full the City /HOME Loan, the City approves such sale and the purchaser assumes the balance of the City /HOME Loan in accordance with the terms of this Note; or (ii) in the case of a Refinancing in which the Refinancing Proceeds are insufficient to repay in full the City /HOME Loan, the City approves such Refinancing and the Borrower remains obligated pursuant to the terms of this Note; b. In event of default pursuant to any of the Loan Documents or the Senior Loan Documents; C. Any default by Borrower as to any other loan or loans by City or Successor Agency to Borrower with respect to the Property; or d. On the Maturity Date, the City agrees to review the performance of the Property and consider in good faith any reasonable request by Borrower to modify the terms of this Note or extend the Term of this Note. 11. Prepayment. Borrower may prepay the outstanding principal balance under this Note, in whole or in part, together with any accrued but unpaid interest, if any, and other sums owed to the City under this Note, if any, at any time without penalty. 12. Lawful Money. All payments hereunder shall be made in lawful money of the United States of America. 13. Application of Payments; Late Charges. a. Any payments received by the City pursuant to the terms hereof shall be applied first to sums, other than principal and interest, due the City pursuant to this Note, next to the payment of all interest accrued to the date of such payment, and the balance, if any, to the payment of principal. b. If any payment is not received by the City within ten (10) days following the due date thereof, then in addition to the remedies conferred upon the City pursuant to this Note and the other Loan Documents, (i) a late charge of four percent (4 %) of the amount due and unpaid will be added to the delinquent amount to compensate the City for the expense of handling the delinquency and (ii) the amount due and unpaid, excluding the late charge, shall bear interest at the highest annual rate which may lawfully be charged and collected under applicable law on the obligation evidenced by this Note, computed from the date on which the amount was due and payable until paid. Without prejudice to the rights of the City hereunder or under any of the other Loan Documents, Borrower shall indemnify the City against, and shall pay the City on demand, any expense or loss which it may sustain or incur as a result of the failure by Borrower to pay when due any installment of interest and /or principal, fees, or other amounts payable to the City under this Note or any other Loan Document, to the extent that any such expense or loss is not recovered pursuant to such foregoing D -6 DOCSOC/ 1475221 v 10/200272 -0004 provisions. A certificate of the City setting forth the basis for the determination of the amounts necessary to indemnify the City in respect of such expenses or direct loss, submitted to Borrower by the City, shall be conclusive and binding for all purposes except as immediately corrected by Borrower notice to City. 14. Securi This Note is secured by the City /HOME Loan Deed of Trust 15. Acceleration by Reason of Transfer or Financin¢. a. In order to induce City to make the City /HOME Loan evidenced hereby, Borrower agrees that in the event of any Transfer (defined in Section 16.2 of the Loan Agreement) of the Property without the prior written consent of City (other than a Transfer resulting from a foreclosure by, or conveyance by deed in lieu of foreclosure to, the holder of the Senior Loan Deed of Trust), City shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. City may grant or deny such consent in its sole discretion and, if consent should be given, any such Transfer shall be subject to this Section 15, and any such Transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Borrower from any liability thereunder without the prior written consent of City. b. In the event of any Refinancing or partial Refinancing in an amount in excess of the balance of the Senior Loan, without the prior written consent of City (which consent City may grant or deny in its sole discretion), then the entire outstanding balance of the City /HOME Loan together with all accrued and unpaid interest, shall be repaid to the City at the time of each Refinancing or partial Refinancing. C. Notwithstanding anything to the contrary contained herein, a "Transfer" shall not include a Permitted Transfer as set forth in Section 16.2.2 of the Loan Agreement. 16. Event of Default. Subject to the provisions of Sections 23 and 25 hereof, the occurrence of any of the following shall be deemed to be an event of default ( "Event of Default ") hereunder: (a) failure by Borrower to make any payments provided for herein, if such default is not cured within fifteen (15) calendar days of the due date; (b) failure by Borrower to perform any covenant or agreement in the Deed of Trust, the Agreement, or the Affordability Restrictions within thirty (30) days after written demand therefor by City (or, in the event that more than thirty (30) days is reasonably required to cure such default, should Borrower fail to promptly commence such cure, and diligently and continuously prosecute same to completion); or (c) a default under the Senior Loan Deed of Trust that remains uncured after the cure period, if any, provided therein. 17. Remedies. Upon the occurrence of an Event of Default, after any applicable notice has been provided and the expiration of any applicable cure period therefore, City may declare all sums evidenced hereby immediately due and payable by delivery to the Trustee named in the City /HOME Loan Deed D -7 DOCSOC/1475221v10/200272 -0004 of Trust securing this Note, and to Borrower, written declaration of default and demand for sale, and written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record and City may foreclose on the City /HOME Loan Deed of Trust. City shall also deposit with Trustee the City /HOME Loan Deed of Trust, this Note and all documents evidencing expenditures secured thereby and evidenced hereby. Upon the occurrence of an Event of Default (and so long as such Event of Default shall continue), the entire balance of principal together with all accrued interest shall bear interest at the Bank of America reference rate on the due date of the delinquent payment plus four percent (4 %). No delay or omission on the part of the City in exercising any right under this Note or under any of the other Loan Documents shall operate as a waiver of such right. 18. Attorneys' Fees. If this City /HOME Loan Note is not paid when due or if any Event of Default occurs, Borrower promises to pay all costs of enforcement and collection, including but not limited to, reasonable attorneys' fees and expert witness fees, whether or not any action or proceeding is brought to enforce the provisions hereof. 19. Severability. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. 20. Number and Gender. In this Note the singular shall include the plural and the masculine shall include the feminine and neuter gender, and vice versa, if the context so requires. 21. Non- recourse. The City /HOME Loan is a nonrecourse obligation of the Borrower. Neither Borrower nor any other party shall have any personal liability for repayment of the City /HOME Loan or for any other amounts under any of the documentation evidencing, securing or describing the City/HOME Loan. The sole recourse of City under this Note and the City /HOME Loan Deed of Trust for repayment of the City /HOME Loan and for such other amounts arising therefrom shall be the exercise of its rights against the Property and related security thereunder. 22. Subordination. a. It is hereby expressly agreed and acknowledged by Borrower and City that the City /HOME Loan Deed of Trust is a subordinate deed of trust, and that this Note is subject and subordinate to the Senior Loan Deeds of Trust held by the Senior Lender, subject to and provided that the City and such Senior Lender enter into a subordination agreement providing notice and cure rights to City that are reasonably acceptable to the Executive Director and consistent with the requirements of Section 20 of the Affordability Restrictions. b. City acknowledges that Borrower and the California Tax Credit Allocation Committee intend to enter into, or concurrently with the execution and delivery of the Loan IBM DOCSOC/ 1475221 v 10/200272 -0004 Documents are entering into, an extended use agreement, which constitutes the extended low- income housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code, as amended. City agrees to subordinate the provisions of this Note to the relevant provisions of said extended use agreement. This subordination is being made in consideration of the allocation of tax credits to the project to be constructed on the Property, absent which the development of the Project would not occur, and this City /HOME Loan would not be made. 23. Notice of Default. a. Subject to the applicable cure periods set forth in Section 16 and extensions of time set forth in Section 25, and subject to the further provisions of this Section 23, failure or delay by the Borrower to perform any term or provision of this Note constitutes a default under this Note. The Borrower must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy -with reasonable diligence and during any period of curing shall not be in default. b. The City shall give written notice of default to the Borrower and Borrower's limited partner specifying the default complained of by the City. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. C. Except in the case of a monetary event of default, the Borrower shall not be in default so long as it endeavors to complete such cure, correction or remedy with reasonable diligence, provided such cure, correction or remedy is completed within the applicable time period set forth herein after receipt of written notice (or such additional time as may be deemed by the City to be reasonably necessary to correct the default). d. Any failures or delays by the City 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. Delays by the City in asserting any of its rights and remedies shall not deprive the City 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. e. If a monetary event of default occurs under the terms of this Note or the City /HOME Loan Deed of Trust, prior to exercising any remedies thereunder City shall give Borrower and Borrower's limited partner written notice of such default. f. If a non - monetary event of default occurs under the terms of this Note or the City /HOME Loan Deed of Trust, prior to exercising any remedies thereunder, City shall give Borrower and Borrower's limited partner notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Borrower shall have such period to effect a cure prior to exercise of remedies by the City under this Note and the Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Borrower (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then Borrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by City. In no event shall City be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) days after the first notice of default is given. D -9 DOCSOC /1.475221 v10/200272 -0004 Notwithstanding anything to the contrary contained in this Note, the City hereby agrees that any cure of any default made or tendered by the Limited Partner shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as if made or tendered by Borrower. Copies of all notices which are sent to Borrower under the terns of this Note shall also be sent to the Limited Partner at an address to be provided in writing to the City by the Limited Partner. 24. Insurance and Condemnation. In the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of the Project or any part thereof, Borrower shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to keep the City/HOME Loan in balance and rebuild the Project in a manner that provides adequate security to City for repayment of the City /HOME Loan or if such proceeds are insufficient then Borrower shall have funded any deficiency, (b) City shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no material default then exists under this Note or the Deed of Trust. If the casualty or condemnation affects only part of the Project and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the City /HOME Loan in a manner that provides adequate security for repayment of the remaining balance of the City /HOME Loan. 25. Force Maieure. Notwithstanding specific provisions of this Note, performance hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor or supplier; acts of the other party; acts or failure to act of the City or any other public or governmental City or entity (except that any act or failure to act of City shall not excuse performance by City); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. 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 the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is given within thirty (30) days after the commencement of the cause. Times of performance under this Note may also be extended in writing by the City and the Borrower. 26. Assignments. The City, and any assignee of the City, shall have the right to assign this Note and the Deed of Trust securing this Note, without any further act of Borrower. The assignee shall give notice to Borrower as soon as practicable after such assignment. 27. Successor Agency and Authority Right to Enforce. The Successor Agency and the Housing Authority of the City of Santa Ana are each intended third party beneficiaries of City's rights under this Note, with full rights (but no obligation) to enforce all of Borrower's obligations hereunder. D -10 DOCSOC/ 1475221 v 10/200272 -0004 (Signatures appear on following page) D -11 DOCSOC/ 1475221 v10/200272 -0004 This City /HOME Loan Note is hereby entered into as of the date first stated hereinabove. VISTA DEL RIO HOUSING PARTNERS LP, a California limited partnership By: A Community of Friends, a California nonprofit public benefit corporation Its: Managing General Partner By: Dora Leong Gallo Its: Chief Executive Officer By: Foundation for Affordable Housing V, Inc. a California nonprofit public benefit corporation Its: Administrative General Partner By: Deborrah A. Willard Its: President D -12 DOCSOC /1475221 v1 0/200272-0004 EXHIBIT E FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail to: City of Santa Ana, acting as successor agency to the Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, California 92702 Attn: Executive Director SUCCESSOR AGENCY LOAN DEED OF TRUST AND ASSIGNMENT OF RENTS This SUCCESSOR AGENCY LOAN DEED OF TRUST AND ASSIGNMENT OF RENTS (the "Deed of Trust ") is made as of March , 2012, among Vista Del Rio Housing Partners LP, a California limited partnership (the "Truster"), First American Title Insurance Company, a California corporation (the "Trustee "), and the City of Santa Ana, acting as successor agency of the Community Redevelopment Agency of the City of Santa Ana (the `Beneficiary "). Trustor, in consideration of the promises herein recited and the trust herein created, irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the property located in the City of Santa Ana, County of Orange, State of California, described in the attached Exhibit A and more commonly known 1600 West Memory Lane, Santa Ana, California (the "Property "); TOGETHER with all the improvements now or hereafter erected on the property, and all easements, rights, appurtenances and all fixtures now or hereafter attached to the Property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by this Deed of Trust; TOGETHER with the right, power and authority during the continuance of these Trusts, to collect the rents, issues, and profits of the Property, reserving unto the Truster the right, prior to any default by Trustor in payment of the indebtedness secured by this Deed of Trust or in the performance of any agreement secured by this Deed of Trust, to collect and retain these rents, issues and profits as they become due and payable; and, TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected, or hereafter to be erected, on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities E -1 DOCSOC /1475221v 10/200272 -0004 conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefore, whether or not the same are, or shall be attached to said building or buildings in any manner; and all of the foregoing, together with the Property, is herein referred to as the "Security"; To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever; TO SECURE to the Beneficiary (a) the repayment of the sums evidenced by that certain Agency Loan Note secured by Subordinated Deed of Trust to the Community Redevelopment Agency of the City of Santa Ana to the Beneficiary executed by Trustor, dated concurrently herewith in the principal amount of Four Hundred Sixty -Nine Thousand Dollars ($469,000.00) (the "Loan "); (b) the payment and performance of the covenants and agreements of Trustor contained in that certain Loan Agreement dated concurrently herewith and recorded in the official land records of the County of Orange concurrently herewith, by and among Trustor, Beneficiary, and City ( "Agreement "), (c) the payment and performance of the covenants and agreements of Trustor contained in the Disposition and Development Agreement dated July 20, 2009, the First Amendment to the Disposition and Development Agreement dated March 15, 2010, the Second Amendment to the Disposition and Development Agreement dated December 20, 2010, and the Third Amendment to the Disposition and Development Agreement dated March 21, 2011, by and among Truster, Beneficiary, and Housing Authority of the City of Santa Ana (collectively, the "DDA "); (d) the payment and performance of the covenants and agreements of Trustor contained in the Affordability Restrictions on Transfer of Property by and among City, Trustor and Beneficiary, dated and recorded concurrently herewith (the "Affordability Restrictions ") and (e) the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and the performance of the covenants and agreements of Trustor contained herein. TRUSTOR AND THE BENEFICIARY COVENANT AND AGREE AS FOLLOWS: 1. Agency Loan. This Deed of Trust is executed and delivered, along with the Promissory Note, pursuant to and in implementation of the 41 unit special needs affordable multi- family residential project in the aforementioned Agreement and DDA entered into by and between the Beneficiary and Trustor, to benefit the Property, a copy of which is on file as a public record with the Beneficiary. Trustor acknowledges that but for the execution of this Deed of Trust, the Beneficiary would not enter into the Promissory Note secured by this Deed of Trust. 2. Trustor's Estate. Trustor is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security; that other than this Deed of Trust, the Security is not encumbered except for obligations secured by deeds of trust, or any other security agreement, to secure financing or refinancing for the purchase and development of the Property. 3. Repayment of the Loan. Trustor will promptly repay, when due, the principal and interest, if any, as required by the Promissory Note secured by this Deed of Trust. 4. Subordination. This obligation secured by this Deed of Trust shall be subordinated to any and all obligations secured by deeds of trust, or any other security agreement, to secure financing or refinancing for the purchase and rehabilitation of the Property; subject to and provided that the Beneficiary and such Senior Lender enter into a subordination agreement providing notice and cure E -2 DOCSOCn 475221 v 10/200272 -0004 rights to Beneficiary that are reasonably acceptable to the Executive Directors and consistent with the requirements of Section 19 of the Affordability Restrictions. 5. Prior Mortgages and Deeds of Trust; Charges; Liens. Trustor shall perform all of Trustor's obligations under any mortgage, deed of trust or other security agreement with a lien which has priority over this Instrument, including Trustor's covenants to make payments when due. Trustor will pay all taxes, assessments and other charges, fines and impositions attributable to the Security which may attain a priority over this Deed of Trust, by Trustor making any payment, when due, directly to the payee thereof. Trustor will promptly furnish to the Beneficiary all notices of amounts due under this paragraph, and in the event Trustor makes payment directly, Trustor will promptly discharge any lien which has priority over this Deed of Trust; provided that Trustor will not be required to discharge the lien of the Deed of Trust securing any senior lender or any other lien described in this paragraph so long as Trustor will agree in writing to the payment of the obligation secured by such lien in a manner acceptable to the Beneficiary, or will, in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof. 6. Hazard Insurance. Trustor will keep the Security insured by such insurance policies in such amounts and for such periods as called for in the Agreement. All insurance policies and renewals thereof will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of any senior lender and the Beneficiary as their interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the Beneficiary, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the Beneficiary or its designated agent. The Beneficiary, or its designated agent, may make proof of loss if not made promptly by Trustor. The Beneficiary shall receive 30 days' advance notice of cancellation of any insurance policies required under this Section. Unless the Beneficiary and Trustor otherwise agree in writing, insurance proceeds, subject to the rights of any senior lender, will be applied to restoration or repair of the Security damaged, provided such restoration or repair is economically feasible and the security of this Deed of Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the security of this Deed of Trust would be impaired, again, subject to the rights of any senior lender, the insurance proceeds will be used to repay the grant under this Deed of Trust, with the excess, if any, paid to Trustor. If the Security is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its designated agent within 30 days from the date notice is mailed by either of them to Trustor that the insurance carrier offers to settle a claim for insurance benefits, the Beneficiary, or its designated agent, is authorized to collect and apply the insurance proceeds at the Beneficiary's option either to restoration or repair of the Security or to repay the Loan. If the Security is acquired by the Beneficiary, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the Beneficiary to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition subject to the rights of any senior lender. 