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HomeMy WebLinkAboutItem 13 - Affordable Housing Project at 1411 N Broadway Community Development Agency santa-ana.org/community-development Item # 13 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report March 7, 2023 TOPIC: Affordable Housing Project at 1411 N Broadway AGENDA TITLE: Approve a Loan Agreement with North Broadway Housing Partners LP (C/O Jamboree Housing Corporation and WISEPlace) for a total of $5,256,327 for the Development of the WISEPlace Permanent Supportive Housing Project Located at 1411 N Broadway; Approve a Subordination Agreement with Bank of America as the Senior Lender; Approve Two (2) Subordination Agreements with the County of Orange and the Orange County Housing Finance Trust, Respectively, as Junior Lenders (Non-General Fund) RECOMMENDED ACTION 1.Authorize the City Manager to execute a Loan Agreement with North Broadway Housing Partners LP (c/o Jamboree Housing Corporation and WISEPlace) for $5,256,327 in HOME Investment Partnerships Program - American Rescue Plan (“HOME-ARP”) funds for the development of the WISEPlace Permanent Supportive Housing project located at 1411 N. Broadway, Santa Ana, CA 92701, APN 398-523- 04 (“Site”) subject to non-substantive changes approved by the City Manager and City Attorney. 2. Authorize the City Manager to execute a Subordination Agreement with Bank of America to subordinate the City’s Loan Agreement to a senior loan, subject to non- substantive changes approved by the City Manager and City Attorney. 3. Authorize the City Manager to execute two (2) Subordination Agreements with the County of Orange (“County”) and Orange County Housing Finance Trust (“OCHFT), respectively, to subordinate the County and OCHFT’s junior loan agreements to the City’s HOME-ARP Loan Agreement, subject to non-substantive changes approved by the City Manager and City Attorney. 4. Authorize the City Manager to execute a future Subordination Agreement with Jamboree Housing Corporation, WISEPlace, Bank of America and/or any other senior lender as needed after the WISEPlace Permanent Supportive Housing project is complete, subject to approval as to form by the City Attorney. EXECUTIVE SUMMARY On June 21, 2022, the City Council (attached as Exhibit 1) authorized the City Manager to execute a pre-commitment letter (attached as Exhibit 2) for an award of $5,256,327 in HOME Investment Partnerships Program - American Rescue Plan (“HOME-ARP”) funds, and an award of twenty-five (25) U. S. Department of Housing and Urban Loan Agreement for WISEPlace Permanent Supportive Housing March 7, 2023 Page 2 3 2 8 1 Development Project-Based Vouchers (“PBVs”) from the Housing Authority for the development of Permanent Supportive Housing (PSH) at the Site by Jamboree Housing Corporation and WISEPlace. The project will have 47 new affordable studio units and 1 managers unit. These 47 units are specifically designated for permanent supportive housing for persons who are experiencing chronic homelessness at extremely low- income levels (at or below 30% of the Area Median Income). Fourteen (14) units will serve individuals experiencing chronic homelessness with a mental illness, financed by the Mental Health Services Act (“MHSA”), and these services will be provided on site by WISEPlace and the Orange County Health Care Agency. As a condition of the City’s award of funds, staff is now returning to the City Council for approval of their Loan Agreement. In addition, staff is recommending approval of a Subordination Agreement to subordinate the City’s Loan Agreement to a senior loan from Bank of America; two (2) Subordination Agreements with the County of Orange and Orange County Housing Finance Trust, respectively, to subordinate their two (2) junior loans to the City’s Loan Agreement; and a future Subordination Agreement with any other senior lender as needed after the project is complete. DISCUSSION After the City Council approved the pre-commitment of funding Jamboree Housing Corporation and WISEPlace applied for 9% Low-Income Housing Tax Credits with additional funding through the County of Orange, and Orange County Housing Finance Trust. In September of 2022, Jamboree Housing Corporation and WISEPlace secured all of their financial commitments including 9% Tax Credits and are prepared to close on their financing and begin construction of the Project. In accordance with the pre- commitment letter, staff is now recommending approval of a Loan Agreement for $5,256,327 in HOME-ARP funds, a Subordination Agreement with Bank of America as the senior lender, and two (2) Subordination Agreements with the County of Orange and OCHFT, respectively, as junior lenders, for the development of the Project. HOME-ARP Loan Agreement The HOME-ARP Loan Agreement is attached as Exhibit 3. The following loan terms are incorporated into the Loan Agreement: •Borrower: North Broadway Housing Partners LP (c/o Jamboree Housing Corporation and WISEPlace). •Loan Amount: $5,256,327 principal amount from the HOME-ARP funds. •Interest Rate: 3% simple interest per year. •Term: fifty-five (55) years from the date of issuance of the Certificate of Completion for the Project. •Terms of Repayment: Repaid from fifty percent (50%) of residual receipts (pro- rata with payments due in connection with other financing provided) calculated by taking the Annual Project Revenues from the Property for each year, less deductions for Annual Operating Expenses. Loan Agreement for WISEPlace Permanent Supportive Housing March 7, 2023 Page 3 3 2 8 1 •Disbursement Schedule: o One hundred percent (100%) (up to $4 million) of the Construction Component of the City/HOME-ARP Loan proceeds will be disbursed by City to Developer after execution and recording of the Agreement. o One hundred percent (100%) of the HOME-ARP Subsidy Reserve Component will be disbursed to the Developer after completion of construction of the Project and issuance of a Certificate of Completion. •Selection of Tenants: North Broadway Housing Partners LP shall give preference in leasing units to households who qualify as chronically homeless that live in the City of Santa Ana. The Loan Agreement has been signed by Jamboree Housing Corporation on behalf of North Broadway Housing Partners LP to acknowledge their acceptance of the terms. Subordination Agreements The City’s loan is $5,256,327 compared to Bank of America’s larger construction loan of approximately $16 million (the exact amount of Bank of America’s loan will be determined at construction loan closing). It is standard practice for a private market senior lender to request a Subordination Agreement for the City’s smaller loan in order to permit the senior lender to complete their underwriting and commit their private market financing. The Subordination Agreement will ensure the senior lender will be paid back before the City’s loan (attached as Exhibit 4). The City’s loan for $5,256,327 is larger than the County’s junior loan for $1,500,000; therefore, the City is seeking to subordinate the County’s junior loan (attached as Exhibit 5). The City’s total loan for $5,256,327 is larger than the Orange County Housing Finance Trust (OCHFT) junior loan for $2,480,030; therefore, the City is seeking to subordinate the OCHFT’s junior loan (attached as Exhibit 6). Staff will not know if another Subordination Agreement is required until after the Project is complete. However, given the various sources of financing and structure of the loans for this Project, staff is seeking approval to authorize the City Manager to enter into any future Subordination Agreement if one is required for the permanent loan closing of the Project. Project Description To preserve the landmark status of the existing building the project consists of the adaptive reuse of the one-story east-west wing of WISEPlace facing Broadway Street. The existing north-south wing facing Sycamore Street will be demolished to accommodate the new construction of a four-story building, with a podium-parking garage on the ground floor and three levels of wood frame construction above. The building architecture is complementary to the existing building’s Spanish Colonial Revival style, while being differentiated and distinguishable from the existing architecture. The sight lines along Broadway Street are preserved to maintain the Loan Agreement for WISEPlace Permanent Supportive Housing March 7, 2023 Page 4 3 2 8 1 historic character from that street frontage. The ground floor amenities include a community garden, barbeque area with seating, dog run, and renovation of the existing patio and planters. The indoor amenities include two community rooms, a community kitchen, laundry rooms on each floor, a computer room, and a fitness center. Resident Services WISEPlace will coordinate the delivery of all services, including those services to be provided through the Orange County Health Care Agency. A comprehensive range of services will be offered to assist residents achieve and maintain self-sufficient, healthy and purposeful lives. Working under the Housing First model and the “WISEPlace Way”, WISEPlace will utilize strategies from an array of evidence-based models and practices to ensure residents have access to all required services. WISEPlace’s comprehensive, wrap around services, achieve personal self-sufficiency. In CY 2021 WISEPlace achieved the following outcomes: •77% of clients transitioned into stable housing. •72% of clients increased their savings. •39% of clients decreased their mental health symptoms. •100% of clients were linked with benefits and resources. •95% of clients retained housing. An on-site Resident Clinical Services Coordinator will provide case management services for the MHSA units and create a Supportive Services Plan ensuring residents have access to needed services to maintain housing, on-site community building activities, and links to partner organizations. Community Inclusion The Project team held two community outreach meetings in February and March 2022. The team also met with the Willard, Downtown, and Floral Park Neighborhood Associations. The development also received letters of support from several community organizations including but not limited to Santa Ana Rotary, Dr. Snow of the University of California at Irvine, Santa Ana Elks, Orange County United Way, United to End Homelessness, Providence, Assistance League, Mariposa, Working Wardrobes, Santa Ana Kiwanis, and Justice League. The one-story adaptive reuse project will include commercial in the existing community room space facing Broadway. A museum displaying the history of the Y.W.C.A. and landmark building will be open to the public during regular business hours. WISEPlace plans to partner with community organizations such as the Orange County School of the Arts for periodic art installations as well. WISEPlace will continue to serve the broader community and maintain its headquarters at the Site. Loan Agreement for WISEPlace Permanent Supportive Housing March 7, 2023 Page 5 3 2 8 1 Parking The proposed site plan includes 20 covered parking spaces in the gated parking garage with an entrance on Sycamore Street. The parking ratio is 0.42 spaces per PSH unit. While the development team has included 20 parking stalls, PSH located near transit is not required to provide any parking under State law. The developer has agreed to provide a Parking Management Plan as part of the Density Bonus Agreement. FISCAL IMPACT Funds for the HOME Investment Partnerships Program - American Rescue Plan Loan Agreement in the amount of $5,256,327 are available in the HOME Investment Partnerships Program – American Rescue Plan, Loans and Grants account (no. 18218780-69152) for expenditure in the current fiscal year. Up to $4 million will be expended in this current fiscal year for the Project’s construction loan closing. Any remaining balances not expended at the end of the fiscal year will be presented to City Council for approval of carryovers to FY 23-24. EXHIBIT(S) 1.Staff Report from June 21, 2022 2. Pre-Commitment Letter 3. HOME Investment Partnerships Program - American Rescue Plan Loan Agreement 4. Subordination Agreement with Bank of America 5. Subordination Agreement with the County of Orange 6. Subordination Agreement with the Orange County Housing Finance Trust Submitted By: Michael L. Garcia, Executive Director of Community Development Approved By: Kristine Ridge, City Manager :z :::::, MAYOR Vicente Sarmiento MAYOR PRO TEM Phil Bacerra COUNCILMEMBERS Johnathan Ryan Hernandez Jessie Lopez Nelida Mendoza David Penaloza Thai Viet Phan A-2022 -130 CITY MANAGER Kristine Ridge CITY ATTORNEY Sonia R. Carvalho CLERK OF THE COUNCIL Daisy Gomez -:, INSURANCE NOT REQUIRED WORK MAY PROCEED CLERK OF COUNCIL CITY OF SANTA ANA COMMUNITY DEVELOPMENT AGENCY 20 Civic Center Plaza M-25 Santa Ana, California 92702 www.santa-ana.org DATE� June 21, 2022 Tish Kelly Vice President, Development Jamboree Housing Corporation Brateil Aghasi Chief Executive Officer WISEPlace Re: WISEPlace Permanent Supportive Housing 1411 N. Broadway, Santa Ana, CA 92706 Sent via E-mail Pre-Commitment Letter for HOME-American Rescue Plan ("HOME-ARP") Loan, lnclusionary Housing Funds Loan, Twenty-Five (25) Project-Based Vouchers, and CDBG Loan Forgiveness Dear Mses. Kelly and Aghasi, Jamboree Housing Corporation ("Jamboree"), in partnership with the fee owner of the WISEPlace apartment development ("Owner," and collectively with Jamboree, the "Developer"), requested financial assistance in connection with the proposed development of a forty-eight (48) unit affordable housing complex, with forty-seven (47) units restricted for chronically homeless individuals, to be located at 1411 N. Broadway, Santa Ana, CA 92706 (APN 398-523-04) (the "Project"). The Project will be an adaptive reuse of the existing one-story structure and the demolition of the existing two-story gym structure along Sycamore. The new construction component will include one story within the existing building along Broadway and a four­ story new building along Sycamore. The Project requires a Density Bonus Agreement to be approved by the City Council. The City of Santa Ana ("City") and the Housing Authority of the City of Santa Ana ("Housing Authority") have reviewed the Developer's request for assistance, and at the SANTA ANA CITY COUNCIL Vicente Sannienlo Mayor vsann iento@santa•ana oro Phil Bacerra Mayor Pro Tem, Ward 4 pbacerraa@santa-ana.org Thai Viet Phan Ward1 tp h3n@sa nla•ana.9rg Nelida Mendoza Jessie Lopez Johnathan Ryan Hernandez David Penaloza Ward 2 Ward 3 Ward 5 Ward 6 nmendoza@santa-ana.om iess1etooez@santa-ana.org 1ryanhemandez@santa•ana.org dpenaloza@santa-ana.org EXHIBIT 2 Page 12 City Council/ Special Housing Authority meeting on June 21, 2022, the City Council and Housing Authority Board authorized and approved issuance of this pre-commitment letter evidencing the preliminary award of (collectively, the "City Assistance"): - A loan in the maximum amount of $5,256,327 funded from the HOME Investment Partnerships Program -American Rescue Plan ("HOME -ARP") funds held by the City of Santa Ana for the Project ("HOME-ARP Loan"); -A loan in the maximum amount of $484,000 from the lnclusionary Housing Fund held by the City for the Project ("lnclusionary Loan") to be used for relocation purposes only if necessary; -Twenty-Five (25) U.S. Department of Housing and Urban Development Project-Based Vouchers ("PBV") from the Housing Authority of the City of Santa Ana. This letter shall evidence the City's pre-commitment of the City Assistance to the Developer for the Project subject to the conditions described below. City Assistance: The amount of the proposed City Assistance has been determined based upon the City's review of the Developer's request for the receipt of the City Assistance and the development proforma and projected cash flows for the Project submitted by the Developer to the City ("Proforma"). The City Manager has authority to approve revised development proformas and projected cash flows for the Project; provided, however, that the City Assistance is not increased or extended. The City Assistance shall include the following loan terms: •The HOME-ARP Loan shall be for a maximum principal amount of $5,256,327, or as much thereof as is disbursed for hard and soft costs in constructing the Project, provided from the HOME Investment Partnerships Program -American Rescue Plan fund: o A portion of the $5,256,327 will be in the form of capital funds, repayable from residual receipts. o The remaining portion of the $5,256,327 will be in the form of capitalized operating subsidy reserve. o The exact amounts may be determined at construction closing. •3% simple interest per annum. •Repayment from 50% of Residual Receipts (pro-rata with payments due in connection with other financing provided by other public agencies) (after payment of operating expenses, including social services expenses and monitoring fees, debt service, any deferred developer fee, and partnership fees to be described in the Agreement), with the remaining 50% to be disbursed to the Developer. EXHIBIT 2 Page 13 o Any repayments to the soft loans must be based on the pro rata share of all the soft loan balances (the same as the residual receipts splits). •Remaining principal and accrued interest due upon the 55th anniversary of the issuance of Certificate of Occupancy or earlier upon sale, refinancing or an uncured default. On that date, the City agrees to review the performance of the Property and consider in good faith any reasonable request by Developer to modify the terms or extend the term of the City Promissory Note. Additionally, the City will receive 50% of the net proceeds received from any sale or refinancing of the Project in order to repay any outstanding principal or interest due on the City Promissory Note, after payment of outstanding conventional debt, payment in full of any deferred developer fee, payment for any necessary repairs, and establishment of any reserves and transaction costs. •Cost savings from the Project, if any, will be applied first to pay down the City Assistance, subject to compliance with the Tax Credit Allocation Committee ("TCAC") Regulations and California Health and Safety Code, as applicable. •After all other funding sources have been secured through enforceable funding commitments, a HOME Subsidy Layering Review is required in order to confirm the eligible amount of HOME-ARP funds committed to the Project. •An environmental review in compliance with the National Environmental Policy Act is required prior to entering into a Loan Agreement for the HOME-ARP funds committed to the Project. The HOME-ARP Loan shall also require specific HOME-ARP designated units in the Project. The City's preliminary HOME-ARP Cost Allocation Analysis suggests that approximately nine (9) units in the Project will be designated as HOME-ARP assisted­ units. The lnclusionary Loan shall have the same terms above and be for a maximum principal amount of $484,000, or as much thereof as is disbursed for relocation benefits for current WISEPlace residents in the event the residents are not matched with an alternative housing or shelter option prior to the start of construction and would need to vacate the site, provided from the lnclusionary Housing Fund. If relocation assistance is to be provided to the site occupants per the same requirements as the Uniform Relocation Act ("URA") or California Relocation Regulations, the Owner will also contribute an equal amount, dollar for dollar, in matching funds to the lnclusionary Loan. For example, if the twenty (20) current WISEPlace residents are provided relocation assistance as calculated per the requirements of the URA and California State Relocation Regulations, the estimated total for relocation payments will be $968,000, to be paid equally by the lnclusionary Loan and the Owner. The Owner will work with staff to relocate their 20 WISEPlace residents prior to the start of construction of the project. The lnclusionary Loan is for relocation purposes only, so if the Owner is able to relocate residents prior to the start of construction of the project, then the lnclusionary Loan funds shall be EXHIBIT 2 Page 14 proportionately reduced, or will not be required at all if all residents are relocated prior to the commencement of the project. Project-Based Vouchers: The basic terms of the award are as follows: •Funding Source: The twenty-five (25) PBVs will be funded exclusively out of the tenant-based voucher program annual budget authority received by the Housing Authority from the U.S. Department of Housing and Urban Development (HUD). •Rents: The PBV Housing Assistance Payments (HAP) Contract rents below are preliminary and contingent upon a reasonable rent determination to be conducted by the Housing Authority at the time of execution of the HAP Contract: o Studio:$1,682 In accordance with HUD regulations and SAHA's Administrative Plan, these rents are subject to review prior to the execution of a HAP contract. •Annual Amount: The Project will receive PB Vs for twenty-five (25) units: 30% AMI Unit Size No. Units Proposed Rent Studio 25 $1,682 The estimated maximum annual amount received under this award is $560,100. These estimates assume 100% occupancy of the units over the twelve-month period with contract rent amounts limited to the current applicable Santa Ana Housing Authority Payment Standard. •Term: The HAP Contract will have a term of twenty (20) years. Any time before the expiration of the HAP Contract, the Developer may request an additional twenty (20) years, subject to a determination by the Housing Authority that it is appropriate to continue providing permanent supportive housing for chronically homeless individuals or to expand housing opportunities and HUD funding. Subsequent extensions are subject to the same requirements. •Units Receiving Assistance: The maximum number of units receiving PBV assistance will be twenty-five (25). •Local Preference: o All individuals and families shall be chronically homeless individuals with, subject to compliance with applicable fair housing laws, a preference for EXHIBIT 2 Page JS local residents from the City of Santa Ana based on the City's local residency screening criteria. o An absolute preference shall be for current WISEPlace residents who are unable to be relocated prior to the start of construction and who qualify for relocation assistance paid for by the lnclusionary Loan and the Owner until the completion of the project. The "absolute" nature of this preference means that these current WISEPlace shelter residents will be selected if determined eligible for occupancy at the project before any other applicants are to be determined eligible. CDBG Loan Forgiveness: In 1996, the City provided the Owner a $900,000 loan of Community Development Block Grant ("CDBG") funds ("CDBG Loan") to finance the rehabilitation of the site for the purposes of providing permanent affordable rental housing. The CDBG Loan was structured with a 55-year term and a 1 % simple interest rate. The loan repayments were to be made from 50% of the project's residual receipts. In 2001, the City amended the terms of the CDBG Loan. At that time, the outstanding principal balance of the loan was set at $916,265, which consisted of two components: (1)a $250,000 component, and (2) a $666,616 component. The amended promissory note set the loan term at 55 years -starting in 2002 and ending in 2056. The current outstanding CDBG Loan balance is currently $723,446.41. Per the terms of the amended promissory note, the Owner is required to continue paying annual interest only payments until the end of the loan term in 2056. The entire balance of the CDBG Loan ($723,446.41 plus interest) will become due and payable at that time. Following the fulfillment of the conditions provided herein, the entirety of the CDBG Loan will be forgiven by the City, including any interest that may have accrued since the date of this letter. General Provisions: The City's obligation to provide the City Assistance and CDBG Loan Forgiveness to the Project is subject to each of the following conditions: •Developer must provide proof that it has secured all of its remaining financing for the development of the Project in the form of enforceable funding commitments, which may include 9% or 4% Federal Low Income Housing Tax Credits, State Housing Tax Credits, a commitment of affordable housing funds from the County of Orange or State of California, Section 8 project-based vouchers from the Orange County Housing Authority, or any other funding source needed in the Project's capital stack to develop the Project before staff will return to the City Council for consideration of the HOME-ARP Loan Agreement and lnclusionary Loan Agreement. EXHIBIT 2 Page 16 •100% of the affordable units (less one (1) manager's unit) in the Project will be restricted to extremely low-income, chronically homeless households at 30% of the Area Median Income. •The Project consists of forty-seven ( 4 7) permanent supportive housing units for chronically homeless individuals and families. All individuals and families shall be referred from the Orange County Coordinated Entry System except for those current WISEPlace residents who qualify for an absolute preference. •The rent standards for the Project must comply with the strictest of the standards imposed by TCAC and the HOME Program regulations, or other funding sources contributed to the Project, as applicable and with respect to the units assisted by each applicable funding source. •All provided funding and Project requirements shall conform to the City's most recently adopted Affordable Housing Funds Policies and Procedures, unless alternative requirements are expressly provided in the executed Loan Agreements for the City Assistance or any other documents related to the development of the Project. •Approval of all required entitlements and discretionary actions, to allow the adaptive reuse and construction (as applic able) of a forty-eight (48) unit affordable housing complex, with forty-seven (47) units restricted for chronically homeless individuals, to be located at 1411 N. Broadway, Santa Ana, CA 92706 (APN 398- 523-04). •The City's obligation to provide the City Assistance and CDBG Loan Forgiveness is and shall remain subject to all covenants, conditions, and restrictions set forth in the Loan Agreements, and in particular the City's analysis of the available funding sources and development and operating costs of the Project and the overall economic feasibility of the Project. •Review and approval of the Loan documents evidencing the City Assistance by the City Council including the Loan Agreement(s), Promissory Note(s), Affordability Restrictions and Deed(s) of Trust. •Developer must provide proof that it has received and reviewed three general contractor bids, and that all subcontractors are competitively bid out. Specifically, the Developer must obtain three general contractor bids; all subcontractors must be competitively bid out; and the City must review and approve the final general contractor's contract. •. Execution of HAP Contracts and all necessary documents for the PBV's. •Compliance with applicable federal regulations set forth in 24 Code of Federal Regulations (CFR) Part 570 and 24 CFR Part 983, applicable HOME-ARP requirements, and all other federal, state, and local laws and regulations. EXHIBIT 2 Page 17 Developer, at its sole cost and expense, will be responsible for securing any and all permits and discretionary approvals that may be required for the Project by the City or any other federal, state, or local governmental entity having jurisdiction over the Property or Project. Notably, this pre-commitment letter shall not obligate the City or any department thereof to approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the construction, rehabilitation, installation or operation of the Project. This pre-commitment letter for the Project will expire on June 21, 2024. If you have any questions or require any additional information regarding this pre­ commitment letter, please contact Judson Brown, Housing Division Manager, by telephone at (714) 667-2241 or by e-mail at jbrown@santa-ana.org. Sincerely, On behalf of the City of Santa Ana: K� ns Ine I ge City Manager Attest: APPROVED AS TO FORM Sonia R. Carvalho Authority General Counsel Secretary On behalf of the Housing Authority of the City of Santa Ana: �� oC\v,'iw.\: £ stevenA. Mendoza Executive Director EXHIBIT 2 EXHIBIT 3 FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 6103 & 27383 When Recorded Mail to: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council SPACE ABOVE THIS LINE FOR RECORDING USE FREE RECORDING REQUESTED [Government Code Section 6103] HOME-AMERICAN RESCUE PLAN (HOME-ARP) LOAN AGREEMENT by and between the CITY OF SANTA ANA And NORTH BROADWAY HOUSING PARTNERS LP a California limited partnership (1411 North Broadway, Santa Ana, California (APN 398-523-04)) Dated: [March 7], 2023 EXHIBIT 3 TABLE OF CONTENTS DEFINITIONS AND INTERPRETATION ............................................. 2Section 1. 1.1. Defined Terms. ................................................................................................... 2 1.2. Singular and Plural Terms.................................................................................... 9 1.3. References and Other Terms................................................................................ 9 1.4. Exhibits Incorporated.. ......................................................................................... 9 Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. [RESERVED]............................................................................................ 9 SCOPE OF WORK/ PROJECT BUDGET............................................... 9 [RESERVED].......................................................................................... 10 LOANS.................................................................................................... 10 CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS........... 11 AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY ....................................................................................................... 16 Section 8. Section 9. Section 10. Section 11. Section 12. RESERVED. ........................................................................................... 22 GENERAL PROVISIONS AND WARRANTIES................................. 22 CONDITIONS FOR CONSTRUCTION................................................ 25 FEDERAL (HOME PROGRAM) COVENANTS ................................. 28 MAINTENANCE, MANAGEMENT, OPERATION, PRESERVATION AND REPAIR OF PROPERTY....................................................................................... 33 Section 13. Section 14. Section 15. Section 16. Section 17. Section 18. Section 19. Section 20. Section 21. NONDISCRIMINATION COVENANTS.............................................. 37 ENVIRONMENTAL MATTERS .......................................................... 38 OTHER AFFIRMATIVE COVENANTS .............................................. 39 OTHER NEGATIVE COVENANTS ..................................................... 41 CERTIFICATE OF COMPLETION ...................................................... 42 INDEMNIFICATION............................................................................. 42 INSURANCE, CASUALTY AND CONDEMNATION ....................... 45 DEFAULTS AND REMEDIES.............................................................. 50 MISCELLANEOUS................................................................................ 53 i WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 LOAN AGREEMENT HOME-ARP PROGRAM THIS LOAN AGREEMENT (the "Agreement") dated, for identification purposes only, as of [March 7], 2023, is made and entered into by and between the City of Santa Ana, a charter city and municipal corporation (referred to herein as “City”) and North Broadway Housing Partners LP, a California limited partnership (referred to herein as “Developer”), with reference to the following: RECITALS: A.City has received an allocation of HOME-American Rescue Plan (HOME-ARP) funds from the United States Department of Housing and Urban Development ("HUD") under Section 3205 of the American Rescue Plan Act of 2021 (P.L. 117-2)) (“ARP) to be implemented through the HOME Investment Partnerships Program (the "HOME Program") (42 U.S.C. §12701, et seq.,) and to be used in accordance with applicable statutory requirements, regulations, and guidance, including but not limited to HUD Notice CPD-21-10, and its appendices, inclusive of the Waivers and Alternative Requirements for HOME Investment Partnerships (collectively, the “HOME-ARP Notice”) and the HOME Regulations (24 CFR Part 92); B.WISEPlace, a California nonprofit public benefit corporation (“WISEPlace”), is the owner of fee simple title to certain property located at 1411 North Broadway (APN 398- 523-04), in the City of Santa Ana, totaling approximately 0.60 acres of land area (“the Property”). WISEPlace intends to ground lease the Property to the Developer (the “Ground Lease”) for [sixty-five (65) years] from the Commencement Date of the Ground Lease. C.The Developer is a limited partnership, whose sole general partner is JHC-North Broadway LLC, a California limited liability company (the “General Partner”). WISEPlace and Jamboree Housing Corporation (“JHC”), a California non-profit public benefit corporation, are the sole members of the General Partner. The Developer will adaptively reuse one existing building on the Property and construct, own and operate an additional building on the Property to accommodate a forty-eight (48) unit multifamily affordable housing project (“Project”). D.In furtherance of the HOME-ARP Program, the Developer has applied to the City for a loan with which to: 1. provide deeper affordability for a longer term, as well as to construct the Property, and 2. thereafter to maintain, operate and professionally manage the Property as decent, safe, sanitary and affordable rental housing. E.City, on certain terms and conditions, desires to make such loan to Developer in order to make possible the construction of the Property, to expand the supply of decent, safe, sanitary and affordable housing. 1 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 F.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. G.This Agreement and all of its attachments shall be enforceable by City in accordance with the terms thereof. Each of the Agreement, the Affordability Restrictions on Transfer of Property, the City/HOME-ARP Loan Note and the City/HOME-ARP Loan Deed of Trust provide a means of enforcement by the City if Developer is in breach of its obligations hereunder and thereunder, including liens on the Property, use and deed restrictions and covenants running with the land [24 CFR 92.504]. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, City and Developer agree as follows: Section 1. 1.1. DEFINITIONS AND INTERPRETATION Defined Terms. All capitalized terms used herein, including, without limitation, in the Recitals above and in all other Loan Documents, unless otherwise expressly defined, are defined where first used in this Agreement and/or as set forth in this Section 1. "Affordable Housing" means housing operated in accordance with the requirements of 24 CFR 92.252 and the rents governed by HUD. “Affordability Period” means the period beginning upon the issuance of the Certificate of Completion and ending on the date which is fifty-five (55) years after the issuance of the Certificate of Completion during which the Affordability Restrictions on Transfer of Property remain in effect. "Affordability Restrictions on Transfer of Property" means that certain document affecting real property benefiting the City, attached hereto as Exhibit F. “Affordable Rent” means the monthly rents that are set forth in more detail in Section 7 of this Agreement. "Building Permit" means the building permit(s) issued by City and required for the construction, if any. "Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday on which Santa Ana City Hall is open to the public to conduct City affairs. "Calendar Year" means each consecutive twelve (12) month period from January 1 to December 31. "Certificate of Completion" has the meaning set forth in Article 17. 2 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 “Chronically Homeless” means an individual or family who meets the definition of “chronically homeless” under HUD regulations and guidance, including 24 C.F.R. § 578.3. "City" means the City of Santa Ana, California, a charter city and municipal corporation. "City/HOME-ARP Loan" means the loan to be made to Developer by City from HOME-ARP funds pursuant to Article 5 of this Agreement. "City/HOME-ARP Loan Deed of Trust" means the deed of trust encumbering the Property, in the form attached hereto as Exhibit D, to be executed by Developer pursuant to Section 5.B.2 in order to secure the City/HOME-ARP Loan Note. "City/HOME-ARP Loan Note" means that certain promissory note in the original principal amount of $5,256,327.00, in the form attached hereto as Exhibit E, to be executed by Developer in favor of City to evidence the obligation of Developer to repay the City/HOME-ARP Loan. “City Restriction Period” shall mean a period of fifty-five (55) years after date on which a Certificate of Completion is issued. "Close of Escrow" shall mean the date upon which the City/HOME Loan Deed of Trust is recorded in the Official Records of the County. "Closing Statement" means the final statement of Developer's Escrow account for the ground leasee of the Property pursuant to the Ground Lease. “Construction Period” means the period of time commencing with the Close of Escrow and ending on the Conversion Date. “Conversion Date” means the date on which the Senior Construction Loan is paid in full in accordance with the Senior Loan Documents. "County" means the County of Orange, California. "Developer" means North Broadway Housing Partners LP, a California limited partnership, its successors and assigns. "Developer's Representative" shall mean any of Laura Archuleta, Michael Massie, or Tish Kelly or his/her designee. “Environmental Reports” [list to be provided under separate cover] "Escrow Holder" means Commonwealth Land Title Company. "Event of Default" has the meaning set forth in Section 20.1. 