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3/30/11 <br />B. The Project shall consist of twenty six two-bedroom units, of which twenty-five <br />(25) units will be rented to very low income households (at or below 50% of AMI), and <br />the remaining unit will be reserved for the on-site manager. <br />C. Affordable rents shall be governed as provided in the NSP Regulations. Rental <br />increases shall be in conformance with federal and state law. <br />D. Initial rents may be recalculated to allowable rental amounts at the time of initial <br />lease-up following completion of construction in accordance with any changes in allowable <br />rent and income tables as published by HUD. <br />17. Maintenance of Property. Borrower must maintain the interior and <br />exterior of the improvements and the landscaping on the Property in a manner consistent <br />with community standards which will uphold the value of the Property, in accordance, <br />with this Agreement and the Santa Ana Municipal Code. The maintenance requirements <br />are set forth in specific detail in the recorded Deed of Trust. <br />18. Handicapped Accessibility. Borrower shall comply with (a) Section 504 <br />of the Rehabilitation Act of 1973, and implementing regulations, and (b) the Americans <br />with Disabilities Act of 1990, and implementing regulations in order to provide <br />handicapped accessibility to the extent readily achievable. <br />19. Loan Servicing. The City may contract with a private lender to <br />originate and service the City Loan, and any costs associated therewith shall be paid by <br />the Borrower. <br />20. Indemnification. Borrower shall indemnify, defend and hold <br />harmless the City, the City, and their respective officers, agents, employees, legal <br />counsel, representatives and volunteers, from and against any loss, liability, claim or <br />judgment relating in any manner to the Property or this Agreement. Borrower shall <br />remain fully obligated for the payment of taxes, liens and assessments relating to the <br />Property. There shall be no reduction in taxes for Borrower, nor any transfer or <br />responsibility to the City to make such payments, by virtue of the City Loan. <br />21. Insurance. Borrower shall maintain, during the term of the City Loan, <br />an all-risk property insurance policy insuring the Property in an amount equal to the full <br />replacement value of the structures on the Property. The policy shall name the City as <br />loss payee and shall contain a statement of obligation on behalf of the insurance carrier to <br />notify the City of any material change, cancellation or termination of coverage at least 30 <br />days in advance of the effective date of such material change, cancellation or termination. <br />Borrower shall deliver a copy of the certificate of insurance and loss payee endorsement <br />to the City at the time of escrow closing, and Borrower shall annually deliver a copy of <br />the certificate of insurance and loss payee endorsement to the City, signed by an <br />authorized agent of the insurance carrier and setting forth the general provisions of <br />coverage. The copy of the certificate of insurance and loss payee endorsement shall be <br />delivered to the City as follows: <br />Page 10 of 14 <br />Exhibit 2 <br />25E-14