209 WEST CIVIC CENTER, LLC, KNOWN AS CARIBOU INDUSTRIES, INC.

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and commence operation of the hotel shall start on the date that is one (1) year and one (1) day after the Close of Escrow. 3.2. Grantee shall maintain the Project on the Property in good condition and order, shall keep the Property free from accumulation of debris and waste materials. 3.3. All obligations imposed upon Grantee herein shall bind any and all successors of Grantee (subject to Section 8 below); provided, however, that upon sale or conveyance of the Project, the party selling or conveying shall be relieved of any such obligation to the extent that such obligation arises after the date of sale or conveyance. 4. If Buyer fails to complete the construction of the Project and/or Improvements when required, Grantee shall have one hundred twenty (120) days following written notice of default from the Grantor to complete construction, provided that the Grantee shall not have obtained an extension or postponement to which Grantee may be entitled or that Grantee or Grantee's lender for the project have commenced and are diligently proceeding to cure such default. In the event Grantee fails to cure such default, Grantee shall be liable for liquidated damages in accordance with the Agreement. 5. The Property is subject to the requirements of the Surplus Lands Act. Accordingly, pursuant to Government Code section 54233, if 10 or more residential units are developed on the Property, not less than 15 percent of the total number of residential units developed on the parcels shall be sold or rented at affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, to lower income households, as defined in Section 50079.5 of the Health and Safety Code. Rental units shall remain affordable to, and occupied by, lower income households for a period of at least 55 years for rental housing and 45 years for ownership housing. The initial occupants of all ownership units shall be lower income households, and the units shall be subject to an equity sharing agreement consistent with the provisions of paragraph (2) of subdivision (c) of Section 65915. This covenant shall run with the land and shall be enforceable, against any owner who violates a covenant or restriction and each successor in interest who continues the violation, by any of the entities described in subdivisions (a) to (f), inclusive, of Section 54222.5. Rooms in a hotel project are not considered residential units under the foregoing laws. 6. All covenants contained in this Hotel Covenant shall be covenants running with the land and equitable servitudes thereon. The covenants contained in Sections 3 and 4 herein shall automatically terminate upon (a) issuance of a last Certificate of Occupancy for the Project; or (b) Grantee's payment of liquidated damages in accordance with the Agreement, without further notice or documentation. 7. The covenants contained herein shall be binding for the benefit of Grantor, the City of Santa Ana and, if applicable, any successor in interest to said parties. Such covenants shall run in favor of the Grantor and such aforementioned parties for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. The right to exercise all of the right and remedies, and to maintain any actions at law or suits in equity or contained in this Hotel Covenant shall be for the benefit of and shall be enforceable only by the Grantor and such aforementioned parties. Notwithstanding anything to the contrary in this Hotel Covenant, no default by Grantee hereunder shall result in any forfeiture of fee title to the Property. -2-