3 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 "Executive Director" means the Executive Director of the Community Development Agency, or his/her designee. "Extremely Low Income" means an adjusted income that does not exceed thirty percent (30%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD. “Extremely Low Income Household” means an individual or family whose income qualifies as Extremely Low Income, adjusted for household size, as published by HUD. “General Partner” means the General Partner of Developer, JHC-North Broadway LLC (the “Managing General Partner”) a California limited liability company, , and its successors and assigns. "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. "Hazardous Materials" means any flammable materials, explosives, radioactive materials, hazardous wastes, toxic substances and similar substances and materials, including all substances and materials defined as hazardous or toxic wastes, substances or materials under any applicable law, including without limitation the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., and the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et seq., as amended including: (i)poses a hazard to the Project or to persons on the Project or (ii)causes the Project to be in violation of any Hazardous Substance Law; (iii) asbestos in any form; (iv) (v) urea formaldehyde foam insulation; transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls; (vi) radon gas; (vii) any chemical, material, or substance defined as or included in the definition of “hazardous substance,” “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste,” or “toxic substances” or words of similar import under any applicable local, state, or federal law or under the regulations adopted or publications promulgated pursuant to those laws, including, but not limited to, any Hazardous Substance Law, Code of Civil Procedure § 564, as amended from time to time, Code of Civil Procedure § 726.5, as amended from time to time, Code of Civil Procedure §736, as amended from time to time, and Civil Code § 2929.5, as amended from time to time; (viii) any other chemical, material, or substance, exposure to which is prohibited, limited, or regulated by any governmental authority or which may pose a hazard to the health and safety of the occupants of the Project or the owners or occupants of property 4 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 adjacent to or surrounding the Project, or any other person coming on the Project or any adjacent property; and (ix)any other chemical, material, or substance that may pose a hazard to the environment flammable materials, explosives, radioactive materials, hazardous wastes, toxic substances and similar substances and materials, including all substances and materials defined as hazardous or toxic wastes, substances or materials under any applicable law, including, without limitation the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et. seq., as amended. The term Hazardous Substance shall not include materials or substances commonly used in the construction and operation of an apartment complex in accordance with applicable Hazardous Substance Law. “Hazardous Substance Law” means any federal, state, or local law, ordinance, regulation, or policy relating to the environment, health, and safety, any Hazardous Materials (including, without limitation, the use, handling, transportation, production, disposal, discharge, or storage of the substance), industrial hygiene, soil, groundwater, and indoor and ambient air conditions or the environmental conditions on the Project, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 [42 USCS §§ 9601 et seq.], as amended from time to time; the Hazardous Substances Transportation Act [49 USCS §§ 1801 et seq.], as amended from time to time; the Resource Conservation and Recovery Act [42 USCS §§ 6901 et seq.], as amended from time to time; the Federal Water Pollution Control Act [33 USCS §§ 1251 et seq.], as amended from time to time; the Hazardous Substance Account Act [Health and Safety Code §§ 25300 et seq.], as amended from time to time; the Hazardous Waste Control Law [Health and Safety Code §§ 25100 et seq.], as amended from time to time; the Medical Waste Management Act [Health and Safety Code §§ 25015 et seq.], as amended from time to time; and the Porter-Cologne Water Quality Control Act [Water Code §§ 13000 et seq.], as amended from time to time. “HOME-ARP Compliance Period” is for a period of twenty (20) years from the issuance of the Certificate of Completion, unless a shorter period is required by HUD or the HOME-ARP Program. "HOME-ARP Operating Expense Deficit" is the amount by which operating costs of the HOME-ARP Units as defined in the HOME-ARP Notice exceed the rent payments of qualifying households of the HOME-ARP Units for any period. "HOME-ARP Program" has the meaning set forth in Recital "A" above. "HOME-ARP Qualifying Population” means any individual or family who meets the eligibility criteria of a “qualifying population” of the HOME-ARP Program. “HOME-ARP Subsidy Reserve” has the meaning set forth in Section 12.10 and complies with the requirements for payment of “operating cost assistance” under the HOME-ARP Program. 5 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 “HOME-ARP Subsidy Reserve Compliance Period” is for a minimum period of fifteen (15) years from the issuance of the Certificate of Completion during which withdrawals can be made from the HOME-ARP Subsidy Reserve to cover operating cost deficits of the HOME-ARP Units, subject to any requirements of HUD or the HOME-ARP Program. "HOME-ARP Regulations" has the meaning set forth in Recital "A" above and summarized in Exhibit G. HOME-ARP Units” means the sixteen (16) units assisted under the HOME-ARP Program and available for rental to HOME-ARP Qualifying Populations during the HOME-ARP Compliance Period. "HOME Program" has the meaning set forth in Recital "A" above. "HOME Regulations" has the meaning set forth in Recital "A" above and summarized in Exhibit G. "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" has the meaning set forth in Section 14.5. "Laws" means all statutes, laws, ordinances, regulations, orders, writs, judgments, injunctions, decrees or awards of the United States or any state, county, municipality or other Governmental Authority. "Lien" means any lien, mortgage, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any lien or security interest). “Limited Partner” means the Tax Credit Investor and any other Limited Partner(s) or Special Limited Partner(s) of Developer, and their successors and assigns. “Loan Documents” means, collectively, this Agreement, the City/HOME-ARP Loan Note, the City/HOME-ARP Loan Deed of Trust, the Affordability Restrictions on Transfer of Property, and any other agreement, document, or instrument that the City requires in connection with the execution of this Agreement or from time to time to effectuate the purposes of this Agreement. 6 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 “Low HOME Rent” means rent that does not exceed thirty percent (30%) of the adjusted income of a household whose annual income is equal to or less than fifty percent (50%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD for the HOME-ARP rent limits. “Median Income for the Area” means the median income for the Orange County, California PMSA as most recently determined by HUD. Also may be referred to interchangeably in the Loan Documents as “Area Median Income” or “AMI”. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen (18) months, the City shall provide the Developer with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HUD and the State. "Operating Reserves" shall mean reserves maintained during the Term of Agreement and funded out of Residual Receipts, loan advances, equity, or other sources and set aside for taxes and assessments, insurance premiums, operating expenses, and debt service. Operating Reserves shall not exceed the amount required to pay three (3) months of operating expenses and three (3) months of mandatory debt service, or such higher amount required by a project lender or by the Tax Credit Investor. “Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of Developer, dated on or about the same date hereof March __, 2023, as said Partnership Agreement may be amended from time to time. "Permitted Encumbrances for the Affordable Housing Restrictions" means, collectively, the Senior Loan Deed of Trust and all other title exceptions and limitations with respect to the Property hereafter approved by the Executive Director in writing. "Permitted Encumbrances for the City Loan Deed of Trust" means, collectively, the Senior Loan Deed of Trust and all other title exceptions and limitations with respect to the Property hereafter approved by the Executive Director in writing. "Project" means the possession of a leasehold interest and construction and ownership of improvements on the Property by Developer pursuant to this Agreement. "Project Budget" means the line-item development cost budget for the Project attached hereto as Exhibit C, 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. "Property" means the Property that is located at 1411 North Broadway (APN 398- 523-04), within the City of Santa Ana, and is more fully described in the “Legal Description” of the Property attached hereto as Exhibit A and incorporated herein by reference. 7 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 “Replacement Reserves” shall mean reserves maintained during the Term of Agreement and funded out of Residual Receipts, loan advances, equity, or other sources and set aside for replacement of roofing, furniture, fixtures, equipment and other capital expenditures. The annual amount set aside for Replacement Reserves shall be a minimum of two hundred fifty dollars ($250) per unit but shall not exceed five hundred dollars ($500) per unit and may increase by 3% per year, or such higher amount as may be required by the Tax Credit Investor and approved by City (such approval not to be unreasonably withheld or delayed). “Residual Receipts” has the meaning set forth in the City/HOME-ARP Loan Note. "Restricted Units” means the forty-seven (47) units restricted to Extremely Low Income Households during the City Restriction Period, which includes the sixteen (16) HOME-ARP Units assisted under the HOME-ARP Program and available for rental to HOME-ARP Qualifying Populations during the HOME-ARP Compliance Period. “Senior Construction Lender” means Bank of America, N.A., or such senior construction lender designated by the Developer and approved in advance by the City for the Project. “Senior Construction Loan” means the construction loan made by Senior Construction Lender to Developer. "Senior Lender" means the Senior Construction Lender or any other holder of a Senior Loan Note(s) approved by the City or any refinancing of a Senior Loan Note(s) as approved by the City. "Senior Loan" shall mean the Senior Construction Loan being made by Senior Lender concurrent to the City Loan for payment of a portion of the construction costs, and any subsequent loan that refinances the initial Senior Loan as approved by the City. "Senior Loan Deed of Trust" means the deed of trust securing the Senior Loan by encumbering the Property, as the same may be amended and restated from time to time. "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, as the same may be amended and restated from time to time. "Senior Loan Note" means the promissory note evidencing the Senior Loan from Senior Lender, as the same may be amended and restated from time to time. “Tax Credit Investor” means Bank of America, N.A. and its permitted successor(s) and assign(s). “Tax Credit Rules” means the provisions of Section 42 of the Internal Revenue Code and/or, if applicable, California Revenue and Taxation Code Sections 17057.5, 8 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 17058, 23610.4 and 23610.5, et seq., as the foregoing may be amended from time to time, to the extent applicable to the Project and the rules and regulations implementing the foregoing, including the regulations set forth in Title 4 Cal. Code Regs. Section 10300, et seq. “Term of Agreement” means the term of this Agreement, which shall commence upon the date first written above and remain in effect for fifty-five (55) years from the issuance of the Certificate of Completion. “Very Low Income” means an adjusted income that does not exceed fifty percent (50%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD. “Very Low Income Household” means an individual or family whose annual income qualifies as Very Low Income, adjusted for household size, as published by HUD. 1.2.Singular and Plural Terms. Any defined term used in the plural in this Agreement or any other City 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. Section 2. Section 3. [RESERVED] SCOPE OF WORK/ PROJECT BUDGET Developer shall comply with this Section until the Certificate of Completion is issued. A “Scope of Work” for the Property is attached hereto as Exhibit B. Any change to the Scope of Work requested by the Developer, which would result in a change to the development costs in the Project Budget in excess of ten percent (10%) of any individual development cost line item or in excess of five percent (5%) of the aggregate development cost budget, shall be subject to the prior written approval of the Executive Director. 9 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 A line-item development cost budget for the Project, including a summary statement of sources and uses of funds, is incorporated into Exhibit C (the "Project Budget"). Any material change to the development costs in the Project Budget in excess of ten percent (10%) of any individual development cost line item or in excess of five percent (5%) of the aggregate development cost budget shall be subject to the prior written approval of the Executive Director which approval will not be unreasonably withheld, conditioned or delayed and if not granted or denied within five (5) Business Days, shall be deemed approved; provided, however, that in all events, Developer shall at all times obtain and maintain all required permits and approvals from the City’s Planning and Building Agency. Notwithstanding the foregoing, the City’s approval of a change order shall not be required unless the approval of the Senior Lender is required with respect to such change order. Section 4. Section 5. [RESERVED] LOANS 5.1.CITY LOAN: (a)Amount and Purpose. Subject to the terms and conditions of this Agreement, City agrees to make a loan of HOME-ARP funds to Developer in the principal amount of up to Five Million Two Hundred Fifty-Six Thousand Three Hundred Twenty- Seven Dollars ($5,256,327) (the "City/HOME-ARP Loan") to the Developer. The City/HOME-ARP Loan will be utilized for the following components: (i)Construction Component. Approximately Three Million Four Hundred Fifty-Six Thousand and Three Hundred Twenty-Seven Dollars [$3,456,327] of the City/HOME-ARP Loan (the “Construction Component”) will be utilized to fund a portion of the Project’s construction costs; and (ii)HOME-ARP Subsidy Reserve Component. Approximately One Million Eight Hundred Thousand Dollars [$1,800,000] of the City/HOME-ARP Loan (the “HOME-ARP Subsidy Reserve Component”) will be utilized to fund a HOME-ARP Subsidy Reserve as further described in Section 12.10. (iii)The final allocation of the City/HOME-ARP Loan as between the Construction Component and HOME-ARP Subsidy Reserve Component shall be subject to review and approval by the City prior to Close of Escrow, subject to the requirements of the HOME-ARP Program, and provided that in no event shall the sum of the Construction Component and the HOME-ARP Subsidy Reserve Component exceed the total City/HOME-ARP Loan principal amount of $5,256,327. (b)City/HOME-ARP Loan Note and Deed of Trust. The City/HOME-ARP Loan shall be evidenced by the City/HOME-ARP Loan Note in the form attached hereto as Exhibit E. The City/HOME-ARP Loan shall be secured by the City/HOME-ARP Loan Deed of Trust in the form attached hereto as Exhibit D. The City/HOME-ARP Loan Deed of Trust shall be a deed of trust encumbering the fee simple 10 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 interest and the leasehold interest under the Ground Lease in the Property, subordinate to the Senior Loan(s) made to Developer and the Senior Loan Documents. (c)City/HOME-ARP Loan Terms. The terms and conditions of the City/HOME-ARP Loan are as set forth in the City/HOME-ARP Loan Note, which is a residual receipts note. The HOME-ARP Compliance Period will end twenty (20) years from the issuance of the Certificate of Completion. Section 6. Developer shall comply with this Section until the Certificate of Completion is issued. 6.1. Conditions Precedent. City's obligation to disburse the City/HOME-ARP CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS Loan is subject to the satisfaction, or waiver by the Executive Director, of the following conditions precedent: (a)Loan Documents.Developer shall have delivered to the Escrow Holder, signed by the authorized officer or officers of Developer, with such signature(s) acknowledged where necessary, each of the following documents: (i)this Agreement; (ii) (iii) (iv) (v) The City/HOME-ARP Loan Note; The City/HOME-ARP Loan Deed of Trust; The Affordability Restrictions on Transfer of Property; The Project Budget; and (vi)All other documents and instruments reasonably required by the City to be executed and delivered, all in form and substance reasonably satisfactory to the City. The City has received and approved all required Environmental Reports. (b)Title Insurance. City shall have received an LP-10 ALTA Lender’s loan policy of title insurance (2006 edition), or evidence of a commitment therefor satisfactory to City, issued by Commonwealth Land Title Company and in form and substance satisfactory to City, together with all endorsements and binders required, naming City as the insured, in a policy amount of not less than the City/HOME-ARP Loan Amount, showing Developer as the ground lessee of the Property under the Ground Lease and insuring the City/HOME-ARP Loan Deed of Trust to be a valid lien on the Property. This Agreement, the City/HOME-ARP Loan Note, and City/HOME-ARP Loan Deed of Trust shall be subordinate to the Senior Loan Note, Senior Loan Deed of Trust and the other Senior Loan Documents. The Affordability Restrictions on Transfer of Property and City/HOME-ARP Loan Deed of Trust shall be reflected as an encumbrance on the fee simple interest and the leasehold interest of the Property. 11 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 (c) (d) Intentionally Omitted. Management Plan. The Developer shall have submitted and the City shall have approved (such approval not to be unreasonably withheld or delayed) a Management Plan ("Management Plan"). The Management Plan shall include a management contract with a manager approved in writing by the City for management of the Project and a plan for long-term marketing, operation, maintenance, repair and security of the Project, method of selection of tenants, and for rental policies in compliance with any applicable requirements, policies and procedures and with the Affordability Restrictions on Transfer of Property, along with any other policies or procedures required by the City. The Management Plan shall also include an initial budget for the Project. Developer shall obtain City’s written consent to a property manager (such approval not to be unreasonably withheld or delayed), and City shall have thirty (30) days written notice for any request to approve a property manager. (e)Documents Recorded. This Agreement, the City/HOME-ARP Loan Deed of Trust and the Affordability Restrictions on Transfer of Property shall have been recorded in the Official Records of the County. This Agreement, and the City/HOME- ARP Loan Deed of Trust shall be subordinate to the Senior Loan Note, the Senior Loan Deed of Trust, and the other Senior Loan Documents. (f)Request for Notice. For the benefit of City, Escrow Holder shall have recorded a request for notice of default of the Senior Loan (the “Request for Notice of Default”). (g)Insurance. City shall have received evidence satisfactory to the City that all of the policies of insurance required by Section 19 of this Agreement are in full force and effect. (h)Representations and Warranties. The representations and warranties of Developer contained in this Agreement and the other Loan Documents shall be correct in all material respects as of the Close of Escrow as though made on and as of that date, and if requested by the Executive Director, City shall have received a certificate to that effect signed by Developer’s Representative. (i)No Default. No Event of Default by Developer shall have occurred and be continuing, 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 Developer under this Agreement, and if requested by the Executive Director, City shall have received a certificate to that effect signed by Developer’s Representative. 6.2.Disbursement Procedures for Loan. The City/HOME-ARP Loan proceeds shall be utilized to finance the construction of the Property and to fund a HOME-ARP Subsidy Reserve (as evidenced in Exhibit C). The City/HOME-ARP Loan proceeds shall not be used for any purpose other than for eligible construction costs which may include a developer fee and soft costs related to development of the Project and the funding of the HOME-ARP Subsidy Reserve (costs all subject to City’s 12 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 prior review). The City allows for eligible costs to be paid by City/HOME-ARP Loan funds that were incurred not more than 24 months prior to the HOME-ARP funds commitment date of this Agreement in accordance with HOME-ARP regulations. One hundred percent (100%) of the Construction Component of the City/HOME-ARP Loan proceeds will be disbursed by City to Developer after execution and after, or concurrently with, the recording of this Agreement. One hundred percent (100%) of the HOME-ARP Subsidy Reserve Component will be disbursed to the Developer after completion of construction on the Project and issuance of a Certificate of Completion, subject to the requirements of Section 12.10 of this Agreement. 6.3. First Disbursement. The City's obligation to make the disbursement of the Construction Component is subject to satisfaction of the following conditions precedent: (a)General Contractor. If the Executive Director has not yet approved the General Contractor, the Executive Director shall have approved the identity and qualifications of the General Contractor which approval will not be unreasonably withheld, conditioned or delayed. (b)Construction Contract. If the Executive Director has not yet approved the Construction Contract, the Executive Director shall have approved the Construction Contract which approval will not be unreasonably withheld, conditioned or delayed. 6.4.Termination for Failure of Condition. If (a) any of the conditions set forth herein are not timely satisfied within no more than ninety (90) days of the date of this Agreement or waived by the Executive Director, and (b) City is not in default under this Agreement, City may terminate this Agreement without any further liability on its part by giving written notice of termination to Developer. Upon the giving of such notice, all principal, interest and other amounts owing under the City/HOME-ARP Loan Note shall be immediately due and payable, regardless of any other specified due date. 6.5. 6.6. 6.7. [Reserved.] [Reserved.] Waiver of Conditions. The conditions set forth pertaining to City’s obligation to make disbursements of the Construction Component are for City's benefit only and the Executive Director may waive all or any part of such rights by written notice to Developer, provided such waiver is consistent with the City’s approval of this Agreement. 6.8. condition may only be provided with written approval by the City. Waiver of Disbursement Conditions.A waiver of a disbursement 6.9.Modification of Disbursement Conditions and Procedures. The Executive Director 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 Construction Contract, provided such modification is consistent with City’s approval of this Agreement. 13 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 6.10. Other Terms and Conditions of Loan. (a)The City/HOME-ARP Loan Note shall become immediately due and payable, in the event of any of the following: (i)failure to complete the Project within four (4) years of the Close of Escrow; (ii)the HOME-ARP Units fail to achieve initial occupancy within 12 months of the issuance of the Certificate of Completion; (iii) violation of any of the use covenants and restrictions contained in this Agreement after the expiration of any applicable notice and cure period; (iv) an Event of Default by Developer which is not timely cured after expiration of any applicable notice and cure period pursuant to the terms of this Agreement. 6.11. Closing Costs and Fees. Developer 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 title insurance required hereunder. 6.12. Approval of Additional Financing. Except as to the Senior Loan, the loans secured by permitted encumbrances for the City Loan Deed of Trust and as otherwise described herein or in the policy of title insurance issued to the City at loan closing, the Developer shall not place or permit (either voluntarily or involuntarily) to be placed any encumbrances, including, but not limited to any additional liens or financing of any kind on the Project without the prior written discretionary consent of the City. 6.13. Cost Savings Obligation. (a)Subject to compliance with the Tax Credit Rules and the approval of the California Tax Credit Allocation Committee (“TCAC”), and further subject to any requirements of the HOME-ARP Program, Developer hereby agrees to provide and pay to the City the payment described in this Section 6.13 in connection with Cost Savings, if any, from the Project in an amount to be determined based on the “Audit” (as defined in Section 6.13(b) below and in accordance with 6.13) to be conducted upon completion of construction for the Project. Payment of the City Share of Cost Savings (defined below) shall be made at the time set forth therefore in Section 6.13(d) below. Provided that the payment is timely and fully made in accordance with Section 6.13(d), the amount paid for the City Share of Cost Savings shall be credited against the amount then outstanding on the City/HOME-ARP Loan Note. (b)Audit to Determine Cost Savings and City Share of Cost Savings. The actual amount of “Cost Savings” (as defined below) to be paid to the City and retained by the Developer shall be determined after the Audit, as hereafter defined and described, and the amount of such Cost Savings shall be equal to the amount by which the total sources of permanent financing for the Project exceed the costs of development incurred for the Project including without limitation payment of the Developer Fee (resulting amount constituting “Cost Savings”). From the total amount of Cost Savings, the Developer shall retain fifty percent (50%) and pay to City fifty percent (50%) (“City Share of Cost 14 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 Savings”). If any of the other soft lenders request a share of Cost Savings, the City shall split the City Share of the Cost Savings (50%) on a pro rata basis with the other soft lender(s) that are requesting a share of Cost Savings. The pro rata distribution shall be based on the initial principal balances of each respective soft loan of the soft lender(s) that are requesting a share of Cost Savings. If none of the other soft lenders request a share of the Cost Savings, the City shall receive the full 50% of the Cost Savings. Within one hundred and eighty (180) days following the issuance of Form 8609 by TCAC, Developer shall cause its certified public accountant(s) to perform a final audit of the costs of development of the Project in accordance with the requirements of the Tax Credits and generally accepted auditing standards (GAAP) (“Audit”). If the Audit determines that the total sources of permanent financing for the Project (including long-term permanent debt and tax credit equity) exceed the total development cost for the Project required in connection with the development of the Project, such excess shall be considered the “Cost Savings” for the Project. (c)Allocation of Cost Savings Amount. Once determined by the Audit pursuant to Section 6.13 above, the full amount of Cost Savings shall be allocated and remitted in the following order: (a) first, Developer shall retain fifty (50%) of Cost Savings, and (b) second, Developer shall pay to the City the City Share of Cost Savings which shall be utilized as principal payment due on the City/HOME-ARP Loan Note. (d)Timing of Allocation and Payment of Cost Savings. In the event of any Cost Savings, the payment of the City Share of Cost Savings shall become due and payable no later than sixty (60) days after Developer receives its final Tax Credit equity payment for the Project, and each of such payments shall be allocated and remitted in a lump sum, and as applicable credited toward the respective amount outstanding under the City/HOME-ARP Loan Note. 6.14. Standard Form Leases. On or before issuance of the Certificate of Completion, Developer shall submit to City for its written approval (such approval not to be unreasonably withheld or delayed) a standard form of residential lease to be used for leasing of the Project (the “Standard Lease”). The Standard Lease shall be in compliance with this Agreement, and any other agreement with the City regarding the Project, and all applicable laws and Developer shall be obligated to revise said Standard Lease from time to time to comply with any changes in said applicable laws. 6.15. Leasing Program. Developer shall market and lease the Project consistent with the Marketing Plan described in Exhibit G. 6.16. No Changes. Developer shall not materially modify the approved Standard Lease or materially deviate from the approved rental rate schedule for the units without the City’s prior written consent in each instance. 6.17. Landlord’s Obligations. Developer shall timely and in good faith, perform all obligations required to be performed by it as landlord under any lease affecting any part of the Project or any space within the Project. If any tenant at any time claims any breach of landlord’s obligations and the amount of such claim (in excess of available insurance 15 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 coverage) is $10,000 or more, Developer shall promptly notify City of such claim. Section 7. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY 7.1.Use Covenants and Restrictions. (a) Developer agrees and covenants, which covenants shall run with the land and bind Developer, its successors, its assigns and every successor in interest to the Property, that all Restricted Units on the Property will be made available for rent as follows: (i)Except as set forth in sub-paragraph (ii) of this Section 7.1(a), the Restricted Units shall be rented to Extremely Low Income Households for the City Restriction Period. (ii)During the HOME-ARP Compliance Period, all HOME- ARP Units must be rented to a HOME-ARP Qualifying Population as allowed by the HOME-ARP Program. After the HOME-ARP Compliance Period expires, all Units shall be restricted under sub-paragraph (i) of this Section 7.1(a). (b)The HOME-ARP Units shall be studio units, with comparable amenities to the other Restricted Units. The HOME-ARP Units shall be initially distributed throughout the complex, but thereafter shall be allowed to “float”. (c)It is anticipated that during the Term of Agreement the Project will be supported by Project-Based Section 8 rental subsidy payments provided by the Housing Authority of the City of Santa Ana (“Housing Authority”) for not less than twenty-five (25) of the Restricted Units (the “PBV Rental Subsidy”), and the HOME- ARP Subsidy Reserve will be utilized to cover operating deficits associated with the sixteen (16) HOME-ARP Units. The HOME-ARP Subsidy Reserve cannot be used for HOME-ARP Qualifying Households with project-based vouchers or project-based rental assistance. The PBV Rental Subsidy may not be placed on any HOME-ARP Unit. (d)The Developer shall establish a preference for renting Restricted Units to individuals and families who qualify as Chronically Homeless in accordance with the Affordability Restrictions on Transfer of Property, provided however that any preference applicable to the HOME-ARP Units must comply with the HOME-ARP Program. (e)Rental increases in the Restricted Units shall be subject to and in conformance with federal, state law, and local law. (f)Maximum Occupancy for Restricted Units will be two persons per studio unit, unless a different number is required by state or federal law. (g)For all Restricted Units, Developer must have a written lease between tenant and owner for a period of at least one year, unless a shorter period is 16 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 mutually agreed upon. All leases must be consistent with the applicable laws and regulations, including the HOME-ARP Program for the HOME-ARP Units. 7.2.Affordability Levels/Unit Mix: (a)All Restricted Units in the Property will be studios, except the one (1) manager unit will be a 2-bedroom unit reserved for the on-site manager. (b)Except as set forth in sub-paragraph (c) of this Section 7.2, the allowable rent for the Restricted Units in the Project shall not exceed the Affordable Rent for an Extremely Low Income Household as follows: 30% TCAC AMI Unit Size No. Units 47 Current Rent $711Studio Total 47 The remaining unit will be an unrestricted 2-bedroom unit reserved for the on-site manager. (c) During the HOME-ARP Compliance Period, the allowable rent for HOME-ARP Units in the Project shall not exceed the lesser of: (a) 30% of the tenant’s actual household income (inclusive of Supplemental Security Income (SSI) / State Supplementary Payment (SSP) payments); or (b) the Low HOME Rent in accordance with the HOME-ARP Program. The number of HOME-ARP Units and allowable rent shall be as follows: HOME-ARP Units # of HOME- ARP Units HOME-ARP Restriction Maximum Allowable Rent HOME-ARP Qualifying Population16 Studio Units Low HOME Rent (i)At the time of project completion, the Developer shall provide to the City the address and/or unit number of each of the units initially designated as the HOME-ARP Units. (ii) Annually with the financial statements, the Developer shall provide an annual report of rents and occupancy of all Restricted Units, including the HOME-ARP Units, to verify compliance with affordability requirements. For the HOME-ARP Units, information on unit substitution and filling vacancies shall be provided to ensure that the project maintains the required unit mix. 17 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 (d)The Affordable Rents charged at the Project must comply with the standards set forth by TCAC as defined in the Affordability Restrictions on Transfer of Property, except that during the HOME-ARP Compliance Period, and if allowed by the HOME-ARP Program, the Affordable Rents for the HOME-ARP Units must comply with the most stringent of standards set forth by the HOME-ARP Program and TCAC. (e)At the time of this Agreement, the Project will pay for all utilities with no tenants being charged for utilities. If tenants are charged for utilities at any time during the term of this Agreement, a utility allowance must be deducted from the maximum affordable rent charged at the Project for each unit. With respect to the HOME-ARP Units, any utility allowance must be based on project-specific allowances. (f)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. 7.3.Rent Increases. On an annual basis, the City shall provide Developer with the maximum allowable schedule of rents for the Property in accordance with changes in allowable rent and income tables published by HUD and TCAC, provided however that the rent for the HOME-ARP Units shall in no event be higher than the rent for the equivalent non-HOME-ARP Unit within the Project. In no event can Developer charge any tenant more than such amount. All rent increases are subject to City approval pursuant to the terms of this Section. No later than sixty (60) days prior to the proposed implementation of any rent increase, Developer shall submit to the City a schedule of any proposed increase in the rent. The City will disapprove a rent increase if it does not comply with the restrictions set forth in Section 7.1 and 7.2 above. Subject to the applicable requirements and provisions of, and changes to, Section 42 of the Code and the HOME-ARP Program, if, upon recertification of the income of any tenant, the Developer determines that any household has an adjusted income exceeding 30% of the applicable Median Income for the Area, in each case, adjusted for household size, such tenant may be permitted to continue to occupy the unit at the rental rate as provided for in Sections 7.1 and 7.2 above, as applicable, until the tenant chooses to vacate the unit. After the unit is vacated, the Developer shall re-rent the unit to a tenant pursuant to the terms, covenants and conditions of this Agreement. 