7. Preservation and Maintenance of Security. Trustor will keep the Security in good repair and will not commit waste or permit impairment or deterioration of the Security. E -3 DOCSOC /1475221 v 10/200272 -0004 8. Protection of the Beneficiary's Security. If Truster fails to perform the covenants and agreements contained in this Deed of Trust or if any action or proceeding is commenced which materially affects the Beneficiary's interest in the Security, including, but not limited to, default under this Deed of Trust securing any senior lender, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the Beneficiary, at the Beneficiary's option, upon notice to Truster, may make such appearances, disburse such sums and take such action as it determines necessary to protect the Beneficiary's interest, including, but not limited to, disbursement of reasonable attorneys' fees and entry upon the Security to make repairs. Any amounts disbursed by the Beneficiary pursuant to this paragraph, with interest thereon, will become an indebtedness of Truster secured by this Deed of Trust. Unless Truster and the Beneficiary agree to other terms of payment, such amount will be payable upon notice from the Beneficiary to Trustor requesting payment thereof, and will bear interest from the date of disbursement at the rate payable from time to time on outstanding principal under the Promissory Note unless payment of interest at such rate would be contrary to applicable law, in which event such amounts will bear interest at the highest rate permissible under applicable law. Nothing contained in this paragraph will require the Beneficiary to insure any expense or take any action hereunder. 9. Inspection. The Beneficiary may make, or cause to be made, reasonable entries upon and inspections of the Security during normal business hours; provided that the Beneficiary will give Trustor reasonable notice of inspection. 10. Forbearance by the Beneficiary Not a Waiver. Any forbearance by the Beneficiary in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by the Beneficiary will not be a waiver of the Beneficiary's right to accelerate the maturity of the indebtedness secured by this Deed of Trust. 11. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively. 12. Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the Beneficiary and Trustor subject to the provisions of this Deed of Trust. 13. Joint and Several Liability. All covenants and agreements of Truster shall be joint and several. 14. Notice. Except for any notice required under applicable law to be given in another manner, (a) any notice to Truster provided for in this Deed of Trust will be given by certified mail, return receipt requested, addressed to Trustor at Vista Del Rio Housing Partners LP, c/o Foundation for Affordable Housing V, Inc., 30950 Rancho Viejo Road, Suite 100, San Juan Capistrano, CA 92675, with a copy to Enterprise Community Investment, Inc., 10227 Wincopin Circle, Suite 800, Columbia, Maryland 21044, Attention: General Counsel, and (b) any notice to the Beneficiary will be given by certified mail, return receipt requested, to the Beneficiary at 20 Civic Center Plaza, P.O. Box 1988, Santa Ana, California 92702, Attention: Executive Director, or at such other address as the Beneficiary may designate by notice to Trustor as provided above. Notice shall be effective as of the date received by the Beneficiary as shown on the return receipt. E -4 DOCSOC /1475221 v 10/200272 -0004 15. Governing Law. This Deed of Trust shall be governed by the laws of the State of California. 16. Severability. In the event that any provision or clause of this Deed of Trust or the Promissory Note conflicts with applicable law, such conflict will not affect other provisions of this Deed of Trust or the Promissory Note which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust and the Promissory Note are declared to be severable. 17. Captions. The captions and headings in this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 18. Default in Foreclosure; Remedies. Upon Trustor's breach of any covenant or agreement of Trustor in this Deed of Trust or the Promissory Note secured by this Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this Deed of Trust, or any default under any other agreement the performance of which is secured by this Deed of Trust, the Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Truster notice thereof specifying: (1) The breach; (2) the action required to cure such breach; (3) a date not less than 30 days from the date the notice is received by Truster as shown on the return receipt, by which such breach is to be cured provided, however, that if such default is not reasonably susceptible to being cured within 30 days, Trustor shall have a reasonable period to cure the defect so long as Trustor is diligently prosecuting the cure to completion; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Security. The notice will also inform Trustor of Trustor's right to reinstate after acceleration and the right to bring a court action to assert the non - existence of default or any other defense of Trustor to acceleration and sale. If the breach is not cured on or before the date specified in the notice or such longer period as provided above, the Beneficiary, at the Beneficiary's option, may: (a) declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by California law; (b) 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 Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of the Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or any part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (c) commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (d) deliver to the Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924, et seq., as amended from time to time; or (e) exercise all other rights and remedies provided herein, in the instruments by which Trustor acquires title to 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. E -5 DOCSOC/1475221 v 10/200272 -0004 The Beneficiary shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees. Notwithstanding anything to the contrary contained in this Deed of Trust, the Successor Agency hereby agrees that any cure of any default made or tendered by the Limited Partner shall be deemed to be a cure by Truster and shall be accepted or rejected on the same basis as if made or tendered by Trustor. Copies of all notices which are sent to Trustor under the terms of this Deed of Trust shall also be sent to the Limited Partner at an address to be provided in writing to the Successor Agency by the Limited Partner. 19. Truster's Right to Reinstate. Notwithstanding the Beneficiary's acceleration of the sums secured by this Deed of Trust, Trustor will have the right to have any proceedings begun by the Beneficiary to enforce this Deed of Trust discontinued at any time prior to 5 days before sale of the Security pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of ajudgment enforcing this Deed of Trust if: (a) Trustor pays the Beneficiary all sums which would be then due under this Deed of Trust and no acceleration under the Promissory Note has occurred; (b) Truster cures all breaches of any other covenants or agreements Trustor contained in this Deed of Trust and the Covenants; (c) Trustor pays all reasonable expenses incurred by the Beneficiary and the Trustee in enforcing the covenants and agreements of Truster contained in this Deed of Trust and the Covenants, and in enforcing the Beneficiary's and the Trustee's remedies, including, but not limited to, reasonable attorneys' fees; and (d) Trustor takes such action as the Beneficiary may reasonably require to assure that the lien of this Deed of Trust, the Beneficiary's interest in the Security and Truster's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred. 20. 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. Trustee is not obligated to notify any party to this Deed of Trust of pending sale under any other deed of trust or any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 21. Reconveyance. Upon payment or forgiveness of all sums secured by this Deed of Trust and expiration of the Term of the Agreement and the Term of the Affordability Restrictions, the Beneficiary will request the Trustee to reconvey the Security and will surrender this Deed of Trust and the Promissory Note to the Trustee. The Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. 22. Substitute Trustee. The Beneficiary, at the Beneficiary's option, may from time to time remove the Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 23. Request for Notice. Truster requests that copies of the notice of default and notice of sale be sent to Trustor at the address set forth in Section 14 above. 24. Nonrecourse Liability. Neither Trustor nor any general partner of Truster shall have any personal liability under the Loan Agreement, Promissory Note, and this Deed of Trust and any E -6 DOCSOC/ 1475221 v 10/200272 -0004 judgment, decree or order for payment of money obtained in any action to enforce the obligation of Trustor to repay the Loan evidenced by such documents shall be enforceable against Trustor only to the extent of Trustor's interest in the Property. 25. Third Party Beneficiaries. City and the Housing Authority of the City of Santa Ana are third party beneficiaries of Beneficiary's rights hereunder, with full right (but no obligation) to enforce the terms and exercise the remedies provided to Beneficiary hereunder. G -7 DOC SOC/ 1475221 v 10/200272 -0004 IN WITNESS WHEREOF, Truster has executed this Agency Loan Deed of Trust and Assignment of Rents as of the date first written above. " Trustor" VISTA DEL RIO HOUSING PARTNERS LP, a California limited partnership By: A Community of Friends, a California nonprofit public benefit corporation Its: Managing General Partner By: Dora Leong Gallo Its: Chief Executive Officer By: Foundation for Affordable Housing V, Inc. a California nonprofit public benefit corporation Its: Administrative General Partner Deborrah A. Willard Its: President E -8 DOCSOC/ 1475221 v 10/200272 -0004 EXHIBIT F AGENCY LOAN NOTE SECURED BY SUBORDINATED DEED OF TRUST TO THE CITY OF SANTA ANA, ACTING AS SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA $469,000.00 March , 2012 Santa Ana, California 1. Principal Amount of Aeency Loan For value received, Vista Del Rio Housing Partners LP, a California limited partnership ( "Borrower "), promises to pay to the order of the City of Santa Ana, acting as successor agency of the Community Redevelopment Agency of the City of Santa Ana ( "Successor Agency "), at 20 Civic Center Plaza, Santa Ana, California 92702, or at such other place as the Successor Agency may from time to time designate in writing, or to the assignee of the Successor Agency, the principal sum of FOUR HUNDRED THOUSAND SIXTY -NINE DOLLARS ($469,000.00) or so much thereof as shall be disbursed hereunder, with three percent interest (3.0 %). In implementation of the acquisition and development of that certain real property in the City of Santa Ana, described in the Loan Agreement as the "Property," commonly known as 1600 West Memory Lane, Santa Ana, California, and operation of the Property as affordable rental housing for Extremely Low Income and Very Low Income households, (a) the Community Redevelopment Agency of the City of Santa Ana, as predecessor in interest to the City of Santa Ana, acting as Successor Agency, the Housing Authority of the City of Santa Ana and Borrower have heretofore entered into that certain Disposition and Development Agreement dated July 20, 2009, the First Amendment to the Disposition and Development Agreement dated March 15, 2010, . the Second Amendment to the Disposition and Development Agreement dated December 20, 2010, and the Third Amendment to the Disposition and Development Agreement dated March 21, 2011 (collectively, the "DDA "); (b) City, Successor Agency and Borrower have entered into that certain "Loan Agreement" dated concurrently herewith and recorded against the Property (the Loan Agreement and DDA are collectively referred to herein as the "Agreement "), and (c) the City of Santa Ana ( "City "), Successor Agency and Borrower have entered into those certain Affordability Restrictions on Transfer of Property, dated concurrently herewith and recorded against the Property ( "Affordability Restrictions "). This Note is made pursuant to, entitled to the benefits of and referred to as the Agency Loan Note in the Loan Agreement. This Note is secured by that certain Agency Loan Deed of Trust and Assignment of Rents between Borrower and Successor Agency, dated concurrently herewith ( "Agency Loan Deed of Trust'). This Note, the Loan Agreement, the Affordability Restrictions, the Agency Enhanced Entryway Note, the Agency Enhanced Entryway Loan Deed of Trust, the Agency Loan Deed of Trust, the Agency Transfer Note, the City /HOME Loan Note, and the City /HOME Loan Deed of Trust are sometimes collectively referred to herein as the "Loan Documents." The Loan Documents and the rights and responsibilities of Borrower thereunder inure to the benefit of the City, Successor Agency and the Housing Authority of the City of Santa Ana. Any capitalized term which is not otherwise defined herein shall have the meaning ascribed to such tern in the Loan Agreement. 2. Definitions. F -1 DOCSOC/1 47522 1 v10/200272 -0004 For the purpose of calculating the payments to be made by Borrower to Successor Agency pursuant to this Note, the following terms shall have the following respective meanings: "Agency Loan" shall mean the loan evidenced by this Note. "Calendar Year" means each consecutive twelve (12) month period from January 1 to December 30. "Closing Costs" shall mean: 21.18.2In the case of a Sale, reasonable brokerage commissions payable to a broker as a result of the Sale, which shall not in any event exceed the customary amount charged -for similar transactions in the immediate market place, costs of title insurance premiums, documentary stamp taxes, escrow fees, recording charges, loan repayment charges and other costs reasonably incurred with respect to the Property, in each case actually paid by Borrower as a condition of the Sale. 21.18.3In the case of a Refinancing, the reasonable and necessary costs of completing such Refinancing, including, without limitation, loan fees, loan repayment charges, costs of title insurance premiums, escrow fees, recording fees and attorneys' fees. "Gross Revenues" shall mean all revenues and receipts of every kind actually received by Borrower from operating the Property, and all parts thereof, including, but not limited to, income from both cash and credit transactions, rental from leased and /or subleased spaces and parking fees and charges (but not including security deposits and other tenant deposits, except to the extent such deposits are forfeited to the Borrower under the tenant's lease). Gross Revenues also includes any casualty insurance proceeds in excess of those used to restore the Property and any rental interruption insurance proceeds. Any credit consideration shall be included in Gross Revenues at the time cash proceeds (principal, interest and /or other) are received. Borrower shall establish and maintain accounts for the Gross Revenues (the "`Project Accounts ") that are segregated from revenues and income received by Borrower from all other projects. Gross Revenues shall also include all interest earned on the Project Accounts. Gross Revenues shall not include loan proceeds or capital contributions. "Operating Expenses" shall mean the sum of the following: (a) scheduled payments of principal and interest and all other charges relating to the Senior Loan(s); (b) all other actual, reasonable cash operating costs and expenses, calculated on an annual basis, that are directly attributable to managing and operating the Property, including, without limiting the generality of the foregoing, the following: costs and expenses for real and personal property taxes, special assessments or similar charges; water, fuel, electricity and other utilities; heating, ventilation and air conditioning expenses; labor; supplies; tools; equipment; insurance; advertising and marketing; accounting and legal fees; brokerage commissions and other leasing expenses; reasonable reserves for all anticipated expenses as approved by the Successor Agency; and other such items constituting operation, maintenance and repair costs actually paid by the Borrower, subject to the following conditions: F -2 DOC S O C/ 1475221 v 10/200272 -0004 (i) Depreciation and amortization expenses shall not be considered Operating Expenses, except as otherwise provided herein. (ii) Any expenses, compensation or fees paid to any affiliate of Borrower shall only be included as Operating Expenses to the extent they are not in excess of the reasonable expenses, compensation or fees which would be payable to unrelated third parties in arms - length transactions for similar services in the Santa Ana, California area. (c) a management fee equal to $55 per unit a month (increasing by CPI). (d) deposits into required reserves. (e) payments due on any deferred Developer Fees. (f) Any other expenses necessary to meet Senior Lender requirements and requirements of Borrower's Limited Partner, or its assignee, as set forth in Borrower's Partnership Agreement. "Project" shall mean the acquisition, development, operation, maintenance, and management of the Property as affordable housing by Borrower pursuant to the Loan Agreement. "Property" shall mean the real property located at 1600 West Memory Lane, Santa Ana, California, described in the Agency Loan Deed of Trust. "Refinancing" shall mean changing the then existing financing on the Property by, without limitation, modifying the interest rate and /or the term of the existing Senior Loan, increasing or reducing the amount of the existing Senior Loan, paying off the existing Senior Loan and obtaining a new Senior Loan. "Refinancing Proceeds" shall be disbursed as set forth in Section 7 hereof. "Residual Receipts" shall mean the Gross Revenues from the Property for each year, less deductions for Operating Expenses applicable to each such year less [Items 1 -7 on Exhibit A -4] of the Partnership Agreement, to the extent not already deducted as an Operating Expense. "Sale" shall mean any transfer, assignment, conveyance or lease (other than to a tenant for occupancy) of the Property or any portion thereof, or any interest therein by the Borrower, and includes, except as permitted under Section 16.2.2 of the Loan Agreement, any transfer, assignment or sale of any partnership interest in the Borrower by an individual or entity which is a general or limited partner in the Borrower, or any interest by any individual or entity which holds an interest in any such general or limited partner in the Borrower, which brings the cumulative total of all such direct and indirect transfers, assignments and sales during the term of this Note to more than thirty - five percent (35 %) of the ownership interests in the Borrower, and any such transfer, assignment or sale of a direct or indirect partnership interest thereafter. Sale includes a sale in condemnation or under threat thereof. Sale does not include dedications and grants of easements to public and private utility companies of the kind customary in real estate development. "Sale Proceeds" shall mean the proceeds received by Borrower in connection with any Sale. F -3 DOCS OC/ 1475221 v 10/200272 -0004 "Senior Loan" shall mean the senior loan being made by JPMorgan Chase Bank, N.A., concurrent to the Agency Loan for payment of a portion of the Construction costs incurred by Vista Del Rio relating to the Project, as approved by the Executive Director, and shall include any subsequent loan that refinances the initial Senior Loan. "Term" shall mean the term for repayment of this Note, which shall commence on the date of this Note and end on the fifty -fifth (55th) anniversary of the date the Release of Construction Covenants is recorded against the Property ( "Maturity Date "). 3. Loan Repayment. Borrower shall make payments to the Successor Agency as provided in Sections 5 (Residual Receipts), 7 (Refinancing Proceeds), 8 (Sale Proceeds) and 10 (Accelerated Loan Repayment). 4. Reserved. 5. Annual Loan Repayment. a. Borrower shall make a loan payment to the Successor Agency annually, in the amount of the lesser of the outstanding balance due under this Note or the Agency's Percentage of Residual Receipts, as provided in this Section 5. b. Within one hundred twenty (120) days after the close of the initial Calendar Year following the year the Project is placed -in- service and on or before the 120th day of each Calendar Year thereafter, the Borrower shall submit to the Successor Agency audited financial statements, including a detailed statement of Gross Revenues and Operating Expenses attributable to the Property for the applicable Calendar Year, along with a computation of the amount of the Residual Receipts applicable to such Calendar Year with which to make a Agency Loan payment then due. C. The Borrower shall pay to the Successor Agency seventy -five percent (75 %) of the Residual Receipts ( "Agency's Percentage of Residual Receipts ") as payment of principal and interest under the Agency Loan. The remaining twenty five percent (25 %) of the Residual Receipts shall remain with the Borrower. Pursuant to the Loan Agreement, the Borrower has also received a loan of HOME Program funds from the City in the original principal amount of $1,500,000 ( "City /HOME Loan "). The Agency's Percentage of Residual Receipts for each year shall be applied to repay the amounts owing under this Note and the amounts owing under the City /HOME Loan, as follows: 76% of the Agency's Percentage of Residual Receipts will be applied to repay the City /HOME Loan and 24% of the Agency's Percentage of Residual Receipts will be applied to repay amounts owing under this Note. Upon repayment in full of all amounts owing under the City/HOME Loan, the entire Agency's Percentage of Residual Receipts shall be allocated to repayment of the amounts owing hereunder in accordance with Section 13.a. hereof. d. The Residual Receipts payment shall be made not later than one hundred fifty (150) days after the close of the Calendar Year. 6. Reserved. F -4 DOCSOCn 475221 v 10/200272 -0004 7. Loan Repayment from Refinancing Proceeds. The Borrower shall make a loan payment to the Successor Agency from every Refinancing that occurs during the term of this Note not to exceed the outstanding balance of principal and interest on this Note, to the extent of the Agency's Percentage of the Refinancing Proceeds (if any), as follows: the cash proceeds from such Refinancing shall be applied first to pay Closing Costs; next, the amount necessary to pay in full the balance remaining on the Senior Loan; next, the Borrower shall pay to the Successor Agency fifty percent (50 %) of the Refinancing Proceeds ( "Agency's Percentage of the Refinancing Proceeds ") to the extent of the outstanding balance on this Note. The remaining Refinancing proceeds shall remain with Borrower. Such payment shall be due on the date of such Refinancing, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the Agency Loan. The Successor Agency shall not be required to reconvey the lien of the Agency Loan Deed of Trust if Refinancing Proceeds are insufficient to repay the Agency Loan in full. While any amounts owing under the City/HOME Loan remain unpaid, the Agency's Percentage of the Refinancing Proceeds shall be allocated between repayment of this Note and the City /HOME Loan Note in the same manner as the Agency's Percentage of Residual Receipts as described in Section 5.c. 8. Loan Repavment from Sale Proceeds. The Borrower shall make a loan payment, not to exceed the outstanding balance of principal and interest on this Note, to the Successor Agency from any Sale that occurs during the term of the Agency Loan, to the extent of the Agency's Percentage of the Sale Proceeds, as follows: gross sale proceeds are applied first to pay Closing Costs, next to pay in full the balance remaining on the Senior Loan; next the Borrower shall pay to the Successor Agency fifty percent (50 %) of the total Sale Proceeds ( "Agency's Percentage of the Sale Proceeds "), not to exceed the outstanding amount of principal and interest due on this Note. This fifty percent (50 %) represents the total payment due under this Note with respect to the applicable Sale. The remaining Sale Proceeds shall remain with Borrower. Such payment shall be due on the date of such Sale, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the Agency Loan. The Successor Agency shall not be required to reconvey the lien of the Agency Loan Deed of Trust if Sale Proceeds are insufficient to repay the Agency Loan in full. While any amounts owing under the City /HOME Loan remain unpaid, the Agency's Percentage of the Sale Proceeds shall be allocated between repayment of this Note and the City/HOME Loan Note in the same manner as the Agency's Percentage of Residual Receipts as described in Section 5.c. 9. Buy Out Option. In the event that there is a decision to sell the Property, the Goodwill Special Limited Partner of Borrower shall be given the first right of refusal or the General Partner may exercise the purchase option pursuant to the Borrower's Partnership Agreement (and any amendments thereto). If neither of these options or the right of first refusal are exercised by the Goodwill Special Limited Partner or the General Partner of Borrower, then the Successor Agency shall have a fourth right of refusal, after the City and the Managing General Partner of Borrower, subject to the terms and conditions of Section 42(i)(7) of the Internal Revenue Code. Such provisions shall be included in the Partnership Agreement. 