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employees (each, an "Agency Indemnified Party") against any and all Damages arising out of <br />or in connection with Developer's performance of or failure to perform its Developer <br />Obligations to complete construction and development of the Housing Development, in the <br />manner and within the time periods, and to otherwise perform any covenants, set forth in the <br />AHSC Documents. However, in no event shall the Agency Indemnified Party be indemnified <br />hereunder for any Claims resulting from such party's sole negligence orwillful misconduct. <br />Developer agrees to pay all of the costs and expenses of the Agency Indemnified Party, including <br />attorneys' fees, which maybe incurred in any effort to enforce any termof this Agreement, <br />including, but not limited to, all such costs and expenses which may be incurred by any Agency <br />Indemnified Party in any legal action, reference or arbitration proceeding brought by HCD or <br />other third party. <br />(c) Notwithstanding the generality of the foregoing, neither party is <br />liable to the other party (including any person or entity claiming through the other party) for the <br />other party's lost profits or special, incidental, indirect, consequential, or exemplary damages <br />arising out of or in any manner connected with this agreement or its subject matter, regardless of <br />the form of action and whether or not the non -claiming party has been informed of, or otherwise <br />might have anticipated, the possibility of damages. However, the limitations of liability set forth <br />in this section 2(c) or elsewhere in this agreement do not apply to, or take into account, damages: <br />(i) resulting from the gross negligence, bad faith, or the willful or intentional misconduct of a <br />party or its personnel; or (ii) stemming from personal injury, death, or property damage caused <br />by a party or its personnel. <br />3. Schedule of Performance; Progress ss Reports. The Agency shall comply with the <br />schedule of performance set forth on Exhibit 2 attached hereto for the completion of the Transit <br />Obligations hereunder (the "Schedule of Performance"). <br />4. Cost Overruns. Developer shall be responsible for paying all costs required to <br />complete the Housing Project, irrespective of whether such costs exceeds the AHSC Loan and <br />the portion of the AHSC Grant designated for the HRI Improvements. Agency shall be <br />responsible for paying all costs required for the Transit Obligations irrespective of whether such <br />costs exceed the portion of the AHSC Grant designated for the Transit Obligations. <br />5. Disbursement of AHSC Grant Funds. Developer and Agency agree that the <br />AHSC Grant funds shall be disbursed directly to the Partnership. <br />6. Notices. Formal notices, demands, and communications between the parties shall <br />be sufficiently given if, and shall not be deemed given unless, dispatched by registered or <br />certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, <br />return receipt requested, or delivered personally, to the principal office of the parties as follows: <br />Agency: <br />City Manager <br />City of Santa Ana <br />20 Civic Center Plaza, <br />Santa Ana,CA 92701 <br />