7.4.Prohibited Fees. The Developer is prohibited from charging fees that are not customary or consistent with any applicable laws, and with respect to the HOME-ARP Units, Developer shall not charge fees that are not consistent with the HOME ARP Program, or the HOME Regulations 24 CFR section 92.504(c)(3)(xi). The Developer and subsequent owner can charge reasonable application fees to prospective tenants; other fees only to the extent that they are reasonable and customary for the project area; and fees for services provided to tenants, provided that these services are not mandatory. 7.5.Operation and Maintenance of the Property. Solely at Developer’s 18 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 expense, Developer agrees to maintain the Property in a clean and orderly condition and in good condition and repair and keep the Property free from any accumulation of debris and waste materials. If at any time Developer fails to maintain, or cause to be maintained, the Property as required by this section, and said condition is not corrected after the expiration of a reasonable period of time not to exceed thirty (30) days from the date of written notice from the City, unless such condition cannot reasonably be cured within thirty (30) days, in which case Developer shall have such additional time as reasonably necessary to complete such cure, the City may perform the necessary maintenance and Developer shall pay all reasonable costs incurred for such maintenance. The City shall inspect the Property annually after the date of issuance of the Certificate of Completion as described in Article 17 of this Agreement. During the Affordability Period, the Property must meet all applicable Federal, State and local laws. The Property must be free of all health and safety defects during the Affordability Period. (a)Operation. During the Term of Agreement, Developer shall at all times operate the Project as an affordable housing rental facility in compliance with this Agreement and the Affordability Restrictions on Transfer of Property. (b)Maintenance. During the Term of Agreement, Developer agrees to maintain all interior and exterior improvements, including landscaping (and all abutting ground, sidewalks, roads, parking and landscape areas) on the Project in good condition, repair and sanitary condition (and, as to landscaping, in a healthy condition) and in accordance with any Management Plan approved by the City under this Agreement (such approval not to be unreasonably withheld or delayed) (including without limitation any landscape and signage plans), as the same may be amended from time to time, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having jurisdiction and all their respective departments, bureaus, and officials. Developer acknowledges the great emphasis the City places on quality maintenance to protect its investment and to provide quality affordable housing for its constituents and to ensure that all City-subsidized affordable housing projects within the City are not allowed to deteriorate due to deficient maintenance. In addition, Developer shall keep the Project free from all graffiti and any accumulation of debris or waste material. Developer shall promptly make all repairs and replacements necessary to keep the Project in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials. Developer shall not commit or permit any waste or deterioration of the Project, shall not abandon any portion of the Project, and shall not otherwise act, or fail to act, in such a way as to unreasonably increase the risk of damage to the Project. In the event that Developer breaches any of the covenants contained in this Section 7.5 and such default continues for a period of five (5) days after written notice from the City (with respect to graffiti, debris, waste material, and general maintenance) or thirty (30) days after written notice from the City (with respect to landscaping and building improvements), then City, in addition to whatever other remedies it may have under this Agreement, the other Loan Documents or at law or in equity, shall have the right to enter upon the Project and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the City shall be permitted (but not 19 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 required) to enter upon the Project and perform all acts and work necessary to protect, maintain and preserve the improvements and landscaped areas on the Project, in the amount of the expenditure arising from such acts and work of protection, maintenance, and preservation by City and/or reasonable costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall be promptly paid by Developer to City upon demand. (c)Removal of Personal Property. During the Term of Agreement, Developer shall not cause or permit the removal from the Project of any items of Developer’s personal property (other than tools and equipment used in the operation of the Project and obsolete equipment) unless (i) no Event of Default remains uncured and (ii) Developer promptly substitutes and installs on the Project other items of equal or greater value or utility in the operation of the Project, all of which shall be free of liens and shall be subject to the liens of the City/HOME-ARP Loan Deed of Trust and the Financing Statement. 7.6.Obligation to Refrain from Discrimination. Developer 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, mental or physical disability, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Developer 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 and shall remain in effect for the term of the Agreement. 7.7.Maintaining Financial Stability. It is anticipated that during a portion of the Term of Agreement, the Project will be supported by a PBV Rental Subsidy for not less than twenty-five (25) of the Restricted Units, and the HOME-ARP Subsidy Reserve for the sixteen (16) HOME-ARP Units. These subsidies will not overlap on the same units. If, during the Term of Agreement and through no fault of Developer, (a) the HOME-ARP Subsidy Reserve is depleted, (b) there is a reduction, termination or nonrenewal of the PBV Rental Subsidy, or (c) the Project generates insufficient income to cover its operating costs, required deposits to replacement reserves, and debt service on approved financing as shown on the Operating Budget, and as is necessary to maintain the financial stability of the Project, with the exception of the HOME-ARP Units during the HOME-ARP Compliance Period, Developer may request approval of the City (a) to allow households with adjusted incomes that do not exceed sixty percent (60%) of AMI, adjusted for actual household size, to occupy the Restricted Units (i.e., a unit previously restricted to households with adjusted incomes that do not exceed 30% of AMI), and (b) to increase the rent on one or more of the Restricted Units, to rents that are affordable to households with an adjusted income that does not exceed sixty percent (60%) of AMI, adjusted for actual household size. The rent increase is subject to the following requirements: (a) concurrently with the request, Developer shall provide the City with evidence of the anticipated reduction, 20 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 termination, or nonrenewal of the Rental Subsidy and/or depletion of the HOME-ARP Subsidy Reserve and/or evidence that the Project is not operating at a financially stable level, (b) a Management Plan (as defined in Section 6.1(d) of this Agreement) for the Project for the City’s approval pursuant to Sections 6.1(d) and Exhibit F of this Agreement, showing the impact of the depletion of the HOME-ARP Subsidy Reserve and/or loss, termination, or reduction of the Rental Subsidy, (c) a proposed operating budget reflecting the requested rent increases (the “Operating Budget”), and (d) a description of efforts to obtain alternate sources of rental subsidy and/or maintain financial stability. The number of the Restricted Units subject to the rent increase and the amount of the proposed increase may not be greater than the number or amount required to ensure that the Project generates sufficient income to cover its operating costs, required deposits to replacement reserves, and debt service on approved financing as shown on the Operating Budget, and as is necessary to maintain the financial stability of the Project. In addition, Developer hereby agrees to the following: (a)Developer shall use good faith commercially reasonable efforts to obtain alternative sources of rental subsidies and shall provide the City with annual progress reports on efforts to obtain alternative sources of rental subsidies that would allow the rents to be reduced. Upon receipt of any alternative rental subsidies, Developer shall reduce the rents back to the original restrictions to the extent that the alternative rental subsidies provide sufficient income to cover the operating costs, required replacement reserves and debt service of the Project as shown on the Operating Budget. (b)Developer shall provide tenants in the Restricted Units with notice of any rent increase pursuant to this Section 7.7, and shall notify the tenant that if they have received a tenant-based voucher from the Housing Authority they may use the tenant-based voucher for their Restricted Unit. (c)All rent increases for the Restricted Units are subject to City approval pursuant to the terms of this Section 7.7. No later than sixty (60) days prior to the proposed implementation of any rent increase, Developer shall submit to the City a schedule of any proposed increase in the rent. The City will disapprove a rent increase if it does not comply with the restrictions set forth in this Section 7.7. Notwithstanding the foregoing, rent increases for the Restricted Units shall be subject to review and approval of the City. (d)Developer shall give tenants of all Restricted Units written notice at least sixty (60) days prior to any rent increase. With respect to any Restricted Units for which City has authorized Developer to increase rents pursuant to this Section, the preference to rent to Chronically Homeless households shall automatically terminate. The City’s local preferences as described in Section 11.4 of this Agreement and Section 7.5 of the Affordability Restrictions on Transfer of Property shall remain. 7.8.Developer shall prepare a written Management Plan in accordance with the Affordability Restrictions on Transfer of Property, which shall include, among other things, tenant selection policies and provide for the selection of tenants through the Coordinated Entry System. 21 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 Section 8. Section 9. RESERVED. GENERAL PROVISIONS AND WARRANTIES 9.1.As a material inducement to City to enter into this Agreement, Developer represents and warrants as follows, which representations and warranties are made solely by Developer and not by or on behalf of any partner of Developer: JHC-North Broadway LLC is the managing general partner of Developer and: (a) is a limited liability company, 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. Developer is in compliance with all laws 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. 9.2.Execution and Performance of Loan Documents. (a)Developer has all requisite authority to execute and perform its obligations under the Loan Documents. (b)The execution and delivery of Developer of, and the performance by Developer of its obligations under, each Loan Document has been authorized by all necessary action and does not and will not: (i) require any consent or approval not heretofore obtained of any person having any interest in Developer; (ii)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 Developer; (iii)result in or require the creation of any lien, claim, charge or other right of others of any kind (other than under the City Loan Documents) on or with respect to any property now or hereafter owned or leased by Developer; (iv)violate any provision of any law presently in effect; or (v)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 Developer is a party or by which Developer or any of its property is bound. (c)Developer is not in default, in any respect that is materially adverse to the interests of City under the Loan Documents or that would have any material adverse 22 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 effect on the financial condition of Developer or the conduct of its business, under any law, contract, lease or other agreement or document described in subsection (b). (d)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: (i) the execution of Developer of, and the performance by Developer of its obligations under, the Loan Documents; and (ii)the creation of the liens described in the Loan Documents. 9.3.Financial and Other Information. To the best of Developer’s knowledge, all financial information furnished to City with respect to Developer in connection with the City/HOME-ARP Loan (a) is complete and correct in all material respects as of the date of preparation thereof, (b) accurately presents the financial condition of Developer, and (c) 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 Developer’s knowledge, all other documents and information furnished to City with respect to Developer, in connection with the City/HOME-ARP Loan, are correct and complete in all material respects insofar as completeness is necessary to give the City accurate knowledge of the subject matter. To the best of Developer’s knowledge Developer has no material liability or contingent liability not disclosed to City 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 Developer not disclosed in such financial statements or otherwise disclosed to City in writing. 9.4.No Material Adverse Change. There has been no material adverse change in the condition, financial or otherwise, of Developer since the dates of the latest financial statements furnished to City. Since those dates, Developer has not entered into any material transaction not disclosed in such financial statements or otherwise disclosed to City in writing. 9.5.Tax Liability. Developer 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 in writing) other than taxes being promptly and actively contested in good faith and by appropriate proceedings. Developer 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. 9.6.Governmental Requirements. To the best of Developer’s knowledge, Developer is in compliance with all applicable laws relating to the Property and all applicable 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 23 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 the National Environmental Policy Act and the preparation and approval of all required environmental impact statements and reports; use, occupancy and building permit requirements; and public utilities requirements. 9.7.Rights of Others. Developer 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 the Developer’s knowledge, threatened against or affecting Developer or any property of Developer before any Governmental Authority, except as disclosed to City in writing prior to the execution of this Agreement. 9.9.Bankruptcy. To the best of Developer’s knowledge, no attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against Developer, nor are any of such proceedings contemplated by Developer. 9.10. Information Accurate. To the best of Developer’s knowledge, all information, regardless of its form, conveyed by Developer to City, by whatever means, is accurate and correct in all material respects and sufficiently complete to give City true and accurate knowledge of its subject matter, and does not contain any material misrepresentation or omission. 9.11. Conflicts of Interest. No member, official or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such 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 Developer 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 shall be personally liable to the Developer in the event of any default or breach by the City or for any amount that may become due to Developer or on any obligations under the terms of this Agreement. 9.13. Transfers. Developer expressly acknowledges and agrees that the City has only agreed to assist the Developer as a means by which to induce the acquisition/construction/development of the Property. During the Term of Agreement, except for a Permitted Transfer or except as otherwise permitted under the Loan Documents, Developer shall not sell or otherwise transfer the Project or any portion thereof, and none of the constituent general partners of Developer shall sell or otherwise transfer their interests in Developer, and none of the constituent general partners in a partnership that is a general partner in Developer shall sell or otherwise transfer their interest in such partnership without first obtaining the approval of the City, which consent the City may withhold or grant in the exercise of its reasonable and good faith discretion. The City shall not approve any such transfer request if the Developer is in default under 24 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 any of the Loan Documents or the Management Plan and such default has not been cured following written notice thereof and expiration of the applicable cure period. For purposes hereof, “Permitted Transfer” shall mean: (a)The granting of easements or licenses to any appropriate governmental agency or utility or permits to facilitate the development and/or operation of the Property; (b)A sale or transfer in connection with a foreclosure or deed in lieu of foreclosure of any senior deed of trust so long as the City is given notice as provided in Section 21.2 in order to exercise its remedies under Section 20.2; (c)The lease of any individual residential unit in the Project; (d)(i) A transfer of the Developer’s interest in the Property by foreclosure or deed in lieu of foreclosure to any bona fide third-party lender holding a lien encumbering the Property (or its nominee); and, (ii) following a foreclosure or a transfer of the Property by deed in lieu thereof, the first subsequent transfer to a third-party; (e) (f) A transfer of limited partnership interests in Developer; Transfer of the Property pursuant to the terms of a purchase option or right of first refusal executed in connection with Developer’s Partnership Agreement; and, (g)The removal of the general partner of Developer as permitted under Developer’s Partnership Agreement. 9.14. Applicable Law. This Agreement shall be interpreted, governed and enforced under federal and State of California laws. 9.15. Third Parties. This Agreement is made for the sole benefit of Developer and the City 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 hereunder or arising from any default by Developer, nor shall the City 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 the City has not at any time participated in any manner in the management or operation of the Property, and will not so participate at any time hereafter. Section 10.CONDITIONS FOR CONSTRUCTION Developer shall comply with this Section until the Certificate of Completion is issued. 10.1. Permits and Approvals. Developer shall diligently obtain all permits, including all building permits, licenses, approvals, exemptions and other authorizations of 25 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 Governmental Agencies required in connection with the construction of the Property. 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 for use of the Property as an affordable rental housing development (including required final certificates of occupancy) have been obtained. 10.3. RESERVED. 10.4. Entry and Inspection. At all times prior to completion of the construction, upon reasonable notice of no less than two (2) business’ days, City and their 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. 170lu, 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 contract or 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 Developer, 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 City, 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. 1701u (“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 Extremely Low Income Households and Very Low Income Households served by the Project], particularly persons who are recipients of HUD assistance for housing. 26 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 (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 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 in 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, the Developer shall comply and/or cause compliance with Section 3 Clause requirements for the Project. For example, when and if Developer 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. 27 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 10.6. Construction Information. From time to time during the course of the construction, within ten (10) Business Days following City’s written demand therefor, Developer shall furnish requested reports of project costs, progress schedules and AIA G702 (application and certification for payment) 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. Developer 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 City by any person furnishing labor or materials to the Property, Developer shall promptly give written notice of the same to City 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 a surety bond complying with the requirement of applicable laws for such release, or (c) take such other action as City may reasonably require to release City from any obligation or liability with respect to such stop notice or claim. Nothing in this Section 10.7 shall limit or prohibit Developer’s right to contest any claim of lien, stop notice or claim described herein in good faith. 10.8. General Contractors who are Related Parties to the Developer. If the Project is developed with general contractors who are owned or controlled by Developer, its members or its affiliates (“Related Parties”) to the Developer, the Developer must be audited to the subcontractor level by an outside auditing firm approved by the City. The Developer shall pay for the audit to the subcontractor level by an outside auditing firm. Section 11.FEDERAL (HOME-ARP AND HOME PROGRAM) COVENANTS 11.1. The Developer shall carry out the design, construction and operation of the Project, in conformity with all applicable laws, regulations, and rules of governmental agencies having jurisdiction, including without limitation and to the extent applicable, the HOME-ARP and HOME Requirements and the legal requirements set forth in “Exhibit G” attached to this Agreement and the statutes referenced therein. For purposes of this paragraph, “HOME-ARP Requirements” mean the requirements of the HOME-ARP Program as outlined in the HOME-ARP Notice and “HOME Requirements” mean the requirements of the HOME Investment Partnership Act, as amended (42 U.S.C. § 12741, et seq.), and the implementing regulations (24 C.F.R. § 92, et seq.), and the legal requirements summarized or referenced in Exhibit G attached hereto and incorporated herein by this reference. 11.1.5 Reserved. 11.2. Qualification as Affordable Housing. As more particularly provided in 28 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 the Affordability Restrictions on Transfer of Property, Developer shall use, manage and operate the Property in accordance with the requirements of the HOME-ARP regulations and 24 CFR 92.252 so as to qualify the housing on the Property as Affordable Housing with affordable rents. 11.3. Tenant and Participant Protection. Developer shall comply with the requirements of 24 CFR 92.253. 11.4. Local Preference. With regard to the leasing of the Restricted Units, inclusive of the persons referred off of the County of Orange coordinated entry system for the HOME-ARP Units , and subject to compliance with the HOME-ARP Regulations, the HOME Regulations and applicable California and federal fair housing laws, and the requirements of Section 142(d) and Section 42 of the Internal Revenue Code, Developer’s tenant selection plan shall include a preference for individuals or families who qualify as Chronically Homeless, and satisfy the criteria below, in the following order of priority: (a)First priority shall be given to persons who are either: (i)Residents of Santa Ana; and/or (ii)Working in Santa Ana at least 32 hours per week for at least the last 6 months. (b)The Restricted Units will still be available to the general public, as required under Section 142(d) of the Code and Section 42 of the Code, and these preferences do not restrict the availability of the units to the general public who qualify as Extremely Low Income Households. 11.5. Handicapped Accessibility. Developer shall comply with: (a) Section 504 of the Rehabilitation 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 to the extent readily achievable. 11.6. Use of Debarred. Suspended, or Ineligible Participants. Developer 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. Developer shall certify that Developer will provide a drug-free workplace in accordance with 24 CFR 84.13. 11.8. Lead-Based Paint. Developer shall comply with the requirements of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846) and implementing regulations at 24 CFR 35, as applicable. 11.9. Affirmative Marketing. Developer shall implement and perform such affirmative marketing procedures and requirements for the Property (24 CFR 92.351) in 29 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 compliance with the City’s adopted Affordable Housing Funds Policies and Procedures (the “City’s Program”), which may be amended from time to time, except to the extent the City’s Program is inconsistent with any applicable requirements of the HOME-ARP Program or the Loan Documents. 11.10. Equal Opportunity and Fair Housing. Developer 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. 11.11. Property Standards. Developer 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. 11.12. Displacement and Relocation. Developer acknowledges and agrees that, pursuant to 24 CFR 92.253 and consistent with the other goals and objectives of this part, City must ensure that it has taken all reasonable steps to minimize the displacement of persons as a result of the Project. Furthermore, to the extent feasible, any existing residential tenants must be provided a reasonable opportunity to lease and occupy a suitable, decent, safe, sanitary and affordable dwelling unit on the Property upon completion of the construction. Developer agrees to cooperate fully and completely with City in meeting the requirements of 24 CFR 92.253 and shall take all actions and measures reasonably required by the Executive Director in connection therewith. All applicable state guidelines must also be followed. (a)Developer acknowledges and agrees that if the Project requires temporary or permanent relocation of existing residential or commercial tenants it will hire a Relocation Consultant to provide relocation services, pursuant to the Uniform Relocation Act and Real Property Acquisition Policies Act of 1970 (“URA”) and 24 CFR 92.353. (b)If a Relocation Consultant is required to be retained pursuant to Section 11.12(a), the City, Developer, and Relocation Consultant will meet periodically during the relocation to provide updates and review tenant files, including at Project approval and prior to final benefit calculations. The Developer and Relocation Consultant shall carry out activity in compliance with URA and the City’s Acquisition and Relocation Policy and Procedures Manual (“Manual”). (c)If a Relocation Consultant is required to be retained pursuant to Section 11.12(a), the Developer and Relocation Consultant shall maintain accurate records and files pertaining to the temporary and permanent relocation of tenants, in accordance with URA and the City’s Manual. (d)If a Relocation Consultant is required to be retained pursuant to Section 11.12(a), the Developer and Relocation Consultant shall provide all relocation and tenant files to the City once relocation is complete at the Project. (e)Developer Responsible for Administration of Relocation. Developer acknowledges that former tenants and occupants of the Property may be eligible 30 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 for advisory assistance, monetary payments, and other benefits under the Relocation Laws. Developer shall be fully responsible for administering determinations of eligibility, the extent of advisory assistance, and the scope and amount of benefits and monetary payments pursuant to the applicable Relocation Laws, subject to the right, but not obligation, to oversee Relocation by the City. Developer shall cause to be provided and shall pay Relocation assistance and benefits, if any, in accordance with and to the extent required by applicable Relocation Laws to each eligible tenant/occupant that is required to vacate the Property as a result of implementation of the Project. The City’s rights are limited to determining compliance with Relocation Laws. Developer is and shall remain solely responsible to pay all out-of-pocket costs for direct payments, if any, to eligible person(s), household(s) and business(es) for Relocation assistance and benefits due and paid and for any other costs incurred related to Relocation, including a Relocation consultant, and any and all costs or fees incurred therefor. (f)Indemnification by Developer Relating to Relocation. Developer hereby covenants and agrees to indemnify, save, protect, hold harmless, pay for, and defend the Indemnitees from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including without limitation penalties, fines, and monetary sanctions), losses, costs, or expenses, including without limitation, consultants’ and attorneys’ fees, or relocation benefits claimed or payable under any legal obligation arising from relocation of persons on the Property (for purposes of this Section 11.12, the foregoing shall be referred to as “Liabilities”) which may now or in the future be incurred or suffered by Indemnitees by reason of, or resulting, in full or in part, or in any respect whatsoever from the relocation of residents of the current site pursuant to or resulting from the implementation of this Agreement, except to the extent arising out of the active negligence or willful misconduct of any of the Indemnitees or a breach by the City of any representation, warranty or covenant contained in this Agreement. At the request of Developer, the City shall cooperate with and assist Developer in its defense of any such claim, action, suit, proceeding, loss, cost, damage, City liability, deficiency, fine, penalty, punitive damage, or expense; provided that City shall not be obligated to incur any expense in connection with such cooperation or assistance. (g)Release. Developer, on behalf of itself and its affiliates, and any and all successors and assigns hereby fully and finally releases the Indemnitees from any and all manner of actions, causes of action, suits, obligations, liabilities, judgments, executions, debts, claims and demands of every kind and nature whatsoever, known and unknown, which Developer and any of its affiliates, successors or assigns may now have or hereafter obtain against the Indemnitees by reason of, arising out of, relating to, or resulting from in full or in part, the election of Developer to proceed with the Project pursuant to this Agreement except to the extent arising out of the active negligence or willful misconduct of any of the Indemnitees or a breach by the City of any representation, warranty or covenant contained in this Agreement (collectively, “Claims”), which release shall include but not be limited to any Claims for Relocation assistance or benefits under federal, state, local, or any other applicable laws or Governmental Requirements, except to the extent arising out of the active negligence or willful misconduct of any of the Indemnitees or a breach by the City of any representation, warranty or covenant contained in this Agreement. The parties agree that, with respect to the release of Claims as set forth above, 31 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 all rights under Section 1542 of the California Civil Code and any similar law of any state or territory of the United States are expressly waived. Section 1542 reads as follows: “A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.” 11.13. Other Program Requirements. Developer shall carry out each activity in compliance with all federal laws and regulations described in subpart H of 24 CFR 92, except that Developer 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, Developer may not request disbursements of funds under this Agreement until the funds are needed for payment of eligible costs (such funds shall be used solely towards the construction of the Project). The amount of each request shall be limited to the amount needed. 11.15. Eligible Costs. Developer shall use HOME-ARP Funds to pay costs defined as "eligible costs" pursuant to the HOME-ARP Notice and, as applicable, in 24 CFR 92.206. 11.16. Records and Reports. Developer shall maintain and from time to time submit to City such records, reports and information as the Executive Director may reasonably require in order to permit City to meet the record keeping and reporting requirements required of it pursuant to 24 CFR 92.508 and the HOME-ARP Program. 11.17. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Developer shall comply with the requirements and standards of 2 CFR 200. 11.18. Conflict of Interest. Developer 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. Developer shall allow the City to conduct periodic inspections of the Restricted Units, inclusive of the HOME-ARP Units during the HOME-ARP Compliance Period, on the Property as required by the HOME-ARP Program after the date of construction completion, with reasonable advance written notice of not less than two (2) business days. Developer shall cure any defects or deficiencies found by the City while conducting such inspections within two weeks of written notice thereof, or such longer period as is reasonable within the reasonable discretion of the City. Not less than once per year, the City shall review Developer’s activities and operations under the Agreement and Developer’s compliance with the HOME-ARP Requirements. Such review may include an on-site inspection of the Project units (including unit interiors). If such an on-site inspection of the Project units is to be undertaken, the City 32 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 shall coordinate such inspection with Developer. The monitoring required pursuant to this paragraph shall be in compliance with the requirements of 24 C.F.R. § 92.504. 11.20. Recertification of Tenant Income. (a)Developer shall take all necessary steps to ensure that each HOME- ARP Unit is initially rented to a household that meets the requirements of a HOME-ARP Qualifying Population as further defined in the HOME-ARP Notice. The Developer shall take all necessary steps to review the income of all other Restricted Unit tenants prior to renting to them, as well as reviewing current tenants on an annual basis, in accordance with the HOME-ARP Program, and HOME regulations and guidelines. Every fifth (5th) year, Developer shall require new original income documents to be submitted by tenants in the City’s HOME-ARP Units. Tenants in the City’s HOME-ARP Units whose incomes no longer comply with federal income guidelines, including HOME-ARP guidelines, shall have their rents adjusted in accordance with federal HOME guidelines (24 CFR 92.252- 92.253). (b)HOME-ARP 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 (24 CFR 92.252-92.253) until the non-compliance is corrected. 11.21. Other HOME-ARP Program Requirements. Developer shall comply with all other applicable requirements of the HOME-ARP and HOME Programs, including but not limited to all requirements regarding record-keeping and confidentiality set forth in the HOME-ARP Notice. 11.22. Controlling Covenants. If there is a discrepancy between State of California and Federal law with regard to any of the aforementioned covenants, the more stringent shall apply. 11.23. Faith Based Activities. To the extent applicable to the Project, in accordance with 24 CFR 92.257, Developer will comply with the restrictions on the use of HOME-ARP funds for faith based activities as set forth in Section 92.257. Section 12.MAINTENANCE, MANAGEMENT, OPERATION, PRESERVATION AND REPAIR OF PROPERTY 12.1. Maintenance. Developer shall maintain the Property (and all abutting grounds, sidewalks, roads, parking and landscape areas which Developer is otherwise required to maintain) in good condition and repair; shall operate the Property in a businesslike manner; shall prudently preserve and protect its own as well as the City's interests in connection with the Property; shall not commit or permit any waste or deterioration of the Property (except for normal wear and tear); shall not abandon any portion of the Property or leave the Property unguarded or unprotected as reasonably required; and shall not otherwise act, or fail to act, in such a way as to unreasonably increase the risk of any damage to the Property or of any other impairment of City's 33 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 interests under the Loan Documents. City acknowledges and agrees that as of the effective date of this Agreement, Developer’s installation of security cameras at the Property shall satisfy Developer’s obligation pursuant to this Section 12.1 not to leave the Property unguarded or unprotected. Without limiting the generality of the foregoing, and except as otherwise agreed by City in writing from time to time, Developer shall promptly and faithfully perform and observe each of the following provisions: 12.2. Alterations and Repair. Developer shall not remove, demolish or materially alter any Improvement without City’s prior consent, except to make non- structural repairs that 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. 