10. Accelerated Loan Payment. F -5 DOCSOC /1475221 v10/200272 -0004 The full principal amount outstanding plus accrued but unpaid interest thereon, shall be due and payable on the earlier to occur of the following: a. Sale or Refinancing of the Property as provided further in Section 15 hereof; unless: (i) in the case of a Sale in which the Sale Proceeds are insufficient to repay in full the Agency Loan, the Successor Agency approves such sale and the purchaser assumes the balance of the Agency Loan in accordance with the terms of this Note; or (ii) in the case of a Refinancing in which the Refinancing Proceeds are insufficient to repay in full the Agency Loan, the Successor Agency approves such Refinancing and the Borrower remains obligated pursuant to the terms of this Note; b. In event of default pursuant to any of the Loan Documents or the Senior Loan Documents; C. Any default by Borrower as to any other loan or loans by Successor Agency to Borrower with respect to the Property; or d. On the Maturity Date, the Successor Agency agrees to review the performance of the Property and consider in good faith any reasonable request by Borrower to modify the terms of this Note or extend the Term of this Note. 11. Prepayment. Borrower may prepay the outstanding principal balance under this Note, in whole or in part, together with any accrued but unpaid interest, if any, and other sums owed to the Successor Agency under this Note, if any, at any time without penalty. 12. Lawful Money. All payments hereunder shall be made in lawful money of the United States of America. 13. Application of Payments; Late Charees. a. Any payments received by the Successor Agency pursuant to the terms hereof shall be applied first to sums, other than principal and interest, due the Successor Agency pursuant to this Note, next to the payment of all interest accrued to the date of such payment, and the balance, if any, to the payment of principal. b. If any payment is not received by the Successor Agency within ten (10) days following the due date thereof, then in addition to the remedies conferred upon the Successor Agency pursuant to this Note and the other Loan Documents, (i) a late charge of four percent (4 %) of the amount due and unpaid will be added to the delinquent amount to compensate the Successor Agency for the expense of handling the delinquency and (ii) the amount due and unpaid, excluding the late charge, shall bear interest at the highest annual rate which may lawfully be charged and collected under applicable law on the obligation evidenced by this Note, computed from the date on which the amount was due and payable until paid. Without prejudice to the rights of the Successor Agency hereunder or under any of the other Loan Documents, Borrower shall indemnify the Successor Agency against, and shall pay the Successor Agency on demand, any expense or loss which it may sustain or incur as a result of the failure by Borrower to pay when due any installment of interest and /or principal, fees, or other amounts payable to the Successor Agency under this Note or any other Loan Document, to the extent that any such expense or loss is not recovered pursuant to such F -6 DOC SOC/ 1475221 v 10/200272 -0004 foregoing provisions. A certificate of the Successor Agency setting forth the basis for the determination of the amounts necessary to indemnify the Successor Agency in respect of such expenses or direct loss, submitted to Borrower by the Successor Agency, shall be conclusive and binding for all purposes except as immediately corrected by Borrower notice to Successor Agency. 14. Securi This Note is secured by the Agency Loan Deed of Trust. 15. Acceleration by Reason of Transfer or Financine. a. In order to induce Successor Agency to make the loan evidenced hereby, Borrower agrees that in the event of any Transfer (defined in Section 16.2 of the Loan Agreement) of the Property without the prior written consent of Successor Agency (other than a Transfer resulting from a foreclosure by, or conveyance by deed in lieu of foreclosure to, by the holder of the Senior Loan Deed of Trust), Successor Agency shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Successor Agency may grant or deny such consent in its sole discretion and, if consent should be given, any such Transfer shall be subject to this Section 15, and any such Transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Borrower from any liability thereunder without the prior written consent of Successor Agency. b. In the event of any Refinancing or partial Refinancing in an amount in excess of the balance of the Senior Loan, without the prior written consent of Successor Agency (which consent Successor Agency may grant or deny in its sole discretion), then the entire outstanding balance of the Agency Loan together with all accrued and unpaid interest, shall be repaid to the Successor Agency at the time of each Refinancing or partial Refinancing. C. Notwithstanding anything to the contrary contained herein, a "Transfer" shall not include a Permitted Transfer as set forth in Section 16.2.2 of the Loan Agreement. 16. Event of Default. Subject to the provisions of Sections 23 and 25 hereof, the occurrence of any of the following shall be deemed to be an event of default ( "Event of Default ") hereunder: (a) failure by Borrower to make any payments provided for herein, if such default is not cured within fifteen (15) calendar days of the due date; (b) failure by Borrower to perform any covenant or agreement in the Deed of Trust, the Agreement, or the Affordability Restrictions within thirty (30) days after written demand therefor by Successor Agency (or, in the event that more than thirty (30) days is reasonably required to cure such default, should Borrower fail to promptly commence such cure, and diligently and continuously prosecute same to completion); or (c) a default under the Senior Loan Deed of Trust that remains uncured after the cure period, if any, provided therein. 17. Remedies. Upon the occurrence of an Event of Default, after any applicable notice has been provided and the expiration of any applicable cure period therefore, Successor Agency may declare all sums F -7 D OC S O C/ 1 475221 x 10 /200272 -0004 evidenced hereby immediately due and payable by delivery to the Trustee named in the Agency Loan Deed of Trust securing this Note, and to Borrower, written declaration of default and demand for sale, and written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record and Successor Agency may foreclose on the Agency Loan Deed of Trust. Successor Agency shall also deposit with Trustee the Agency Loan Deed of Trust, this Note and all documents evidencing expenditures secured thereby and evidenced hereby. Upon the occurrence of an Event of Default (and so long as such Event of Default shall continue), the entire balance of principal together with all accrued interest shall bear interest at the Bank of America reference rate on the due date of the delinquent payment plus four percent (4 %). No delay or omission on the part of the Successor Agency in exercising any right under this Note or under any of the other Loan Documents shall operate as a waiver of such right. 18. Attorneys' Fees. If this Agency Loan Note is not paid when due or if any Event of Default occurs, Borrower promises to pay all costs of enforcement and collection, including but not limited to, reasonable attorneys' fees and expert witness fees, whether or not any action or proceeding is brought to enforce the provisions hereof. 19. Severabilitv. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. 20. Number and Gender. In this Note the singular shall include the plural and the masculine shall include the feminine and neuter gender, and vice versa, if the context so requires. 21. Non - recourse. The Agency Loan is a nonrecourse obligation of the Borrower. Neither Borrower nor any other party shall have any personal liability for repayment of the Agency Loan or for any other amounts under any of the documentation evidencing, securing or describing the Agency Loan. The sole recourse of Successor Agency under this Note and the Agency Loan Deed of Trust for repayment of the Agency Loan and for such other amounts arising therefrom shall be the exercise of its rights against the Property and related security thereunder. 22. Subordination. a. It is hereby expressly agreed and acknowledged by Borrower and Successor Agency that the Agency Loan Deed of Trust is a subordinate deed of trust, and that this Note is subject and subordinate to the Senior Loan Deeds of Trust held by the Senior Lender, subject to and provided that the Successor Agency and such Senior Lender enter into a subordination agreement providing notice and cure rights to Successor Agency that are reasonably acceptable to the Executive Director and consistent with the requirements of Section 20 of the Affordability Restrictions. W. DOC SOC/ 1475221 v 10/200272 -0004 b. Successor Agency acknowledges that Borrower and the California Tax Credit Allocation Committee intend to enter into, or concurrently with the execution and delivery of the Agency Loan Documents are entering into, an extended use agreement, which constitutes the extended low- income housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code, as amended. Successor Agency agrees to subordinate the provisions of this Note to the relevant provisions of said extended use agreement. This subordination is being made in consideration of the allocation of tax credits to the project to be constructed on the Property, absent which the development of the Project would not occur, and this Agency Loan would not be made. 23. Notice of Default. a. Subject to the applicable cure periods set forth in Section 16 and extensions of time set forth in Section 25, and subject to the further provisions of this Section 23, failure or delay by the Borrower to perform any term or provision of this Note constitutes a default under this Note. The Borrower must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy -with reasonable diligence and during any period of curing shall not be in default. b. The Successor Agency shall give written notice of default to the Borrower and Borrower's limited partner specifying the default complained of by the Successor Agency. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. C. Except in the case of a monetary event of default, the Borrower shall not be in default so long as it endeavors to complete such cure, correction or remedy with reasonable diligence, provided such cure, correction or remedy is completed within the applicable time period set forth herein after receipt of written notice (or such additional time as may be deemed by the Successor Agency to be reasonably necessary to correct the default). d. Any failures or delays by the Successor Agency 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. Delays by the Successor Agency in asserting any of its rights and remedies shall not deprive the Successor Agency 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. e. If a monetary event of default occurs under the terms of this Note or the Agency Loan Deed of Trust, prior to exercising any remedies thereunder Successor Agency shall give Borrower and Borrower's limited partner written notice of such default. f. If a non - monetary event of default occurs under the terms of this Note or the Agency Loan Deed of Trust, prior to exercising any remedies thereunder, Successor Agency shall give Borrower and Borrower's limited partner notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Borrower shall have such period to effect a cure prior to exercise of remedies by the Successor Agency under this Note and the Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Borrower (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then Borrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Successor Agency. In no event shall Successor Agency be precluded from exercising remedies if its security becomes or is about to F -9 D OC S O C/ 1475 221 v 10/200272 -0004 become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) days after the first notice of default is given. Notwithstanding anything to the contrary contained in this Note, the Successor Agency hereby agrees that any cure of any default made or tendered by the Limited Partner shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as if made or tendered by Borrower. Copies of all notices which are sent to Borrower under the terms of this Note shall also be sent to the Limited Partner at an address to be provided in writing to the Successor Agency by the Limited Partner. 24. Insurance and Condemnation. In the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of the Project or any part thereof, Borrower shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to keep the Agency Loan in balance and rebuild the Project in a manner that provides adequate security to Successor Agency for repayment of the Agency Loan or if such proceeds are insufficient then Borrower shall have funded any deficiency, (b) Successor Agency shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no material default then exists under this Note or the Deed of Trust. If the casualty or condemnation affects only part of the Project and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the Agency Loan in a manner that provides adequate security for repayment of the remaining balance of the Agency Loan. 25. Force Maieure. Notwithstanding specific provisions of this Note, performance hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor or supplier; acts of the other party; acts or failure to act of the Successor Agency or any other public or governmental Successor Agency or entity (except that any act or failure to act of Successor Agency shall not excuse performance by Successor Agency); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. 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 the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is given within thirty (30) days after the commencement of the cause. Times of performance under this Note may also be extended in writing by the Successor Agency and the Borrower. F -10 DOCSOC /1475221 v 10/200272 -0004 26. Assignments The Successor Agency, and any assignee of the Successor Agency, shall have the right to assign this Note and the Deed of Trust securing this Note, without any further act of Borrower. The assignee shall give notice to Borrower as soon as practicable after such assignment. 27. City and Authority Right to Enforce. The City and the Housing Authority of the City of Santa Ana are each intended third party beneficiaries of Successor Agency's rights under this Note, with full rights (but no obligation) to enforce all of Borrower's obligations hereunder. {Signatures on following page} F -11 DOC SOC/ 1475221 v 10/200272 -0004 This Agency Loan Note is hereby entered into as of the date first stated hereinabove. VISTA DEL RIO HOUSING PARTNERS LP, a California limited partnership By: A Community of Friends, a California nonprofit public benefit corporation Its: Managing General Partner By: Dora Leong Gallo Its: Chief Executive Officer By: Foundation for Affordable Housing V, Inc. a California nonprofit public benefit corporation Its: Administrative General Partner By: Deborrah A. Willard Its: President F -12 DOCSOC /1475221 v10/200272 -0004 EXHIBIT G SCOPE OF WORK/BUDGET G -1 DOCSOC/ 1475221. v 10/200272 -0004 EXHIBIT H MARKETING PLAN H -1 DOCSOC /1475221 v 10/200272 -0004 MANAGEMENT PLAN Property Name: Vista del Rio Owners: Vista del Rio Housing Partners LP Property Location: 1600 W. Memory Lane, Santa Ana, CA 92706 Table of Contents Project Description Statement of Owners Goals and Responsibilities Statement of Agent's Management Policy L Management A. Terms with Management Agent B. Role and Responsibility of Management Agent C. Expiration or Termination D. Personnel Policy and Staffing Arrangements E. Accounting Records F. Procurement of Contracts G. Insurance 7 7 10 14 14 IL Occupancy 14 A. Sustaining Occupancy (tenant selection, outreach, marketing, lease -up) 14 - Tenant Selection Plan (pages 17 -26) 17 B. Determining Tenant Eligibility and Annual Certifications 27 C. Tenant Orientation, Community Building and Tenant Engagement 28 III. Operations A. Rent Collection Policies and Procedures B. Eviction Policy and Eviction Prevention C. Confidentiality D. Communication between Property Management and Services E. Utility Rate Assistance Programs F. Reasonable Accommodations & Modification Requests G. Incident Reports H. Security N. Green Operations and Maintenance A. On -Going Maintenance B. Preventive Maintenance C. General Repairs D. Emergency Repairs & Graffiti E. Schedule of Useful Life and Replacement Needs F. Recycling Exhibit H - 1 - 32 32 32 35 36 37 38 38 38 39 40 40 40 41 41 41 MANAGEMENTPLAN Property Name: Vista del Rio Property Location: 1600 W. Memory Lane, Santa Ana, CA 92706 This Management Plan is developed and effective as of November 1, 2011 for Vista del Rio in Santa Ana, California. Project Description Vista del Rio is a 41 unit multi - family housing complex located in the City of Santa Ana, California. The target population is very low income, physically or developmentally disabled adults earning less than or equal to 30 -50% AMI. In eight (8) units, the rents will be subsidized by the Housing Authority of the City of Santa Ana through the Section 8 program. Tenants in subsidized units will pay 30% of their gross household income as rent. The households in the remaining units will pay 30 -50% AMI rents. The property will feature a furnished community room, office spaces for property management and social services staff, laundry facilities, additional storage space for each unit and outdoor common area. Units will be furnished with internet and cable access. The owner is a limited partnership with A Community of Friends (ACOF) as Managing General Partner, Foundation for Affordable Housing (FFAH) as Administrative General Partner, Goodwill Industries of Orange County (Goodwill) as Special Limited Partner, AMCAL Multi - family as Special Limited Partner, and Enterprise Community Investment Inc. as Limited Partner. ACOF is also the developer of the project and as the Managing General Partner will oversee the third party property management company. Goodwill will provide services to tenants in the building. Statement of Owner's Goals and Management Philosophy As the managing general partner, ACOF will provide asset management services to Vista del Rio Housing Partners L.P. and Goodwill will serve as service provider. ACOF will hire John Stewart Company, a third party property management company, who will operate and maintain the Property. JSCO will work hand -in -hand with ACOF's Asset Management Department to coordinate the intake /lease -up, preparation of monthly reports, rent collection, the processing of evictions and prepare income certifications and lender reports. ACOF's Asset Management staff and Residential Services Supervisor will visit Vista del Rio at least twice a month to meet with the site staff. Regular meetings and site visits will prevent the escalating of tenant issues and will allow for expeditious resolution of existing problems. ACOF also conducts bi- monthly staff trainings that involve asset management, property management and residential services staff. These trainings are focused on inculcating ACOF's mission and operational philosophy, team building, skills improvement, bi- departmental (residential services and property management) collaboration, and specific workshops aimed at improving service provision to the people with special needs that ACOF serves. These trainings are also an opportunity for corporate staff to hear what works and Exhibit H - 2 - what needs fine - tuning directly from site operations. ACOF has maintained this successful approach to development, property management, and asset management in all of its existing properties; thus enabling fulfillment of ACOF objectives: ➢ To assist tenants in maintaining housing; ➢ To assist tenants in improving skills and income; ➢ To encourage tenant self - sufficiency; ➢ To ensure that our properties meet or exceed development pro -forma expectations; ➢ To ensure that all properties are managed in such a way that they meet all reporting and regulatory requirements; ➢ To ensure the preservation of ACOF's affordable housing stock; ➢ To ensure that each property maintains physical and fiscal integrity; ➢ To ensure that ACOF buildings and tenants are an asset to the neighborhood and community; Routine Property Management Services: The management company (JSCO) is responsible for preparing monthly reports, administrating rent collection, coordinating lease -up with ACOF, processing evictions, preparing annual income certifications and investor reports. A property management staff will work and live on -site. Some of his /her responsibilities will be: to collect rents, address all tenant complaints, take all requests for maintenance, handle emergency situations, qualify new applicants as well as other record keeping and reporting responsibilities. External Reporting & Property Management Oversight: ACOF is directly responsible for all external reporting which includes direct oversight of the physical building as well as financial audits. JSCo is responsible for the day -to -day property management responsibilities, submitting weekly, monthly, quarterly and annual management reports to ACOF. These reports serve as management and monitoring tools for ensuring fiscal, physical and tenant eligibility as well as compliance in accordance with the loan and regulatory compliance documents that govern the subject property, and provide ready data so that ACOF fulfill it external reporting responsibilities. ACOF has a hands -on approach to property management. Consequently property management is a shared responsibility between ACOF and the third party property management company. Thus, ACOF assures that the apartment community is being managed in manner that is consistent with ACOF's operating philosophy by instituting the following policies and procedures at all its sites: ■ Compliance Matrix: Based on loan and regulatory agreements, ACOF Asset Management Department develops a one -page compliance matrix that acts as a handy tool for JSCO to use to monitor compliance. ■ Site Specific Performance Standards: As part of the budgeting process, ACOF's Asset Management staff develops site - specific performance standards which are used to track actual vs. projected cash flow performance; compliance with loan documents and regulatory agreement; and progress with achieving corrective action. Exhibit H - 3 - ■ Weekly reports directly from the site staff: These reports ensure that ACOF's Asset Management Department has real time information about the operating conditions at the sites. Consequently ACOF can provide timely intervention and proactive oversight of site conditions and tenant relations. Site Visits: ACOF's Asset Management Department visits each property at least twice a month. This provides ACOF with a first hand understanding of site operations and tenant relations. It also provides the asset manager with an opportunity to provide direct support to property management staff. During these visits the asset manager will review new move -in files, conduct an inspection that includes all vacant units, meet with tenants, attend site staff meetings and monthly community meetings. Statement of Agent's Management Policy The goal of the property management company is to ensure that the management plan, policies and procedures align with the ACOF's goals for the property. To that end, JSCO will ensure tenant satisfaction, and the long -term financial and physical well being of Vista del Rio through the provision of high quality tenant relationships and management services. This plan has been developed to set forth the relationship between ACOF and JSCO and to describe some of the policies, procedures and regulatory requirements to be observed in the management of the Vista del Rio. Additional information is delineated in the Management Agreement. Specifically, this plan intends to outline a program of action to assure the following outcomes: 1. A well managed and properly maintained project. 