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<br />EXHIBIT 3
<br />(a)The relationship between Developer and City is and shall remain
<br />solely that of borrower and lender, City neither undertakes nor assumes any responsibility
<br />to review, inspect, supervise, approve (other than for aesthetics) or inform Developer of
<br />any matter in connection with the construction, including matters relating to: (i) the
<br />performance of the construction work, (ii) architects, contractors, subcontractors and
<br />materialmen, or the workmanship of or materials used by any of them, or (iii) the progress
<br />of the construction; and Developer shall rely entirely on its own judgment with respect to
<br />such matters and acknowledges that any review, inspection, supervision, approval or
<br />information supplied to Developer by City in connection with such matters is solely for the
<br />protection of City and that neither Developer nor any third party is entitled to rely on it;
<br />(b)Notwithstanding any other provision of any Loan Document: (i) the
<br />City is not a partner, joint venture, alter-ego, manager, controlling person or other business
<br />associate or participant of any kind of Developer and City does not intend to ever assume
<br />any such status; (ii) City’s activities in connection with the City/HOME-ARP Loan shall
<br />not be “outside the scope of the activities of a lender of money” within the meaning of
<br />California Civil Code Section 3434, as modified or recodified from time to time, and City
<br />does not intend to ever assume any responsibility to any person for the quality or safety of
<br />the Property; and, (iii) City shall not be deemed responsible for or a participant in any acts,
<br />omissions or decisions of Developer;
<br />(c)City shall not be directly or indirectly liable or responsible for any
<br />loss or injury of any kind to any person or property resulting from any construction on, or
<br />occupancy or use of, the Property, whether arising from: (i) any defect in any building,
<br />grading, landscaping or other onsite or offsite improvement; (ii) any act or omission of
<br />Developer or any of Developer’s agents, employees, independent contractors, licensees or
<br />invitees; or, (iii) any accident on the Property or any fire or other casualty or hazard
<br />thereon; and
<br />(d)By accepting or approving anything required to be performed or
<br />given to City under the Loan Documents, including any certificate, financial statement,
<br />survey, appraisal or insurance policy, City shall not be deemed to have warranted or
<br />represented the sufficiency or legal effect of the same, and no such acceptance or approval
<br />shall constitute a warranty or representation by City to anyone.
<br />18.2.Indemnity. Developer shall defend (by counsel reasonably satisfactory
<br />to City), indemnify and save and hold harmless the Indemnitees from and against all
<br />claims, damages, demands, actions, losses, liabilities, costs and expenses (including,
<br />without limitation, reasonable attorneys' fees and court costs) arising from or relating to:
<br />(i) a breach of this Agreement by Developer; (ii) the making of the City/HOME-ARP Loan;
<br />(iii) a claim, demand or cause of action that any person has or asserts against Developer;
<br />(iv) any act or omission of Developer, any contractor, subcontractor or material supplier,
<br />engineer, architect or other person with respect to the Property; or, (v) the ownership,
<br />occupancy or use of the Property. Notwithstanding the foregoing, Developer shall not be
<br />obligated to indemnify City with respect to the consequences of any act of illegal conduct,
<br />gross negligence or willful misconduct of City. Developer's obligations under this Section
<br />shall survive the cancellation of the City/HOME-ARP Loan Note, release and
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<br />WISEPlace Permanent Supportive Housing
<br />City HOME-ARP Loan Agreement
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