12.3. Compliance. Developer shall comply with all laws and requirements of Governmental Authority (including, without limitation, all requirements relating to the obtaining of Governmental Authority approvals), all Governmental Authority approvals and all rights of third parties, relating to Developer, the Property or Developer's business thereon. 12.4. Taxes and Impositions. Developer 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 (if any); and (c) all license fees, taxes and assessments imposed on City (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, Developer may pay any Imposition in installments (together with any accrued interest). 12.5.Right to Contest. Developer 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) Developer 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’s interests under the Loan Documents; and, (c) Developer has furnished City with a bond or other security reasonably satisfactory to City in an amount not less than 100% of the applicable claim (including interest and penalties). 12.6. Evidence of Payment. Upon demand by City from time to time, Developer shall deliver to City, within thirty (30) days following the due date of any Imposition, evidence of payment reasonably satisfactory to City. 12.7. Books, Records and Annual Statement. Developer shall maintain complete books of account and other records reflecting the construction and operation of the Project in accordance with generally accepted accounting principles applied on a 34 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 consistent basis. During the Term of Agreement, the amount of the Residual Receipts shall be determined on the basis of an annual audited financial statement (” Annual Statement”), for the preceding year, beginning with the first year of operation of all or any part of the Project, prepared at the Developer’s expense by an independent certified public account firm acceptable to the City. Such Annual Statement shall include an updated statement based on the information provided in or required by Exhibit C. During the Term of Agreement, the Developer shall submit the Annual Statement and any payment to the City not later than one hundred twenty (120) days after closing of the Developer’s previous year’s books. The first Annual Statement submitted by the Developer for the City/HOME- ARP Loan shall include the period from the Completion of Construction to the close of that year’s books. The City shall review and approve such statement (such approval not to be unreasonably withheld or delayed), or request revisions, within ninety (90) days after receipt. In the event that Developer’s calculation of Residual Receipts is found to be incorrect as a result of a City review, and has underreported, Developer shall pay to the City the full amount of additional amounts owed within thirty (30) days of notice of such error. The terms of this subsection shall not be the exclusive method by which the City may review Residual Receipts payments by the Developer. In the event the discovery occurs at any time subsequent to the ninety (90) day period for that year’s books, Developer shall pay to the City the full amount of such additional amounts owed within thirty (30) days after the error is discovered. Notwithstanding the foregoing, no previous action or inaction by the City shall prohibit the City from requesting repayment of any unpaid, owed amounts of Residual Receipts at any time during the term of this Agreement or thereafter within ten (10) years of when such unpaid Residual Receipts were due. The Developer shall pay to the City the full amount of such additional amounts owed within thirty (30) days of notice of such errors for periods prior to the previous year. 12.8. Project Operating Account. Developer shall establish an interest bearing account to be known as the Operating Reserve Account. Upon the Conversion Date, Developer shall deposit an amount into the Operating Reserve Account sufficient to pay at least three (3) months of operating expenses and three (3) months of mandatory debt service payments (“Target Balance”), or such greater amount as may be required by a senior lender or the Tax Credit Investor. Funds shall be invested subject to the prior written approval of the City (such approval not to be unreasonably withheld or delayed), and any earnings shall become and remain a part of the Operating Reserve. Funds may be drawn only when revenue is insufficient to pay operating expenses and may be used as permitted under Developer’s Partnership Agreement. Promptly following any withdrawals from the Operating Reserve Account, written notice shall be provided to the City which provides a narrative of the nature of the operating deficits that are being cured, including all necessary amounts to cure them. If the balance in the Operating Reserve Account falls below the amount required to pay three (3) months of operating expenses and three (3) months of mandatory debt service payments, then Developer shall apply Residual Receipts, when and if available, or other funds, to the replenishment of Operating Reserves until the Target Balance is achieved. 35 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 12.9. Replacement Reserve Account. At or before the Conversion Date, Developer shall establish an interest bearing account to be known as the Replacement Reserve Account. Annually prior to March 31 of each year, Developer shall deposit into the Replacement Reserve Account an amount equal to a minimum of two hundred fifty dollars ($250) per unit but shall not exceed five hundred dollars ($500) per unit, which amounts may increase by 3% annually, or such higher amount as may be required by the Tax Credit Investor or Senior Lender and approved by City; provided, however, that City acknowledges that the Tax Credit Investor and/or Senior Lender will require an annual deposit of funds into the Replacement Reserve Account for all units, and City hereby approves such requirement and agrees that any replacement reserve established by Developer and held by the Tax Credit Investor and/or Senior Lender shall satisfy the requirements of this Section 12.9. The funds in the Replacement Reserve Account shall be held in an interest bearing account, and any earnings shall become and remain a part of the Replacement Reserve. The Developer may withdraw funds from the Replacement Reserve Account solely to replace or maintain Project assets that have a useful life of more than one (1) year in accordance with Generally Accepted Accounting Principles (“GAAP”), and have been or will be depreciated on the Partnership Tax Return, Form 1040P, filed with the Internal Revenue Service by the Developer’s accountant. Promptly following any withdrawals from the Replacement Reserve Account, written notice shall be provided to the City which provides a narrative of the nature of the repairs that are being made, including all necessary amounts to repair them. Developer shall not withdraw funds from the Replacement Reserve Account for any other purpose without the prior written approval of the City. In the event of a failure by the Developer to adequately maintain the Project, or pay operating expenses, mandatory debt service payments, or other payments required under the Loan Documents or Senior Loan Documents, or during the continuance of an event of default by Developer under the Loan Documents or Senior Loan Documents that would provide for the acceleration of the City/HOME-ARP Loan or Senior Loan, then the City may, after delivery of written notice to Developer and the expiration of any applicable cure periods and subject to the rights of any Senior Lender, apply the funds in the Replacement Reserve Account to the City/HOME-ARP Loan, the Senior Loan, or use such funds for the maintenance, improvement, or continued operation of the Project. 12.10. HOME-ARP Subsidy Reserve. (a)A special "HOME-ARP Subsidy Reserve" shall be created and maintained as a segregated interest-bearing account held by the Developer for a minimum 15-year HOME-ARP Subsidy Reserve Compliance Period, subject to subsections (c) and (d) below. The HOME-ARP Subsidy Reserve shall be capitalized in the amount established at closing and approved by the City in accordance with Sections 5.1 and 6.1 of this Agreement, subject to the requirements of Section 6 above. Any interest earned on funds in the HOME-ARP Subsidy Reserve shall be added to and become part of the HOME-ARP Subsidy Reserve. (b)The HOME-ARP Subsidy Reserve shall be used in accordance with, and subject to, all requirements of the HOME-ARP Program, to pay any HOME- 36 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 ARP Operating Expense Deficit which occurs during the HOME-ARP Compliance Period; provided, however, the Developer shall have no right to expend funds from the HOME-ARP Subsidy Reserve while a Developer Event of Default is continuing. (c)If at any time during the HOME-ARP Subsidy Reserve Compliance Period, the Developer experiences a cash flow shortfall resulting in a HOME-ARP Operating Expense Deficit which the Developer believes qualifies for payment out of the HOME-ARP Subsidy Reserve, Developer shall submit a written request to the City for consent to a disbursement from the HOME-ARP Subsidy Reserve including the specific expenses for which the disbursement is requested. The City shall approve or disapprove such request within ten (10) business days of receipt of the written request; such approval shall not be unreasonably withheld. (d)In no event shall any of the HOME-ARP Subsidy Reserve funds be used to pay for any partnership fees or asset management fees of the Partnership. (e)The HOME-ARP Subsidy Reserve is intended to assure affordability of the HOME-ARP Units during the HOME-ARP Subsidy Reserve Compliance Period. If the HOME-ARP Units continue to operate in accordance with the HOME-ARP requirements, per enforceable restrictions imposed by the City, after the HOME-ARP Subsidy Reserve Compliance Period, unexpended funds in the HOME-ARP Subsidy Reserve at the end of the HOME-ARP Subsidy Reserve Compliance Period may be retained in the HOME-ARP Subsidy Reserve and utilized to cover HOME-ARP Unit Operating Expense Deficits associated with HOME-ARP Units during the extended HOME-ARP Subsidy Reserve Compliance Period. (f)Unexpended funds in the HOME-ARP Subsidy Reserve at the time the HOME-ARP Restrictions are no longer enforced must be returned to the City and deposited in the City’s HOME account and recorded as HOME Program income. (g)Per the HOME-ARP Regulations, no less than annually, the City will review the HOME-ARP Subsidy Reserve account to determine that the account is appropriately sized based on the projected operating deficits of the HOME-ARP Units restricted to occupancy for HOME-ARP Qualifying Populations. (h)If the Developer re-syndicates the tax credit financing any time during the HOME-ARP Compliance Period, the City, at the City’s sole and absolute discretion, shall require the Developer to either: (i) allow the HOME-ARP Subsidy Reserve to remain with the Property; or (ii) repay any amounts remaining in the HOME- ARP Subsidy Reserve as of the date of the re-syndication to the City. (i)Net operating income resulting from the HOME-ARP Subsidy Reserve is not permitted and is prohibited by this Agreement. Section 13.NONDISCRIMINATION COVENANTS 13.1. Obligation to Refrain from Discrimination. Developer covenants and agrees that: 37 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 (a)In Use of Property. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, mental or physical disability, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Developer or any person claiming under or through it, 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 vendors of the Property. (b)In Affordable Housing Restrictions. The foregoing covenant shall: (a) be included in the Affordability Restrictions on Transfer of Property; (b) run with the land; and, (c) remain effective for the Term of Agreement. (c)In Employment. In construction of the Property, Developer shall not discriminate against any employee or applicant because of race, color, creed, religion, sex, marital status, mental or physical disability, national origin, or ancestry. Developer shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, creed, religion, sex, marital status, national origin, or ancestry. (d)In all Contracts. Developer shall cause the foregoing covenants to be inserted in all contracts for any work covered by this Agreement so that such provisions will be binding upon each contractor and subcontractor for the benefit of City, provided that the foregoing covenant shall not apply to contracts or subcontracts for standard commercial supplies or raw materials. Section 14.ENVIRONMENTAL MATTERS 14.1. Representation and Warranty. Except as disclosed in writing to the City including the Environmental Reports prepared on behalf of Developer and delivered to the City, Developer has no knowledge: (a) of the presence on, under or about the Property, now or in the past, of any Hazardous Materials in violation of applicable law, or of the transportation to or from the Property of any Hazardous Materials in violation of applicable law; (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. Developer shall: (a) comply with all environmental laws and environmental permits applicable to the construction of the Property; (b) promptly 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 applicable environmental law; and, (d) obtain and renew all environmental permits required for ownership or use of the Property. 14.3. Presence of Hazardous Materials. Developer 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 38 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 with all applicable environmental laws and required in connection with the routine construction, operation and/or maintenance of the Property. 14.4. Notice of Environmental Matters. Developer shall promptly advise City in writing of any of the following: (a) any pending or threatened environmental claim against Developer 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 Developer. 14.5. Environmental Indemnification by the Developer. Developer agrees to defend, indemnify and hold harmless the City and their respective officers, directors, employees and agents (collectively the "Indemnitees") from and against any and all obligations (including removal and remediation), losses, claims (including third party claims), suits, judgments, liabilities, penalties, damages (including consequential and punitive damages), costs and expenses (including reasonable fees of consultants and attorneys) of whatever kind or nature whatsoever that may at any time be incurred by or imposed on the Indemnitees directly or indirectly based on, or arising or resulting from the actual or alleged presence of Hazardous Materials on the Property except to the extent arising from the active negligence, willful misconduct and/or illegal actions of any Indemnitee and the Existing Hazardous Materials (as such term is defined in the Ground Lease). Section 15.OTHER AFFIRMATIVE COVENANTS While any obligation of Developer under the City/HOME-ARP Loan Note or City/HOME-ARP Loan Deed of Trust remain outstanding, the following provisions shall apply, except to the extent that the Executive Director otherwise consents in writing: 15.1. Existence. Developer’s Managing General Partner shall maintain its existence in good standing under the laws of the State of California, and Developer shall provide documentation of such status annually to the City as set forth in Section 21.2 15.2. Protection of Lien. Developer shall maintain the lien of the City/HOME- ARP Loan Deed of Trust as a valid second priority deed of trust on the Property and take all actions, and execute and deliver to City all documents, reasonably required by City from time to time in connection therewith. 15.3. Notice of Certain Matters. Developer shall give notice to City, within fifteen (15) days of Developer's learning thereof, of each of the following: (a)any filed litigation or claim affecting or relating to the Property and involving an amount in excess of $25,000; and any litigation or claim that might subject Developer or any general partner of Developer to liability in excess of $50,000, whether covered by insurance or not; (b)any material dispute between Developer and a Governmental 39 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 Authority relating to the Property, the adverse determination of which would reasonably be expected to have a material adverse effect on the Property; (c)any change in Developer'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 Developer or any other party under any Senior Loan document, or the receipt by Developer 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 Developer. 15.4. Further Assurances. Developer 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 City/HOME-ARP Loan Deed of Trust; to encumber by the City/HOME-ARP Loan Deed of Trust any property intended by the terms of any Loan Document(s) to be covered by the City/HOME-ARP Loan Deed of Trust or otherwise to carry out the purposes of the Loan Documents and the transactions contemplated thereunder. Notwithstanding anything to the contrary set forth herein, the Developer shall have no obligation to execute any document, or take any action, which would: (i) change a material term of any Loan Document; (ii) change or impair any material right of Developer; and/or, (iii) increase the liability of Developer or any partner thereof. 15.5. Annual Financial Statements. Developer shall deliver to City, within one hundred twenty (120) days after the end of each Calendar Year following issuance of a Certificate of Completion: (a) a certified public accountant reviewed balance sheet for Developer as of the end of such Calendar Year and a certified public accountant reviewed statement of profit and loss for Developer and for Developer's operations in connection with the Property 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 Developer's Managing General Partner 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 present Developer's financial condition; (iii) show all material liabilities, direct and contingent; and, (iv) fairly present the results of Developer's 40 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 operations. Developer shall also provide the City with any other annual audit reports issued by other monitoring agencies upon written request. 15.6. Audits and Access to Records. Developer agrees that City, the U.S. Department of Housing and Urban Development, 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 Developer that are pertinent to this Agreement in order to make audits, examinations, abstracts, excerpts or transcripts. Developer 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 Developer's activities, for a period of not less than five (5) years after the Affordability Period ends. 15.7. Compliance with Federal and State Laws. Nothing contained herein shall require the Developer to do anything contrary to or refrain from doing anything required by federal and state laws and regulations promulgated thereunder applicable to the management, maintenance, operation and rental of the Project or the Property. The Developer shall operate the Project, and cause all work to be performed on the Project, in compliance with (i) all applicable laws, ordinances, rules and regulations of federal, state, or municipal governments or agencies now in force or that may be enacted hereafter, including (without limitation and where applicable) state prevailing wage provisions, (ii) the HUD housing quality standards set out in 24 C.F.R. 5.703 and the cost-effective and, to the extent applicable, energy conservation and effectiveness standards in [24 C.F.R. 965.301], and (iii) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. Any construction, renovation, or capital improvement at the Project shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction. Section 16.OTHER NEGATIVE COVENANTS While any obligation of Developer under the City/HOME-ARP Loan Note or City/HOME-ARP Loan Deed of Trust remain outstanding, the following provisions shall apply, except to the extent that the Executive Director otherwise consents in writing: 16.1. Default on Senior Loan. Developer shall not default on any of the Senior Loan Documents, provided however, that Developer shall have such period as is provided in the Senior Loan Documents during which to effectuate a cure. 16.2. Sale or Lease of Property. Unless and until Developer has received a Certificate of Completion for the construction from City, except for a Permitted Transfer, Developer shall not sell, lease, sublease or otherwise transfer all or any part of the Property or any interest therein without the prior written consent of the Executive Director, which consent may be withheld in the Executive Director's sole and absolute discretion. In connection with the foregoing consent requirements, Developer acknowledges that City 41 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 relied upon Developer's particular expertise in entering into this Agreement and continues to rely on such expertise to ensure the satisfactory completion of the construction. Notwithstanding anything to the contrary contained herein, a "transfer” shall not include: (i) a transfer of any general partner’s interest in Developer when made in connection with the exercise by the Developer’s Limited Partner of its rights upon a default by a general partner under the Developer’s 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; (ii) any transfer of the Property to the managing general partner of Developer pursuant to the right of first refusal or to the general partners of Developer pursuant to the purchase option, as provided for in the Partnership Agreement; (iii) any transfer of the Limited Partner’s interest in accordance with the Partnership Agreement; and, (iv) any sale, transfer or other disposition of an interest in a Limited Partner of the Developer. Section 17.CERTIFICATE OF COMPLETION Upon satisfactory completion of the construction and upon the request of Developer, or at its own election, the City shall issue a certificate of completion (“Certificate of Completion”). Such Certificate of Completion shall be, and shall so state, conclusive determination of satisfactory completion of the construction. If City declines to furnish a Certificate of Completion after written request from Developer, the Executive Director shall, within thirty (30) days after receipt of the request, provide Developer with a written statement of the reasons therefor. The statement shall contain a description of the action(s) Developer must take to obtain a Certificate of Completion. If the reason therefor is that the Developer has not completed a minor portion of the Construction, City may, in its sole and absolute discretion, issue the Certificate of Completion upon the posting with City of a bond or other form of security acceptable to the Executive Director in the amount of the fair value of the uncompleted work. A Certificate of Completion is not evidence of compliance with or satisfaction of the Loan Documents or any obligation of Developer to any other party whatsoever, including any holder of a mortgage or deed of trust. A Certificate of Completion is not "notice of completion” referred to in Section 3093 of the California Civil Code. A Certificate of Occupancy issued by the City will also meet the same purpose and requirement as the Certificate of Completion. Section 18. 18.1. INDEMNIFICATION Nonliability of City. Developer acknowledges and agrees that: 42 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 (a)The relationship between Developer and City is and shall remain solely that of borrower and lender, City neither undertakes nor assumes any responsibility to review, inspect, supervise, approve (other than for aesthetics) or inform Developer of any matter in connection with the construction, including matters relating to: (i) the performance of the construction work, (ii) architects, contractors, subcontractors and materialmen, or the workmanship of or materials used by any of them, or (iii) the progress of the construction; and Developer shall rely entirely on its own judgment with respect to such matters and acknowledges that any review, inspection, supervision, approval or information supplied to Developer by City in connection with such matters is solely for the protection of City and that neither Developer nor any third party is entitled to rely on it; (b)Notwithstanding any other provision of any Loan Document: (i) the City is not a partner, joint venture, alter-ego, manager, controlling person or other business associate or participant of any kind of Developer and City does not intend to ever assume any such status; (ii) City’s activities in connection with the City/HOME-ARP Loan 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 City does not intend to ever assume any responsibility to any person for the quality or safety of the Property; and, (iii) City shall not be deemed responsible for or a participant in any acts, omissions or decisions of Developer; (c)City shall not 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, whether arising from: (i) any defect in any building, grading, landscaping or other onsite or offsite improvement; (ii) any act or omission of Developer or any of Developer’s agents, employees, independent contractors, licensees or invitees; or, (iii) any accident on the Property or any fire or other casualty or hazard thereon; and (d)By accepting or approving anything required to be performed or given to City under the Loan Documents, including any certificate, financial statement, survey, appraisal or insurance policy, City shall not 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 to anyone. 18.2.Indemnity. Developer shall defend (by counsel reasonably 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) a breach of this Agreement by Developer; (ii) the making of the City/HOME-ARP Loan; (iii) a claim, demand or cause of action that any person has or asserts against Developer; (iv) any act or omission of Developer, any contractor, subcontractor or material supplier, engineer, architect or other person with respect to the Property; or, (v) the ownership, occupancy or use of the Property. Notwithstanding the foregoing, Developer shall not be obligated to indemnify City with respect to the consequences of any act of illegal conduct, gross negligence or willful misconduct of City. Developer's obligations under this Section shall survive the cancellation of the City/HOME-ARP Loan Note, release and 43 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 reconveyance of the City/HOME ARP Deed of Trust, issuance of the Certificate of Completion, and termination of this Agreement. (a)Notwithstanding the foregoing, neither Developer, nor any of its partners, shall be personally liable for any indemnification obligation hereunder which would result in the repayment of principal and/or interest under the City/HOME-ARP Loan. (b)To the fullest extent permitted by law, the Developer agrees to indemnify, hold harmless and defend the City and its elected officials, officers, governing members, employees, attorneys and agents (collectively, the "Indemnified Parties"), from and against any and all losses, damages, claims, actions, liabilities, reasonable costs and expenses of any and every conceivable nature, kind or character (including, without limitation, reasonable attorneys’ fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or any of them, may become subject to under any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to: (i) the Loan Documents or the execution or amendment thereof or in connection with the transactions contemplated thereby; (ii)Developer’s ownership or operation of the Project or any act or omission of the Developer or any of its agents, contractors, servants, employees or licensees in connection with the City/HOME-ARP Loan or the Project, the operation of the Project, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, installation, operation or rehabilitation of, the Project or any part thereof; (iii)any lien or charge upon payments by the Developer to the City, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the City in respect of any portion of the Project; (iv)any violation of any applicable environmental law, rule or regulation with respect to, or the release of any toxic substance from the Project or any part thereof; (v)any untrue or misleading statement of a material fact by the Developer, which Developer knew or should have known to be untrue or misleading, that is contained in any Loan Document or any of the documents or instruments relating to said Loan Documents that the City relied upon in making the City/HOME-ARP Loan, except to the extent such damages are caused by the active negligence or willful misconduct of such Indemnified Party. In the event that any action or proceeding is brought against any Indemnified Party with respect to which indemnity may be sought hereunder, the Developer, upon written notice from the Indemnified Party, shall assume the investigation and defense thereof, including the employment and payment for counsel selected by the Indemnified Party, and shall assume the payment of all reasonable expenses related thereto, 44 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 with full power to litigate, compromise or settle the same; provided that the Indemnified Party shall have the right to review and approve or disapprove in its reasonable discretion any such compromise or settlement; and, (vi)Notwithstanding anything in this Section 18.2 to the contrary, if judgment is entered against Developer and City by a court of competent jurisdiction because of the concurrent active negligence of City or Indemnified Parties, Developer and City agree that liability will be apportioned as determined by the court. Neither Party shall request a jury apportionment. 18.3. Reimbursement of City. Developer shall reimburse City immediately upon written demand for all costs reasonably incurred by City (including the reasonable fees and expenses of attorneys, 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 is indemnified under the Loan Documents. Such reimbursement obligations shall bear interest from the date occurring twenty (20) days after City gives written demand to Developer at the rate of Interest defined in the Note and shall be secured by the City/HOME-ARP Loan Deed of Trust. Such reimbursement obligations shall survive the cancellation of the City/HOME-ARP Loan Note, release and reconveyance of the City/HOME-ARP Loan Deed of Trust, issuance of a Certificate of Completion, and termination of this Agreement. Subsequent to the making and disbursement of the City/HOME-ARP Loan, the Developer shall pay for any subsequent revisions, transfers, extensions, renewals, modifications, refinancing or "workouts," and providing estoppels or subordinations of the City/HOME- ARP Loan (collectively, “Changes”), and in the exercise of any of City's rights or remedies under this Agreement. The City will receive from Developer in connection with any request by Developer for a Change, a nonrefundable fee in the amount of Five Hundred Dollars ($500) and Developer shall reimburse City for all of the City’s reasonable out-of-pocket expenses (including reasonable attorney’s fees) incurred in the administration and review of such Changes, to the extent such expenses exceed Five Hundred Dollars ($500). Section 19.INSURANCE, CASUALTY AND CONDEMNATION 19.1. Prior to undertaking performance of work under this Agreement, Developer shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a.Minimum Scope and Limit of Insurance – Coverage shall be at least as broad as: 1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per 45 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: Insurance Services Office Form Number CA 00 01 covering any auto (Code 1), or if Developer has no owned autos, hired (Code 8), and non-owned autos (Code 9), with a limit no less than $1,000,000 per accident for bodily injury and property damage. 3. Workers’ Compensation: Insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. 4. Professional Liability (Errors & Omissions): Insurance appropriate to the Developer’s profession, with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate. 5. Broader Coverage: If Developer maintains broader coverage and/or higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by Developer. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. b.Other Insurance Provisions – The insurance policies are to contain, or be endorsed to contain, the following provisions: 1. Additional Insured Status: The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of Developer including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to Developer’s insurance (at least as broad as ISO Form CG 20 10 11 85 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 2037 forms if later revisions used). 2. Primary Coverage: For any claims related to this Agreement, Developer’s insurance coverage shall be primary coverage at least as broad as ISO CG 20 01 04 13 as respects the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of Developer’s insurance and shall not contribute with it. 46 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 3. Notice of Cancellation: Each insurance policy required above shall state that coverage shall not be canceled, except with notice to the City. 4. Waiver of Subrogation: Developer hereby grants to City a waiver of any right to subrogation which any insurer of said Developer may acquire against the City by virtue of the payment of any loss under such insurance. Developer agrees to obtain any endorsement that may be necessary to affect this waiverof subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer. 5. Self-Insured Retentions: Self-insured retentions must be declared to and approved by the City. The City may require Developer to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City. 6. Acceptability of Insurers: Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City. 7. Claims Made Policies: If any of the required policies provide coverage on a claims-made basis: i. The Retroactive Date must be shown and must be before the date of the Agreement or the beginning of work. ii. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the work. iii. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Developer must purchase “extended reporting” coverage for a minimum of five (5) years after completion of work. 8. Verification of Coverage: Developer shall furnish the City with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage requiredby this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing allpolicy endorsements to City before work begins. However, failure to obtain the required documents prior to the work beginning shall not waive Developer’s obligation to provide them. The City reserves the right to require 47 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 complete, certified copies of all required insurance policies,including endorsements required by these specifications, at any time. 9. Subcontractors: Developer shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Developer shall ensure that City is an additional insured on insurance required from subcontractors. 10. Special Risks or Circumstances: City reserves the right to modify these requirements, including limits, based on the nature of therisk, prior experience, insurer, coverage, or other special circumstances. 19.2.Claims and Proceedings. Developer shall give City immediate notice of any material casualty to any portion of the Property, 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 with copies of all documents which pertain to any such casualty or Condemnation. Developer shall take all action reasonably required by City in connection therewith to protect the interests of Developer and/or City, and City 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. Developer shall not settle, adjust, or compromise any claim, action, adjustment or proceeding without prior written approval, which approval shall not be unreasonably withheld or delayed. 19.3. Delivery of Proceeds to City. If the proceeds from any casualty insurance is in excess of $500,000, Developer shall, subject to any superior rights of the Senior Lender, deliver such proceeds to the City immediately upon receipt. 19.4. Application of Casualty Insurance Proceeds. Any proceeds collected (the "Proceeds") under any casualty insurance policy described in this Agreement shall be disbursed to Developer 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 Developer and City) following the occurrence of the damage for which the Proceeds are collected, or the date the City receives the Proceeds, whichever is later: (a)Developer shall demonstrate to City's reasonable satisfaction that the Proceeds (together with amounts deposited by Developer pursuant to subparagraph (b)) will be adequate to repair the Improvements and to restore the fair market value of the Property, within two years (or such longer time period reasonably determined by City), to at least the value it had immediately prior to sustaining the damage. Such demonstration shall include delivery to City of: (i) plans and specifications reasonably satisfactory to City; and, (ii) a construction contract in form and content, and with a contractor, reasonably satisfactory to City. (b)To the extent that the Proceeds are insufficient to accomplish the restoration required above, Developer shall deliver to City (the "Shortfall Funds") in the 48 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 amount of such shortfall, which funds shall be assigned to City as security for Developer's obligation hereunder and held and disbursed in the same manner as the Proceeds. (c)Developer shall execute such documents as City reasonably requires to evidence and secure Developer's obligation to use all amounts disbursed for the diligent restoration of the Property. No Event of Default shall remain uncured. 