2. A pleasant, healthy, and secure living environment for tenants. 3. A pleasant and cooperative relationship among and between tenants, JSCO's employees, residential services staff and members of the surrounding community. Unless otherwise stated in the plan hereon, the term "Owner" will refer to ACOF, the Managing General Partner representing Vista del Rio Housing Partners L.P. as well as the main contact for site service provision. The term "Agent" will refer to The John Stewart Company, and the term "Property" will refer to Vista del Rio, the term "Services" will refer to Goodwill, the on -site service provider, the term "PM" shall refer to the on -site property manager and the term `RSC" shall refer to the on -site residential service coordinator. MANAGEMENT A. Terms with Management Agent The initial contract (Management Agreement) between Owner and Agent will be for one (1) year and shall be automatically renewed for one year terms unless terminated by Owner or Agent. Exhibit H - 4 - B. Role and Responsibility of Management Agent The Agent shall operate and manage the Property in accordance with the provisions stated in the Management Agreement. The Agent, based on previous experience with effective management practice, shall provide advice and recommendations to the Owner to establish general policies for the operation of Vista del Rio. Additionally, the Owner and the Agent will establish additional management policies, as needed. Such policies shall include, but are not limited to: a. The intake process which includes the affirmative marketing plan; b. The tenant selection criteria and wait list management; c. House rules; d. Evictions and eviction prevention policies, e. Security and emergency after hour services; f. Supportive services including substance abuse policy and services; g. Reasonable accommodation procedures; h. Confidentiality policy; i. Communications between Services and Property Management; j. Site - specific performance standards k. Maintenance including training of site staff and tenants in green education; and 1. Tenant employment and volunteer activities. Once the policies have been established by the Owner, the Owner shall delegate authority to the Agent to implement the policies. The Agent will, by means of periodic budgets, financial statements, and status reports, inform the Owner on the operation of the Property. In addition, the following procedures shall be followed to ensure effective day -to -day operations and cooperation between the Owner and Agent: 1. The Agent and Owner shall enter into a Management Agreement that will provide detailed responsibilities that the Agent and Owner will assume. The responsibilities shall be clearly assigned and described, and shall not overlap. 2. Agent shall operate and manage the Property in accordance with the provisions set forth in the Management Agreement. In its operation and management of the same, Agent shall generally and specifically in accordance with the terms of the Management Agreement, collect all income from its operation of the Property, and pay all expenses to the extent that income is available to do so. Exhibit H - 5 - 3. Agent agrees to furnish its services and to operate and manage the Property in all instances under the supervision of Owner. 4. Agent shall operate and maintain the Property commensurate with standards required for similar properties in similar communities and markets and in strict accordance with (1) government regulations, (ii) tax credit compliance rules (iii) requirements of all funding sources (iv) Property restrictions and (v) the Management Plan for the applicable calendar year which includes property specific performance standards. 5. Day -to -day operations of the Property will be under the direct supervision of the Property Manager (PM) who will report to the Property Supervisor designated by the Agent. 6. A senior management person shall be the Agent's representative in reporting to the Owner. 7. The Owner shall appoint a key contact person or liaison to represent the Owner in regular communications with the Agent. 8. There will be regular meeting times between the Owner and the Agent for the purpose of reviewing policies, management procedures, tenant relations, and budget control. Owner and Agent will work jointly to establish any changes in the policies and procedures. Should it become necessary to alter these policies, the Agent will not do so without the prior approval and consent of the Owner. 9. To the extent practicable, Owner's concerns and suggestions shall generally be communicated to the Agent's senior management representative or Property Supervisor who shall issue instructions to the Property Manager. 10. Unless instructed otherwise in writing by tenant, a copy of all property management notices regarding lease or house rules violations will be sent to the RSC. This gives the RSC time to intervene and/or advocate on behalf of the tenant. Outside case managers will also be provided these documents unless otherwise instructed in writing by the tenant. 11. As described in the Management Agreement, the annual operating budget for the Property will be prepared by the Agent and approved by the Owner. In the event that items need to be purchased that either were not budgeted, or that would bring the Property over budget the Agent will promptly inform the Owner who will review and approve such additional purchases. Exhibit H - 6 - 12. In the event that Agent must arrange for emergency repairs involving manifest danger to persons or Property or make payments required to avoid suspension of any necessary service to the Property, the Agent will inform the Owner of the facts as promptly as possible. C. Expiration or Termination of Term In the event that the Owner or Agent terminate the Management Agreement the Agent shall vacate and relinquish control of the Property to Owner and transfer all the books and records in possession or control of Agent pertaining to the management and operation of the Property together with all other property or funds of Owner, provided that Agent shall have the right at its cost and expense to retain copies of said books and records. Agent shall have no obligation to keep or maintain any books or records of the Property or the operations thereof after the termination or expiration of the Agreement to the extent that such books and records have been delivered to Owners as hereinabove provided. Agent shall, upon the expiration or termination of the Agreement, also deliver to Owner all furniture, equipment supplies, brochures and advertising materials owned by the Owner or the Property used in the operation of the Property and a complete list of same, and all service contracts and agreements binding upon Owner or the Property. Said furniture shall include furniture used in the office of the Property, but may not include furniture which may be leased from third parties. Agent shall at any such termination or expiration, cooperate with Owner or any successor Agent in providing Owner or any successor Agent such information as it may reasonably require to operate the Property to provide for an orderly transition in the management of the Property. D. Personal Policy and Staffing Arrangements Vista del Rio shall be assigned a PM that provides after hours coverage and resides on site, as well as an RSC and a dedicated maintenance staff person. In the event the PM does not reside on site, a key holder position will be placed at the property. The key holder will report to the PM and will be the lead for after business hours coverage and emergency response. In addition, Vista del Rio will be assigned a back -up PM. At ACOF buildings, property managers work in pairs to provide full experienced coverage to all of ACOF's properties. The back up system ensures cross training, that is, more than one PM is familiar with each buildings systems, operations and tenant population. It also addresses ACOF's special needs tenants' sensitivity to change and the unfamiliar. The back -up manager is required to collect rent and conduct community meetings once a quarter. The property management company assigns a supervisor to each property manager. In ACOF's case, JSCO has assigned a dedicated supervisor who acts as liaison for ACOF thus providing ACOF with a supervisor who is well versed in Exhibit H - 7 - ACOF's operational philosophy and goals. A dedicated supervisor provides continuity for tenants and a consistent property management interface. Agent shall (i) employ, discharge, supervise, and pay as expenditures a property manager, a key holder, and on -site maintenance persomnel for the Property and (ii) independent maintenance personnel, all as- required for the efficient operation and maintenance of the Property in accordance with the Property requirements. The anticipated staffing pattern will be as follows: Title/Position Compensation Property Manager (PM)* Per Approved Operating Budget Key Holder ** Per Approved Operating Budget Maintenance Personnel Per Approved Operating Budget *A rental unit is part of the employee's compensation, and is counted in income and expense statements. The employee's unit is subject to local, state and federal tax regulations. * *The Key Holder will report to the PM who will in turn report to the Property Supervisor, who reports to The John Stewart Company Support staff in Agent's office, also involved in property management, includes clerical, accounting personnel whose responsibilities are to assist in administrative functions and in the preparation of financial reports, and compliance staff whose responsibilities includes ensuring that the qualified occupancy is maintained including initial intake and annual recertifications. Specific responsibilities for all property personnel are detailed in the job descriptions which is part of the annual management plan package. 2. Anticipated Hiring Policies: a. All hiring of Agent employees shall conform to Equal Employment Opportunity requirements. Agent shall not discriminate against any applicant for employment because of race, religion, color, ancestry, national origin, or age, sex, pregnancy, marital status, disability, sexual orientation or AIDS. It is JSCO's goal to have the ethnic composition of the on -site staff reflect the ethnic composition of the development and surrounding community. Special efforts will be made to provide information regarding job openings to minority candidates and contractors through outreach to community organizations, bulletin boards, newspapers and other Exhibit H - 8 - communication media. Job announcements will also be posted at the Property. c. Hiring Tenants: Due to concerns about confidentiality, Vista del Rio tenants will not be hired for employment at the Property. Vista del Rio tenants interested in working with JSCO or responding to a job listing will be interviewed and considered for positions in other properties in the Agent and/or Owner's portfolio. d. All hiring materials will indicate that The John Stewart Company is an "Equal Opportunity Employer." 3. The Owner requires Agent to hire personnel with previous experience in their particular field. In addition, persons with a social service background and/or experience working with people with physical and /or developmental disabilities will be actively recruited. Nevertheless, all personnel will receive training specific on JSCO's policies, procedures and property management software and data input. This training will include specialized training regarding compliance with all regulatory restrictions that govern the property including TCAC, HOME, AHP and housing authority policies and will consist of the following: a. One -on -one supervision by the Property Supervisor of the Property. b. Written guidelines, manuals, and materials. c. Periodic attendance at special training workshops sponsored by various property management associations for the purpose of updating and renewing work- related skills such as Affirmative Marketing, ADA, Fair Housing, Maintenance and Compliance. Fair Housing, ADA, Reasonable Accommodations and Affirmative Marketing training will occur once a year and each participant will receive a certificate of attendance. d. Mandatory attendance at Owner sponsored bi- monthly trainings aimed at focusing on the integration between services and property management and educating the Agent and site staff about the particular needs and concerns of the special needs population. 4. As indicated in the Management Agreement, all on -site personnel shall be employees of the Agent. However, compensation payable to on -site staff and all taxes and assessments incident to the employment of such personnel will be treated as a Property expense and paid out of the Vista del Rio' general operating account. Exhibit H - 9 - 5. Owner shall interview and approve any PM and site staff assigned to the Property. 6. Employment grievances, termination of employment, and promotions shall be conducted according to the Agent's personnel policies and procedures, which conform to equal opportunity and affirmative action goals and requirements. Agent shall also consult with Owner prior to terminating the employment of any onsite employee. E. Plan for maintaining adequate accounting records and handling necessary forms and vouchers. 1. Agent agrees to keep accurate, complete and separate books and records of accounts in accordance with accepted accounting standards and procedures on the basis of a calendar year. Financial accounting, reports and records shall be in conformance with modified accrual basis accounting procedures, and responsible to the guidelines provided by the regulatory agencies connected with the Property. Accordingly, the Agent will maintain accurate files of all tenant transactions, revenue, and expenditures and prepare for the following monthly reports for the Owner's review and send it to the Owner no later than the fifteenth (15th) day of the following month. The reports include Balance Sheet, Detailed General Ledger, Check Register, Aged Accounts Payables, Aged Receivable Report, Bank Statements, Bank Reconciliation, Monthly Report for establishing Net Income, Rent Roll, Vacancy Report and any other additional Reports as requested by Owner and other regulatory agencies. 2. Bills will be paid and accounts will be funded pursuant to the requirements of the Property's Regulatory Agreement. Specifically: a. A purchase order system will be utilized to document all Property expenses with the exception of items and services provided on a regular contractual basis (utilities, trash removal, service contracts, etc.) b. All purchases shall be pre- approved by the Agent's Property Supervisor. c. Invoices will be matched with outstanding purchase orders by the PM, reviewed for accuracy by the Property Supervisor, and then vouchered for payment by the Agent's central office accounting staff. Checks will be processed at least semi- monthly for payment of any payables on hand. Exhibit H - 10 - d. The following separate accounts shall be established: 1) Vista del Rio Housing Partners L.P., General Operating Account into which rental and other miscellaneous income will be deposited and from which the Property's operating expenses will be paid. 2) Vista del Rio Housing Partners L.P., Replacement Reserve Account to be funded through regular contributions from the operating account, based on a capital improvements schedule of anticipated useful life; and replacement needs for major items all in accordance with the Regulatory Agreement, mortgages and Partnership Agreement as defined in the Management Agreement; 3) Vista del Rio Housing Partners L.P., Operating Reserve Account to be funded through regular contributions from the operating account in accordance with the Limited Partnership Agreement, the Regulatory Agreement and mortgages. 4) Vista del Rio Housing Partners L.P., Security Deposit Account to be funded by tenants' security deposits. Policies and procedures for administering this account are noted in Section I(E)(6) below; 5) Any other accounts required by Regulatory Agencies. 3. All Property financial records will be audited annually by an independent CPA firm. a. The Agent maintains a computerized General Ledger program, which shall be continually updated to meet the accounting and reporting needs of the Property and to produce a quality audit trail. b. Careful monthly monitoring shall allow for cost control, prompt identification of potential problems and sufficient lead -time to develop plans to meet Property needs. c. Major budget variances shall be reviewed by the Agent with the Owner and appropriate actions shall be taken to ensure that monthly cash flow is sufficient to meet the Property's operating expenses and deposits to the reserve accounts noted above. Exhibit H - 11 - d. Purchasing and procurement of contract services are delineated in the Management Agreement. Additionally, expenses over One thousand, five hundred dollars ($1,500.00) require the Owner's specific approval, except for emergency repairs where the Agent will communicate with the Owner as soon as possible. Purchase contracts in excess of One Thousand Five Hundred Dollars ($1,500.00) must be put out for bid. 4. In order to ensure strict compliance with all regulatory restrictions herein, the Agent will systematically review all pertinent regulatory agreements and establish a manual of instructions, schedules and tickler files indicating relevant deadlines, reporting formats, etc. This manual will be distributed to all bookkeeping and accounting personnel on Agent staff, and to any accounting firms hired to provide audits and/or other reports for the Property. 5. The Agent shall prepare, as part of the monthly reports to the Owner, an income /expense statement showing scheduled and actual rents, and a list of tenant delinquencies. Delinquency reports shall indicate whether tenants are thirty (30), sixty (60), or ninety (90) days behind on their rent. 6. Security Deposits a. Agent shall collect a security deposit from each tenant. The deposit shall be equal to one month's rent unless otherwise restricted by any regulatory body including the rental subsidy provider that governs the management of the Property or the Owner. b. Tenants shall be required to make a refundable security deposit in accordance with the terms of their leases and applicable state and local laws. Their security deposits shall be held in a separate interest bearing trust account with a depository insured by an agency of the federal government or a comparable federal deposit insurance program. The balance of this account shall at all times be equal to or exceed the aggregate of all outstanding deposits. c. The PM will notify the RSC or the referring agency if he /she becomes aware that applicants do not have the resources to make the security deposit. The PM may consider a payment plan backed by a service agency, after consultation with the applicant and the RSC. d. When a unit is vacated, the Agent will perform a move -out inspection to determine any damages to be corrected or cleaning necessary over and above normal wear and tear, which shall be Exhibit H - 12 - charged against the security deposit. Since the inspection is a useful tool for letting the tenant know the best condition to leave the unit in order to maximize the amount of security deposit that will be refunded, the tenant will be encouraged but will not be required to participate in this inspection. If applicable, the RSC will also be asked to join the inspection and /or to assist the tenant with move -out preparations. The move -out inspection form will be compared to the move -in inspection form to determine the extent of tenant - caused damages. e. Within 21 days from the day of the move -out inspection, a security deposit refund will be completed in accordance with applicable estate and federal laws, indicating: 1) Security deposit on hand 2) Amount of interest earned, if applicable 3) Amount of past due rent or unpaid charges as of the date of the move -out. 4) Amount of damage and /or cleaning charges. An itemized list of work and actual costs will be attached to the forms for repair, cleaning or replacement of items above the normal wear and tear based on the Property's useful life schedule. The balance of the security deposit and interest after deductions for outstanding rent, charges, cleaning and damages will be refunded to the tenant with the move -out inspection form and itemization of costs. f. As part of the tenant orientation interviews, tenants shall receive an explanation of the use of security deposits, and shall sign a security deposit agreement. 7. Other Reports The Agent shall comply with all reporting requirements defined in any regulatory agreements or Partnership Agreements. The Agent shall comply with the regulations of the California Tax Credit Allocation Committee for annual and other reporting as required for compliance under Section 42 of the Internal Revenue Code. 8. Year -End Audited Financial Statement Agent shall work with the Owner's independent third party auditor to insure that the audited financial statement and tax returns are prepared in Exhibit H - 13 - an accurate and timely fashion. The audited financial statement and the tax return are due no later than 75 days after the close of each fiscal year. 9. Agent shall submit to Owner an annual operating budget ninety (90) days prior to the close of each fiscal year. F. Procurement of Contract Services At least three competitive bids must be obtained for contracts over $1,500 such as landscape maintenance and services related to periodic capital improvements (exterior painting, roofing, etc.). This three bid requirement may be amended in order to comply with regulatory requirements of lenders and funders. 