19.5. Method of Disbursement and Undisbursed Funds. Any Proceeds and Shortfall Funds to be disbursed to Developer shall be held by City and disbursed in accordance with then customary disbursement procedures and related provisions. Any amounts remaining undisbursed following completion of such restoration shall be returned to Developer up to the amount of any Shortfall Funds deposited by Developer, and any other amounts remaining shall either be paid to Developer or applied by City against any obligations to City that are secured by a lien on the Property, as they elect in their sole and absolute discretion. 19.6. Failure to Satisfy Conditions. In the event that Developer fails to fulfill the Restoration Conditions within ninety (90) days, unless extended, following the date on which the damage occurs, the Proceeds shall be applied by City against any obligations to City 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 in their sole and absolute discretion, subject to the rights of the Senior Lender. 19.7. Condemnation; Treatment of Compensation. Subject to any superior rights of Senior Lender, Developer hereby assigns to the City, as security for all obligations to City secured by a lien on the Property, all amounts payable to Developer in connection with any Condemnation, and any proceeds of any related settlement (collectively, "Compensation"). Subject to any superior rights of Senior Lender, Developer shall deliver such remaining Compensation to City immediately upon receipt. If the taking results in a loss of the Property to an extent that, in the reasonable opinion of City, renders or is likely to render the Property not economically viable or if, in City’s reasonable judgment Developer’s security is otherwise impaired, City 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 City/HOME-ARP Loan Note. If so applied, any award in excess of the unpaid balance of the City/HOME- ARP Loan Note and other sums due to City shall be paid to Developer or Developer’s assignee. City shall have no obligation to take any action in connection with any actual or threatened condemnation or other proceeding. (a)Notwithstanding the foregoing, as long as the Developer is not in default under the Loan Documents, any condemnation proceeds may be used by the Developer for repair and/or restoration of the Project. 49 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 Section 20.DEFAULTS AND REMEDIES 20.1. Events of Default. The occurrence of any of the following, whatever the reason therefore, shall constitute an Event of Default by Developer: (a)Developer fails to make any payment of principal or interest under the City/HOME-ARP Loan Note when due, and such failure is not cured within thirty (30) Business Days after Developer's receipt of written notice that such payment was not received when due; (b)Developer fails to perform any other obligation for the payment of money under any Loan Document, and such failure is not cured within thirty (30) Business Days after Developer's receipt of written notice that such obligation was not performed when due; (c)Developer 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 Developer'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 Developer (in any event, within ten (10) days after receipt of such notice) commences to cure, and thereafter diligently (in any event within one hundred and twenty (120) 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) (f) Reserved; Subject to the terms of Section 21.17, work on the construction ceases for ninety (90) consecutive days for any reason; (g)Developer is enjoined or otherwise prohibited by any Governmental Authority from constructing and/or occupying the improvements and such injunction or prohibition continues unstayed for ninety (90) days or more for any reason; (h)Developer is dissolved, liquidated or terminated, or all or substantially all of the assets of Developer are sold or otherwise transferred without the Executive Director's prior written consent; (i)Developer 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 Developer 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 Developer and the appointment continues undischarged or unstayed for ninety (90) days; or Developer institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, 50 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceeding relating to it or any part of its property; or any similar proceeding is instituted without the consent of Developer 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 Developer and is not released, vacated or fully bonded within ninety (90) days after its issue or levy; (j)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 or delayed), to the extent the City’s consent is required pursuant to any subordination agreement between the City and the Senior Lender; (k)Senior Loan Document Breach. Any default or breach of Developer that continues uncured after the expiration of any applicable cure period under any other loan document including, but not limited to, the Senior Loan Documents (including but not limited to the Senior Loan Deed of Trust); (l)Voluntary Suspension. The voluntary suspension of Developer's business or the dissolution or termination of the Partnership (if any) constituting Developer; (m)Unauthorized Transfer. Developer’s sale or other transfer of the Property or the Project in violation of the terms in this Agreement; (n)Fraud or Material Misstatement or Omissions. Any fraudulent act or intentional material omission of Developer's, or intentional material misrepresentation of Developer's, pertaining to or made in connection with the City/HOME-ARP Loan, Loan Documents or the Project; or, (o)Project Monies.Developer’s intentional misapplication or embezzlement of Project monies. 20.2. Remedies Upon Default. Upon the occurrence and during the continuance of any Event of Default, City may, at its option and in its sole and absolute discretion, do any or all of the following: (a)By written notice to Developer, 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 shall automatically, without notice or other action on City's part, 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, 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 51 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 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 elects in its sole and absolute discretion; (d)Suspend or terminate the award of City/HOME-ARP funds if Developer fails to comply with any term of that award; and, (e)Cure any monetary Event of Default by Developer under a loan other than the City/HOME-ARP Loan. The Developer agrees to reimburse the City for any funds advanced by the City to cure any such monetary default by Developer upon demand therefor, together with interest thereon at the rate of twelve percent (12%) per annum (which rate shall in no event exceed the maximum rate permitted by law and if it does, said rate shall be reduced to the maximum rate then permitted by law), from the date of expenditure until the date of reimbursement. 20.3. Cumulative Remedies: No Waiver. City'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 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 City in the exercise of any other right or remedy. No waiver of any default shall be implied from any omission by City 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 consent to or approval of any act by Developer requiring further consent or approval shall not be deemed to waive or render unnecessary City's consent to or approval of any subsequent act. The City's acceptance of the late performance of any obligation shall not constitute a waiver by City of the right to require prompt performance of all further obligations; City'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 acceptance of any partial performance shall not constitute a waiver by City of any rights. 20.4. Nonrecourse Liability. Neither Developer, nor any other party, including any partner of Developer, shall have any personal liability under this Agreement, or the attached City/HOME-ARP Loan Note and City/HOME-ARP Loan Deed of Trust, and any judgment, decree or order for the payment of money obtained in any action to enforce the obligation of Developer to repay the City/HOME-ARP Loan or any other amount evidenced or secured by such documents shall be enforceable against Developer only to the extent of Developer’s interest in the Property. 20.5. Limited Partner Cure. The City shall provide the Developer’s Limited Partner with an opportunity to cure any default. Any cure made or tendered by Limited Partner shall be accepted as if made by Developer. 52 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 Section 21.MISCELLANEOUS 21.1. Obligations Unconditional and Independent. Notwithstanding the existence at any time of any obligation or liability of City to Developer, or any other claim by developer against City, in connection with the City/HOME-ARP Loan or otherwise, Developer hereby waives any right it might otherwise have: (a) to offset any such obligation, liability or claim against Developer'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 Developer 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 Developer:During Construction: North Broadway Housing Partners LP c/o 17701 Cowan Ave., Suite 200 Irvine, CA 92614 Attention: Chief Executive Officer Following construction: North Broadway Housing Partners LP c/o Jamboree Housing Corporation 17701 Cowan Ave., Suite 200 Irvine, CA 92614 Attention: Asset Management With a copy to:Rutan & Tucker, LLP 18575 Jamboree Road, 9th Floor Irvine, CA 92612 Attention: Patrick D. McCalla With a copy to: Limited Partner Bank of America, N.A. 100 Federal Street MA5-100-04-11 Boston, MA 02110 Attention: Asset Management Facsimile: 617-346-2257 and Banc of America CDC Special Holding Company, Inc. 53 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 100 Federal Street MA5-100-04-11 Boston, MA 02110 Attention: Asset Management Facsimile: 617-346-2257 and Buchalter, a Professional Corporation 1000 Wilshire Blvd., Suite 1500 Los Angeles, CA 90017-2457 Attn: Michael A. Williamson, Esq. If to City:City of Santa Ana Executive Director (CDA) 20 Civic Center Plaza (M-26) P .0. 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 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 City/HOME-ARP Loan described herein and have been or will be relied on by City notwithstanding any investigation made by either party. 21.4. No Third Parties Benefited. This Agreement is made for the purpose of setting forth rights and obligations of Developer and the City, and no other person shall have any rights hereunder or by reason hereof. 21.5. Reserved. 21.6. Prior Agreements; Amendments; Consents. This Agreement (together with the other Loan Documents) contains the entire agreement between the City and Developer with respect to the City/HOME-ARP Loan 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 54 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 and for the specific purpose given. Notwithstanding the foregoing, that certain Density Bonus Agreement approved by City and recorded against the Property on June 29, 2022, as Instrument No. 2022000231667 shall remain an encumbrance on the Property subject to the provisions of the City Affordability Restrictions on Transfer of Property. 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. Developer 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 reasonably 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, Developer 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 Loan Document, this Agreement, unless otherwise expressly provided, shall prevail; provided however that, 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. 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 City shall have any direct or indirect interest in this Agreement, nor participate in any decision relating to the Agreement that is prohibited by law. 21.13. Warranty Against Payment of Consideration. Developer 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. Reserved. 21.15. Plans and Data. As additional collateral for the City/HOME-ARP Loan, Developer hereby grants to the City a security interest in all plans and data concerning the Property, subject to the rights of any Senior Lender. Such right of City shall be subject to any right of the preparer of the plans to their use. 55 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 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 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 for Developer or is withdrawn. 21.17. Force Majeure. Notwithstanding specific provisions of this Agreement, 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 Agreement may also be extended in writing by the City and the Developer. 21.18. Approvals and Actions. (a)The Executive Director shall have the authority, on behalf of the City to make approvals, issue interpretations, waive provisions, grant extensions of time, approve amendments to this Agreement and changes to the attached exhibits prior to their execution and execute documents necessary to implement this Agreement, as may be required by the Tax Credit Investor or any of Lender, so long as such actions: (1) were authorized by the City Council’s approval of the Loan Documents; (2) comply with the HOME-ARP Program; and (3) do not reduce the length of affordability of the Restricted Units or increase the risk of liability or the costs to be incurred by the City hereunder. The Executive Director reserves the right, in his or her sole and absolute discretion, to submit any requested modification, interpretation, amendment or waiver to the City Council if the Executive Director reasonably determines or reasonably believes that such action could increase the risk, liability or costs to City, or reduce the length of affordability of the Project, or is otherwise required by law. (b)Whenever this Agreement or any other Loan Document references a request that requires the approval or consent of a party, then each party shall act reasonably and in good faith in making any such request and responding to the request, but in no event shall either party be required to agree to terms that are not specified in this Agreement or waive any rights or privileges set forth herein. Whenever this Agreement references a party having “sole and absolute” discretion, then that party may exercise its discretion for any reason or no reason at all as that party may determine in its exclusive and independent judgment. 56 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 {signatures on following page} 57 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date set forth at the beginning of this Agreement. DEVELOPER NORTH BROADWAY HOUSING PARTNERS LP, a California limited partnership By:JHC-North Broadway LLC, a California limited liability company, its managing general partner By:Jamboree Housing Corporation, a California non-profit public benefit corporation, its managing member By: Name: Title: 58 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 ATTEST:CITY OF SANTA ANA ___________________________ Norma Orozco _______________________ Kristine Ridge Clerk of the Council City Manager Dated:Dated: APPROVED AS TO FORM: SONIA R. CARVALHO, City Attorney By: ________________________ Special Counselto the City Best, Best & Krieger Dated:2/23/23 RECOMMENDED FOR APPROVAL: _______________________________ Michael L. Garcia Executive Director Community Development Agency 59 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 EXHIBITS A. B. C. D. E. F. Legal Description Scope of Work Project Budget City/HOME-ARP Loan Deed of Trust City/HOME-ARP Loan Note Affordability Restrictions on Transfer of Property G.Additional Terms and Conditions for Federal HOME-American Rescue Plan (HOME-ARP) and HOME Investment Partnership (HOME) Funds 60 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Agreement EXHIBIT 3 Exhibit A: Legal Description EXHIBIT 3 All that certain real property situated in the County of Orange, State of California, described as follows: COMMENCING AT THE CENTERLINE INTERSECTION OF 15TH STREET AND SYCAMORE STREET AS SHOWN ON THE RECORD OF SURVEY NO 85-1067, RECORDED IN BOOK 111, PAGE 38, OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, SAID CENTERLINE OF SYCAMORE STREET BEING DESCRIBED IN THAT CERTAIN FINAL JUDGMENT, SUPERIOR COURT CASE NO. 23280, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 8, 1929 IN BOOK 227, PAGE 401 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, CALIFORNIA; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET SOUTH 00° 14' 46” WEST, 90 FEET AND SOUTH 00° 04' 48” EAST, 213.42 FEET TO THE POINT OF BEGINNING; THENCE LEAVING SAID CENTERLINE NORTH 89° 58' 21” WEST, 312.17 FEET TO THE CENTERLINE OF BROADWAY, THENCE NORTHERLY ALONG SAID CENTERLINE OF BROADWAY NORTH 00° 16' 10” EAST, 75.00 FEET TO THE SOUTHWEST CORNER OF THE LAND DESCRIBED IN A DEED TO T. J. MULLINIX RECORDED OCTOBER 29, 1897 IN BOOK 33, PAGE 197 OF DEEDS OF SAID ORANGE COUNTY; THENCE EASTERLY ALONG SAID SOUTHERLY LINE OF SAID DEED TO T. J. MULLINIX SOUTH 89° 58' 10” EAST, 181.72 FEET TO THE WESTERLY LINE OF THE EAST 130.00 FEET OF THAT PORTION OF THE LAND ALLOTTED TO JACOB ROSS, AS DESCRIBED IN THE FINAL DECREE OF PARTITION OF THE RANCHO SANTIAGO DE SANTA ANA, WHICH WAS ENTERED SEPTEMBER 12, 1869 IN BOOK “B”, PAGE 410 OF JUDGMENTS OF THE DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND FOR LOS ANGELES COUNTY, CALIFORNIA; THENCE NORTHERLY, ALONG SAID WESTERLY LINE NORTH 00° 04' 48” WEST, 77.08 FEET; THENCE SOUTH 89°58'10” EAST, 130.00 FEET TO THE ABOVE MENTIONED CENTERLINE OF SYCAMORE STREET; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET, SOUTH 00°04'48” EAST, 152.06 FEET TO THE POINT OF BEGINNING. SAID LAND IS SHOWN AS LOT 1 ON VOLUNTARY LOT MERGER NO. 2022-06 RECORDED JANUARY 26, 2023 AS INSTRUMENT NO. 2023000018589, OFFICIAL RECORDS OF SAID COUNTY. Assessor’s Parcel Number: 398-523-04 EXHIBIT 3 Exhibit B: Scope of Work EXHIBIT 3 WISEPlace PSH North Broadway Housing Partners LP Project Description Overview The proposed project, WISEPlace PSH (the “Project”) will be located at 1411 N. Broadway, Santa Ana, CA 92706 (the “Property”). The 0.6 acre site includes one (1) parcel. The current APN associated with the Project is APN 398-523-04. The Project will be a 48-unit community, with 47 permanent supportive housing units, of which 47 are for individuals experiencing homelessness and 14 are for individuals living with a mental illness. The Project will be constructed on the existing WISEPlace site. The East-West portion of the development is an adaptive reuse of the existing WISEPlace building, with one story facing Broadway. The North-South portion of the existing building facing Sycamore will be demolished. The site has a wide array of amenities close by including a grocery store, health clinic, bus stop, park, and a public library. The site is in the Midtown Specific Plan Area, in a neighborhood with a variety of uses. The area around the site is mostly commercial with new live/work townhomes being constructed across Broadway. Ownership and Conveyance of Land The development team includes Jamboree Housing Corporation (“Jamboree”) and WISEPlace. The Developer will be Jamboree and WISEPlace will be the service provider. Jamboree and WISEPlace have structured the acquisition as a long-term ground lease, with a de minimis $1 per year annual ground lease payment for a term of 65 years. WISEPlace will be the ground lessor. North Broadway Housing Partners LP, which includes WISEPlace and Jamboree, will be the ground lessee. Design Description The Project is a 48-unit community, with 47 permanent supportive housing units, of which 47 are for individuals experiencing homelessness and one (1) unit as a manager’s unit. Of the 47 permanent supportive housing units, fourteen (14) will be set aside for Mental Health Services Act (“MHSA”) tenants for individuals living with a mental illness. The Project is an adaptive reuse of the existing one-story structure and the new construction of a four-story Type V over Type I podium. A four-story new construction building will include 42 units and communal amenity spaces and an elevator. The existing one story structure will include six (6) units. The PSH Project site will include approximately 20 parking stalls in a gated podium parking garage. 1 EXHIBIT 3 WISEPlace PSH North Broadway Housing Partners LP Residents will have access to a landscaped courtyard property with a seating area and a community garden with raised bed planters. The Project was fully entitled on June 21, 2022. Floor Plans and Unit Amenities The project consists of 47 studios and one (1) two-bedroom manager’s unit. The studios range in size from 353 square feet to 423 square feet. Unit amenities include ENERGY STAR appliances, including a stove/oven and refrigerator, energy efficient lighting, bathroom fixtures and finishes, floor and window coverings, central heating/air conditioning, storage closets, ceiling fans, and dishwashers. Accessibility The Project will comply with accessibility requirements. The Project will provide fifteen percent (15%) of all units as accessible to people with mobility impairments, and an additional ten percent (10%) of all units as accessible to people with vision and hearing impairments. Community Amenities Community amenities will include a community center with computer lab, onsite property management, a community kitchen, a community garden, laundry facilities, onsite supportive services, and onsite counselors and counseling offices. Demolition and Remediation The East-West portion of the existing building facing Broadway is historic and a majority of the one-story structure will remain. The North-South portion of the existing building facing Sycamore was significantly altered and is not historic. It will be demolished for the new construction of the four-story structure. It will require lead-based paint and asbestos remediation prior to demolition. Services WISEPlace will be the service provider on site to provide a full range of services, including:  Adult Education, Health, Skill Building Classes – classes may include, but are not limited to: basic life skills, cleaning, computer literacy, resume building, nutrition, health, fitness, and cooking, especially with ingredients from the onsite community garden.  Service Coordinator – responsible for implementing and coordinating programs that develop the resident’s capacity to engage in life skills development, coping mechanisms that nurture their wellbeing, set personal goals and maintain housing stability. The Resident Services Coordiator will also provide linkage and referrals to residents to increase housing stability. 2 EXHIBIT 3 WISEPlace PSH North Broadway Housing Partners LP In addition to the services provided by WISEPlace, the Orange County Health Care Agency (OCHCA) will provide individualized services for the fourteen (14) Mental Health Services Act residents. Population Served 47 of the units will be restricted to households with income levels at or below the 30 percent AMI level, with one two-bedroom manager’s unit. 25 of the units are restricted at 30 percent AMI and will have project-based vouchers, administered by the City of Santa Ana Housing Authority. 14 of the units will be Mental Health Services Act (MHSA) units, which provides funding for housing for persons with serious mental illness who are chronically homeless, homeless, or at-risk of being homeless. Development Team The Owner, North Broadway Housing Partners LP, is comprised of Jamboree Housing Corporation and WISEPlace. The two non-profits shared a common vision for the development of WISEPlace Permanent Supportive Housing and joined to combine expertise in development and supportive services. Jamboree is the lead developer, while WISEPlace is the land owner, ground lessor, and service provider. Jamboree will own a 0.0065% interest and WISEPlace will own a 0.0035% interest. Please see organizational chart on the following page. 3 EXHIBIT 3 Organizational Chart North Broadway Housing Partners L.P. (Project Partnership) JHC North Broadway LLC (Jamboree Entity) Managing General Partner 0.01% Bank of America Investor Limited Partner 99.99% WISEPlace CorporationJamboree Housing Corporation 65% Managing Member 35% Managing Member • The applicant is North Broadway Housing Partners LP. • JHC-North Broadway LLC, a non-profit subsidiary of Jamboree Housing Corporation and WISEPlace Corporation, is and will remain the Managing General Partner with a 0.01%• Jamboree Housing Corporation retains 65% ownership of JHC North Broadway LLC• WISEPlace Corporation retains 35% ownership of JHC-North Broadway LLC • The tax credit investor, Bank of America, will be admitted to the partnership at the close of the construction financing. The Invested Limited Partner will have 99.99% ownership in the Partnership. EXHIBIT 3 Exhibit C: Project Budget EXHIBIT 3 WISEPlace PSH 9% - TCAC Application 02/08/23City of Santa Ana Project Data Operating Economic Assumptions 1411 N. Broadway Total Units Vacancy Rate 10.00% 48 Income Inflator Expense Inflator Tax Inflator 2.00% 3.00% 2.00%Land Area Units Per Acre QCT/DDA 0.6 Acres 80.00 YES Construction Loans Construction Period Loan Amount Prevailing Wage YES 22 Months 15,584,322 1.00%Loan Fees 4% or 9% Financing Federal Tax Credit Price 9.00% $0.95 Loan Rate 7.25% Permanent Loans Permanent Loans Overhang Loans Fee Interest Amortizaton Amount 0.75% 1.00% 6.00% 4.75% 420 180 0 0 UNIT MIX UNITS MONTHLY UTILITY ANNUAL GROSS AVERAGE RENT/SFBEDROOMSSFMGRPERCENTAVGAVG GROSS ALLOWANCE NET 286 0 INCOME PER MONTH 0 1 2 3 650 0 0 0 0 47 0 0 0 0 0 0 1 0 0 1 98% 0% 2% 0% 0% 286 0 0 74 161,304 0 0.44 0 0 0 103 133 163 0 0 0 0 0 04 TOTAL 47 100%286 161,304 0.44 PERMANENT SOURCES Net Investor Equity (Federal) Net Investor Equity (State) Permanent Loan Tranche B - Loan OCHFT City of Santa Ana City of Santa Ana - COSR County ARPA PERCENT 68% 0% TOTAL 20,089,816 0 PER UNIT AMI 30% 35% 40% 45% 50% 55% 60% TOTAL NO. UNITS PERCENT 98% 0% 418,538 47 0 0 0 0 0 0 47 0 0 0 0% 0% 8% 14% 4% 0 0 0% 0% 0% 0% 0% 98% 2,480,030 3,986,407 1,269,920 1,500,000 0 51,667 83,050 26,457 31,250 0 5% 0%Land Donation Deferred Developer Fee 0%85,072 1,772 BASIS CALCULATIONS TOTAL SOURCES 100%29,411,245 612,734 Threshold Basis Eligible Basis Involuntary Reduction Voluntary Reduction 21,502,403 25,934,565 0 (6,793,110) 19,141,455 USES OF FUNDS Land / Acquisition Costs Total Hard Costs Hard Cost Contingency Construction Interest Loan Fees PERCENT TOTAL 0 18,024,033 1,357,247 1,441,226 266,051 PER UNIT 0%0 375,501 28,276 30,026 5,543 Unadjusted Eligible Basis 8.00% Qualified Basis DDA/QCT Boost 21,502,403 130% Soft Costs Soft Costs Contingency Developer Fee 5,681,528 441,161 2,200,000 29,411,245 118,365 9,191 45,833 612,734 27,953,123 9.00%10.00%Credit Rate Adjusted Qualified Basis (Acquisition) Credit Rate (Acquisition) 0 TOTAL DEVELOPMENT COSTS 9.00% Total Available Annual Credits Total Requested Credits 2,515,781 2,114,929Stabilized Cash Flow INCOME Gross Potential Rental Income Laundry Income PER UNIT 3,361 1 161,304 5,184 Total Available State Credits Total Requested State Credits 5,742,436 108 0 Subsidy Income Vacancy and Collection EFFECTIVE GROSS INCOME 9,463 (1,009) 11,922 454,200 (48,443) 572,245 Public Funds 12,276,858 OPERATING EXPENSES Management Fee Real Estate Taxes NOTES 780 139 37,440 6,675 Insurance - Property Operating Expenses Supportive Services Reserves 396 19,000 Basic Construction Cost Per Unit = (Not including General Conditions Profit, GC Bond, PW) $323,186 25 6,836 3,104 500 328,117 149,000 24,000 Project Based Vouchers TOTAL OPERATING EXPENSES 11,755 564,232 NET OPERATING INCOME TOTAL DEBT SERVICE NET CASH FLOW 167 8,014 0 8,014 Stabilized DSC N/A EXHIBIT 3 WISEPlace PSH Sources & Uses City of Santa Ana Version: 9% - TCAC Application Revised: 02/08/23 PROJECT SOURCES BEGINNING BALANCE ENDING BALANCE Deferred Developer Fee and Costs PERMANENT SOURCES Net Investor Equity (Federal) Net Investor Equity (State) Permanent Loan PERCENT 68% TOTAL PER UNIT TOTAL PER UNIT CONSTRUCTION SOURCES Net Investor Equity (Federal) Net Investor Equity (State) Construction Loan TOTAL Description TCAC Monitoring Fee Title/Recording/Escrow Permanent Loan Fees Cost Cert / Audit Survey Total 1 2 3 4 5 6 7 8 9 20,089,816 418,538 0 0 1 2 3 4 5 6 7 8 9 $3,013,472 $191,000 0% 0% 0 0 0 0 $0 $9,500 0 0 0 0 $15,584,322 $0 Tranche B - Loan 0%0 0 0 0 Tranche B - Loan $0 $25,000 Permanent Loan (2) Accrual Mortgage Variable Interest Mortgage OCHFT City of Santa Ana 10 City of Santa Ana - COSR 11 County ARPA 0%0 0 0 0 Permanent Loan (2) Accrual Mortgage Variable Interest Mortgage OCHFT City of Santa Ana 10 City of Santa Ana - COSR 11 County ARPA $0 $8,000 0%0 0 0 0 $0 Operating Reserve Cap Oper Subsidy Reserv Developer Fee $141,058 0%0 0 0 0 $0 $1,269,920 8%2,480,030 51,667 83,050 0 0 $2,480,030 $3,986,407 $1,142,536 14% 4% 3,986,407 0 0 Legal (Perm)$60,000 1,269,920 26,457 31,250 1,772 0 0 0 0 $0 Deferred Cost 10 Deferred Cost 11 Deferred Cost 12 Deferred Cost 13 Deferred Cost 14 Deferred Cost 15 Deferred Cost 16 Deferred Cost 17 TOTAL COSTS $0 5%1,500,000 $1,500,000 $2,847,014 $0 12 Deferred Developer Fee 13 General Partner Equity 14 Land Donation 0%85,072 85,072 1,772 12 Deferred Developer Fee and Costs 13 General Partner Equity 14 Land Donation $0 0%0 0 0 0 $0 $0 0%0 0 0 0 $0 $0 15 Other 0%0 0 0 0 15 Other $0 $0 16 Interest on Surplus Funds 17 NOI During Construction TOTAL SOURCES 0%0 0 0 0 0 0 0 0 16 Interest on Surplus Funds 17 NOI During Construction TOTAL SOURCES $0 $0 $0 $00% 100%29,411,245 612,734 85,072 1,772 $29,411,245 $2,847,014 PROJECT USES TOTAL PER UNIT NEW OR ACQUISITION REHAB COST ELIGIBLE HISTORIC ELIGIBLE STATE NOT ELIGIBLE INCLUDED 50% TEST AMOUNT INCLUDEDUSES OF FUNDS TOTAL LAND / ACQUISITION COST Land at $0 Per Acre or $0.00 Per SF Existing Structure 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 YES YES YES 0 0 0 0 0 0 0 0 Other Acquisition Costs TOTAL LAND / ACQUISITION COST HARD COSTS Hard Cost Residential 18,024,033 323,186 0 45,246 7,069 28,276 403,777 15,512,913 0 2,171,808 339,312 1,357,247 19,381,279 0 0 0 0 0 0 14,882,093 0 0 0 0 0 0 0 0 0 0 0 0 630,820 YES YES YES YES YES 0 15,512,913 0 2,171,808 339,312 1,357,247 19,381,279 Site Improvements 0 88,315 0 General Conditions, Profit & Overhead GC Bond / Insurance / Letter of Credit Hard Cost Contingency 14.00% 2.00% 8.00% 2,083,493 339,312 1,357,247 18,662,145 0 TOTAL HARD COSTS 719,135 FINANCING COSTS Construction Interest (7.25%) at Perm. Rate + 125bp Bridge Interest at 7.25% 10.00% 30,011 1,440,508 0 0 0 0 0 0 0 530,658 0 0 0 0 0 0 0 0 0 0 0 0 0 0 909,850 YES YES NO NO YES NO 0 1,440,508 15 718 0 718 718 0Construction Loan Fees 5,543 0 0 0 266,044 266,044 0 0 0 0 Permanent Loan Fees Bridge Loan Fees 4% Related Costs / Cost of Issuance TOTAL FINANCING COSTS 0 7 0 0 7 0 7 0 35,568 1,707,277 796,709 910,567 1,441,233 SOFT COSTS Accounting & Audit 833 729 40,000 35,000 693,500 158,140 208,400 550,520 47,500 0 343,000 576,527 95,000 380,000 0 141,058 25,000 0 18,000 1,269,920 40,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 40,000 35,000 693,500 158,140 208,400 550,520 47,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 YES YES YES YES YES YES YES YES YES YES NO 40,000 35,000 693,500 158,140 208,400 550,520 47,500 0 Appraisal / Market Study Architecture (Architect, Landscape Architect) Civil Engineering 0 14,448 3,295 4,342 11,469 990 0 0 Construction Manager 0 Consultants ( CM, Geo, LEED, Utilities, exc.) Environmental (EIR, Phase I, Asbestos, exc.) Financial Advisor / Syndication Consultant Furnishings 0 0 0 0 7,146 12,011 1,979 7,917 0 343,000 576,527 10,000 300,000 0 0 343,000 576,527 0 Impact Fees Lease-up & Marketing Expenses Legal MHSA Construction Period Fees Operating & Debt Service Reserve (3-mo's / debt) Other (Admin, Repro. & Reimb.) Other (Bank Inspections) Other (Security) 0 85,000 80,000 YES YES NO 380,000 00 3 2,939 521 0 375 0 141,058 0 25,000 0 0 YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES NO 25,000 00 18,000 0 40,000 0 0 18,000 1,269,920 40,000 0 Other (Capitalized Operating Subsidy Reserve) Other (Jamboree Predevelopment Interest) Other (Reduced Construction Loan Interest) Other (Specify) 26,457 833 1,269,920 0 00 0 0 0 0 0 Other (Specify)0 0 0 0 0 Other (Specify)0 0 0 0 0 Other (Specify)0 0 0 0 0 Permit Fees 9,301 7,917 0 446,463 380,000 0 446,463 300,000 0 0 446,463 380,000 0 Property Taxes and Insurance Relocation 80,000 0 0Replacement Reserve Soft Cost Contingency Tax Credit Fees (App., Mon., & Res.) Title & Recording TOTAL SOFT COSTS 0 0 0 0 10.00%9,191 3,979 885 441,161 191,000 42,500 6,122,689 441,161 0 0 191,000 0 441,161 0 42,500 4,275,711 YES 0 42,500 5,695,631127,556 1,846,978 DEVELOPER FEE / OVERHEAD Developer Overhead 0 45,833 45,833 0 2,200,000 2,200,000 0 0 0 0 2,200,000 2,200,000 0 0 0 0 0 0 0 0 0 YES YES 0 0 2,200,000 2,200,000 Developer Fee TOTAL DEVELOPER FEE / OVERHEAD TOTAL USES 612,734 29,411,245 0 25,934,565 0 0 3,476,680 28,718,143 EXHIBIT 3 WISEPlace PSH Unit Mix & Targeting City of Santa Ana Version: Revised: 9% - TCAC Application 02/08/23 AVERAGE AFFORDABILITY 29% AMI 30% 35% NO. UNITS PERCENT UNIT MIX UNITS TOTAL NET MONTHLY RENT GROSS ANNUAL INCOME 47 0 98% 0% BEDROOMS MGR PERCENT UTILITY ALLOWANCE 40% 45% 50% 55% 60% TOTAL 0 0 0 0 0 47 0% 0% 0% 0% 0% 98% 0 1 2 3 4 47 0 0 0 0 0 0 1 0 0 1 98% 0% 2% 0% 0% 0 74 103 133 163 13,442 0 0 0 0 161,304 0 0 0 0 TOTAL 47 100%13,442 161,304 TCAC MONTHLY RENT 286 908 1,049 882 1,059 1,224 1,009 1,211 1,399 1,135 1,362 1,573 1,261 1,513 1,748 1,513 1,816 2,098 GROSS ANNUAL INCOME 161,304 VLI, LI NO. OF UNITS NO. OF BEDROOMS SET- ASIDE 30% 30% 30% 35% 35% 35% 40% 40% 40% 45% 45% 45% 50% 50% 50% 60% 60% 60% SF PER UNIT 650 850 1,025 650 850 1,025 650 850 1,025 650 850 1,025 650 850 1,025 650 UTILITY ALLOWANCE PER UNIT NET RENT 286 805 916 808 956 1,091 935 1,108 1,266 1,061 1,259 1,440 1,187 1,410 1,615 1,439 1,713 1,965 MONTHLY INCOME 13,442 TOTAL UNIT SF 30,550 SLI, MKT UNIT DESCRIPTION PERCENT 97.9%VLI VLI VLI VLI VLI VLI VLI VLI VLI VLI VLI VLI VLI VLI VLI LI 47 UNITS @ 30% 0 UNITS @ 30% 0 UNITS @ 30% 0 UNITS @ 35% 0 UNITS @ 35% 0 UNITS @ 35% 0 UNITS @ 40% 0 UNITS @ 40% 0 UNITS @ 40% 0 UNITS @ 45% 0 UNITS @ 45% 0 UNITS @ 45% 0 UNITS @ 50% 0 UNITS @ 50% 0 UNITS @ 50% 0 UNITS @ 60% 0 UNITS @ 60% 0 UNITS @ 60% 47 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 103 133 74 103 133 74 103 133 74 103 133 74 103 133 74 103 133 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 LI LI 850 1,025 1 UNITS @ 0% MGR 2.1%1 2 1,025 MGR TOTAL OR AVERAGE 48 29%31,575 23,046 21,260 13,442 161,304 30,550 TRANCHE B - UNIT MIX & TARGETING WISEPlace PSH Tranche B - Loan Unit Mix & Targeting City of Santa Ana 02/08/23 Version: Revised: AVERAGE AFFORDABILITY 30% AMI 30% 35% NO. UNITS PERCENT UNIT MIX UNITS NET MONTHLY RENT GROSS ANNUAL INCOME 25 0 100% 0% BR MGR PERCENT UTILITY ALLOWANCE 40% 45% 50% 55% 60% TOTAL 0 0 0 0 0 25 0% 0% 0% 0% 0% 100% 0 1 2 3 4 25 0 0 0 0 0 0 0 0 0 0 100% 0% 0% 0% 0% 0 74 103 133 163 0 0 0 0 0 0 454,200 0 0 0 0 TOTAL 25 100%454,200 NET TCAC RENT 286 PUBLIC SUBSIDY RENT (FMR) 1,800 2,098 2,905 NET MONTHLY RENT GROSS ANNUAL INCOME 454,200 NO. OF UNITS NO. OF BEDROOMS SET- ASIDE 30% 30% 30% 35% 35% 35% 40% 40% 40% 45% 45% 45% 50% 50% 50% 60% 60% 60% SF PER UNIT 650 850 1,025 650 850 1,025 650 850 1,025 650 850 1,025 650 850 1,025 650 TCAC RENT 286 908 1,049 882 1,059 1,224 1,009 1,211 1,399 1,135 1,362 1,573 1,261 1,513 1,748 1,513 1,816 2,098 UTILITY ALLOWANCE RENT/SF PER YEAR 27.95 UNIT DESCRIPTION 25 UNITS @ 30% SEC. 8 0 UNITS @ 30% SEC. 8 0 UNITS @ 30% SEC. 8 0 UNITS @ 35% SEC. 8 0 UNITS @ 35% SEC. 8 0 UNITS @ 35% SEC. 8 0 UNITS @ 40% SEC. 8 0 UNITS @ 40% SEC. 8 0 UNITS @ 40% SEC. 8 0 UNITS @ 45% SEC. 8 0 UNITS @ 45% SEC. 8 0 UNITS @ 45% SEC. 8 0 UNITS @ 50% SEC. 8 0 UNITS @ 50% SEC. 8 0 UNITS @ 50% SEC. 8 0 UNITS @ 60% SEC. 8 0 UNITS @ 60% SEC. 8 0 UNITS @ 60% SEC. 8 PERCENT 52.