2. The Agent shall prepare bid specifications and supervise the bid proposals and acceptance procedures. In the event that items need to be purchased that either were not budgeted, or that would bring the Property over budget, the Agent will promptly inform the Owner, who will review and approve such additional purchases. G. Insurance The Owner ensures that the Property is covered by insurance as specified in the regulatory agreements that govern the management of the Property. Insurance coverage is reviewed and renewed annually. All insurance policies and renewals thereof shall be issued by a carrier and in an industry acceptable form. Property insurance policies shall name the Owner as a named insured for general liability insurance and a loss payee for the property insurance. The John Stewart Company, the Santa Ana Redevelopment Agency, the City of Santa Ana, the Housing Authority of the City of Santa Ana and any other companies or public agencies that require so shall be listed as additional loss payee. Per the Management Agreement the Agent shall promptly investigate and make a full written report of all damage or destruction to the Property in excess of $500 and all accidents or claims for damages relating to the ownership, operation or maintenance of the Property. The report shall include the estimate cost of repair, if applicable. Agent shall also cooperate with and make any reports or satisfy any other requirements of the insurance policy or policies covering a loss or claim. Owner reserves the right to pre- approve any claims made against the insurance for such incidents. Il. OCCUPANCY A. Plan for Sustaining Occupancy Exhibit H - 14 - Vacancy rate at Vista del Rio should average no more than 3 %. The property should have three (3) pre- approved applicants per unit type and ten (10) other applicants per unit type on the referral list. Units are marketed in accordance with Affirmative Fair Housing marketing guidelines, and the tenant selection criteria indicated below. Each tenant is assigned a Residential Service Coordinator (RSC) who acts as an advocate for the tenant and provides proactive support. Tenant referrals will come from the following agencies: Goodwill Industries of Orange County, the Regional Center of Orange County, Project Independence, OCARC, Elwyn and Vocational Visions. In addition ACOF staff will meet with social service agencies and interested groups to increase referrals and facilitate the application process. B. The Referral Process The referral process begins with the completion of ACOF's Housing Intake form. The form should be completed by the applicant's referring case manager or licensed practitioner. Each form must be accompanied by a completed Release of Information form signed by the applicant authoring the release of and sharing of information including Protected Health Information (PHI) Release form. The release allows all participating agencies in the development and operations of the Project to share information including, but not limited to ACOF, Goodwill, JSCO, City of Santa Ana, Santa Ana Redevelopment Agency and the Santa Ana Housing Authority. Upon receipt of the completed ACOF Housing Intake Form, Goodwill and JSCO will perform a preliminary review to determine whether based on the unverified information the applicant appears to meet the tenant eligibility criteria. Eight (8) units of this project are receiving Section 8 Project Based Assistance (PBA), therefore eight applicants approved by Goodwill and JSCO will be referred to the Housing Authority of the City of Santa Ana in order to determine eligibility to occupy a unit at Vista del Rio per the Section 8 requirements. The public housing authority will: Determine Section 8 Project Based Assistance Eligibility per HUD and local public housing authority regulations and policies. Process all applicants through their internal criminal background check program, as required. Applicants that do not meet the Housing Authority's eligibility criteria including those who have been evicted from a federally- assisted housing project will be denied. 1. All applicants will be initially interviewed by the PM or leasing representative of the managing agent 2. It will be the responsibility of the Agent to inform the applicant in writing of rejection or approval Exhibit H - 15 - 3. The Agent will notify applicants who are rejected, in writing, and the applicants will be informed of their option to appeal this decision. Upon approval of the applicant, the referring case manager will also be notified. Applications will be stamped, dated as they are received, and then sorted for family size, income level and eligibility status. Vista del Rio's Tenant Selection Criteria (TSC) fully describes the affirmative marketing and intake process and waitlist management, as noted below. Exhibit H - 16 - TENANT SELECTION CRITERIA VISTA DEL RIO 1600 W. Memory Lane, Santa Ana, CA Project Description Vista del Rio is a 41 unit multi - family housing complex located in the City of Santa Ana, California. The target population is very low income, physically or developmentally disabled adults earning less than or equal to 30 -50% AMI. In eight (8) units, the rents will be subsidized by the Housing Authority of the City of Santa Ana through the Section 8 program. Tenants in subsidized units will pay 30% of their gross household income as rent. The households in the remaining units will pay 30 -50% AMI rents. The property will feature a furnished community room, office spaces for property management and social services staff, laundry facilities, additional storage space for each unit and outdoor common area. Units will be furnished with internet and cable access. The owner is a limited partnership with A Community of Friends (ACOF) as Managing General Partner, Foundation for Affordable Housing (FFAH) as Administrative General Partner, Goodwill Industries of Orange County (Goodwill) as Special Limited Partner, AMCAL Multi- family as Special Limited Partner, and Enterprise Community Investment Inc. as Limited Partner. ACOF is also the developer of the project and as the Managing General Partner will oversee the third party property management company. Goodwill will provide services to tenants in the building. Policy on Non - Discrimination With respect to the treatment of applicants, the Management Agent will not discriminate against any individual or family because of race, color, national origin or ancestry, religion, sex (including gender identity), sexual orientation, age, handicap /disability, medical condition, source of income, marital status or familial status, or any other arbitrary basis. No criteria will be applied or information considered pertaining to an attribute of behavior that may be imputed by some to a particular group or category. All criteria shall be applied equitably and all information considered on an applicant shall be related solely to the attributes and behavior of individual members of the household as they may affect residency. Program Eligibility Requirements for Permanent Housing Units 1. Occupancy is restricted to low income individuals with disabilities. Each unit must include a disabled adult diagnosed with a qualifying disability by a licensed practitioner in accordance with the U.S. Department of Housing and Urban Development (HUD) standards. 2. Full time student applicant households do not qualify, unless an applicant is receiving assistance under Title IV of the Social Security Act (AFDC, TANF, Cal Works — NOT SSA/SSI), enrolled in a job training program receiving assistance though the Job Training Participation Act (JTPA) or other similar program, is a single parent with a dependent child or children and neither the applicant nor his /her child(ren) are Exhibit H - 17 - dependents of another individual, is married filing a joint return or previously enrolled in the Foster Care Program (age 18 -24 only) 3. All Applicants must be referred by a case manager or supportive service agency. 4. Goodwill, the designated service provider agency for Vista del Rio, is responsible for screening all supportive housing applicants for Program Eligibility. Goodwill will review applications to verify program eligibility. Goodwill will then refer all eligible applicants to the property manager, JSCO, for income verification and conduct appropriate background checks. As for the eight (8) units that receive Section 8 Project Based Assistance (PBA), the SAHA will maintain their own wait list and send referrals to management to fill these units. Goodwill and Management will first ensure that applicants meet program eligibility and will then send pre- approved applicants to the Santa Ana Housing Authority in order to further determine eligibility to occupy a unit at Vista del Rio per the Section 8 requirements. II. Program Eligibility for Subsidy. 1. Section 8 Project -Based Voucher Program i. Eight (8) units will be subsidized by the Section 8 program which is administered by the Santa Ana Housing Authority. ii. The Housing Authority must verify citizenship or eligible immigration status. HAP benefits will be prorated based on the residency status of each household member. iii. If required, applicants must provide a complete and accurate social security number and proof of age. iv. The applicant's adjusted income must be less than the required AMI for the unit in question. v. The applicant may not be a registered sex offender in any state. The Housing Authority will deny applicants with: vi. violent felony convictions; vii. drug - related criminal activity within the last three years; viii. a history of illegal drug use; ix. child molestation and /or sexual misconduct convictions; or x. prior evictions from a federally- assisted housing project. III. Occupancy, income and rent standards 1) Units will be occupied in accordance with the following standards: UNIT SIZE MINIMUM MAXIMUM Exhibit H - 18 - 0 Bedroom 1 Bedroom 2 Bedroom 2) Every household resident will be counted when determining unit size. This includes household members in the military or at school and anyone who will occupy the unit during the upcoming 12 months. 3) The head of household must be 18 years of age or older, unless he or she is an emancipated minor. All household members, age 18 years or over, and emancipated minors, must sign the appropriate consent forms and comply with the verification process. 4) Applicants must be able to maintain the housing unit in accordance with local health standards and Housing Authority standards, with or without assistance. 5) All applicants must have a valid Social Security Number and legal photo ID. Birth certificates and /or proof of guardianship will be required of dependant minors. 6) Background checks will be performed on all adults 18 years and older in the household; the same requirement will apply for live -in aides. Live -in aides must provide government issued photo ID. In addition, proposed live -in aides must provide a complete and accurate social security number or permit him /herself to be fingerprinted for purposes of running a background check. The live -in aide is subject to all the tenancy and lease provision of the subject household. 7) Personal care attendants will be given a separate bedroom. 8) The assigned unit must be the household's primary place of residence. 9) Total household income cannot exceed 30 % -50% of area median income. 10) To meet program requirements, persons cannot pay more than 30% of their adjusted income as rent. Actual rent amount will be determined by the Housing Authority. AFFORDABLE UNITS # of Unit AMI % Rent Determined by SAHA Maximum Household Units Size Income 6 0 30% $424* $20,250; $23,130 9 0 50% $722 ** $33,750; $38,550 8 1 30% 30% OF INCOME OR $444* $20,250; $23,130; $26,010 2 1 30% $444* $20,250; $23,130; $26,010 8 1 50% $764 ** $33,750; $38,550; $43,350 2 1 50% $764* $33,750; $38,550; $43,350 4 2 30% 30% OF INCOME $23,130; $26,010; $28,890; $31,230 Exhibit H - 19 - *Approximate rental rates based upon 2012 current income limits published by California Health and Safety Code Sections 50052.5, 50053(b)(1), and 50053(b)(2)and current housing authority utility allowances. Rental rates subject to change. ** Approximate rental rates based upon 2012 Department of Housing and Community Development and current housing authority utility allowances. Rental rates subject to change. One two- bedroom unit will be reserved for the property manager. All applicants must meet certain underwriting guidelines. This Project is subject to the requirements of several funding sources. The above information reflects these requirements to the best of Owner's knowledge at this time but is subject to change if required for compliance with law, regulations or policy changes. IV. Application Process The application process begins with the completion of ACOF's Housing Intake form. The form should be completed by the applicant's referring case manager or licensed practitioner. The form must be accompanied by a completed Release of Information form signed by the applicant authoring the release of and sharing of information including Protected Health Information (PHI) Release form. The release allows all participating agencies to share the information including, but not limited to ACOF, JSCO, the City of Santa Ana, the Santa Ana Housing Authority, and Goodwill. Upon receipt of the completed ACOF Housing Intake Form, Goodwill and JSCO will perform a preliminary review to determine whether based on the unverified information the applicant appears to meet the tenant eligibility criteria. If the applicant does not appear to meet the tenant eligibility criteria, the tenant and /or the referring case manager will be sent a UTA (Unable to Accommodate). If the applicant appears to meet the eligibility criteria, the applicant will be sent a complete application package that includes the following: 1. Application for Admission 2. Section 8 Housing Assistance Application, if applicable 3. Certification of Homelessness 4. Certification of Residence in a Homeless facility 5. Certification of Disability Completed application package should be submitted with a copy of personal identifying information such as a social security card and birth certificate, and documentation of income. Originals will be requested during the interview. Goodwill will review applications to verify program eligibility. Goodwill will then refer all eligible applicants to the property manager, JSCO, for income verification and conduct appropriate background checks. As for the eight (8) units that receive Section 8 Project Based Assistance (PBA), the SAHA will maintain their own wait list and send referrals to management to fill these units. Goodwill and Management will first ensure that applicants meet program eligibility and will then send pre- approved applicants to the Santa Ana Housing Authority in order Exhibit H - 20 - $43,350; $48,150 1 2 50% 30% OF INCOME $52,050 *Approximate rental rates based upon 2012 current income limits published by California Health and Safety Code Sections 50052.5, 50053(b)(1), and 50053(b)(2)and current housing authority utility allowances. Rental rates subject to change. ** Approximate rental rates based upon 2012 Department of Housing and Community Development and current housing authority utility allowances. Rental rates subject to change. One two- bedroom unit will be reserved for the property manager. All applicants must meet certain underwriting guidelines. This Project is subject to the requirements of several funding sources. The above information reflects these requirements to the best of Owner's knowledge at this time but is subject to change if required for compliance with law, regulations or policy changes. IV. Application Process The application process begins with the completion of ACOF's Housing Intake form. The form should be completed by the applicant's referring case manager or licensed practitioner. The form must be accompanied by a completed Release of Information form signed by the applicant authoring the release of and sharing of information including Protected Health Information (PHI) Release form. The release allows all participating agencies to share the information including, but not limited to ACOF, JSCO, the City of Santa Ana, the Santa Ana Housing Authority, and Goodwill. Upon receipt of the completed ACOF Housing Intake Form, Goodwill and JSCO will perform a preliminary review to determine whether based on the unverified information the applicant appears to meet the tenant eligibility criteria. If the applicant does not appear to meet the tenant eligibility criteria, the tenant and /or the referring case manager will be sent a UTA (Unable to Accommodate). If the applicant appears to meet the eligibility criteria, the applicant will be sent a complete application package that includes the following: 1. Application for Admission 2. Section 8 Housing Assistance Application, if applicable 3. Certification of Homelessness 4. Certification of Residence in a Homeless facility 5. Certification of Disability Completed application package should be submitted with a copy of personal identifying information such as a social security card and birth certificate, and documentation of income. Originals will be requested during the interview. Goodwill will review applications to verify program eligibility. Goodwill will then refer all eligible applicants to the property manager, JSCO, for income verification and conduct appropriate background checks. As for the eight (8) units that receive Section 8 Project Based Assistance (PBA), the SAHA will maintain their own wait list and send referrals to management to fill these units. Goodwill and Management will first ensure that applicants meet program eligibility and will then send pre- approved applicants to the Santa Ana Housing Authority in order Exhibit H - 20 - to further determine eligibility to occupy a unit at Vista del Rio per the Section 8 requirements. V. Verification Process A. Financial 1. All income will be verified in writing by the income source indicated on the income certification form. 2. All assets, including bank accounts, will be verified in writing. 3. Upon initial occupancy, tenant's income cannot exceed the area median for household size as published annually by the U.S. Department of Housing & Urban Development and the California Tax Credit Allocation Committee. 4. To protect the property from rent charge loss or delinquency, if an applicant's projected rent obligation will be more than 30% of his /her household's combined monthly income for rent, the applicant will not be accepted. Applicants approved for units subsidized by the Housing Authority are exempted from these criteria. 5. Third -party income verification will be required from all sources, including but not limited to: a. Employment, Self Employment b. Savings and checking c. Pension d. Disability e. Asset verification, property, home, stocks, bonds, annuities, IRA, etc. f. Government assistance, A.F.D.C., food stamps, etc. g. Social Security h. Child Support /Alimony i. Non - Tuition Financial Aid 6. Credit checks, including landlord references, will be requested from all applicants. 7. Income calculations are based on the applicant household's annual gross (anticipated) income for the following 12 months. Annual gross income includes income from any and all assets. 8. Criminal record checks will be conducted on all adults in the qualified households who have satisfied the income requirements, credit report and tenancy requirements. This process will also apply for attendant care providers who will be occupying the unit. A criminal history or misdemeanor offense(s) could be grounds for denial. At the request of an applicant, a reasonable accommodation request will be considered. In addition, with the approval of the applicant, the referring case manager will be given an opportunity to appeal any application denial based on Exhibit H - 21 - information obtained from criminal record checks. However, all applicants will have to demonstrate that they meet program requirements. B. History of Responsible Tenancy, Behavior and Conduct A credit report to verify housing history will be obtained on all applicants. Current landlord references will be obtained. Previous landlords during the past five years may also be contacted. Landlord references will help determine rental history including but not limited to non - payment of rent, repeated disruptive behavior, past destruction of property, and chronic late rent payments. A determination will be made regarding whether or not the applicant has demonstrated a record of conduct which could constitute a material violation of Vista del Rio's occupancy agreement provisions or applicable tenancy law. If such a record of violations is documented, that will be considered grounds for a determination of ineligibility. If landlord references are not available, applicants will be asked to provide as much information as possible regarding where they have been living for the past three years. On a case by case basis, if sufficient landlord references are not available staff may require written references of social workers or others involved with the applicant in a professional capacity. Based upon these references, staff will decide if the applicant has demonstrated an ability and willingness to live peacefully with neighbors and refrain from behavior that jeopardizes the safety, security and peaceful enjoyment of the community. The level of support an applicant has, transitional living programs completed, and /or the appropriateness of an applicant's needs with the services offered will be considered. VI. Offer of Apartment / Waiting List Applicants will be offered only two apartments. Mitigating circumstances may be taken into account, such as an emergency situation or hospitalization. In such cases, if an applicant cannot accept an apartment during the initial lease -up of the building, the applicant would be placed on the waitlist in chronological order. Applications will be stamped, dated as they are received, and then sorted for family size, income level and eligibility status. Tenants will be qualified under Section 8 guidelines, California Tax Credit Allocation Committee (TCAC) requirements and all other applicable regulatory agreements by the Property Manager. All qualification processing is subject to review and approval by ACOF. JSCO's on -site staff will maintain one waiting list for the entire Project. Applicants will be placed in the order of their application date and time, with a notation of priority determination. Those who are not selected as a tenant will remain on the waiting list, and shall receive a letter informing them of their status with an estimate of when the next unit of the size and income designation they seek, based on previous turnover histories for similar housing projects, may be available. A. Applicants will be added to a waiting list in chronological order. B. In the event that the volume of applications received exceeds the number of available apartments and more than one applicant qualifies for the unit; the Exhibit H - 22 - application with the earliest date will be approved. The other will go to the top of the list until the next unit is available. C. When the next 30 -day notice is received by management, it will be the responsibility of the Property Manager to notify the applicant at the top of the waiting list. If that applicant turns down the unit, the Property Manager will then proceed to the next person on the waiting list. With the permission of the applicant, the Property Manager will also notify the referring case manager. D. After receiving a notification letter, applicants will have ten days to respond to the Property Manager regarding the available apartments. If there is no response, a second notice will be mailed and the applicant will have an additional five days to notify management of his /her decision. E. If an applicant on the waiting list rejects two units offered to him /her, this action will be considered to be a withdrawal of the application by the applicant. VII. General Many of the potential tenants of Vista del Rio are expected to be referred from Goodwill, the Regional Center of Orange County, Project Independence, OCARC, Elwyn and Vocational Visions. Goodwill and ACOF staff will meet with social service agencies and other interested groups to increase referrals and facilitate the application process. A. Goodwill will interview the applicants to ensure that the applicant meets the qualifications of the project. B. All applicants will be initially interviewed by a representative of the Agent. C. It will be the responsibility of the Agent to inform the applicant in writing of denial or approval. D. Agent will notify applicants who are denied, in writing, and the applicants will be informed of their option to appeal this decision. With the permission of the applicant, the referring case manager will also be notified. VIII. Rejected Applications A. Applications may be rejected for any of the following: 1. Blatant disrespect, disruptive or anti - social behavior toward management, the Property, or other tenants exhibited by an applicant or family member any time prior to move -in (or demonstrable history of such behavior); 2. A negative landlord or other reference, encompassing failure to comply with the lease, poor payment history, poor housekeeping habits (when house visits apply), substantial damage to the unit /building, or eviction for cause; 3. Falsification of any information on the application; 4. Household size that does not conform to the stated minimum and maximum sizes; 5. Income exceeding the of area median based upon income limits established at the Property; Exhibit H - 23 - 6. Full student applicant households as defined above will be rejected, unless they meet any of the exemptions. Full time status is determined by the subject educational institution. 