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,514 0 850 1,025 1 UNITS @ 0% MGR 0.0%0 2 1,025 MGR TOTAL OR AVERAGE 25 30%16,250 23,046 286 1,514 454,200 27.95 EXHIBIT 3 WISEPlace PSH Operating Budget - Summary City of Santa Ana Version: Revised: 9% - TCAC Application 02/08/23 PER UNITOPERATING EXPENSES SUMMATION Management Fee Real Estate Taxes Insurance - Property Utilities Payroll Repairs & Maintenance Marketing TOTAL 37,440 6,675 19,000 59,203 128,832 65,678 864 780 139 396 1,233 2,684 1,368 18 Administrative Contract Services Manager Rent 44,208 4,080 0 921 85 0 Agency Debt Service Supportive Services Other (Monitoring Fees) Other (Misc. Licenses) Other (Security) Other (HCD Payments) Operating Reserve Replacement Reserve 0 0 149,000 4,180 2,640 18,432 0 3,104 87 55 384 0 0 0 24,000 564,232 500 11,755TOTAL W/O SERVICES TOTAL W/O SERVICES, RR, RE TAXES TOTAL 415,232 384,557 8,651 8,012 EXHIBIT 3 WISEPlace PSH Cash Flow Satement - Detailed City of Santa Ana Version: Revised: 9% - TCAC Application 02/08/23 INFLATOR: INCOME 2% / 3% STABILIZED YEAR PER UNIT Lease Up 4mo. Stabilized 8mo. 2025 1 2 3 4 5 6 7 8 9 10 2034 11 2035 12 2036 13 2037 14 2038 15 2039 16 2040 17 2041 18 2042 19 2043 20 2044202520262027202820292030203120322033 TOTAL Gross Potential Rental Income Other Income (Residential) GROSS POTENTIAL INCOME (RES.) Vacancy (Residential) Vacancy (Other Income) Gross Commercial Income Vacancy (Commercial) Subsidy Income Vacancy (Subsidy) Operating Reserve Draws EFFECTIVE GROSS INCOME 3,361 161,304 0 0 0 0 0 0 0 0 0 0 0 161,304 5,184 166,488 (36,624) (518) 164,530 167,821 171,177 174,601 178,093 181,655 185,288 188,993 192,773 196,629 200,561 204,572 208,664 212,837 217,094 221,436 225,865 230,382 7,404 237,786 (23,038) (740) 234,989 7,552 242,542 (23,499) (755) 3,919,263 125,958 4,045,221 (412,420) (12,596) 0 108 3,469 (336) (11) 0 0 9,463 (662) 0 5,184 166,488 (16,130) (518) 5,288 169,818 (16,453) (529) 5,393 173,214 (16,782) (539) 5,501 176,678 (17,118) (550) 5,611 180,212 (17,460) (561) 5,724 183,816 (17,809) (572) 5,838 187,493 (18,165) (584) 5,955 191,242 (18,529) (595) 6,074 195,067 (18,899) (607) 6,195 198,969 (19,277) (620) 6,319 202,948 (19,663) (632) 6,446 207,007 (20,056) (645) 6,575 211,147 (20,457) (657) 6,706 215,370 (20,866) (671) 6,840 219,677 (21,284) (684) 6,977 224,071 (21,709) (698) 7,117 228,552 (22,144) (712) 7,259 233,123 (22,586) (726) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 454,200 (31,794) 0 454,200 (31,794) 0 463,284 (32,430) 18,437 602,127 472,550 (33,078) 23,275 618,639 482,001 (33,740) 28,355 635,626 491,641 (34,415) 33,685 653,102 501,474 (35,103) 39,275 671,080 511,503 (35,805) 45,135 689,576 521,733 (36,521) 51,274 708,604 532,168 (37,252) 57,703 728,180 542,811 (37,997) 64,433 748,319 553,667 (38,757) 71,475 769,039 564,741 (39,532) 78,840 790,355 576,035 (40,322) 86,540 812,285 587,556 (41,129) 94,587 834,847 599,307 (41,952) 102,994 858,059 611,293 (42,791) 77,740 847,907 623,519 (43,646) 85,885 871,455 635,990 (44,519) 94,400 895,681 648,709 (45,410) 103,297 920,605 661,684 (46,318) 112,592 946,245 11,035,865 (772,511) 1,269,920 15,153,48011,922 572,245 551,752 OPERATING EXPENSES Management Fee Real Estate Taxes Insurance - Property Utilities Payroll Repairs & Maintenance Marketing Administrative Contract Services Manager Rent Agency Debt Service Supportive Services Other (Monitoring Fees) Other (Misc. Licenses) Other (Security) Other (HCD Payments) Operating Reserve Replacement Reserve TOTAL OPERATING EXPENSES 780 139 396 1,233 2,684 1,368 18 921 85 0 37,440 6,675 19,000 59,203 128,832 65,678 864 44,208 4,080 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 24,960 6,675 19,000 59,203 128,832 65,678 864 44,208 4,080 0 38,563 6,808 19,570 60,979 132,697 67,648 890 45,534 4,202 0 39,720 6,945 20,157 62,809 136,678 69,678 917 46,900 4,328 0 40,912 7,083 20,762 64,693 140,778 71,768 944 48,307 4,458 0 42,139 7,225 21,385 66,634 145,001 73,921 972 49,756 4,592 0 43,403 7,370 22,026 68,633 149,351 76,139 1,002 51,249 4,730 0 44,705 7,517 22,687 70,692 153,832 78,423 1,032 52,787 4,872 0 46,046 7,667 23,368 72,812 158,447 80,775 1,063 54,370 5,018 0 47,428 7,821 24,069 74,997 163,200 83,199 1,094 56,001 5,168 0 48,851 7,977 24,791 77,247 168,096 85,695 1,127 57,681 5,323 0 50,316 8,137 25,534 79,564 173,139 88,265 1,161 59,412 5,483 0 51,826 8,299 26,300 81,951 178,333 90,913 1,196 61,194 5,648 0 53,380 8,465 27,089 84,410 183,683 93,641 1,232 63,030 5,817 0 54,982 8,635 27,902 86,942 189,194 96,450 1,269 64,921 5,992 0 56,631 8,807 28,739 89,550 194,869 99,344 1,307 66,869 6,171 0 58,330 8,984 29,601 92,237 200,716 102,324 1,346 68,875 6,357 0 60,080 9,163 30,489 95,004 206,737 105,394 1,386 70,941 6,547 0 61,883 9,346 31,404 97,854 212,939 108,555 1,428 73,069 6,744 0 63,739 9,533 32,346 100,789 219,327 111,812 1,471 75,261 6,946 0 65,651 9,724 33,317 103,813 225,907 115,166 1,515 77,519 7,154 0 993,547 162,182 510,537 1,590,812 3,461,755 1,764,787 23,216 1,187,886 109,631 0 2.00% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2.50% 3.00% 3,104 87 55 384 0 0 149,000 4,180 2,640 18,432 0 149,000 4,180 2,640 18,432 0 152,725 4,305 2,719 18,985 0 156,543 4,435 2,801 19,555 0 160,457 4,568 2,885 20,141 0 164,468 4,705 2,971 20,745 0 168,580 4,846 3,060 21,368 0 172,794 4,991 3,152 22,009 0 177,114 5,141 3,247 22,669 0 181,542 5,295 3,344 23,349 0 186,081 5,454 3,445 24,050 0 190,733 5,618 3,548 24,771 0 195,501 5,786 3,654 25,514 0 200,388 5,960 3,764 26,280 0 205,398 6,138 3,877 27,068 0 210,533 6,323 3,993 27,880 0 215,796 6,512 4,113 28,716 0 221,191 6,708 4,236 29,578 0 226,721 6,909 4,364 30,465 0 232,389 7,116 4,494 31,379 0 238,199 7,330 4,629 32,321 0 3,806,154 112,318 70,938 495,275 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00%500 11,755 24,000 564,232 24,000 551,752 24,000 579,627 24,000 595,464 24,000 611,756 24,000 628,515 24,000 645,756 24,000 663,492 24,000 681,738 24,000 700,508 24,000 719,817 24,000 739,681 24,000 760,117 24,000 781,140 24,000 802,767 24,000 825,017 24,000 847,907 24,000 871,455 24,000 895,681 24,000 920,605 24,000 946,245 480,000 14,769,038 NET OPERATING INCOME DEBT SERVICE (HARD) 167 8,014 0 0 22,500 23,175 23,870 24,586 25,324 26,084 26,866 27,672 28,502 29,357 30,238 31,145 32,080 33,042 0 0 0 0 0 384,442 Permanent Loan Tranche B - Loan Permanent Loan (2) Accrual Mortgage Variable Interest Mortgage TOTAL DEBT SERVICE 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Stabilized DSC Required DSC N/A 1.15 NET CASH FLOW 0 0 22,500 23,175 23,870 24,586 25,324 26,084 26,866 27,672 28,502 29,357 30,238 31,145 32,080 33,042 0 0 0 0 0 384,442 HARD DEBT RATIOS Debt Service Coverage Ratio (Hard) Break-Even Occupancy N/A N/A N/A N/A N/A 89.0% N/A 89.1% N/A 89.1% N/A 89.2% N/A 89.2% N/A 89.2% N/A 89.3% N/A 89.3% N/A 89.4% N/A 89.4% N/A 89.4% N/A 89.5% N/A 89.5% N/A 89.5% N/A N/A N/A N/A N/A N/A N/A 90.4%N/A N/A N/A N/A Ratio of Hard Debt To Total Sources 0.0% DISTRIBUTION OF INCOME (WATERFALL) TYPE SLP GP Loan Loan Loan Loan Loan GP LP Administrative Fee GP Asset Management Fee Deferred Developer Fee City of Santa Ana City of Santa Ana - COSR OCHFT County ARPA Social Services Fee Other 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7,500 15,000 0 0 0 0 0 0 7,725 15,450 0 0 0 0 0 0 7,957 15,914 0 0 0 0 0 0 8,195 16,391 0 0 0 0 0 0 8,441 16,883 0 0 0 0 0 0 8,695 17,389 0 0 0 0 0 0 8,955 17,911 0 0 0 0 0 0 9,224 18,448 0 0 0 0 0 0 9,501 19,002 0 0 0 0 0 0 9,786 19,572 0 0 0 0 0 0 10,079 20,159 0 0 0 0 0 0 10,382 20,764 0 0 0 0 0 0 10,693 21,386 0 0 0 0 0 0 11,014 22,028 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 128,147 256,295 0 0 0 0 0 0 0GP00000000000000000000 TOTAL EXPENSES, FEES AND DEBT SERVICE 551,752 602,127 618,639 635,626 653,102 671,080 689,576 708,604 728,180 748,319 769,039 790,355 812,285 834,847 858,059 847,907 871,455 895,681 920,605 946,245 384,442 CASH FLOW 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EXHIBIT 3 Exhibit D: City/HOME-ARP Loan Deed of Trust EXHIBIT 3 FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail to: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council _________________________________________________________________ CITY HOME-ARP DEED OF TRUST AND ASSIGNMENT OF LEASES AND RENTS (1411 North Broadway, Santa Ana, California (APN 398-523-04) THIS DEED OF TRUST AND ASSIGNMENT OF RENTS (“Deed of Trust”) is made as of this 7th day of March, 2023, by North Broadway Housing Partners LP, a California limited partnership (“Trustor”) and WISEPlace, a California nonprofit public benefit corporation (“Obligor”; collectively, Trustor and Obligor are referred to as “Grantor”), , to Commonwealth Land Title Company, a California corporation, as trustee (“Trustee”), for the benefit of the City of Santa Ana, a charter city and municipal corporation , as beneficiary (“Beneficiary”). FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Grantor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE AND RIGHT OF ENTRY AND POSSESSION, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, all of Grantor’s estate, right, title and interest that Grantor now has or may later acquire in and to the real property located in the City of Santa Ana, State of California, that is described in Exhibit A, attached hereto and incorporated herein by this reference (the “Property”), on which Trustor intends to construct and operate an apartment complex commonly known as WISEPlace Permanent Supportive Housing. TOGETHER WITH all interest, estates, leaseholds, or other claims, both in law and in equity which Grantor now has or may hereafter acquire in the Property and the leases and rents; TOGETHER WITH all easements, rights-of-way and rights used in connection therewith or as a means of access thereto, including without limiting the generality of the foregoing, all tenements, hereditament and appurtenances thereof and thereto; TOGETHER WITH any and all buildings, improvements and landscaping of every kind and description now or hereafter erected thereon, and all property of the Trustor now or hereafter affixed to or placed upon the Property (sometimes collectively referred to as the “Improvements”); 1 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 TOGETHER WITH all building materials and equipment now or hereafter delivered to said Property and intended to be installed therein; TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Property, and any and all sidewalks, alleys, strips and gores of land adjacent to or used in connection with the Property and/or Improvements; TOGETHER WITH all estate, interest, right, title, other claim or demand, of every nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all oil, gas and mineral rights (including royalty and leasehold rights relating thereto), all water and water rights and shares of stock relating thereto, all leases of all or any portion of the Property or Improvements entered into by Grantor as lessor or lessee, all options to purchase or lease all or any portion of the Property and/or Improvements, all deposits made with or other security given by Grantor to third parties including, utility companies, the proceeds from any or all of such property, including the Property, claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Grantor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by and proceeding or purchase in lieu thereof of the whole or any part of such property; and TOGETHER WITH all articles of personal property or fixtures now or hereafter attached to, located on, installed in or used in and about the Property and/or Improvements, including without limitation, all partitions, generators, screens, boilers, furnaces, pipes, plumbing, elevators, cleaning and sprinkler systems, fire extinguishing machinery and equipment, water tanks, heating, ventilating, air conditioning and air cooling machinery and, equipment, gas and electric machinery and equipment and other appliances, machinery and equipment and other fixtures of every nature, all of which shall remain real property, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to the Property in any manner. TOGETHER WITH all present and future accounts, general intangibles, chattel paper, deposit accounts, investment property, instruments and documents as those terms are defined in the California Commercial Code, now or hereafter relating or arising with respect to the Property and/or Improvements and/or the use thereof or any improvements thereto, including without limitation: (i) all rights to the payment of money, including escrow proceeds arising out of the sale or other disposition of all or any portion of the Property and/or Improvements; (ii) all deposit accounts and other accounts and funds created under or pursuant to the Loan Agreement (as defined below), and the other Loan Documents, all amounts now or hereafter on deposit herein, and all interest and other earnings thereon with the exception of the operating reserve created pursuant to Trustor’s Partnership Agreement (as defined in the Loan Agreement); (iii) all use permits, occupancy permits, construction and building permits, and all other permits and approvals required by any governmental or quasi-governmental authority in connection with the development, construction, use, occupancy or operation of the Property and/or Improvements; (iv) any and all agreements relating to the occupancy and/or operation of the Property and/or Improvements, including without limitation service, property management, landscaping, gardening, consulting and other contracts of every nature (to the extent the same are assignable); (v) all lease or rental agreements; (vi) all names under which the Property and/or Improvements 2 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 are now or hereafter known and all rights to carry on business under any such names or any variant thereof; (vii) all trademarks relating to the Property and/or Improvements and/or the use, occupancy or operation thereof; (viii) all goodwill relating to the Property and/or Improvements and/or the use, occupancy or operation thereof; (ix) all insurance proceeds and condemnation awards arising out of or incidental to the ownership, use, occupancy or operation of the Property and/or Improvements; (x) all reserves, deferred payments, deposits, refunds, cost savings, bonds, insurance policies and payments of any kind relating to the Property and/or Improvements; (xi) all water stock, if any, relating to any Property and/or Improvements; (xii) all supplements, modifications and amendments to the foregoing and all present and future accessions, additions, attachments, replacements and substitutions of or to any or all of the foregoing; and (xiii) all cash and noncash proceeds and products of any or all of the foregoing, including without limitation all monies, deposit accounts, insurance proceeds and other tangible or intangible property received upon a sale or other disposition of any of the foregoing, whether voluntary or involuntary; and TOGETHER WITH all present and future goods, equipment and inventory, as those terms are defined in the California Commercial Code, and all other present and future personal property of any kind or nature whatsoever, now or hereafter located at, upon or about the Property and/or Improvements, or used or to be used in connection with or relating or arising with respect to the Property and/or Improvements, the use thereof or any improvements thereto. 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. FOR THE PURPOSE OF SECURING: (a) Payment of and performance of all indebtedness of Trustor to Beneficiary as set forth in the Loan Agreement (defined in Section 1.5 below) and the Note (defined in Section 1.6 below) in the original principal amount of Five Million Two Hundred Fifty-Six Thousand Three Hundred Twenty-Seven Dollars ($5,256,327) until paid or canceled. Said principal and other payments shall be due and payable as provided in the Loan Agreement and the Note. The Loan Agreement and the Note and all their terms are incorporated herein by reference, and this conveyance shall secure any and all extensions thereof, however evidenced; (b) Payment and performance of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust with interest thereon as provided herein; (c) Payment and performance of every other obligation, covenant or agreement of Trustor contained in this Deed of Trust and in the other “Loan Documents” (as such term is defined in the Loan Agreement); (d) Payment and performance of all renewals, extensions, supplements, amendments and other modifications of any of the foregoing, including without limitation modifications that are evidenced by new or additional documents or that change the rate of interest on any obligation. All of the foregoing obligations are referred to collectively herein as the “Obligations”. 3 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: Section 1. 1.1 DEFINITIONS Defined Terms. In addition to the terms defined elsewhere in this Deed of Trust or the Loan Agreement, the following terms shall have the following meanings in this Deed of Trust: “Debt Instrument” means any debt, loan, mortgage, deed of trust, regulatory agreement or security instrument relating to the Property or the Security, including, but not limited to, the Loan Documents. “Environmental Reports” [list to be provided under separate cover] “Ground Lease” mean the ground lease entered into by Trustor and Obligor, the same date hereof, and for a term of sixty-five (65) years. “Hazardous Substance” means: (a) any oil, flammable substance, explosive, radioactive material, hazardous waste or substance, toxic waste or substance or any other waste, material, or pollutant that (i) poses a hazard to the Property or to persons on the Property or (ii) causes the Property to be in violation of any Hazardous Substance Law; (b) asbestos in any form; (c) urea formaldehyde foam insulation; (d) transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls; (e) radon gas; (f) any chemical, material, or substance defined as or included in the definition of “hazardous substance,” “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste,” or “toxic substances” or words of similar import under any applicable local, state, or federal law or under the regulations adopted or publications promulgated pursuant to those laws, including, but not limited to, any Hazardous Substance Law, Code of Civil Procedure § 564, as amended from time to time, Code of Civil Procedure § 726.5, as amended from time to time, Code of Civil Procedure §736, as amended from time to time, and Civil Code § 2929.5, as amended from time to time; (g) any other chemical, material, or substance, exposure to which is prohibited, limited, or regulated by any governmental authority with authority over the Property 4 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 or which may pose a hazard to the health and safety of the occupants of the Property or the owners or occupants of property adjacent to or surrounding the Property, or any other person coming on the Property or any adjacent property; and (h) any other chemical, material, or substance that may pose a hazard to the environment. The term Hazardous Substance shall not include materials or substances commonly used in the construction and operation of an apartment complex in accordance with applicable Hazardous Substance Law. “Hazardous Substance Claim” means any enforcement, cleanup, removal, remedial, or other governmental, regulatory, or private actions, agreements, or orders threatened, instituted, or completed pursuant to any Hazardous Substance Law together with all claims made or threatened by any third party against Trustor or the Property relating to damage, contribution, cost-recovery compensation, loss, or injury resulting from the presence, release or discharge of any Hazardous Substance. “Hazardous Substance Law” means any federal, state, or local law, ordinance, regulation, or policy relating to the environment, health, and safety, any Hazardous Substance (including, without limitation, the use, handling, transportation, production, disposal, discharge, or storage of the substance), industrial hygiene, soil, groundwater, and indoor and ambient air conditions or the environmental conditions on the Property, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 [42 USCS §§ 9601 et seq.], as amended from time to time; the Hazardous Substances Transportation Act [49 USCS §§ 1801 et seq.], as amended from time to time; the Resource Conservation and Recovery Act [42 USCS §§ 6901 et seq.], as amended from time to time; the Federal Water Pollution Control Act [33 USCS §§ 1251 et seq.], as amended from time to time; the Hazardous Substance Account Act [Health and Safety Code §§ 25300 et seq.], as amended from time to time; the Hazardous Waste Control Law [Health and Safety Code §§ 25100 et seq.], as amended from time to time; the Medical Waste Management Act [Health and Safety Code §§ 25015 et seq.], as amended from time to time; and the Porter-Cologne Water Quality Control Act [Water Code §§ 13000 et seq.], as amended from time to time.“Limited Partner” means the Tax Credit Investor and any other Limited Partner(s) or Special Limited Partner(s) of Developer, and their successors and assigns. “Loan Agreement” means that certain Loan Agreement, which terms and provision are incorporated into this Deed of Trust by reference, of even date herewith between Trustor and Beneficiary. “Note” means that certain promissory note of even date herewith executed by the Trustor, the payment of which is secured by this deed of Trust. “Principal” means the aggregate of all principal and interest due under the Note. 5 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 “Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment, including continuing migration, of Hazardous Substances that goes into the soil, surface water, or groundwater of the Property, whether or not caused by, contributed to, permitted by, acquiesced to, or known to Trustor. Any capitalized term referenced herein that is not specifically defined shall have the meaning set forth in the Loan Agreement or Note. Section 2.GENERAL COVENANTS OF TRUSTOR REGARDING THE PROPERTY, IMPROVEMENTS AND SECURITY 2.1. Payment of Secured Obligations. Trustor shall duly and punctually pay and perform all Obligations, including but not limited to all terms, covenants, conditions and agreements set forth in the Debt Instruments, the Loan Agreement, the Note, the Ground Lease and any other agreement of any nature whatsoever now or hereafter involving or affecting the Security or any part thereof. 2.2. Maintenance, Repair and Modification. (a) The Trustor agrees that at all times prior to full payment of the sum owed under the Note, the Trustor will, at the Trustor’s own expense, maintain, preserve and keep the Security or cause the Security to be maintained and preserved in good condition and repair and in a prudent and businesslike manner. The Trustor will from time to time make or cause to be made all repairs, replacements and renewals to the Security, which are necessary or appropriate. The Beneficiary shall have no responsibility in any of these matters or for the making of improvements or additions to the Security. (b) Trustor shall not remove, demolish or substantially alter any of the Improvements, other than to make repairs in the ordinary course of business of a non-structural nature which serve to preserve or increase the value of the Security without Beneficiary’s prior written consent, which consent shall not be unreasonably withheld so long as Trustor provides reasonable evidence to Beneficiary that, following such demolition and restoration and/or alteration, the Improvements shall have a fair market value at least equal to their fair market value prior to such demolition and restoration and/or alteration; Trustor shall complete promptly and in a good and workmanlike manner any Improvement which may now or hereafter be constructed and promptly restore in like manner any Improvement which may be damaged or destroyed thereon from any cause whatsoever, and pay when due all claims for labor performed and materials furnished therefor; Trustor shall comply with all applicable laws, ordinances, rules, regulations, covenants, conditions, restrictions and orders of any governmental authority now or hereafter affecting the conduct or operation of Trustor’s business or the security or any part thereof or requiring any alteration or improvement to be made thereon; Trustor shall not commit, suffer or permit any act to be done in, upon or to the Security or any part thereof in violation of any such applicable laws, ordinances, rules, regulations or orders, or any covenant, condition or restriction now or hereafter affecting the Security; Trustor shall not commit or permit any waste or deterioration of the Security, and shall keep and maintain abutting grounds, sidewalks, roads, 6 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 parking and landscape areas in good and neat order and repair; Trustor will not take (or fail to take) any action, which if taken (or not so taken) would increase in any way the risk of fire or other hazard occurring to or affecting the Security or otherwise would impair the security of Beneficiary in the Security; Trustor shall comply with the provisions of all leases, if any, constituting a portion of the Security, inclusive of the Ground Lease and all subsequent leases for residents of the Property; Trustor shall not abandon the Security or any portion thereof or leave the Security unprotected, unguarded, vacant or deserted; Trustor shall not initiate, join in or consent to any change in any zoning ordinance, general plan, specific plan, private restrictive covenant or other public or private restriction limiting the uses which may be made of the Security by Trustor or by the owner thereof; Trustor shall secure and maintain in full force all permits necessary for the use, occupancy and operation of the Security; except as otherwise prohibited or restricted by the Loan Agreement and the other instruments and documents executed in connection with the transaction to which the Loan Agreement pertains or any of them, Trustor shall do any and all other acts which are reasonably necessary to protect or preserve the value of the Security and the rights of Trustee and Beneficiary with respect thereto. 2.3.Granting of Easements. Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in the nature of easements with respect to any property or rights included in the Security except those required or desirable for installation and maintenance of public utilities including, without limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law. 2.4.Agreement to Pay Attorneys’ Fees and Expenses. In the event of any Event of Default (as defined below) hereunder, and if the Beneficiary should employ attorneys or incur other expenses for the collection of amounts due or the enforcement of performance or observance of an obligation or agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so paid by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the indebtedness secured by the lien of this Deed of Trust, and shall bear interest from the date such expenses are paid at the Agreed Rate (as defined in Section 3.1(d) below). 2.5.Payment of the Principal. The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth in the Note in the amounts and by the times set out therein. 2.6.Fixture Filing and Security Agreement. (a) To the maximum extent permitted by law, the personal property subject to this Deed of Trust shall be deemed to be fixtures and part of the real property and this Deed of Trust shall constitute a fixture filing under the California Commercial Code. As to any personal property not deemed or permitted to be fixtures, this Deed of Trust shall constitute a security agreement under the California Commercial Code and Trustor hereby grants to Beneficiary a security interest in all of Trustor’s right, title and interest, whether now existing or hereafter 7 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 arising, in and to any portion of the Property which constitutes personal property (the “Personal Property”). (b) Trustor hereby represents and warrants to Beneficiary that: (1) Trustor is the owner of the Personal Property and no other person has any right, title, claim or interest (by way of security interest or other lien or charge or otherwise) in, against or to the Personal Property other than any senior lender or lien holder approved in writing by Beneficiary; (2) the Personal Property is free from all liens, security interests, encumbrances and adverse interests, except Permitted Encumbrances (hereinafter defined); (3) no financing statement or similar filing covering any of the Personal Property, and naming any secured party other than Beneficiary and the holders of Permitted Encumbrances, is on file in any public office; (4) each account, general intangible, chattel paper, deposit account, instrument, document, agreement, contract or right to the payment of money constituting Personal Property (collectively, the "Rights to Payment"), if any, is genuine and enforceable in accordance with its terms against the party obligated to pay the same and (5) the Personal Property is not used nor was the Personal Property purchased for personal or family use by Trustor. (c) Trustor hereby agrees: (1) to pay, prior to delinquency, all taxes, assessments, charges, encumbrances and liens now or hereafter imposed upon or affecting all or any part of the Personal Property; (2) not to amend, modify, supplement, terminate or cancel any of the Personal Property; (3) without the prior written consent of Beneficiary, not to remove all or any part of the tangible Personal Property from the Property; (4) to give Beneficiary thirty (30) days' prior written notice of any change in Trustor's residence, principal place of business, chief executive office or trade names or styles; (5) to appear in and defend any action or proceeding which may affect the Personal Property (including, without limitation, actions, proceedings and claims which may affect Trustor's title to the Personal Property or the validity or priority of Beneficiary's security interest in the Personal Property); (6) to indemnify Beneficiary against all claims, demands and liabilities of every kind caused by the Personal Property; and (7) upon not less than 72 hours’ prior written notice and during regular business hours, to permit Beneficiary to enter Trustor's premises to inspect the Personal Property; provided, that Trustor shall have the right to require that a representative of Trustor be present during any such entry made while any construction and/or rehabilitation work is occurring. Trustor further agrees (8) to fully and timely perform all of its obligations under and with respect to all Rights of Payment and to diligently enforce all of the obligations of each obligor thereunder; (9) not to amend, modify, supplement, cancel or terminate any of the Rights to Payment in any material respect without the prior written consent of Beneficiary; (10) to keep the Rights to Payment and all proceeds free and clear of all defaults, defenses, rights of offset and counterclaim; (11) to take or bring, in Beneficiary's name or in the name of Trustor, as Beneficiary may require, all actions, suits or proceedings reasonably deemed necessary by Beneficiary to effect collection or to realize upon Rights to Payment; and (12) not to commingle Rights to Payment or collections thereunder with other property. (d) As soon as practicable, and in any event within ten (10) days, Trustor shall notify Beneficiary of: (1) any attachment or other legal process levied against any of the Personal Property; (2) any information received by Trustor which may in any manner materially and adversely affect the value of the Personal Property or the rights and remedies of Beneficiary with respect thereto; and (3) the removal of any of the Personal Property to a new location other than 8 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 in the ordinary course of business and the removal of any records of Trustor relating to the Personal Property to any location other than the Land and Improvements. (e) Trustor hereby irrevocably constitutes and appoints Beneficiary as its attorney-in- fact to, after the occurrence and during the occurrence of an Event of Default: (1) perform any obligation of Trustor hereunder in Trustor's name or otherwise; (2) give notice of Beneficiary's rights in the Rights to Payment, to enforce the same, and make extension agreements with respect thereto; (3) release persons liable on the Rights to Payment and to give receipts and acquittances and compromise disputes in connection therewith; (4) release security for the Rights to Payment; (5) resort to security for the Rights to Payment in any order; (5) prepare, execute, file, record or deliver notes, assignments, schedules, designation statements, financing statements, continuation statements, termination statements, and other documents to perfect preserve or release Beneficiary's interest in the Rights to Payment; and (6) do all acts and things and execute all documents in the name of Trustor or otherwise, deemed by Beneficiary as necessary, proper and convenient in connection with the preservation, perfection or enforcement of its rights hereunder. The power of attorney granted hereunder is coupled with an interest and is irrevocable. 2.7.Financing Statement. The Trustor shall execute and deliver to the Beneficiary such financing statements pursuant to the appropriate statutes, and any other documents or instruments as are required to convey to the Beneficiary a valid perfected security interest in the Security. The Trustor agrees to perform all acts that the Beneficiary may reasonably request so as to enable the Beneficiary to maintain such valid perfected security interest in the Security in order to secure the payment of the Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such financing statement in any jurisdiction(s) as it shall deem appropriate from time to time in order to protect the security interest established pursuant to this instrument. 2.8.Operation of the Security. The Trustor agrees and covenants to operate the Security in full compliance with the Loan Agreement, the Debt Instruments, and the Ground Lease. 2.9.Inspection of the Security. The Trustor covenants and agrees that at any and all reasonable times during regular business hours and upon not less than 72 hours’ prior written notice, the Beneficiary and its duly authorized agents, attorney’s experts, engineers, accountants and representatives, shall have the right, without payment of charges or fees, to inspect all or any portion of the Security, including, but not limited to, the right to inspect and copy all reports and records pertaining thereto provided, that Trustor shall have the right to require that a representative of Trustor be present during any entry onto the Property made while any construction and/or rehabilitation work is occurring. 2.10. Nondiscrimination. 9 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 The Trustor herein covenants by and for itself, its 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 race, color, creed, religion, sex, sexual orientation, age, marital status, national origin, ancestry or disability in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor shall the Trustor itself or any person claiming under or through it 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 in the Security. The foregoing covenants shall run with the land. 2.11. Subrogation and Waiver of Offset. (a) Trustor waives any and all right to claim or recover against Beneficiary, its officers, employees, agents and representatives, for loss of or damage to Trustor, the Security, Trustor’s property or the property of others under Trustor’s control from any cause insured against or required to be insured against by the provisions of this Deed of Trust; provided, however, that this waiver of subrogation shall not be effective with respect to any policy of insurance permitted or required by this Deed of Trust if (i) such policy prohibits, or if coverage thereunder would be reduced as a result of, such waiver of subrogation and (ii) Trustor is unable to obtain from a carrier issuing such insurance a policy that, by special endorsement or otherwise, permits such a waiver of subrogation. (b) Except as otherwise specifically provided herein, all amounts payable by Trustor pursuant to this Deed of Trust shall be paid without notice, demand, counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction, and the obligations and liabilities of Trustor hereunder shall in no way be released, discharged or otherwise affected (except as expressly provided herein) by reason of: (i) any damage to or destruction of or any condemnation or similar taking of the Security or any part thereof; (ii) any restriction or prevention of or interference by any third party with any use of the Security or any part thereof; (iii) any title defect or encumbrance or any eviction from the Security or any part thereof by title paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Beneficiary, or any action taken with respect to this Deed of Trust by any trustee or receiver of Beneficiary, or by any court, in any such proceeding; (v) any claim which Trustor has or might have against Beneficiary; (vi) any default or failure on the part of Beneficiary to perform or comply with any of the terms hereof or of any other agreement with Trustor; or (vii) any other occurrence whatsoever, whether similar or dissimilar to the foregoing. Except as expressly provided herein, Trustor waives all rights now or hereafter conferred by statute or otherwise to any abatement, suspension, deferment, diminution or reduction of any sum secured hereby and payable by Trustor. 2.12. Utilities. Trustor shall pay or cause to be paid when due all utility charges which are incurred for the benefit of the Security or which may become a charge or lien against the Security for gas, electricity, water, sewer services or other fees and charges for utilities furnished to the Security and all other assessments or charges of a similar nature, whether public or private, affecting or 10 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 related to the Security or any portion thereof, whether or not such taxes, assessments or charges are or may become liens thereon. 2.13. Actions by Beneficiary to Preserve Property. If Trustor fails to make any payment or to do any act as and in the manner provided in this Deed of Trust, Beneficiary and Trustee, and each of them, each in its own discretion, without obligation to do so, without releasing Trustor from any Obligation, and subject only to the notice and cure provisions of the Loan Agreement, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. In connection therewith (without limiting their general and other powers, whether conferred herein, in another Loan Document or by law), Beneficiary and Trustee shall each and are hereby given the right, but not the obligation: (i) to enter upon and take possession of the Security; (ii) to make additions, alterations, repairs and improvements to the Security which either of them consider necessary or proper to keep the Security in good condition and repair; (iii) to appear and participate in any action or proceeding which may affect the security hereof or the rights or powers of Beneficiary or Trustee; (iv) to pay, purchase, contest or compromise any encumbrance, claim, charge, lien or debt which in the judgment of either may affect the security of this Deed of Trust or be prior or superior hereto; and (v) in exercising such powers to pay necessary expenses, including employment of counsel or other reasonably necessary consultants. Trustor shall reimburse Beneficiary on demand for all costs incurred by Beneficiary in connection with actions which Beneficiary reasonably deems necessary to protect its interest under the Loan Agreement and all such amounts shall bear interest at the Agreed Rate following demand and be secured hereby. 2.14. Transfer of Property by Trustor. Prior to repayment of the Note, Trustor agrees that Trustor shall not sell or transfer the Security or any interest therein or sell or transfer all or substantially all of the assets of Trustor or any of them except as may be provided in the Loan Agreement. 2.15. Additional Security. No other security now existing, or hereafter taken, to secure the Obligations secured hereby or the liability of any maker, surety guarantor or endorser with respect to such Obligations, or any of them, shall be impaired or affected by the execution of this Deed of Trust; and all additional security shall be taken, considered and held as cumulative. The taking of additional security, execution of partial releases of the Security, or any extension of the time of payment of the indebtedness shall not diminish the force, effect or lien of this Deed of Trust and shall not affect or impair the liability of any maker, surety, guarantor or endorser for the payment of said indebtedness. In the event Beneficiary at any time holds additional security for any of the Obligations secured hereby, it may enforce the sale thereof or otherwise realize upon the same, at its option, either before, concurrently, or after a sale is made hereunder. 2.16. Liens. Trustor shall not cause, incur suffer or permit to exist or become effective any lien, encumbrance or charge upon all or any part of the Property, the Improvements or any interest therein other than (a) easements, rights of way, covenants, conditions, restrictions, liens, and 11 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 other title limitations approved in writing by Beneficiary prior to the execution of this Deed of Trust, (b) immaterial easements and rights of way which are required by governmental authorities as a condition to the use and operation of the Improvements which are approved in writing by Beneficiary after the execution of this Deed of Trust, which approval shall not be unreasonably withheld or delayed, (c) easements, rights of way, covenants, conditions, restrictions, liens and other title limitations allowed pursuant to Section 2.3 hereof and (d) deeds of trust, regulatory agreements and covenants contained in that certain lender’s title policy issued to the Beneficiary in connection with the Loan on or about the date hereof (the “Permitted Encumbrances”). Trustor shall pay and promptly discharge, at Trustor’s cost and expense, all liens, encumbrances and charges upon the Security, or any part thereof or interest therein other than the Permitted Encumbrances; provided, that the existence of any mechanic’s, laborer’s, materialman’s, supplier’s or vendor’s lien or right thereto shall not constitute a violation of this Section if payment is not yet due under the contract which is the foundation thereof. Trustor shall have the right to contest in good faith the validity of any such lien, encumbrance or charge, provided Trustor shall first deposit with the Beneficiary a bond or other security reasonably satisfactory to Beneficiary in such amounts as Beneficiary shall reasonably require, but not more than one hundred fifty percent (150%) of the amount of the claim or shall post a bond authorized by statute in lieu thereof, and provided further that Trustor shall thereafter diligently proceed to cause such lien, encumbrance or charge to be removed and discharged. If Trustor shall fail to remove and discharge any such lien, encumbrance, or charge, then, in addition to any other right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to, discharge the same, without inquiring into the validity of such lien, encumbrance or charge nor into the existence of any defense or offset thereto, either by paying the amount claimed to be due, or by procuring the discharge of such lien, encumbrance or charge by depositing in court a bond or the amount claimed, or otherwise giving security for such claim, in such manner as is or may be prescribed by law. Trustor shall, promptly upon demand therefor by Beneficiary, pay to Beneficiary an amount equal to all costs and expenses incurred by Beneficiary in connection with the exercise by Beneficiary of the foregoing right to discharge any such lien, encumbrance or charge, together with interest thereon from the date of such expenditure at the Agreed Rate and, until paid, such sums shall be secured hereby. 2.17. Beneficiary’s Powers. Without affecting the liability of any other person liable for the payment of any Obligation herein mentioned, and without affecting the lien or charge of this Deed of Trust upon any portion of the Security not then or theretofore released as security for the full amount of all unpaid Obligations, Beneficiary may, from time to time and without notice: (a) release any person so liable, (b) extend the maturity or alter any of the terms of any such Obligation (to the extent that Beneficiary is so allowed under the Loan Agreement), (c) grant other indulgences, (d) release or reconvey, or cause to be released or reconveyed at any time at Beneficiary's option any parcel, portion or all of the Security, (e) take or release any other or additional security for any Obligation herein mentioned, or (f) make compositions or other arrangements with debtors in relation thereto. By accepting payment or performance of any Obligation secured by this Deed of Trust after the payment or performance thereof is due or after the filing of notice of default and election to sell (other than satisfaction in full of the Obligations), Beneficiary shall not have thereby waived its right to require prompt payment or performance, when due, of all other Obligations secured hereby, or to declare a default for failure so to pay or perform, or to proceed 12 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 with the sale under any notice of default and election to sell theretofore given by Beneficiary, or with respect to any unpaid balance of the indebtedness secured hereby. The acceptance by Beneficiary of any sum in an amount less than the sum then due shall not constitute a waiver of the obligation of Trustor to pay the entire sum then due. Trustor’s failure to pay the entire sum then due shall continue to be a default, notwithstanding the acceptance of partial payment, and, until the entire sum then due shall have been paid, Beneficiary or Trustee shall at all times be entitled to declare a default and to exercise all the remedies herein conferred, and the right to proceed with a sale under any notice of default and election to sell shall in no way be impaired, whether or not such amounts are received prior or subsequent to such notice. No delay or omission of Trustee or Beneficiary in the exercise of any other right or power hereunder shall impair such right or power or any other right or power nor shall the same be construed to be a waiver of any default or any acquiescence therein. 2.18. Suits to Protect Property. Trustor agrees to appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or any additional or other security for the obligations secured, the interest of Beneficiary of the rights, powers and duties of Trustee, and to pay all costs and expenses, including without limitation, cost of evidence of title and reasonable attorneys’ fees, in any action or proceeding in which Beneficiary or Trustee may appear to be made a party, including, but not limited to, foreclosure or other proceeding commenced by those claiming a right to any part of the Property under subordinate liens, in any action to partition or condemn all or part of the Property, whether pursued to final judgment, and in any exercise of the power of sale in this Deed of Trust, whether the sale is actually consummated. 2.19. Title to Real Property. Trustor lawfully possesses and holds a leasehold interest in the Property under the Ground Lease, and fee simple title to all of the Improvements, and Obligor owns good and marketable fee simple title to the Property. Grantor owns all of the beneficial and equitable interest in and to the Real Property, and is lawfully seized and possessed of the Property. Grantor has the right and authority to convey the Property and does hereby convey the Property with general warranty. The Property is subject to no Encumbrances other than the Permitted Encumbrances. 2.20. Title to Improvements Trustor has good title to the Improvements and any other Security (aside from the Property), and such other Security is not subject to any Encumbrance other than the Permitted Encumbrances. 2.21 Leases and Tenants. The Ground Lease is valid and in full force and effect, and Trustor is not in default under any of the terms thereof. Except as expressly permitted in the Loan Agreement, Trustor has not accepted any rents in advance of the time the same became due under the leases and has not forgiven, compromised or discounted any of the rents. Trustor has title to and the right to assign the Ground Lease, all other leases, and rents to Beneficiary, and no other assignment of the 13 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 leases or rents has been granted, except for any Permitted Encumbrances. To the best of Trustor’s knowledge and belief, no tenant or tenants occupying, individually or in the aggregate, more than five percent (5%) of the net rentable area of the Improvements are in default under their leases or are the subject of any bankruptcy, insolvency or similar proceeding. 2.22 Affordability Covenant. The Affordability Restrictions on Transfer of Property (“Affordability Restrictions”), the same date hereof, and executed in connection with the Loan Agreement, is valid and in full force and effect. Grantor agrees and hereby acknowledges that the Affordability Restrictions shall be recorded as an encumbrance against the Security, inclusive of the leasehold interest established by the Ground Lease and the fee simple interest owned by Obligor. Section 3. 3.1. TAXES AND INSURANCE; ADVANCES Taxes, Other Governmental Charges and Utility Charges. (a) Trustor shall pay, prior to delinquency, all real property taxes and assessments, general and special, and all other charges of any kind, including without limitation non- governmental levies or assessments such as maintenance charges, levies or other charges resulting from covenants, conditions and restrictions affecting the Security, which are assessed or imposed upon the Security or upon Trustor as owner or operator of the Security, or become due and payable, and which create or may create a lien upon the Security, or any part thereof, or upon any personal property, equipment or other facility used in the operation or maintenance thereof (all the above collectively hereinafter referred to as “Impositions”); provided, however, that if, by law, any Imposition is payable, or may at the option of the taxpayer be paid, in installments, Trustor may pay the same in installments (together with any interest charged) as the same become due and before any fine, penalty or cost may be added thereto for the nonpayment of any such installment. Notwithstanding the foregoing, Trustor shall have the right to diligently contest, in good faith and by appropriate proceedings, the validity of any Imposition, so long as Trustor demonstrates to Beneficiary that Trustor is maintaining sufficient reserves for the payment of all contested liabilities and so long as the security and value of Beneficiary’s interest under this Deed of Trust are not impaired as a result of such contest. (b) If at any time after the date hereof there shall be assessed or imposed (1) a tax or assessment on the Security in lieu of or in addition to the Impositions payable by Trustor pursuant to this Section 3.1 hereof, or (2) a license fee, tax or assessment imposed on Beneficiary and measured by or based in whole or in part upon the amount of the outstanding Obligations secured hereby, then all such taxes, assessments or fees shall be deemed to be included within the term “Impositions” as defined in this Section and Trustor shall pay and discharge the same as herein provided with respect to the payment of Impositions. If Trustor fails to pay such Impositions prior to delinquency or if Trustor is prohibited by law from paying such Impositions, Beneficiary may at its option declare all Obligations secured hereby, together with all accrued interest thereon, immediately due and payable. Anything to the contrary herein notwithstanding, Trustor shall have no obligation to pay any franchise, estate, inheritance, income, excess profits or similar tax levied on Beneficiary or on the Obligations secured hereby. 14 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 (c) Trustor shall deliver to Beneficiary within thirty (30) days after the date upon which any such Imposition is due and payable by Trustor official receipts of the appropriate taxing authority, or other proof reasonably satisfactory to Beneficiary, evidencing the payment thereof. Trustor shall not suffer, permit or initiate the joint assessment of any real and personal property which may constitute all or a portion of the Security and the personal property or suffer, permit or initiate any other procedure whereby the lien of real property taxes and the lien of personal property taxes shall be assessed, levied or charged to the Security as a single Lien. Trustor shall cause to be furnished to Beneficiary a tax reporting service, covering the Property, of a type and duration, and with a company, reasonably satisfactory to Beneficiary. (d) In the event that Trustor shall fail to pay any of the foregoing items required by this Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to fully pay such items within fifteen (15) business days after receipt of such notice. Any amount so advanced therefor by Beneficiary, together with interest thereon from the date of such advance at the lesser of twelve percent (12%) per annum or the maximum rate permitted by law (hereinafter the “Agreed Rate”), shall become an additional Obligation of Trustor to the Beneficiary and shall be secured hereby, and Trustor agrees to pay all such amounts. 3.2.Insurance. (a) Trustor agrees to provide insurance conforming in all respects to that required under the Loan Agreement at all times until all amounts secured by this Deed of Trust have been paid and all other Obligations secured hereunder fulfilled, and this Deed of Trust reconveyed. All such insurance policies and coverages shall be maintained at Trustor’s sole cost and expense. (b) All said insurance shall have attached thereto a lender’s loss payable endorsement for the benefit of Beneficiary in form reasonably satisfactory to the Beneficiary and/or shall name Beneficiary as an additional insured, as Beneficiary may require, and shall contain an endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms of such policies notwithstanding any act or negligence of Trustor or any party holding under Trustor which might otherwise result in forfeiture of said insurance and the further agreement of the insurer waiving all rights of setoff, counterclaim and deduction against Trustor. At Beneficiary’s option, Trustor shall furnish Beneficiary with an original of all required policies of insurance and/or a certificate of insurance with all required endorsements for each required policy setting forth the coverage, the limits of liability, the deductible, if any, the name of the carrier, the policy number, and the period of coverage, which certificates and endorsements shall be executed by authorized officials of the companies issuing such insurance, or any agents or attorneys-in-fact authorized to issue said certificates and endorsements (in which event each such certificate and endorsements shall be accompanied by a notarized affidavit, agency agreement or power of attorney evidencing the authority of the signatory to issue such certificate on behalf of the insurer named therein), accompanied by a certificate from Trustor that the insurance satisfies the requirements of the Loan Agreement, and that Beneficiary may conclusively rely on such certificates. If Beneficiary consents (which consent shall not be unreasonably withheld or delayed), Trustor may provide any of the required insurance through blanket policies carried by Trustor and covering more than one location; provided, however, all such policies shall be in form and substance and issued by companies reasonably satisfactory to Beneficiary. 15 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 (c) At least thirty (30) days prior to the expiration of each required policy, Trustor shall deliver to Beneficiary evidence reasonably satisfactory to Beneficiary of the payment of premium and the renewal or replacement of such policy continuing insurance in form as required by this Deed of Trust or the Loan Agreement. All such policies shall contain a provision that, notwithstanding any contrary agreement between Trustor and the insurance company, such policies will not be canceled, allowed to lapse without renewal, surrendered or materially amended (which term shall include any reduction in the scope, or limits of coverage), other than for nonpayment, without at least thirty (30) days prior written notice to Beneficiary. (d) In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the debt secured hereby, all right, title and interest of Trustor in and to all policies of insurance required by Section 3.2 hereof and any unearned premiums paid thereon shall, without further act, be assigned to and shall inure to the benefit of and pass to the successor in interest to Trustor or the purchaser or grantee of the Property, and Trustor hereby appoints Beneficiary its lawful attorney-in-fact to execute an assignment thereof and any other document necessary to effect such transfer. 3.3.Advances. In the event the Trustor shall fail to maintain the full insurance coverage required by this Deed of Trust or shall fail to keep the Security in accordance with the Loan Agreement, the Beneficiary, after at least twenty (20) days prior written notice to Trustor, may (but shall be under no Obligation to) take out the required policies of insurance and pay the premiums on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by the Beneficiary shall become an additional Obligation of the Trustor to the Beneficiary (together with any applicable interest) and shall be secured hereby, which amounts the Trustor agrees to pay on the demand of the Beneficiary, and if not so paid, shall bear interest from the date of the advance at the Agreed Rate. Section 4. 4.1. DAMAGE, DESTRUCTION OR CONDEMNATION Casualties. Trustor shall give prompt written notice to Beneficiary upon the occurrence of casualty to or in connection with the Security or any part thereof, whether or not covered by insurance. In the event of such casualty, subject to the rights of any senior lender, Trustor hereby absolutely and unconditionally assigns to Beneficiary all insurance proceeds which it may be entitled to receive and such proceeds shall be delivered to and held by Beneficiary to be applied to Beneficiary’s expenses in settling, prosecuting or defending any insurance claim, and then to the restoration of any portion of the Security that has been damaged or destroyed to the same condition, character and value as existed prior to such damage or destruction so long as the following conditions are satisfied: (i) Trustor is not in default hereunder (other than any default resulting from such casualty), (ii) Beneficiary’s security is not materially impaired, (iii) all income (from the Security or otherwise) required to pay all debt service and operating expenses of the Security during such restoration and thereafter will be equal to or greater than the income which was required to pay such debt service and operating expenses prior to the casualty, (iv) Trustor evidences to the reasonable satisfaction of Beneficiary that the insurance required to be 16 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 maintained hereunder will be available to the Trustor during restoration and thereafter, (v) Beneficiary shall have approved the plans and specifications for such restoration, which approval shall not be unreasonably withheld or delayed, and (vi) in the event that in Trustor’s reasonable judgment the insurance proceeds and any amounts deposited with a senior lender are not sufficient to accomplish restoration, Trustor deposits with the Beneficiary or senior lender, if and to the extent required by that senior lender pursuant to the terms of the senior debt instrument, within five days of demand by Beneficiary, the additional amounts necessary to accomplish restoration. Proceeds disbursed for restoration will be released to Trustor in accordance with Beneficiary’s then current customary disbursement procedures. In the event any of the conditions set forth above are not satisfied or if the insurance proceeds shall not be applied to the restoration of the Security within thirty days after receipt of such proceeds by Beneficiary, Beneficiary may release such proceeds to Trustor without such release being deemed a payment of any indebtedness secured hereby, rather than apply such proceeds to the restoration of the Security. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If the Security is restored at a cost less than the available insurance proceeds, then such excess proceeds shall, if Trustor is not then in default hereunder, be paid over to Trustor. Beneficiary may commence, appear in, defend or prosecute any assigned claim or action, and may adjust, compromise, settle and collect all claims, proceeds and awards assigned to Beneficiary, but shall not be responsible for any failure to collect any claim, proceeds or award, regardless of the cause of the failure. 4.2.Condemnation. Promptly upon its obtaining knowledge of the institution or the threatened institution of any proceeding for the condemnation or other taking for public or quasi-public use of the Security or any part thereof, or if the same be taken or damaged by reason of any public improvement or condemnation proceeding, or in any other manner, or should Trustor receive any notice or other information regarding such proceedings, action, taking or damage, Trustor shall promptly notify Trustee and Beneficiary of such fact. Trustor shall then, if requested by Beneficiary, file or defend its right thereunder and prosecute the same with due diligence to its final disposition and shall, subject to the rights of any senior lender, cause any award or settlement to be paid to Beneficiary in accordance with the provisions of the Loan Agreement. At Beneficiary’s option, Beneficiary or Trustor may be the nominal party in such proceeding but in any event Beneficiary shall be entitled, without regard to the adequacy of its security, to participate in, appear in, prosecute and settle, jointly with Trustor to control the same and to be represented therein by counsel of its choice, and Trustor will deliver, or cause to be delivered, to Beneficiary such instruments as may be requested by it from time to time to permit such participation. Trustor and Beneficiary agree to act in good faith with respect to any consent, settlement, or award arising out of said prosecution. If the Security or any part thereof is taken or diminished in value, or if a consent settlement is entered, by or under threat of such proceedings, all compensation, awards, damages, rights of action proceeds and settlements payable to Trustor by virtue of its interest in the security shall be and hereby are assigned, transferred and set over into Beneficiary to be held by it, in trust, subject to the lien and security interest of this Deed of Trust. All such proceeds shall be first applied to reimburse Trustee and Beneficiary, for all costs and expenses, including reasonable attorneys’ fees, incurred in connection with the collection of such award or settlement, and then to the restoration of any portion of the Security that has been taken to the similar condition, character and value as existed 17 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 prior to such taking so long as the following conditions are satisfied: (i) Trustor is not in default hereunder, (ii) Beneficiary’s security is not materially impaired, (iii) all income (from the Security or otherwise) required to pay all debt service and operating expenses of the Security during such restoration and thereafter will be equal to or greater than the income which was required to pay such debt service and operating expenses prior to the casualty, (iv) Trustor evidences to the reasonable satisfaction of Beneficiary that the insurance required to be maintained hereunder will be available to the Trustor during restoration and thereafter, (v) Beneficiary shall have approved the plans and specifications for such restoration, and (vi) in the event that in Trustor’s reasonable judgment the insurance proceeds and any amounts deposited with a senior lender are not sufficient to accomplish restoration, Trustor deposits with the Beneficiary or senior lender, if and to the extent required by that senior lender pursuant to the terms of the senior Debt Instrument, within five days of demand by Beneficiary, the additional amounts necessary to accomplish restoration. Application or release of proceeds as provided herein shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Section 5. 5.1. ENVIRONMENTAL COVENANTS OF TRUSTOR Disclosures By Trustor. Except as disclosed in writing to, and acknowledged and accepted in writing by Beneficiary, including, without limitation, as set forth in the Environmental Reports, copies of which have been provided to Beneficiary prior to the execution of this Deed of Trust, Trustor represents and warrants that: (a)During Trustor’s ownership of a leasehold interest in the Property (1) there has been no use, generation, manufacture, storage, treatment, disposal, discharge, Release, or threatened Release of any Hazardous Substance by any person on or around the Property except in such small quantities as are customary and usual in the ordinary course of constructing, using and operating a residential housing business on the Property and in strict compliance with all Hazardous Substances Laws, and (2)there have been no Hazardous Substances transported over or through the Property; (b) Trustor has no knowledge of, or reason to believe that, there has been: (1) any use, generation, manufacture, storage, treatment, disposal, Release, or threatened Release of any hazardous waste or substance by any prior owners or prior occupants of the Property or by any third parties onto the Property, or (2)any actual or threatened litigation or claims of any kind by any person relating to these matters; (c) to Trustor’s knowledge, no Hazardous Substances in excess of permitted levels or reportable quantities under applicable Hazardous Substance Laws are present in or about the Property or any nearby real property that could migrate to the Property; 18 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 (d) to Trustor’s knowledge, no Release or threatened Release exists or has occurred; (e) to Trustor’s knowledge, no underground storage tanks of any kind are or ever have been located in or about the Property; (f) the Property and all of Trustor’s contemplated operations and activities at, and Trustor’s contemplated use and occupancy of, the Property comply with all applicable Hazardous Substance Laws; (g) Trustor is now in strict compliance with, every permit, license, and approval required by all applicable Hazardous Substance Laws for all activities and operations at, and the use and occupancy of, the Property; (h) to Trustor’s knowledge, there are no Hazardous Substance Claims pending or threatened with regard to Property or against Trustor; (i) to Trustor’s knowledge the Property has not been nor is it within 2,000 feet of any other property designated as “hazardous waste property” or “border zone property,” as applicable, pursuant to Health and Safety Code §§ 25220 et seq, and no proceedings for a determination of this designation are pending or threatened; (j) to Trustor’s knowledge, there exists no occurrence or condition on any real property adjoining or within 2,000 feet of the Property that would cause the Property or any part of it to be designated as “hazardous waste property” or “border zone property,” to the extent applicable, under the current or former provisions of Health and Safety Code §§ 25220 et seq., and any regulation adopted in accordance with those sections; (k) that the Trustor’s use of the Property shall be residential housing; (l) to Trustor’s knowledge, any written disclosure submitted by or on behalf of Trustor to Beneficiary concerning any Release or threatened Release, past or present compliance by Trustor or other person of any Hazardous Substance Laws applicable to the Property, the past and present use and occupancy of the Property, and any environmental concerns relating to the Property, was true and complete in all; material respects when submitted and continues to be true and complete in all material respects as of the date of this Deed of Trust. As used in this Section 5.1, phrases such as “to Trustor’s knowledge,” shall refer to the actual knowledge of the Trustor, and its agents and directors, without duty of inquiry or investigation other than the ordering of a Phase I Environmental Assessment as required pursuant to the Loan Agreement. 5.2.Covenants of Trustor. Trustor agrees, except in the ordinary course of business and in strict compliance with all applicable Hazardous Substance Laws, as follows: 19 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 (a) not to cause or permit the property to be used as a site for the use, generation, manufacture, storage, treatment, Release, discharge, disposal, transportation, or presence of any Hazardous Substance in violation of applicable Hazardous Materials Substance Laws; (b) not to cause, contribute to, permit, or acquiesce in any Release or threatened Release; (c) not to change or modify the use of the Property without the prior written consent of Beneficiary; (d) to comply with and to use commercially reasonable efforts to cause the Property and every invitee or occupant of the Property to comply with all Hazardous Substance Laws; (e) to promptly upon Trustor’s discovery thereof (other than Hazardous Substances that were known prior to Loan closing as disclosed in the Environmental Reports), notify Beneficiary in writing of and to provide Beneficiary with a reasonably detailed description of: (1)any noncompliance of the Property with any Hazardous Substance Laws; (2) (3) (4) any Hazardous Substance Claim; any Release or Threatened Release; the discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that would cause the Property or any part of it to be designated as “hazardous waste property” or “border zone property” under the provisions of former Health and Safety Code §§ 25220 et seq., and any regulation adopted in accordance with that section; (f) if Trustor discovers a Release or the presence of any Hazardous Substance on or about the Property in violation of any Hazardous Substance Law, to: (1)notify Beneficiary of that discovery together with a reasonably detailed description; (2)engage promptly after a request by Beneficiary, a qualified environmental engineer reasonably satisfactory to Beneficiary to investigate these matters and prepare and submit to Beneficiary a written report containing the findings and conclusions resulting from that investigation, all at the sole expense of Trustor, and (3)if the Release of Hazardous Substances results in (i) injury to any person, (ii) injury to or contamination of the Property (or a portion thereof), or (iii) injury to or contamination of any real or personal property wherever situated take, at Trustor’s sole expense, all actions required by applicable Hazardous Substances Laws to remedy, repair, clean up, or 20 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 detoxify any Release of Hazardous Substance, including, but not limited to, any remedial action required by any applicable Hazardous Substance Laws or any judgment, consent, decree, settlement, or compromise in respect of any Hazardous Substance Claims, these actions to be performed: A. B. C. in accordance with applicable Hazardous Substance Laws, in a good and proper manner, under the supervision of a qualified environmental engineer approved in writing by Beneficiary (such approval not to be unreasonably withheld or delayed), D. in accordance with plans and specifications for these actions approved in writing by Beneficiary (such approval not to be unreasonably withheld or delayed), and E.using licensed and insured qualified contractors approved in writing by Beneficiary (such approval not to be unreasonably withheld or delayed); (g) promptly furnish to Beneficiary copies of all written communications received by Trustor from any governmental authority or other person or given by Trustor to any person and any other information Beneficiary may reasonably request concerning any Release, threatened Release, Hazardous Substance Claim, or the discovery of any Hazardous Substance on or about the Property in violation of any applicable Hazardous Substance Law; and (h) keep Beneficiary generally informed regarding any Release, threatened Release, Hazardous Substance Claim, or the discovery of any Hazardous Substance on or about the Property in violation of any Hazardous Substance Law. 5.3.Rights of Beneficiary. Upon Beneficiary’s reasonable belief of the existence of a past or present Release or threatened Release not previously disclosed by Trustor in the Environmental Reports or in connection with the making of the Loan or the execution of this Deed of Trust, or upon Beneficiary’s reasonable belief that Trustor has failed to comply with any environmental provision of this Deed of Trust or any other Loan Document and upon not less than 72 hours’ prior written notice (except in the case of an emergency) to Trustor, Beneficiary or its representatives, employees, and agents, may from time to time and at all reasonable times during regular business hours (or at any time in the case of an emergency) enter and inspect the Property and every part of it (including all samples of building materials, soil, and groundwater and all books, records, and files of Trustor relating to the Property) and perform those acts and things that Beneficiary reasonably deems necessary to inspect, investigate, assess, and protect the Security of this Deed of Trust, for the purpose of determining: (a) the existence, location, nature, and magnitude of any past or present Release or threatened Release, 21 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 (b) the presence of any Hazardous Substances on or about the Property in violation of any applicable Hazardous Substance Law, and (c) the compliance by Trustor of every environmental provision of this Deed of Trust and every other Loan Document. In furtherance of the purposes above, without limitation of any of its other rights, Beneficiary may: (1)obtain a court order to enforce Beneficiary’s right to enter and inspect the Property under Civil Code § 2929.5; and (2)have a receiver appointed under Code of Civil Procedure § 564 to enforce Beneficiary’s right to enter and inspect the Property for the purpose set forth above. All reasonable costs and expenses incurred by Beneficiary with respect to the audits, tests, inspections, and examinations that Beneficiary or its agents, representatives, or employees may conduct, including the reasonable fees of the engineers, laboratories, contractors, consultants, and attorneys, will be paid by Trustor. All reasonable costs or expenses incurred by Trustee and Beneficiary pursuant to this Section (including without limitation court costs, reasonable consultant’s fees, and reasonable attorney fees, whether incurred in litigation and whether before or after judgment) will bear interest at the Agreed Rate from the date they are incurred until those sums have been paid in full. Except as provided by law, any inspections or tests made by Beneficiary or its representatives, employees, and agents will be for Beneficiary’s purposes only and will not be construed to create any responsibility or liability on the part of Beneficiary to Trustor or to any other person. Beneficiary will have the right, but not the obligation, to communicate with any governmental authority regarding any fact or reasonable belief of Beneficiary that constitutes or could constitute a breach of any of Trustor’s obligations under any environmental provision contained in this Deed of Trust or any Loan Document. 