7. No references from social workers or others involved with the applicant in a professional capacity are submitted, if required. 8. Arson conviction. 9. Applicants on probation or parole for conviction of a felony crime. 10. Other good cause, including, but not limited to, failure to meet any of the tenant selection criteria in this document. All rejected applicants will have the right to appeal the decision. A written appeal must be received by the Management Agent no later than fourteen (14) days after the Unable to Accommodate letter is received. Within 3 working days of receipt of an appeal, the appeal will then be forwarded to JSCO and the RSC for the Property. Units will not be held during the appeal process. If the appeal is successful and the applicant is approved for occupancy, the applicant will be offered the next available unit. IX. Fair Housing The property will comply will all federal, state, and local fair housing and civil rights laws and with all equal opportunity requirements. X. Policy on Privacy The privacy of applicants will be safeguarded as conferred by the Federal Privacy Act of 1974. This Act in no way limits management's ability to collect such information as may be needed to determine eligibility, compute rent, or determine an applicant's suitability for tenancy. XI. Pet Policy Tenants may not keep any type of pet on the premises. Assistive animals for the disabled are not considered pets, but do require prior written approval of management. XII. Accessible Units Four units will be accessible. These units are designed with specific features for persons with mobility impairments. All units will be provided with the capability to support audio and visual alarm notification devices. An additional 37 units will be adaptable, as defined by the California Building Code. Preference will be given to applicants who require a unit with the specific design features offered in accessible units in the Project. All reasonable efforts will be made to rent accessible units to applicants who require or who could benefit from such units. Outreach will also be conducted to agencies whose clients require or could benefit from such units. In the case of an accessible unit, when no qualified applicant has applied who requires the design features offered, then the unit will be offered to the next qualified household. This applicant will be required to complete a Lease Addendum form, whereby they agree to transfer to a non - accessible unit within the Project should a tenant or applicant require an accessible unit in the future. Failure to accept or move to the offered unit Exhibit H - 24 - shall be deemed material non - compliance with the lease and would be cause for termination of tenancy. If after occupying the accessible unit, the physical condition of a member of the household changes and a household member would then benefit from continued occupancy in the accessible unit, the household would not be required to move. XIII. Reasonable Accommodation Reasonable accommodations will be made to meet the needs of disabled applicants, including applicants with either physical, developmental and /or mental disabilities. Management will apply the same screening criteria to all applicants. However, management will offer qualified applicants with disabilities additional consideration in the application of rules, practices, or services and structural alterations if the accommodation will enable an otherwise eligible applicant or tenant with a disability an equal opportunity to access and enjoy the housing. Management is not, however, required to make a reasonable accommodation or physical modification if the accommodation or modification will result in an undue financial burden to the Property or if it requires management to alter or change a basic component of the housing program. If, as a result of a disability, an applicant needs changes in the way management communicates with the applicant, applicant(s) may contact JSCO by calling 213 -787- 2700, faxing to 213- 833 -1866, emailing jscola @jsco.net, or visiting the leasing office to request the necessary accommodation. This can include requests for notices and applications in larger font for those with a visual impairment, or to have applications sent to those with mobility impairments. In addition, management can be reached by TTY line for those with a hearing impairment by calling the California Relay Services at (888) 877 -5379. XIV. Outreach Special marketing outreach consideration will be given to special needs populations. Vista del Rio Housing Partners L.P. has as its service partner, Goodwill. Goodwill will be responsible for outreaching to community agencies serving people with developmental and physical disabilities. As early as possible, before construction completion, comprehensive application materials will be made available to these agencies. Goodwill will coordinate with staff at these agencies to assist their clients to apply for housing. Goodwill will provide information about all aspects of the application process in order to eliminate as many obstacles to applying as possible for their clients, supported by ACOF staff. This will enable clients of these agencies to anticipate and positively address issues such as providing identifications, birth certificates, landlord references, credit reports, criminal background reports and other applicable supportive documentation needed to complete the application process. Notices may be given to these agencies and organizations by way of flyers, e- mails, telephone calls, and in- person visits. If specific agencies or organizations request information be given to their clients in the context of meetings, these requests will be honored, as staffing and resources allow. Exhibit H - 25 - In addition, during the formal lease up period, Goodwill will also provide support to individual applicants as requested by any applicant. Advertising and outreach efforts will occur in accordance with the property's Regulatory Agreement and Affirmative Marketing Plan. Advertising for this development will include the use of Equal Housing Opportunity logos to affirmatively market the units, such as: • A Fair Housing poster to be displayed in the place where interviews take place. • An Equal Housing Opportunity logo to be displayed on the development's sign. • An Equal Housing Opportunity logo to be displayed on the marketing brochure, flyers and other marketing materials. Marketing will be provided through Goodwill and JSCO. • Flyers and banners will be displayed at the property and at nearby community centers and social services organizations Exhibit H - 26 - (MANAGEMENT PLANRESUMES): II. OCCUPANCY (cont.) C. Procedures for Determining Tenant Eligibility, Certifying and Annually Recertifying Household Income The Agent shall apply all City, State and Federal requirements in determining tenant eligibility at initial rent -up and during subsequent recertification of tenant income. When filling a vacancy, initial eligibility of prospective tenants shall be determined by the following procedures: a. Basic eligibility will be determined through the use of ACOF's Housing Intake Form. b. Personal interviews will be conducted and third party verifications obtained. C. If a prospective tenant has been determined to be ineligible they will be notified so that they may have an opportunity to provide further information, ask for a reasonable accommodation or engage the appeal process. d. Written notices will be sent advising applicants of their final eligibility status. Agent and Owner both have experience administering rental subsidy contracts with the local housing authorities. In addition to specific requirements, general recertification procedures will be as follows: a A "Tickler File" will be kept on the move -in dates of all tenants. All tenants will be recertified when their income changes (increases or decreases) or on an annual basis within twelve months of their initial move -in date. b. Ninety (90) days prior to their recertification date, tenant will receive a letter advising him/her of the impending recertification date and asking for written authorization to send third party verification forms and application for recertification to appropriate third parties. c. Sixty (60) days prior to the recertification date, the Property Manager will review the income information and determine the continued eligibility and income status of each tenant due to be recertified, and schedule appointments with those tenants. d. Thirty (30) days prior to the recertification date the Property Manager will interview the tenants due to be recertified in the following month. At this interview the tenants will be advised of any changes in their eligibility and income status and /or rental obligation. e. Tenants must report any changes of income within 30 days. Changes of income not reported in a timely manner may result in a significant amount of rent balance at recertification date. Exhibit H - 27 - Tenant occupancy standards shall be established and implemented in accordance with State and Federal regulations, and other policies established by the Owner in conformity with the regulatory agreements that govern the Property. These standards will be outlined in Vista del Rio's House Rules. Special occupancy procedures include: a. Pets: No pets are allowed at Vista del Rio unless requested pursuant to a reasonable accommodation. b. Permissible Absences: Tenants are required to occupy Vista del Rio as their primary place of residence. Absences beyond thirty (30) days will be permitted for emergency purposes only, as long as rental payments are kept current during the absence. Requests for absences must be submitted to the PM in writing, giving the reasons for the absence, and any other material circumstances that might affect the PM's decision about the appropriateness of the absence. The tenant will be notified in writing of the PM's decision. c. Tenant Incapacity: In the event that a tenant appears to be increasingly incapacitated so as to make self care difficult, the Agent will immediately contact the RSC or outside case manager to assist the tenant. Assistance may include contacting relatives, referral agencies, or the County Guardian's Office. d. Live -In Attendants: tenants with disabilities severe enough to require live - in attendants shall be required to present written certification from their physician that their disabilities require live -in care. In that event, the unit must be large enough to accommodate the attendant in accordance with the published occupancy standards. e. Increase in Household Size Due to Pregnancy: In the event that a pregnancy increases household size beyond the maximum allowable, the household may be required to move to the next available, appropriately sized, unit. L Nuisance Behavior and Drug Use: In conjunction with the Property Manager, the RSC will appropriately address any problematic or nuisance behavior. B. Tenant Orientation, Community Building, Outreach and Engagement Tenant Orientation A packet with written orientation material that includes general information about Vista del Rio, a list of emergency numbers for hospitals, ambulance, fire emergency procedures, as well as neighborhood services and amenities, will be Exhibit H - 28 - provided to each new tenant. Specifically the Tenant Handbook's Table of Contents consists of the following: Welcome to your new Community i. Apartment Community Amenities 1. Community Room and Outdoor Space 2. Barbeque 3. Earth boxes /Edible Garden 4. Internet 5. Cable or Satellite 6. Laundry Room 7. Supportive Services 8. Property Management Services ii. Walk, Bike, Bus, or Metro to nearby neighborhood stores and services 1. Parks 2. Places of Worship 3. Schools, Community Colleges 4. Community Gardens/ Urban Landscaping 5. Hardware Stores 6. Groceries stores 7. Farmers Markets 8. Shopping Malls 9. Banks 10. Public Transportation iii. Roles and Responsibilities 1. Tenant 2. Property Manager 3. Back Up Manager 4. Residential Service Coordinator 5. Key Holder (if applicable) 6. Maintenance Staff 7. Security Guards 8. The John Stewart Company 9. A Community of Friends 10. Goodwill Industries iv. Contact Information 1. After Hour Contacts 2. Emergencies 3. If the Manager is away 4. Hospitals 5. Police Exhibit H - 29 - v. Drain and Toilet Issues vi. Utilities 1. Electricity, Gas, Phone and Cable 2. Utility rate assistance program, if available a. Forms b. Assistance from Residential Service Coordinator 3. Locked Out: Authorized Vendors Contact Numbers 4. Utility Account Information vii. Summary of Lease and House Rules 1. Rent Payment 2. Apartment Door Locks and Keys 3. Grievance Policy 4. Reasonable Accommodation 5. Pet /Assistive Animal Policy 6. Maintenance and Work Order requests 7. Community Room Usage Policy 8. Computer Room Usage Policy (if applicable) viii. Energy Conscious Apartment Living & Education 1. Edible Gardens 2. Green Living and Shopping 3. Green Apartment Maintenance a. Cleaning Products b. Safe and Effective Cleaning c. Conserving Water d. Recycling e. Household Hazardous Waste f Pest Prevention g. Bed Bugs h. Replacing light bulbs i. Switches, Times, Dimmers j. Energy Star Products k. Appliance conservation babit 1. Mold Prevention m. Healthy Air Quality A personal interview with every tenant will be scheduled in order to acquaint them with the physical layout of Vista del Rio and the location of fire alarms, fire extinguishers, and fire exits, as well as a review of fire precautions and evacuation procedures. A thorough explanation of Vista del Rio House Rules & Regulations will be given to each tenant. In addition, upon the signing of the rental agreement, all provisions Exhibit H - 30 - contained in the rental agreement will be thoroughly explained and each tenant will be provided a copy of the agreement. A thorough move -in inspection of each dwelling unit by the Property Manager and new tenant will be conducted. At this time both parties will sign a checklist of the unit's condition. Written instructions will be provided to all tenants explaining the use and care of all appliances, maintenance and service request procedures. Orientation and orientation materials will be provided in the language of the tenant if the tenant is not fluent in English whenever possible. Community Building, Outreach and Engagement of Tenants Tenants will be advised of the services and activities available on -site through flyers posted on doors, monthly calendar of events posted in common areas, casual contact with site staff in common areas, and a tenant council. Tenants will receive "Tenant Handbooks" that provide information on local amenities, public transportation, on- site activities and other "tips ". Although tenant participation in community activities will be on a voluntary basis, the RSC will actively reach out to tenants on a weekly basis in order to engage them in the services available. Service staff will also utilize active tenants in reaching out to their neighbors (peer outreach). The RSC will spend time in common areas each week to proactively develop relationships with tenants to encourage them to access the services they may need. Social and educational programs will be developed and implemented by tenants, staff, and volunteers to foster community within the development and help tenants become comfortable with the service staff. On -site activities facilitated by peers, property and service staff, and volunteers may include movie nights, game nights, reading groups /book clubs, spiritual groups, holiday celebrations, arts and crafts, field trips, cooking classes and nutrition counseling, and anger management/non- violent conflict resolution classes. At least once per month tenants will have the opportunity to participate in one or more of these activities. Vista del Rio site staff will facilitate presentations by the Santa Ana Police Department in regards to community oriented policy and security to reinforce safety. Additionally, Vista del Rio site staff will facilitate introductions between tenants and the local neighborhood councils, neighborhood watches, police advisory boards, park advisory boards, community centers, recreation centers, and community -based organizations and encourage tenants to seek out community organizations and activities that interest them. Community Meetings Community meetings are scheduled on the same day and time each month. The schedule will be based on the lifestyle of the apartment community so as to draw as many participants as possible. Site staff, the PM and RSC are jointly responsible for hosting the meeting, however the lead site staff is the PM. Community meetings are a community building tool and a vehicle to empower tenants and to teach them to Exhibit H - 31 - make positive decisions that impact their lives. Concerns and possible suggestions for implementation and/or resolution should be discussed with tenants. Site staff will also use the meeting as an opportunity to elicit suggestions from tenants on programming options at the building. I11. OPERATIONS A. Rent Collection Policies and Procedures The tenant orientation information (both written and oral) for Vista del Rio shall address rent collection policies and procedures. Such policies and procedures shall be strict, consistent, easily understood, and firmly enforced. a. Rents shall be collected by the Agent who will provide the tenant with a receipt. b. All rents shall be due on or before the first (1st) day of each month. Rent is considered delinquent on the second (2nd) day of the month. Rent must be paid by cashier's check, money order or some other secure form of payment. C. Tenants who have not paid their rent by the fourth (4th) day of the month will be served a Ten (10) Day Notice to Pay Rent or Quit. d. Failure to pay rent will result in eviction. The Agent must advise the Owner of all evictions that are to be initiated. The Agent shall provide the attorney with copies of all documents and request that an eviction be scheduled with the court. Eviction proceedings must follow procedures outlined in the California Civil Code. Tenants will be charged if Agent is forced to take legal action against a tenant. e. Tenants having financial problems that affect payment of their rent will be referred to the RSC who will assist in budgeting, coordination of a payment plan with the Agent, and if applicable linkages to an appropriate social agency for assistance in remedying the problem. f. Rents shall be increased annually to cover Property expenses, if approved by funders upon submission of year end reports and a request for rent increases and budget approval. All tenants shall be given a sixty (60) day notice of any rent increases allowed pursuant to agency regulations. B. Eviction Prevention and Eviction Policy Owner is committed to providing permanent affordable, supportive housing for people with special needs. To this end each apartment community is assigned services staff whose primary responsibility is to support tenants, including those Exhibit H - 32 - whose disability may adversely impact their ability to sustain successful tenancies. Evictions represent a waste of valuable and scarce resources. For tenants, eviction can mean long -term homelessness and a setback on their recovery journey. For the Owner, evictions mean expensive, contentious and time - consuming court proceedings; vacancy loss, and unit turnover costs. For Vista del Rio, evictions can mean an adverse impact of the tenant community's right to peaceful enjoyment. Eviction decisions will not be made in haste; all other options should be explored before an eviction is put into motion. However when case management outreach, repeated notices and tenant intervention meetings fail, an eviction might be inevitable. Eviction prevention is both proactive and part of routine property management procedures. Actions that will be undertaken by Owner include: Copies of Tenant Notices to Services: Notices to perform or quit will be issued by the Property Manager for all lease violations. However, unless instructed in writing otherwise by a tenant, the RSC and if applicable the outside case manager will receive a copy of said notices. This gives the RSC the opportunity to intervene on the tenant's behalf to prevent eviction and preserve tenancy. Standing item on site staff bi- weekly meetings: Bi- weekly site staff meetings allow both services and property management staff formal designated time to discuss and strategize about tenants who are at risk of eviction. Communication between Services and Property Management: During formal site staff meetings and as otherwise necessary, Goodwill will inform property management about non - confidential behavioral concerns that might impact the apartment community. Likewise property management informs the RSC of tenant behavior that might lead to evictions such as o Hoarding o Housekeeping o Late rent payment o Complaints from other tenants o Nuisance Behavior Development of an Intervention Plan: Site staff is expected to develop a formal tenant intervention and /or eviction prevention plan. The plan clearly states the tenancy problem /lease violation, documents property and services staff roles in assisting the tenant, documents tenant expectation and responsibility, provides for updates during site staff meetings and includes a time frame during which the Property Manager will hold legal actions in abeyance. Exhibit H - 33 - • Payment Plan for outstanding rent and other receivables: Owner understands low income tenants with disabilities often subsist on a very limited income, therefore the goal is not to place onerous payment plans on tenants. Rather the goal is to get the tenant to accept responsibility. • Reasonable Accommodations & Grievance Process: The RSC will assist with both processes. Services offered by the RSC include: • Explaining and filling out the reasonable accommodation or grievance form • Obtaining documents to substantiate the grievance or reasonable accommodation request. • Seeking alternative housing to prevent a formal eviction that would make the tenant ineligible for Housing Authority rental subsidy assistance. • Attending the property management meeting with the tenant. • If applicable advocate for the tenant • If applicable provide referrals to legal services • If applicable attend meetings with the tenant and outside agencies • In the case of approved accommodation requests that necessitate alternate housing within or outside of ACOF's portfolio • Assist in finding alternative housing • Assist in malting selection through the provision of bus tokens for site visits and interviews Eviction Policy: The Agent shall enforce the terms of the Residential Lease as they apply to the eviction policies and procedures. All such eviction policies and procedures shall be consistent with any applicable TCAC regulations and regulatory agreements. The RSC will receive copies of any lease or house rule violation notices that are issued to tenants, unless otherwise instructed in writing by tenant. Tenants who have violated their Lease or other regulations will be given a thirty (30) day Notice to Vacate. Should the violation continue, the Agent will inform the Owner that it intends to initiate eviction procedures. This is the opportunity for RSCs to intervene to assist the tenant to preserve his /her housing. Eviction for nuisance shall be undertaken only when there is documentable evidence (correspondence, witnesses of illegal activities, police actions, lease violations, etc.) available that the Agent and the attorney may determine to be compelling in court. Court actions typically require four (4) to eight (8) weeks for a decision, unless the action is not contested. Uncontested unlawful detainers may require only two (2) to three (3) weeks for a decision. No rent will be collected during any eviction actions. If a tenant who is in the process of being evicted for nonpayment of rent desires to pay the rent in full, Exhibit H - 34 - then the Property Manager shall confer with the Agent to determine whether rent will be accepted. If rent is accepted, the tenant will be required to pay with a money order or cashier's check only. If it is determined that the tenant is chronically late or has a serious nonpayment problem, then the Agent has the option of foregoing the rent and continuing with the eviction if the deadline specified in the Ten (10) Day Notice has already elapsed. C. Confidentiality Owner has a legal obligation to protect all confidential information in its possession, especially data and information concerning identity, health, criminal, and welfare recipient records of tenants and applicants. Owner and its contractors which include the property management company and service providers understand that they must protect the confidentiality of such data and information. Consequently, Owner staff and its contractors must sign a Confidentiality Agreement as a condition of providing services at Vista del Rio. The Confidentiality Agreement requires Owner, its staff and its contractors to agree that they will not divulge to unauthorized person any data or information obtained while performing work at Vista del Rio. Any staff who may have access to tenant records and medical history must sign this document, confirming that all records will be housed in a secure and confidential manner and that all information concerning any tenant or applicant is privileged and may not be shared with any unauthorized individual without the expressed written consent of the tenant or applicant. However, all staff will be trained to understand that there are exceptions to confidentiality: (1) if there is reasonable suspicion of abuse to children or elderly persons, (2) if there is a disclosure of a serious intent to inflict harm upon oneself or another individual, (3) if a law enforcement agency seeks information related to a criminal investigation or terrorist activity, and (4) for income verification and eligibility determination purposes. Notwithstanding, all tenants and applicants of Vista del Rio will be required to sign a release authorizing Owner, Agent, and supportive services partners to obtain and share pertinent information with regulatory agencies, lenders, and funders that govern the management of Vista del Rio. Owner and its contractors agree to report any and all violations of this agreement by contractor and its staff and /or by any other person whom Owner and its contractors become aware. Owner and its contractors acknowledge that violation of this agreement may cause termination of employment and/or contract, and lead to civil and/or criminal action as Owner shall seek all possible legal redress. To further ensure confidentiality, the Agent and its staff shall not have access to personally identifiable health information of tenants and applicants of Vista del Rio. Certification of applicant and tenant disability status is submitted to property management staff in a sealed envelope during the application process for delivery Exhibit H - 35 - to the Housing Authority. To protect the applicant and tenant confidentiality of applicant's medical information, records of disability and medical information are kept in the services office and are not made available to property management staff. Additionally, Owner and Service Provider will participate and execute any Business Associate Agreements that may be required pursuant to HIPAA, which sets national standards for the security of electronically protected health information. Supportive services are offered as a voluntary program and are not a condition of continued tenancy at Vista del Rio. Thus applicants and tenants of Vista del Rio will be informed of their rights to deny services staff access to private information regarding their application and tenancy at Vista del Rio. D. Communications between Property Management and Services Every effort will be made to facilitate the achievement of consensus among property management and services on decisions affecting Vista del Rio tenants. The property management team and services team will meet bi- weekly to discuss tenant/building issues. Concerns between tenants and the service provider /property manager /project sponsors can also be raised and addressed in tenant council meetings and community meetings. These efforts will help in the early identification of problems /issues and rapid resolution. Most decisions will be reached and disagreements resolved through this process. When parties cannot reach agreement on a course of action about tenant selection or eviction, the Owner will make the final determination. For matters relating to service delivery, Goodwill will make the final determination. As indicated above, ACOF's Asset Management staff and Residential Services Supervisory staff will visit Vista del Rio at least once a month to meet with the site staff. Regular meetings and site visits like these prevent escalating tenant issues and allows for expeditious resolution of existing problems. ACOF conducts bi- monthly trainings that involve asset management, property management and residential services staff. These retreats are focused on inculcating ACOF's mission and operational philosophy, team building, skills improvement, bi- departmental (services and property management) collaboration, and specific workshops aimed at improving service for people with special needs. The trainings are also an opportunity for corporate staff to hear what works and what needs tuning directly from site operations. ACOF has maintained this successful approach to development, property management, and asset management in all of its existing properties. Site Staff Meeting Policy Site staff meetings are designed as a formal opportunity for planning and strategizing to ensure that Goodwill and Property Management work as a Exhibit H - 36 - team to assure successful tenancies. Both departments are expected to discuss at -risk tenancies, keep each other informed about upcoming site events such as inspections, audits and to plan community activities. Property management should update Goodwill on warning notices, adherence to payment plans and /or reasonable accommodation agreements, and any signs, such as housekeeping violations, that a tenant's ability to maintain their apartment or adhere to the terms of the lease has been compromised. Goodwill should update property management on their client's progress on tenant intervention and if appropriate service plans, reasonable accommodation agreements and any property management related tenant concerns. Regular meetings between Goodwill and Property Management prevent the escalation of tenant issues and allows for expeditious resolution of existing problems. Site staff attendance at staff meetings is mandatory; these meetings must be hard calendared at each site and at minimum should occur every two weeks. The task of producing the agenda and taking minutes should be rotated between the PM and the RSC. One staff member will generate the agenda; the other will take the minutes. The staff person that generates the minutes is responsible for distributing the minutes to at least the following: The subject Residential Service Supervisor, Property Supervisor, and ACOF's Asset Manager. In the absence of a PM, the back -up PM or the Property Supervisor will attend the meetings until the PM's position has been filled. In case of RSC's vacancy, the site Residential Services Supervisor will attend the site meetings. The Asset Manager may attend the regular site staff meetings for new sites and in cases where additional support for property management staff is needed. The Property Supervisor will attend staff meetings as part of a new PM's orientation and training and in cases where additional property management support is needed. E. Assisting Tenants to apply for utility rate assistance programs During the orientation process tenants will be given literature and forms for applying for low income utility rate assistance program, if available. This information will also be included in the Tenant Handbook. The RSC is responsible for following up with each tenant and offering assistance, if needed. During site staff meetings, the RSC will provide updates as to which tenants have taken advantage of the rate assistance program. The log will be updated until each tenant has either refused assistance, refused to take advantage of the program or has been deemed ineligible. The updated log will be included in the weekly site report. Exhibit H - 37 - As part of the lease agreement, tenants will be asked to sign a release of utility account information, whereby tenants will authorize access to their utility accounts for the purposes of utility monitoring to facilitate resource conservation. F. Reasonable Accommodation & Modification Requests Reasonable accommodations and modifications will be made to meet the needs of disabled applicants, including applicants with both physical and /or mental disabilities. The reasonable accommodation process starts at the site level when an applicant or tenant makes an accommodation request to the Agent. The Agent determines if the request can be approved and accommodated at the property. If the request is approved and can be accommodated at the property the PM provides a written response with a copy to the RSC or referring case manager. If the Agent determines that the request should not be approved or can not be accommodated at the property, the PM must send the request to the Owner for review and final disposition. Only the Owner is authorized to deny a reasonable accommodation request. The RSC or the outside referring case manager is an integral part of the reasonable accommodation process. With the tenant or applicant's approval, copies of all communications are sent to the RSC thus affording the RSC and /or outside referring case manager full opportunity to intercede and advocate on behalf of the tenant/applicant. Should the Owner determine that the request should be denied then the tenant /applicant and the RSC are invited to enter into interactive process to determine other ways to respond to the tenant/applicant's need. If necessary Owner will consult with its fair housing attorney to assure that Owner has fulfilled it obligations in regards to the tenant/applicant and the law. G. Incident Reports The PM is required to forward an incident report to the owner within 24 hours or no later than and no later than the first business day of an incident.. This policy allows Owner to monitor and provide proactive oversight to incidents that involve the use of the public emergency response systems and well as incidents that involve the communities in which our properties are placed and incidents that may pose a liability to the owner. The Incident Report includes an area for site staff to indicate interventions proposed or undertaken, which allows the asset manager to review the way the incident was handled by the Agent. This ensures consistency with ACOF's philosophy and allows ACOF the opportunity to intervene if necessary. H. Security Exhibit H - 38 - Vista del Rio will include the following security enhancements: 1.) Security Cameras: the project design will include security cameras with remote access and dual monitoring from the tenant manager's office and apartment; 2.) Controlled Entry /Locks /Gated Parking: the building will be locked at all times, and each tenant will have an outside key and a key to their unit; 3.) Fire Alarm monitoring that includes: 24 hour fire alarm monitoring by a third part vendor and a phone calling tree that starts with the PM and ends with ACOF's asset management staff. 4.) Cell phones — Phones will be assigned to each property manager to facilitate accessibility and communications. 5.) Site Staff /CPPIFirst Aid Training: PM living on -site will be trained in fire safety, crisis intervention, and First Aid /CPR will live on -site; and /or 6.) Disaster Preparedness: A site specific evacuation plan for earthquake, fire, and other potential disasters will be in place. The PM will conduct bi- annual fire drills IV. GREEN OPERATIONS & MAINTENANCE Regular and consistent maintenance supports ACOF's mission of safe, supportive, well maintained housing and an uncompromised level of customer service to its tenants. The designated asset manager provides oversight of the Agent's maintenance services. Each building has a dedicated maintenance staff person. Owner works with vendors that have serviced its portfolio in some cases since the first property was placed in operations. This means that when an emergency occurs Owner can count on vendors that are experienced with working with Owner's special needs population. Again, it means that the tenants are not faced with the unfamiliar in extraordinary circumstances. Each buildings has a site specific maintenance plan that is created by a facilities management consultant and takes into account the buildings systems and the manufacturer's maintenance and replacement schedule. Vista del Rio's property maintenance plan will reflect current thinking on Green Operations and Maintenance. The manual will utilize Enterprise's Green Communities template which encompasses best practices for healthy and high performance buildings. Maintenance administration begins during construction. The asset manager reviews and approves any change order that have long term maintenance implications. At the end of construction, to ensure cross training on building systems, the Property Manager, the back up manager, the designated maintenance staff person and if applicable maintenance service vendors attend the subcontractor's systems maintenance instructional session. To ensure that the property maintenance manual is consistent with the manufactures maintenance and operating guidelines, the facilities management consultant who is responsible for creating the manual will also attend the subcontractor's training. The Property Manager, the back up manager and designated maintenance staff also participate in the punch list inspection. The maintenance plan includes a preventive maintenance schedule, routine maintenance, designated maintenance staff and a vendor list. Maintenance standards include a 24 hour response time to all work -order requests, an annual 100% unit inspection, quarterly smoke Exhibit H - 39 - detector inspections, completion of emergency work orders within 24 hours, units make ready within 7 days, and a 24 hour window for graffiti removal. A. The Green Operations shall include the following: • Green and Healthy Housekeeping — cleaning procedures, low -toxic cleaning products, storage and disposal of cleaning products, disposable janitorial supplies, and housekeeping equipment • Indoor Pest Prevention and Control — integrated pest management, pest prevention tips, pest management protocols, and bed bug prevention and control • Waste Reduction and Recycling — waste prevention, weekly recycling program, building rehabilitation / renovation waste management, and hazardous waste disposal • Energy and Water Conservation — energy efficiency strategies, water- saving strategies • Green Groundskeeping — irrigation, plantings, integrated pest management, storm water filtration, exterior lighting, and parking lot B. Preventive Maintenance Schedule Interior painting and redecoration of individual units shall occur every 3 to 5 years based on need substantiated by the annual physical inspection, or as occupancy changes, or as the Agent and Owner may otherwise deem necessary. Any painting needed to be done sooner than six (6) years shall be charged to the tenant on a pro rata basis. C. General Repairs All items needing repair or replacement, whether reported by the tenants or discovered by management staff, shall be recorded by the Agent on a maintenance work order form. 1. The form shall be completed in triplicate; one copy each shall be given to the Tenant and Goodwill and one copy shall be retained in a suitable ledger for follow -up as the work proceeds. 2. The work order form shall indicate the costs of labor and materials and the Property Manager shall determine any charges to tenants for damages beyond normal wear and tear. Tenants will be billed promptly for damages they cause, and per the lease agreement, be required to reimburse the Property within 30 days or other reasonable time agreed upon by the PM and tenant. Exhibit H - 40 - 3. Once the work is completed and the tenant has acknowledged this by signing a copy of the work order, the ledger copy shall be placed in the permanent file assigned to the tenant's unit. 4. Routine maintenance requests will be completed within 72 hours. D. Emergency Repairs and Graffiti 1. All emergency repairs or replacements, regardless of the time of day they occur, shall be handled promptly. Emergency needs shall he defined as those situations posing immediate threat to the health and safety of tenants and/or the integrity of the grounds, buildings, and equipment, including: the interruption of services hot or cold running water, electricity, gas, adequate heat and plumbing; glass breakage which deprives tenants of security or heat; or repairs that if not performed would expose tenants to injury. 2. Graffiti shall be removed within 24 hours. In case of emergency after business hours, a 24 -hour answering service will be maintained to notify Agent. E. Schedule of Useful Life and Replacement Needs for Major Items. Major interior redecorating of common areas, exterior painting and replacements to building infrastructure, heating and ventilation systems shall be integrated into a capital improvements schedule which shall serve as a basis for computing and establishing the Replacement Reserve Fund and adequate contributions from the annual operating budget. Roof 5 - 10 years Carpet 1 Flooring 3 - 30 years Kitchen Appliances 10 years Common Appliances 10 years Mechanical 25 - 35 years Paving 5 - 10 years F. Recycling Vista del Rio will have a robust recycling program with separate facilities /space for recycling. A requirement to recycle will be part of Vista del Rio's House Rules. New tenants will be provided with materials and information regarding the importance of recycling as a component of their welcome orientation to the building. Information about recycling will also be posted in common areas distinguishing between materials, paper, green waste, and hazardous materials. Ongoing trainings about resource conservation will occur at least once a quarter Exhibit H - 41 - during community meetings. To further encourage recycling, on -site staff will explore incentive opportunities for tenants to recycle, including tenant -run recycling programs as a job opportunity or where tenants may retain the monetary benefits of recycling. Exhibit H - 42 - w. When recorded, please mail this Instrument to: Recording Requested By: DPS Clerk of the Council On Behalf Of City of Santa Ana °° DIPS " 20 Civic Center Plaza, M -30 Santa Ana, California 92701 h -zdaq -2_/i Free recording requested by The City of Santa Ana per Government Code Section 6103. This Document was electronically recorded by DPS Norwalk C Recorded in Official Records, Orange County Tom Daly, Clerk- Recorder IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIINO FEE 2012000162988 04:30pm 03/21/12 48 404 E01 4 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 SPACE ABOVE THIS LINE FOR RECORDER'S USE Cancel Approved AS TO Approved By Description Description A.P. Number RAN Map Number Project Taxes Form BY Airy. Director written BY Checked-O.K. Number P.J.S. A.C. 101 - 055 -27 NW 251 3'27V Z9-- ?, Z EASEMENT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Vista Del Rio Housing Partners, L.P., a California Limited Partnership Deed No. 8408 Does Hereby Grant to THE CITY OF SANTA ANA, a Charter City and Municipal Corporation of the State of California, the real property in the City of Santa Ana, County of Orange, State of California, described as follows: An easement for traffic signal and traffic loop purposes as described in Exhibit "A" attached hereto and by this reference made a part hereof, and as shown on Exhibit "B" attached hereto and by this reference made a part hereof. For: Vista Del Rio Housing Partners, L.P., a California Limited Partnership Dated: _J✓ 1 I. } SATE OF CALIFORNIA }SS. COUNTY OF n? X yi' iAL } On personally appeared before me, By:- IL 'OL) A 4,°E-ero\61�1 7 -- Print Name [Akf f. t%EL nircVT= AI R �rrnyvtNlWtzt1 or' t=RaR oS ..I(yy.,, '(IAU�vstSkGLNJ( 6'i�f'a� '�l' -�5✓ -- t n,7p�iTOK pgbli ire who proved to me on th sis of satisfactory evidence to be the person(s) whose names Is /o,�rr ,Wthscribed to the within instrument and acknowledged to that he /gheJthey exe led the same in hi er,their authorized capacity(ies), and at by hi e heir signature(s) on e instrument the person(s) or er itjt upon hlch 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. MARY A. EL TON ��ryry COMM. # 1962216 ��qq NOIARY PUBLIO-CALIFORNIA 7 ° ORANGE COUNTY MY COMM. EXP. UEp^ C. 25620 (This area for official notarial seal) ai U 0 N (0 J 0 0 E m 0 0 .6 rn Y 0 0 to CERTIFICATE OF ACCEPTANCE This is to certify that the interest in the real property conveyed by the easement deed dated - -14-1 , 2012 from Vista Del Rio Housing Partners, L.P., a California Limited Partnership, to the City of Santa Ana, a charter city and municipal corporation duly organized under the Constitution and laws of the State of California, is hereby accepted by the undersigned officer or agent on behalf of the City Council pursuant to authority conferred by Ordinance No. NS- 2352 and Section No. 33 -55 of the Santa Ana Municipal Code adopted by the City Council on June 1, 1998, in compliance with California Government Code Section 27281 and the grantee consents to recordation thereof by its duly authorized officer. Dated 2111 Dated Memory MGE_Casemen[Ac epte ucCect_AC For the City of Santa Ana: By' tAnterim City Manager Paul M. Walters Attested By: City Clerk Maria D. Huizar EXHIBIT "A" LEGAL DESCRIPTION FOR TRAFFIC SIGNAL AND TRAFFIC SIGNAL LOOP EASEMENT IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING A PORTION OF THE NORTHEAST QUARTER OF SECTION 2, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS PER MAP RECORDED IN BOOK 51, PAGE 12 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, AS DESCRIBED IN A DEED TO THE NEWBERT PROTECTION DISTRICT, RECORDED OCTOBER 16, 1919 IN BOOK 339 PAGE 382 OF DEEDS IN THE OFFICE OF SAID COUNTY RECORDER MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST NORTHEASTERLY CORNER OF LOT 38 OF TRACT NO. 2887 AS SHOWN ON A MAP FILED IN BOOK 117, PAGES 28 THROUGH 30, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, BEING ALSO THE WESTERLY CORNER OF THAT CERTAIN STRIP OF LAND DEEDED TO THE CITY OF SANTA ANA ON MAY 14, 2002 BY INSTRUMENT NO. 20020400664 OF OFFICIAL RECORDS OF SAID COUNTY, THE SOUTHERLY LINE OF SAID STRIP BEING A TANGENT CURVE, CONCAVE SOUTHERLY AND HAVING A RADIUS OF 867.00 FEET, THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 07° 01'04", AN ARC LENGTH OF 106.19 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 030 22'44", AN ARC LENGTH OF 51.13 FEET TO THE END OF SAID CURVE; THENCE CONTINUING ALONG SAID SOUTHERLY LINE OF SAID STRIP, SOUTH 69° 55' 32" EAST A DISTANCE OF 48.61 FEET; THENCE DEPARTING THE SOUTHERLY LINE OF SAID STRIP, SOUTH 62° 04' 28" WEST A DISTANCE OF 24.14 FEET; THENCE NORTH 750 55' 32" WEST A DISTANCE OF 6.00 FEET; THENCE SOUTH 14° 04'28" WEST A DISTANCE OF 27.84 FEET; THENCE NORTH 75° 55' 32' WEST A DISTANCE OF 28.00 FEET; THENCE NORTH 14° 04' 28' EAST A DISTANCE OF 42.41 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE SOUTHERLY AND HAVING A RADIUS OF 860.00 FEET, SAID CURVE BEING CONCENTRIC TO AND 7.00 FEET DISTANT FROM SAID SOUTHERLY LINE OF SAID STRIP OF LAND; THENCE CONTINUING NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 01 ° 37' 46 ", AN ARC LENGTH OF 24.46 FEET TO THE END OF CURVE, SAID END OF CURVE HAVING A RADIAL BEARING OF NORTH 18° 15' 12" EAST; THENCE ALONG A LINE NON- TANGENT TO SAID CURVE BEARING NORTH 840 52' 51" WEST ADISTANCE OF 14.00 FEET; THENCE NORTH 26° 58' 15" WEST A DISTANCE OF 14.00 FEET TO THE TRUE POINT OF BEGINNING. The area of the described land consisting of 0.045 acres (1951 square feet) more or less. Subject to covenants, conditions, restrictions and other rights of record. As shown on Exhibit `B" attached hereto and by this reference made a part hereof. No. 5183 EXP. 6/3011 r�s � NZ OP Prepared by: Patrick Savage PLS 5183 - expires 6/30/2013 SHEET 1 OF I 10% =:a v EXHIBIT "B" SHEET 1 OF 1 SKETCH TO ACCOMPANY LEGAL DESCRIPTION FOR TRAFFIC SIGNAL AND TRAFFIC SIGNAL LOOP EASEMENT GAS �N GR ®VF Q) �\ ,O -4 Q =1� P 4,70 °23 da_•07 'n 8,. 4__j oN79 / 4224 O :) N84 52'51 "W l S'LY LINE 14.00' INST No. 2002-0400664 ^ /QQ Z� PATRICK J. SAVAGE Exp. 06/30/13 N0. 5183 0 0 41, 6J 00 4`7 31 (2001, 6 •• a v Q) CIV 2 Shy. �� 4861532 f N� / J' CO _ 10 655 32„W 3 28, 0p. , W— _ EASEMENT AREA Favreau • Savage, Incorporated Land Surveying 340 Old Newport Blvd. • Suite 3 • Newport Beach, California 92663 o (949) 675 - 8030.(949) 675 -1823 PATRICK SAVAGE, PLS 5183 DATE S/ 1,75j oN79 / 4224 O :) N84 52'51 "W l S'LY LINE 14.00' INST No. 2002-0400664 ^ /QQ Z� PATRICK J. SAVAGE Exp. 06/30/13 N0. 5183 0 0 41, 6J 00 4`7 31 (2001, 6 •• a v Q) CIV 2 Shy. �� 4861532 f N� / J' CO _ 10 655 32„W 3 28, 0p. , W— _ EASEMENT AREA Favreau • Savage, Incorporated Land Surveying 340 Old Newport Blvd. • Suite 3 • Newport Beach, California 92663 o (949) 675 - 8030.(949) 675 -1823 PATRICK SAVAGE, PLS 5183 DATE ReWding Requested BY Fiat Rmetican Title Company When recorded, please mail this Instrument to: Clerk of the Council Recording Requested By: D11S City of Santa Ana On Behalf Of: 20 Civic Center Plaza, M -30 - .. DPS cm Santa Ana, California 92701 -- Free recording requested by The City of Santa Ana per Government Code Section 6103. This Document was electronically recorded by DPS Norwalk C Recorded in Official Records, Orange County Tom Daly, Clerk- Recorder IIlllIIIIJJJl JlllIlljI1111111illlIlllIIl [l1111111111 il II J Jill NO FEE 2012000162986 04:30pm 03/21/12 48 404 E01 4 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 SPACE ABOVE THIS LINE FOR RECORDER'S USE Cancel Approved AS TO Approved By "ascription UescripIran A.P. Number R/w Map Number Project Taxes Form BY Atty. Director written BY Checked -O.K, Number P.J.S. A.C. 101- 055 -27 NW 251 371 EASEMENT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Vista Del Rio Housing Partners, L.P., a California Limited Partnership Deed No. 8409 Does Hereby Grant to THE CITY OF SANTA ANA, a Charter City and Municipal Corporation of the State of California, the real property in the City of Santa Ana, County of Orange, State of California, described as follows: An easement for Landscape and Maintenance purposes as described in Exhibit "A" attached hereto and by this reference made a part hereof, and as shown on Exhibit "B" attached hereto and by this reference made a part hereof. For: Vista Del Rio Housing Partners, L.P., a California Limited Partnership Dated:_ l_ I D } SATE OF CALI gRNIA }SS. P COUNTY OF (,I OWxi K' } On "k �,�, r,"y� �-V 1 r.J� before me, IiM /UOA I r f-i -V 10J.I1i°til FLA,bl/ GIs personally appeared who proved to me on the sls of,satWactory evidence to be the person(s) whose names Is/ re subscltbed to the within instrument and acknowledged to n that e/ e,, hey executed the same in hi e jtheir authorized capacity(ies), and t at by hi- er heir signature(s) o the instrument the person(s) or entity upon w ich the person(s) acted, executed the instrument. 'De'V t'A Cnt+36 &AL" Print Name C.,Nr` * I?,)tv�WTvur_ dv^�t�� Pr LAVj nr` )b1 7 pv 5r vS I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. �A ELTON 11Ip� COMM. # 1962218 V! °® NOTARY PUBLIC - CALIFORNIA ORANGE COUany r MY COMM. E %p. DGC. 26, 2010 "-0 (This area for offcllal notarlal seal) U m 0 c N ..J 0 0 E 0 0 N a w -c 0 0 CERTIFICATE OF ACCEPTANCE This is to certify that the interest in the real property conveyed by the easement deed dated 3 - -1 L1-I 2- , 2012 from Vista Del Rio Housing Partners, L.P., a California Limited Partnership, to the City of Santa Ana, a charter city and municipal corporation duly organized under the Constitution and laws of the State of California, is hereby accepted by the undersigned officer or agent on behalf of the City Council pursuant to authority conferred by Ordinance No. NS- 2352 and Section No. 33 -55 of the Santa Ana Municipal Code adopted by the City Council on June 1, 1998, in compliance with California Government Code Section 27281 and the grantee consents to recordation thereof by its duly authorized officer. For the City of Santa Ana: 's(�ylzo�a B w c\v%�me�� ., Dated Interim City Manager Paul M. Walters Dated Memcry1600F _FasementAcceptanceCert AC Attested By: By: a-p � "3 , iii_' City Clerk Maria D. Huizar EXHIBIT "A" LEGAL DESCRIPTION FOR LANDSCAPE AND MAINTENANCE EASEMENT IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING A PORTION OF THE NORTHEAST QUARTER OF SECTION 2, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS PER MAP RECORDED IN BOOK 51, PAGE 12 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, AS DESCRIBED IN A DEED TO THE NEWBERT PROTECTION DISTRICT, RECORDED OCTOBER 16, 1919 IN BOOK 339 PAGE 382 OF DEEDS IN THE OFFICE OF SAID COUNTY RECORDER MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE SOUTHERLY LINE OF THAT CERTAIN STRIP OF LAND DEEDED TO THE CITY OF SANTA ANA ON MAY 14, 2002 BY INSTRUMENT NO. 20020400664 OF OFFICIAL RECORDS OF SAID COUNTY, SAID POINT BEARING SOUTH 69° 55' 32 EAST AND HAVING A DISTANCE OF 77.35 FEET FROM THE EASTERLY END OF AN 867.00 FEET RADIUS CURVE DESCRIBED THEREIN; THENCE NORTH 69° 55'32" WEST A DISTANCE OF 28.74 FEET ALONG THE SOUTHERLY LINE OF SAID STRIP; THENCE SOUTH 62° 04'28" WEST A DISTANCE OF 22.80 FEET; THENCE SOUTH 14° 04'28" WEST A DISTANCE OF 37.84 FEET; THENCE SOUTH 40'01' 11" EAST A DISTANCE OF 33.64 FEET; THENCE SOUTH 25° 35' 43" EAST A DISTANCE OF 29.06 FEET TO THE BEGINNING OF A NON - TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIAL BEARING OF SOUTH 39° 52'08" WEST AND A RADIUS OF 37.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 500 45' 00" AN ARC LENGTH OF 32.77 FEET TO THE END OF SAID CURVE; THENCE ALONG A LINE TANGENT TO SAID CURVE SOUTH 00° 37' 08" WEST A DISTANCE OF 140.00 FEET; THENCE SOUTH 89'22' 52" EAST A DISTANCE OF 5.00 FEET; THENCE NORTH 000 37'08" EAST A DISTANCE OF 140.00 FEET TO TFIE BEGINNING OF A NON - TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 42.00 FEET; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 50° 45' 00" AN ARC LENGTH OF 37.20 FEET TO THE END OF SAID CURVE; THENCE ALONG A LINE NON - TANGENT TO SAID CURVE, NORTH 25° 35'43" WEST A DISTANCE OF 29.37 FEET; THENCE NORTH 400 01' 11" WEST A DISTANCE OF 27.44 FEET; THENCE NORTH 14'04' 28" EAST A DISTANCE OF 36.00 FEET; THENCE NORTH 62'04'28" EAST A DISTANCE OF 13.38 FEET; THENCE SOUTH 69'55'32" EAST A DISTANCE OF 28.00 FEET; THENCE NORTH 20° 04' 28" EAST A DISTANCE OF 7.00 FEET TO THE POINT OF BEGINNING. The area of the described land consisting of 0.039 acres (1712 square feet) more or less. Subject to covenants, conditions, restrictions and other rights of record. As shown on Exhibit `B" attached hereto and by this reference made a part hereof. Prepared y: Patrick Savage PLS 5183 - expires 6/30/2013 SHEET 1 OF 1 _ 71 �- SKETCH TO ACCOMPANY LEGAL DESCRIPTION FOR LANDSCAPE AND MAINTENANCE EASEMENT .w oho 2� d 10 23 2' oorp = EASEMENT AREA L" 5��, PATRICK J. SAVAGE xp. 06/30/13 N0. 5183 ro/ SHEET 1OF1 S69 ss32 Bs\ F S6 2�2g0 a ro //. 6 ^%Np oN� 1�o828E oNOO h pp, r \A62 --f '%r \-A 0lb fig/ p \ <�\ l l�! /I 1 O 1111 o 5� 3 / W p�0 v S89 22'52 "E � Q� 5.00' m Q O qq�\ V m ~ m d 10 23 2' oorp = EASEMENT AREA L" 5��, PATRICK J. SAVAGE xp. 06/30/13 N0. 5183 ro/ SHEET 1OF1 S69 ss32 Bs\ F S6 2�2g0 a ro //. 6 ^%Np oN� 1�o828E oNOO h pp, r \A62 --f '%r \-A 0lb fig/ p \ <�\ l l�! /I 1 O 1111 o 5� 3 / W p�0 v S89 22'52 "E � Q� 5.00' R��urdinq . �irs� A�erican Tale CarK ►p�� Whin recorded, please mail this Instrument to: � Recording Requested ed By: DPS Clerk of the Council On Behalf Of : City of Santa Ana " ])PIS bu 20 Civic Center Plaza, M -30 Santa Ana, California 9270 ° Free recording requested by The City of Santa Ana per Government Code Section 6103. This Document was electronically recorded by DPS Norwalk C Recorded in Official Records, Orange County Tom Daly, Clerk- Recorder IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIN® FEE 2012000162989 04:30pm 03/21/12 48 404 E01 4 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 SPACE ABOVE THIS LINE FOR RECORDER'S USE Cancel Approved AS TO Approved By Description Description A.P. Number RAN Map Number Project Taxes Form BY Ally, Director written BY Checked -O.K. Number P.J.S. A.C. 101 - 055 -27 NW 251 EASEMENT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Vista Del Rio Housing Partners, L.P., a California Limited Partnership Deed No° 8410 Does Hereby Grant to THE CITY OF SANTA ANA, a Charter City and Municipal Corporation of the State of California, the real property in the City of Santa Ana, County of Orange, State of California, described as follows: An easement for sidewalk and pedestrian access purposes as described in Exhibit "A" attached hereto and by this reference made a part hereof, and as shown on Exhibit "B" attached hereto and by this reference made a part hereof. For: Vista Del Rio Housing Partners, L.P., a California Limited Partnership Dated: SATE OF CALI FOR ,N�IA` }SS. COUNTY OF � On i1%�li1t�('�k I r- , before me, �) personally appeared 31eig- 4` "/1 who proved to me on the asis of satisfactory Hence to be the person(s) whose names /a�r subscribed to th, withm instrumee t and acknowledged to me that iegSIn /they ex P uted the same in hi eni their authorized capacity(les), an 't at by his%((h�e, /thy r oignature(s) o`n`"Cfhe instrument the person(s) or entity upon which ine person(s) acted, executed the instrument. By: 1�ro l ;tcdrJG (�tna_ Print Name T,Y�dY6.(n/Tty✓G_ dyiG� A UW041)NI'R� ()V7 F-PI &tJD4h itAYkr0Vc&IP)6 6VW7rlQd'FL" Eyn27r✓fd�. MARY A. ELT011 N ` COMM.# 1862216 /�pp °A NOT1IRY PU8LICCALIFORNIA ql tORANGE COUNTY v CGMMVXo. O,a,EC^. 26201 I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. W Sic (This area for official notarial seal) ei a 0 U (0 c J O E GO L 0 a) .. -0 . N L 0 O CERTIFICATE OF ACCEPTANCE This is to certify that the interest in the real property conveyed by the easement deed dated I �� I 2012 from Vista Del Rio Housing Partners, L.P., a California Limited Partnership, to the City of Santa Ana, a charter city and municipal corporation duly organized under the Constitution and laws of the State of California, is hereby accepted by the undersigned officer or agent on behalf of the City Council pursuant to authority conferred by Ordinance No. NS- 2352 and Section No. 33 -55 of the Santa Ana Municipal Code adopted by the City Council on June 1, 1998, in compliance with California Government Code Section 27281 and the grantee consents to recordation thereof by its duly authorized officer. For the City of Santa Ana: �VAILC"-, By: y °� Dated Interim City Manager Paul M. Walters Dated W..U1600E_Ean. n A,upwan Cw AC Attested By: City'Clerk Maria D. Huizar EXHIBIT "A" LEGAL DESCRIPTION FOR SIDEWALK AND PEDESTRIAN ACCESS EASEMENT IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING A PORTION OF THE NORTHEAST QUARTER OF SECTION 2, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS PER MAP RECORDED IN BOOK 51, PAGE 12 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, AS DESCRIBED IN A DEED TO THE NEWBERT PROTECTION DISTRICT, RECORDED OCTOBER 16, 1919 IN BOOK 339 PAGE 382 OF DEEDS IN THE OFFICE OF SAID COUNTY RECORDER MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST NORTHEASTERLY CORNER OF LOT 38 OF TRACT NO. 2887 AS SHOWN ON A MAP FILED IN BOOK 117, PAGES 28 THROUGH 30, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, BEING ALSO THE WESTERLY CORNER OF THAT CERTAIN STRIP OF LAND DEEDED TO THE CITY OF SANTA ANA ON MAY 14, 2002 BY INSTRUMENT NO. 20020400664 OF OFFICIAL RECORDS OF SAID COUNTY, THE SOUTHERLY LINE OF SAID STRIP BEING A TANGENT CURVE, CONCAVE SOUTHERLY AND HAVING A RADIUS OF 867.00 FEET, THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 070 01'04", AN ARC LENGTH OF 106.19 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 03° 22'45", AN ARC LENGTH OF 51.13 FEET TO THE END OF SAID CURVE; THENCE CONTINUING ALONG SAID SOUTHERLY LINE OF SAID STRIP, SOUTH 69° 55' 32" EAST A DISTANCE OF 48.61 FEET; THENCE DEPARTING THE SOUTHERLY LINE OF SAID STRIP, SOUTH 62° 04'28" WEST A DISTANCE OF 24.14 FEET; THENCE NORTH 750 55' 32" WEST A DISTANCE OF 6.00 FEET; THENCE NORTH 14° 04'28" EAST A DISTANCE OF 11.63 FEET; THENCE NORTH 69° 55' 32" WEST A DISTANCE OF 25.27 FEET PARALLEL TO AND DISTANT 7.00 FEET SOUTHWESTERLY FROM SAID SOUTHERLY LINE OF SAID STRIP OF LAND TO THE BEGINNING OF A TANGENT CURVE, CONCAVE SOUTHERLY AND HAVING A RADIUS OF 860.00 FEET, SAID CURVE BEING CONCENTRIC TO AND 7.00 FEET DISTANT FROM SAID STRIP OF LAND; THENCE CONTINUING NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 010 49' 16 ", AN ARC LENGTH OF 27.34 FEET TO THE END OF CURVE, SAID END OF CURVE HAVING A RADIAL BEARING OF NORTH 18° 15' 12" EAST; THENCE ALONG A LINE NON- TANGENT TO SAID CURVE BEARING NORTH 840 52' 51" WEST A DISTANCE OF 14.00 FEET; THENCE NORTH 260 58' 15" WEST A DISTANCE OF 14.00 FEET TO THE TRUE POINT OF BEGINNING. The area of the described land consisting of 0.018 acres (805 square feet) more or les Subject to covenants, conditions, restrictions and other rights of record. As shown on Exhibit `B" attached hereto and by this reference made a part hereof. Prepared by: Patrick Savage PLS 5183 - expires 6/30/2013 SHEET 1 OF I m V Q EXHIBIT "B" SKETCH TO ACCOMPANY LEGAL DESCRIPTION FOR SIDEWALK AND PEDESTRIAN ACCESS EASEMENT - - -_ GAR® FIV�GROVE tv S'LY LINE 14,00' y� INST No. 2002 - 0400664 7/ Q �a `a 0 Q R,86> .a`7 R e� 3g E N v O/O o �Q dry/ Q)) 00' Ns L - -i ,N O a n 11 = N7555;3» s. 00, 2w SHEET 1 OF 1 Ssg SS 8 67' 32 F 520�2a�r3 � 4 /� 7'� = EASEMENT AREA PATRICK J. °� Favreau • Savage, Incorporated SAVAGE Exp. 08/30/13 Land Surveying * 340 Old Newport Blvd. • Suite 3 • Newport Beach, California 92663 NO. 5183 0 (949) 675 -8030 • (949) 675 -1823 of cnu PATRICK SAVAGE, PLS 5183 DATE P.O.B. /o 4--10. 3,AB % �Q = Z-- j Z,9, N84 52'57 " W l S'LY LINE 14,00' y� INST No. 2002 - 0400664 7/ Q �a `a 0 Q R,86> .a`7 R e� 3g E N v O/O o �Q dry/ Q)) 00' Ns L - -i ,N O a n 11 = N7555;3» s. 00, 2w SHEET 1 OF 1 Ssg SS 8 67' 32 F 520�2a�r3 � 4 /� 7'� = EASEMENT AREA PATRICK J. °� Favreau • Savage, Incorporated SAVAGE Exp. 08/30/13 Land Surveying * 340 Old Newport Blvd. • Suite 3 • Newport Beach, California 92663 NO. 5183 0 (949) 675 -8030 • (949) 675 -1823 of cnu PATRICK SAVAGE, PLS 5183 DATE ti6 Cr b� sm d� xo WHEN RECORDED MAIL TO: City of Santa Ana 20 Civic Center Plaza (M -37) P.O. Box 1988 Santa Ana, California 92702 Attention: City Manager 37Z7c(2!?_ Z-2 This Document was electronically recorded by DIPS Norwalk C Recorded in Official Records, Orange County Tom Daly, Clerk- Recorder IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIN® FEE 2012000163001 04:30pm 03/21/12 48 404 R23 3 0.00 0.00 0.00 0.00 6.00 0.00 0.00 0.00 This document is exempt from the payment of a fee pursuant to Government Code Section 6103. REQUEST FOR NOTICE UNDER CIVIL CODE SECTION 2924B In accordance with California Civil Code Section 2924b 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. 2DI C01 09q 'j 7i on 79 -?-1 � �zBO, 2012 in the Official Records of Orange County, California, and describing land therein as set forth in the legal description attached hereto as Exhibit A and incorporated herein, executed by VISTA DEL RIO HOUSING PARTNERS LP, a California limited partnership, as TrustorBorrower, in which JPMORGAN CHASE BANK, N.A., a national banking association, is named as Beneficiary, and CALIFORNIA RECONVEANCE COMPANY, a California corporation, is named as Trustee, be mailed to: CITY OF SANTA ANA, 20 Civic Center Plaza (M -37), P.O. Box 1988, Santa Ana, California 92702, Attn: City Manager. NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED. ATTEST: Maria D. Huizar, Clerk of 0 Council APPROVED AS TO FORM By: - Y � ,e��.ky.�,.,� Lisa E. Storck Assistant Counsel DOCSOC/1535461v3/200272 -0004 CITY OF SANTA ANA, a charter city and municipal corporation By:- _'kO��i_SS,f�� Francisco Gutierrez Executive Director of Finance and Management Services CA56/r LEGAL DESCRIPTION PARCEL 2 Real Property in the City of Santa Ana, County of Orange, State of California, described as follows IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING A PORTION OF THE NORTHEAST QUARTER OF SECTION 2, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS PER MAP RECORDED IN BOOK 51, PAGE 12 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, AS DESCRIBED IN A DEED TO THE NEWBERT PROTECTION DISTRICT, RECORDED OCTOBER 16, 1919IN BOOK 339 PAGE 382 OF DEEDS IN THE OFFICE OF SAID COUNTY RECORDER MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST NORTHEASTERLY CORNER OF LOT 38 OF TRACT NO. 2887 AS SHOWN ON A MAP FILED IN BOOK 117, PAGES 28 THROUGH 30, INCLUSIVE, OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, BEING ALSO THE WESTERLY CORNER OF THAT CERTAIN STRIP OF LAND DEEDED TO THE CITY OF SANTA ANA ON MAY 14, 2002 BY INSTRUMENT NO, 20020400664 OF OFFICIAL RECORDS OF SAID COUNTY, THE SOUTHERLY LINE OF SAID STRIP BEING A TANGENT CURVE, CONCAVE SOUTHERLY AND HAVING A RADIUS OF 867.00 FEET, THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 10° 23'48", AN ARC LENGTH OF 157,32 FEET TO THE END OF SAID CURVE; THENCE SOUTH 69' 55'32" EAST A DISTANCE OF 77.35 FEET ALONG THE SOUTHERLY LINE OF SAID STRIP; THENCE DEPARTING SAID SOUTHERLY LINE ON A COURSE BEARING SOUTH 2V 04'28" WEST A DISTANCE OF 7.00 FEET; THENCE NORTH 69'55'32" WEST A. DISTANCE OF 28.00 FEET; THENCE SOUTH 62° 04'28" WEST A DISTANCE OF 13.38 FEET; THENCE SOUTH 14'04'28" WEST A DISTANCE OF 36.00 FEET; THENCE SOUTH 40° 01' 11" EAST A DISTANCE OF 27.44 FEET; THENCE SOUTH 25° 35'43" EAST A DISTANCE OF 29.37 FEET TO THE BEGINNING OF A NON - TANGENT CURVE, . CONCAVE SOUTHWESTERLY, HAVING A RADIAL BEARING OF SOUTH 39° 52'08" WEST AND A RADIUS OF 42.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 50° 45' 00" AN ARC LENGTH OF 37.20 FEET TO THE END OF SAID CURVE; THENCE ALONG A LINE TANGENT TO SAID CURVE SOUTH 00° 37' 08" WEST A DISTANCE OF 140.00 FEET; THENCE SOUTH 89° 22' 52" EAST A DISTANCE OF 14.00 FEET TO A POINT ON THE NORTHWESTERLY LINE OF "PARCEL 1" OF A DOCUMENT RECORDED IN BOOK 9034, PAGE 417, OFFICIAL RECORDS OF SAID COUNTY; THENCE SOUTH 2V 53' 03" WEST A DISTANCE OF 534,66 FEET ALONG THE NORTHWESTERLY LINE OF SAID "PARCEL 1 "TO A POINT ON THE EASTERLY LINE OF SAID TRACT 2887; THENCE NORTH T 37' 08" EAST ALONG SAID EASTERLY LINE A DISTANCE OF 802.28 FEET TO THE POINT OF BEGINNING. The area of the described land consisting of 2,740 acres, more or less. EXHIBIT A -2 DOCSOC /1551868v 1/200272 -0004 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California County of Orange }SS. On March 19, 2012 before me Claudia M. FernandezShaw, Notary Public Date Name and Title of Officer (e.g., "Jane Doe, Notary Public ") personally appeared Francisco Gutierrez who proved to me on the basis of satisfactory evidence to be the person(4 whose name) bare subscribed to the within instrument and acknowledged to me that cRLS'fteffiT 7 executed the same in J3WherfteV authorized capacity(), and that by `,I I�P7t heirr signatu eo) on the instrument the person( or the entity upon behalf of which the person(sKacted, executed the instrument. CLAUDIAM.FERNANDEZSHAW I certify under PENALTY OF PERJURY under Commission # 187512 the laws of the State of California that the Z Notary Public - California z Z orange county u foregoing is true and correct. My Comm. Expires Jan 25, 2014 WI�ESS my and and official seal. a e / F, Place Notary Seal Above Though the information below is not required bk1aw, it may prove valuable to persons relying on The 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