5.4.Waiver and Indemnity. Trustor: (a) releases and waives any future claims against Beneficiary for indemnity or contribution in the event Trustor becomes liable for cleanup or other costs under any Hazardous Substance Laws or under any Hazardous Substance Claim except to the extent such liability arises out of the gross negligence or willful misconduct or Beneficiary; (b) following an Event of Default by Trustor with respect to Trustor’s environmental covenants hereunder, agrees to reimburse Beneficiary, on demand, for all costs and expenses incurred by Beneficiary in connection with any review, approval, consent, or inspection relating to the environmental provisions in this Deed of Trust together with interest, after demand, at the Agreed Rate; and (c) agrees to indemnify, defend, and hold Beneficiary and Trustee harmless from all losses, costs, claims, damages, penalties, liabilities, causes of action, judgments, court costs, reasonable attorney fees and other reasonable legal expenses, costs of evidence of title, 22 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 cost of evidence of value, and other expenses (collectively, “Expenses”), including, but not limited to, any Expenses incurred or accruing after the foreclosure of the lien of this Deed of Trust, which either may suffer or incur and which directly or indirectly arises out of or is in any way connected with the breach of any environmental provision either in this Deed of Trust or in any Loan Document or as a consequence of any Release or threatened Release or the presence, use, generation, manufacture, storage, disposal, transportation, Release, or threatened Release of any Hazardous Substance on or about the Property (but excluding any Existing Hazardous Materials), including the soils and groundwater, caused or permitted by Trustor, including, without limitation, to the extent required by an environmental agency with jurisdiction over the Property, the cost of any required or necessary repair, cleanup, remedy, or detoxification of any hazardous Substance and the preparation of any closure, remedial action, or other required plans. Trustor’s obligations will survive the satisfaction, release, or cancellation of the indebtedness, the release and reconveyance or partial release and reconveyance of this Deed of Trust, and the foreclosure of the lien of this Deed of Trust or deed in lieu of the Deed of Trust, for any liability accruing or arising prior to such satisfaction, release, or cancellation of the indebtedness, the release and reconveyance or partial release and reconveyance of this Deed of Trust, and the foreclosure of the lien of this Deed of Trust or deed in lieu of the Deed of Trust. 5.5.Additional Covenants of Trustor. (a) Trustor and Beneficiary agree that: (1)this Section is intended as Beneficiary’s written request for information and Trustor’s written response concerning the environmental condition of the Property as provided by Code of Civil Procedure § 726.5; and (2)each representation, warranty, covenant, or indemnity made by Trustor in this Section or in any other provision of this Deed of Trust or any Loan Document that relates to the environmental condition of the Property is intended by Trustor and Beneficiary to be an “environmental provision” for purposes of Code of Civil Procedure § 736 and will survive the payment of the indebtedness and the termination or expiration of this Deed of Trust and will not be affected by Beneficiary’s acquisition of any interest in the Property, whether by full credit bid at foreclosure, deed in lieu of that, or otherwise. If there is any transfer of any portion of Trustor’s interest in the Property, any successor-in-interest to Trustor agrees by its succession to that interest that the written request made pursuant to this Section will be deemed remade to the successor-in-interest without any further or additional action on the part of Beneficiary and that by assuming the debt secured by this Deed of Trust or by accepting the interest of Trustor subject to the lien of this Deed of Trust, the successor remakes each of the representations and warranties in this Deed of Trust and agrees to be bound by each covenant in this Deed of Trust, including, but not limited to, any indemnity provision. (b) Even though Trustor may have provided Beneficiary with an environmental site assessment or other environmental report together with other relevant information regarding the environmental condition of the Property, Trustor acknowledges and agrees that with the exception of the Environmental Reports, Beneficiary is not accepting the Property as security for the Loan based on that assessment, report, or information. Rather, Beneficiary has relied on the representations and warranties of Trustor in this Deed of Trust, and 23 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 other than with respect to the Environmental Reports, Beneficiary is not waiving any of its rights and remedies in the environmental provisions of this Deed of Trust or any other Loan Document. (c) Beneficiary or its agents, representatives, and employees may seek a judgment that Trustor has breached its covenants, representations, or warranties in Section 2 of this Deed of Trust or any other covenants, representations, or warranties that are deemed to be “environmental provisions” pursuant to Code of Civil Procedure § 736 (each an “Environmental Provision”), by commencing and maintaining an action or actions in any court of competent jurisdiction pursuant to Code of Civil Procedure § 736, whether commenced prior to or after foreclosure of the lien of this Deed of Trust. Beneficiary or its agents, representatives, and employees may also seek an injunction to cause Trustor to abate any action in violation of any Environmental Provision and may seek the recovery of all costs, damages, expenses, fees, penalties, fines, judgments, indemnification payments to third parties, and other out-of-pocket costs or expenses actually incurred by Beneficiary (collectively, “Environmental Costs”) incurred or advanced by Beneficiary relating to the cleanup, remedy, or other response action required by any applicable Hazardous Substances Law or any Hazardous Substance Claim. It will be conclusively presumed between Beneficiary and Trustor that all Environmental Costs incurred or advanced by Beneficiary relating to the cleanup, remedy, or other response action of or to the Property were made by Beneficiary in good faith. All reasonable Environmental Costs incurred by Beneficiary under this Section (including without limitation court costs, reasonable consultant fees, and reasonable attorney fees, whether incurred in litigation and whether before or after judgment) will bear interest at the Agreed Rate from the date of expenditure until those sums have been paid in full. Beneficiary will be entitled to bid, at any trustee’s or foreclosure sale of the Property, the amount of the costs, expenses, and interest in addition to the amount of other indebtedness. (d) Beneficiary or its agents, representatives, and employees may waive its lien against the Property or any portion of it, including but not limited to the Improvements, to the extent that the Property or any portion of the Security is found to be environmentally impaired in accordance with Code of Civil Procedure § 726.5, and to exercise all rights and remedies of an unsecured creditor against Trustor and all of Trustor’s assets and property for the recovery of any deficiency and Environmental Costs, including, but not limited to, seeking an attachment order under Code of Civil Procedure § 483.010. As between Beneficiary and Trustor, for purposes of Code of Civil Procedure § 726.5, Trustor will have the burden of proving that Trustor or any related party (or any affiliate or agent of Trustor or any related party) was not in any way negligent in permitting the Release or threatened Release of the Hazardous Substances. Section 6. 6.1. ASSIGNMENTS OF RENTS, ISSUES AND PROFITS Assignment. Trustor hereby absolutely, irrevocably and unconditionally assigns to Beneficiary, as security for the Obligations, all rents, profits, deposits, royalties, income and other issues and similar benefits derived from the Security, including Leases, as defined below (collectively, the “Rents”), and hereby confers upon Beneficiary the right, power and authority to collect such Rents. Trustor irrevocably appoints Beneficiary its true and lawful attorney-in-fact, at the option 24 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 of Beneficiary, at any time and from time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions, and to sue, in its name or in the name of Trustor, for all Rents, and apply the same to the Obligations secured hereby; provided, however, that Trustor shall have the right, as between Trustor and Beneficiary, to collect the Rents but not more than one (1) month in advance of the date due unless the written approval of Beneficiary has first been obtained, with the exception of security deposits and “first and last months’ rent” collected from tenants in connection with Trustor’s ordinary leasing of residential apartments within the Property), and to retain and enjoy the same, so long as an Event of Default shall not have occurred hereunder and be continuing. 6.2.Collection Upon Default. While any Event of Default remains uncured, Beneficiary may, at any time without notice, either in person, by agent or by a receiver appointed by a court, and without regard to the adequacy of any security for the Obligations hereby secured, enter upon and take possession of the Security, or any part thereof, and, with or without taking possession of the Security or any part thereof, in its own name sue for or otherwise collect such Rents (including those past due and unpaid, and all prepaid Rents and all other monies which may have been or may hereafter be deposited with Trustor by any tenant to secure the payment of any Rent or for any services thereafter to be rendered by Trustor for any other obligation of any tenant to Trustor arising under any lease, and Trustor agrees that, upon the occurrence of any Event or Default hereunder, Trustor shall promptly deliver all Rents and other moneys to Beneficiary), and Beneficiary may apply the same, less costs and expenses of operation and collection, including, without limitation, reasonable attorneys fees, whether or not suit is brought or prosecuted to judgment, against any indebtedness or Obligation of Trustor secured hereby, and in such order as Beneficiary may determine notwithstanding that said indebtedness or the performance of said Obligation may not then be due. The collection of Rents, or the entering upon and taking possession of the Security, or the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done in response to such default or pursuant to such notice of default or be deemed or construed to make Beneficiary a mortgagee- in-possession of the Security or any portion thereof. 6.3.Further Assignments. Upon demand of Beneficiary, Trustor shall, from time to time hereafter, execute, and deliver to Beneficiary recordable assignments of Trustor’s interest in any or all leases, subleases, contracts, rights, licenses and permits now or hereafter affecting the Security or any portion thereof. Such assignments shall be made by instruments in form and substance reasonably satisfactory to Beneficiary; provided, however, that no such assignment shall be construed as imposing upon Beneficiary any obligation with respect thereto. Beneficiary may, at its option, exercise its rights hereunder or under any such specific assignment and such exercise shall not constitute a waiver of any right hereunder or under any such specific assignment. Section 7. 7.1. ASSIGNMENTS OF LEASES Assignment. Trustor hereby absolutely, irrevocably and unconditionally assigns to Beneficiary, as security for the Obligations all leases, licenses and other rental agreements of 25 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 any kind relating to the use or occupancy of the Property and any portion thereof, which are currently in effect for the Property or are entered into on or after the date of this Deed of Trust (collectively, the “Leases” or individually a “Lease”). The Leases shall include (i) all guarantees of and security for lessees' performance under any and all Leases and (ii) all amendments, extensions, renewals or modifications thereto which are permitted hereunder. 7.2 License. This Deed of Trust shall constitute a present and absolute assignment to the Beneficiary. However, Trustor shall have the right under a license (the “License”) granted hereby to collect and use at the time of, but not prior to, the date provided for payment, all of the Rent and to retain and use the same in accordance with the terms and provisions of the Note, Deed of Trust, and other Loan Documents; provided, that such License shall be revoked automatically upon the occurrence of an Event of Default as defined below. The Beneficiary shall not revoke the License prior to an Event of Default. 7.3 Covenants. 1. Trustor covenants and agrees as follows: (a)at Trustor’s sole cost to: (i) perform the duties and obligations of lessor under the Leases and to enforce performance by the lessees of the obligations contained in the Leases; (ii) enforce all remedies available to Trustor in case of default by the lessees under any of the Leases and prosecute and defend any action, arbitration or other controversy relating to any of the Leases or to Trustor's interest in any of the Leases in the ordinary course of Trustor's business; (iii) give the Beneficiary prompt notice of any material default by Trustor which occurs with respect to any of the Leases, and complete copies of any notice of default; (iv) exercise Trustor’s best efforts to keep all portions of the Property designated as lease property leased at all times; (v) upon the Beneficiary's written request, deliver to the Beneficiary a fully executed photocopy and a counterpart original of each and every Lease; (vi) execute and record such additional assignments of any Lease, in form and substance reasonably acceptable to the Beneficiary, as the Beneficiary may request; and (vii) execute and deliver such additional documents and instruments as the Beneficiary may reasonably request from time to time to carry out the purpose of this Deed of Trust; and (b)except with the Beneficiary's prior written consent, which consent will not be arbitrarily withheld, not to either orally or in writing: (i) enter into any Leases after the date of this Deed of Trust which are not in compliance with the applicable provisions of the Loan Agreement, Regulatory Agreement and other Loan Documents; (ii) execute any other assignment relating to any of the Leases or collect the rent in advance, other than to collect one (1) month in advance of the time when it becomes due; (iii) terminate, modify or amend any of the terms of the Leases or in any manner release or discharge any lessee from any obligations thereunder; (iv) consent to any assignment or subletting by any lessee of the Leases; or (v) do or permit anything to be done to impair the validity or enforceability of any of the Leases. Any such attempted action in violation of the provisions of this paragraph shall be null and void. (c)Representations and Warranties. Trustor hereby represents and warrants (1) Trustor is and will be the sole owner of lessor's interest in each Lease; 26 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 (2) each Lease, when executed and delivered, will be valid and enforceable in accordance with its terms, will constitute the entire agreement between the lessee named therein and Trustor, and there will be no amendments, written or oral, to such agreements except in the ordinary course of business, without the Lender's prior written consent; and (3) none of the lessor's interests in, and no Rent under, any of the Leases has been transferred or assigned except as expressly provided for in the Loan Agreement; and (4) Trustor is the owner of the leasehold interest in the Property under the Ground Lease, and has good title to the Leases, any contracts of sale that exist or may be made relating to the sale of a portion of the Property, and any Rent, money, rights or claims under the Leases or contracts of sale, and no other person firm, or corporation has any right, title, or interest in them. Section 8. 8.1. EVENTS OF DEFAULT Events of Default. Each of the following shall constitute Events of Default: (1) the occurrence of an “Event of Default” as defined in the Loan Agreement or as defined in any Debt Instrument; or (2) the failure to make any payment or perform any of Trustor’s other Obligations now or hereafter secured by this Deed of Trust (subject to written notice and expiration of any applicable cure period) and if no cure period is provided, a cure period equal to those granted to the Limited Partner under Section 8.12. 8.2.Acceleration of Maturity. If an Event of Default shall have occurred and be continuing, then at the option of the Beneficiary, the amount of any payment related to the Event of Default, the unpaid Principal of the Note and any other indebtedness and other Obligations secured hereby shall immediately become due and payable without presentment, protest notice or demand, all of which are hereby expressly waived, upon written notice by the Beneficiary to the Trustor and no omission on the part of the Beneficiary to exercise such option when entitled to do so shall be construed as a waiver of such right. 8.3.The Beneficiary’s Right to Enter and Take Possession. If an Event of Default shall have occurred and be continuing, the Beneficiary may: (a) 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 Trustee, and do any acts which it reasonably deems necessary to preserve the value or marketability of the Security, or part thereof or interest therein, increase the income therefrom or protect the security thereof and, with or without taking possession of the Security, sue for or otherwise collect the Rents, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection including without limitation reasonable attorneys fees, against any indebtedness secured hereby, all in such order as Beneficiary may determine. The entering upon and taking possession of the Security the collection of such Rents and the application thereof as aforesaid shall not cure or waive any 27 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 Event of Default or notice of default hereunder or invalidate any act done in response to such Event of Default or pursuant to such notice of default, and, notwithstanding the continuance in possession of the Security, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any Event of Default, including the right to exercise the power of sale; (b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor’s interest in the Security to be sold, which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of Orange County; or (d) Exercise all other rights and remedies provided herein, in the instruments by which the Grantor 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. 8.4.Foreclosure by Power of Sale. Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust, the Loan Agreement and the Note which is secured hereby (and the deposit of which shall be deemed to constitute evidence that the unpaid Principal amount of the Note is immediately due and payable), and such receipts and evidence of any expenditures made that are additionally secured hereby as Trustee may require. (a) Upon receipt of such notice from the Beneficiary (“Notice of Default”), Trustee shall cause to be recorded, published and delivered to Grantor such Notice of Default and election to sell as then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and after notice of sale having been given as required by law (“Notice of Sale”), sell the Security, at the time and place of sale fixed by it in said Notice of Sale, whether as a whole or in separate lots or parcels or items as Trustee shall deem expedient and in such order as it may determine unless specified otherwise to the Trustor according to California Civil Code Section 2924g(b), at public auction to the highest bidder, for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed or any matters of facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale. (b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of sale to payment of: (1) the unpaid Principal amount of the Note; (2) all other sums then secured hereby; and (3) the remainder, if any, to Trustor. 28 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 (c) Trustee may postpone sale of all or any portion of the Security by public announcement at such time and place of sale, and from time to time thereafter, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale. 8.5.Receiver If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of right and without further notice to Grantor or anyone claiming under the Security, and without regard to the then value of the Security or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice of any application therefor. Any such receiver or receivers shall have all the usual powers and duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and shall continue as such and exercise all such powers until the date of confirmation of sale of the Security, unless such receivership is sooner terminated. 8.6.Application of Funds After Default. Except as otherwise herein provided, upon the occurrence of an Event of Default hereunder, and while such Event of Default remains uncured, Beneficiary may, at any time without notice, apply any or all sums or amounts received and held by Beneficiary to pay insurance premiums, Impositions, or either of them, or as Rents or income of the Security, or as insurance or condemnation proceeds, and all other sums or amounts received by Beneficiary from or on account of Grantor or the Security, or otherwise, against any indebtedness or Obligation of the Grantor secured hereby, in such manner and order as Beneficiary may elect. The receipt, use or application of any such sum or amount shall not be construed to affect the maturity of any indebtedness secured by this Deed of Trust, or any of the rights or powers of Beneficiary under the terms of the Loan Agreement, this Deed of Trust or the Note, or any of the Obligations of Grantor or any guarantor under any other instruments or documents now or hereafter delivered in connection with the Loan Agreement or to cure or waive any default or notice of default under the Loan Agreement or any such instruments or documents; or to invalidate any act of Trustee or Beneficiary. 8.7.Costs of Enforcement. If any Event of Default occurs, Beneficiary and Trustee, and each of them, may employ an attorney or attorneys to protect their rights hereunder. Trustor promises to pay to Beneficiary, on demand, the reasonable fees and expenses of such attorneys and all other reasonable costs of enforcing the Obligations secured hereby, including, without limitation, recording fees, the expense of a trustee, sale guarantee, Trustee’s fees and expenses, receivers fees and expenses, and all other reasonable expenses, of whatever kind or nature, incurred by Beneficiary and Trustee, and each of them, in connection with the enforcement of the Obligations secured hereby, whether or not such enforcement includes the filing of a lawsuit. Until paid, such sums shall be secured hereby and shall bear interest at the Agreed Rate. 29 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 8.8.Remedies Cumulative. No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of Trust is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given hereunder or now or hereafter existing at law or in equity. 8.9.No Waiver. (a) No delay or omission of the Beneficiary to exercise any right, power or remedy accruing upon any Event of Default shall exhaust or impair any such right, power or remedy, or shall be construed to be a waiver of any such Event of Default or acquiescence therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary. No consent or waiver, expressed or implied, by the Beneficiary to or any breach by the Trustor in the performance of the Obligations hereunder shall be deemed or construed to be a consent to or waiver of Obligations of the Grantor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or impair any rights, power or remedies consequent on any Event of Default by the Grantor. (b) If the Beneficiary (1) grants forbearance or an extension of time for the payment of any sums secured hereby, (2) takes other or additional security or the payment of any sums secured hereby, (3) waives or does not exercise any right granted in the Loan Agreement, (4) releases any part of the Security from the lien of this Deed of Trust, or otherwise changes any of the terms, covenants, conditions or agreements in the Loan Agreement, (5) consents to the granting of any easement or other right affecting the Security, or (6) makes or consents to any agreement subordinating the lien hereof, any such act or omission shall not release, discharge, modify, change or affect the original liability under this Deed of Trust, or any other obligation of the Grantor or any subsequent purchaser of the Security or any part thereof, or any maker, co- signer, endorser, surety or guarantor (unless expressly released); nor shall any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in any Event of Default then made or of any subsequent Event of Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby. 8.10. Suits to Protect the Security. The Beneficiary shall have power to: (1) institute and maintain such suits and proceedings as it may in its reasonable discretion deem expedient to prevent any impairment of the Security and the rights of the Beneficiary as may be unlawful or any violation of this Deed of Trust, (2) preserve or protect its interest (as described in this Deed of Trust) in the Security, and (3) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the Security thereunder or be prejudicial to the interest of the Beneficiary. 30 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 8.11. Trustee May File Proofs of Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Grantor, its creditors or its property, the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as are necessary in order to have the claims of the Beneficiary allowed in such proceedings and for any additional amount which may become due and payable by the Trustor hereunder after such date. 8.12. Limited Partner Cure Rights. Notwithstanding anything to the contrary in this Deed of Trust, Beneficiary shall give the Limited Partner of Trustor the following notice at the address provided in Section 9.3(b) and cure rights: (a)Beneficiary will give the Limited Partner a copy of any notice (at the Limited Partner's address provided in the Loan Agreement or as otherwise provided by written notice from Trustor to Beneficiary; (b)Beneficiary will give the Limited Partner thirty (30) days after the Limited Partner's receipt of such notice to cure a non-payment of any sum due under this Deed of Trust; (c)Beneficiary will give the Limited Partner sixty (60) days after the Limited Partner's receipt of such notice to cure any other default under this Deed of Trust; (d)If a non-monetary default is incapable of being cured within sixty (60) days, Beneficiary will give the Limited Partner such additional time as is reasonably necessary to cure such default provided the Limited Partner has commenced to cure such default and is diligently proceeding to cure such default through the end of such period; and (e)If the Limited Partner makes any such payment or otherwise cures such default, the Beneficiary will accept such action as curing such default as if such payment or cure were made by Trustor. Section 9. 9.1. MISCELLANEOUS Amendments. This instrument cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by Beneficiary and Trustor. 9.2.Reconveyance by Trustee. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee’s reasonable fees, Trustee shall reconvey, without warranty, the Security to Trustor, or to the person or persons legally entitled thereto. 31 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 9.3.Notices. (a) If at any time after the execution of this Deed of Trust it shall become necessary or convenient for one of the parties hereto to serve any notice, demand or communication upon the other party, such notice, demand or communication shall be in writing and shall be served personally or by depositing the same in the registered United States mail, return receipt requested, postage prepaid and: (1) if intended for Beneficiary shall be addressed to: City of Santa Ana Executive Director (CDA) 20 Civic Center Plaza (M-26) P .0. Box 1988 Santa Ana, California 92702 (2) if intended for Trustors shall be addressed to: During Construction: North Broadway Housing Partners LP c/o 17701 Cowan Ave., Suite 200 Irvine, CA 92614 Attention: Chief Executive Officer Following construction: North Broadway Housing Partners LP c/o Jamboree Housing Corporation 17701 Cowan Ave., Suite 200 Irvine, CA 92614 Attention: Asset Management With a copy to: Rutan & Tucker, LLP 18575 Jamboree Road, 9th Floor Irvine, CA 92612 Attention: Patrick D. McCalla Any notice, demand or communication shall be deemed given, received, made or communicated on the date personal delivery is effected or, if mailed in the manner herein specified, on the delivery date or date delivery is refused by the addressee, as shown on the return receipt. Either party may change its address at any time by giving written notice of such change to Beneficiary or Grantor as the case may be, in the manner provided herein, at least ten (10) days prior to the date such change is desired to be effective. 32 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 9.4.Successors and Joint Trustors. All Obligations of Grantor secured by this Deed of Trust, shall also apply to and bind any permitted transferee or successors in interest. Where the terms of the Deed of Trust have the effect of creating an Obligation of the Grantor and a transferee, such Obligation shall be deemed to be a joint and several Obligation of the Grantor and such transferee. Where Grantor is more than one entity or person, all Obligations of Trustor shall be deemed to be a joint and several Obligation of each and every entity and person comprising Trustor. 9.5.Captions. The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust. 9.6.Invalidity of Certain Provisions. Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or other body of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or partially secured portion of the debt, and all payments made on the debt, whether voluntary or under foreclosure or other enforcement action or procedure, shall be considered to have been first paid or applied to the full payment of that portion of the debt which is not secured or partially secured by the lien of this Deed of Trust. 9.7.Governing Law and Venue. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. In the event of any legal action to enforce or interpret this Deed of Trust, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange County, California, and the parties hereto agree to and do hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394. 9.8.Gender and Number. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter and vice versa, if the context so requires. 9.9.Deed of Trust, Mortgage. Any reference in this Deed of Trust to a mortgage shall also refer to a deed of trust and any reference to a deed of trust shall also refer to a mortgage. 33 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 9.10. Actions. Trustor agrees to appear in and defend any action or proceeding purporting to affect the Security. 9.11. Substitution of Trustee. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the City or counties in which the Security is situated, shall be conclusive proof of proper appointment of the successor trustee. 9.12. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action of proceedings in which Grantor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 9.13. Conflicts. If any term or provision of this Deed of Trust conflicts with any term of provision of the Loan Agreement, the term or provision of the Loan Agreement shall control to the extent of such conflict. 9.14. Statements by Trustor. Trustor shall, at its cost, within ten (10) days after notice thereof from Beneficiary, deliver to Beneficiary a written statement setting forth to the best of its knowledge and information, the amounts then unpaid and secured by this Deed of Trust and stating whether Trustor is aware of any offset or defense against such amounts. 9.15. Beneficiary Statements. For any statement or accounting requested by Grantoror any other entitled person pursuant to Section 2943 or Section 2954 of the California Civil Code or pursuant to any other provision of applicable law, or for any other document or instrument furnished to Grantorby Beneficiary, Beneficiary may charge the maximum amount permitted by law at the time of the request therefor, or if there be no such maximum, then in accordance with Beneficiary’s customary charges therefor or the actual cost to Beneficiary therefor, whichever is greater. 34 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 9.16. Statute of Limitations. Except insofar as now or hereafter prohibited by law, the right to plead, use or assert any statute of limitations as a plea or defense or bar of any kind, or for any purpose, to any debt, demand or obligation secured or to be secured hereby, or to any complaint or other pleading or proceeding filed, instituted or maintained for the purpose of enforcing this Deed of Trust or any rights hereunder, is hereby waived by Grantor. 9.17. Trust Irrevocable; No Offset. The Trust created hereby is irrevocable by Trustor. No offset or claim that Grantornow has or may in the future have against Beneficiary shall relieve Trustor from paying the indebtedness or performing any other Obligation contained herein or secured hereby. 9.18. Corrections. Grantorshall, upon request of Beneficiary, promptly correct any defect, error or omission which may be discovered in the contents hereof or in the execution or acknowledgment hereof, and will execute, acknowledge and deliver such further instruments and do such further acts as may be necessary or as may be reasonably requested by Beneficiary to carry out more effectively the purposes thereof, to subject to, the lien and security interest hereby created any of Grantor’s properties, rights or interests covered or intended to be covered hereby, or to perfect and maintain such lien and security interest. 9.19. Further Assurance. Grantor, Beneficiary and Trustee agree to do or cause to be done such further acts and things and to execute and deliver or to cause to be executed and delivered such additional assignments, agreements, powers and instruments, as any of them may reasonably require to keep valid and effective the charges and liens hereof, to carry into effect the purposes of this Deed of Trust or to better assure and confirm unto any of them their rights, powers and remedies hereunder; and, upon request by Beneficiary, shall supply evidence of fulfillment of each of the covenants herein contained concerning which a request for such evidence has been made. 9.20. Waiver of Jury Trial. Unless prohibited by Federal, State or local laws, each party acknowledges that it is aware of and has had the advice of counsel of its choice with respect to its rights to trial by jury, and each party, for itself and its successors and assigns, does hereby expressly and knowingly waive and release all such rights to trial by jury in any action, proceeding or counterclaim brought by any party hereto against the other (and/or against its officers, directors, employees, agents, or subsidiary or affiliated entities) on or with regard to any matters whatsoever arising out of or in any way connected with this Deed of Trust and/or any claim of injury or damage to the fullest extent permitted by applicable law. 35 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 9.21. Tax Credits. Beneficiary acknowledges that Trustor and the California Tax Credit Allocation Committee have or intend to enter into an extended use agreement pursuant to Section 42(h) of the Internal Revenue Code (“Extended Use Agreement”) which will be recorded against the Property. Beneficiary acknowledges that, in the event of a foreclosure of its interest under this Deed of Trust or delivery by Trustor of a deed in lieu thereof (collectively, a “Foreclosure”), pursuant to Section 42(h)(6)(E)(ii) of the Internal Revenue Code for a period of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated by the Extended Use Agreement, (i) none of the eligible tenants occupying those units at the time of Foreclosure may be evicted or their tenancy terminated (other than for good cause), (ii) nor may the rent of any such eligible tenant be increased except as otherwise permitted under Section 42 of the Internal Revenue Code.. Section 10. WAIVERS 10.1. Waivers and Related Matters. (a) To the fullest extent allowed by law, Grantorhereby waives: (i) presentment, demand, protest, notice of dishonor, notice of protest and all other notices and demands of every kind, and all suretyship defenses of every kind that would otherwise be available in connection with this Deed of Trust, and (ii) all rights of redemption, valuation, appraisement, stay of executive, notice of election to mature or declare due the whole of the Obligation and marshaling in the event of foreclosure of the liens hereby created. (b) Grantorhereby authorizes Beneficiary, at any time and from time to time without notice and without affecting this Deed of Trust in any way, to: (i) accept new or additional instruments, documents, agreements, security or guaranties in connection with all or any part of the Obligations; (ii) accept partial payments on the Obligations; and (iii) waive, release, reconvey, terminate, abandon, subordinate, exchange, substitute, transfer, compound, compromise, liquidate and enforce all or any part of the Obligations and any security or guaranties therefor, and apply any such security and direct the order or manner of sale thereof and bid and purchase at any such sale. (c) Grantorhereby waives any right to require Beneficiary to (i) proceed against any person; (ii) proceed or exhaust any collateral held from any person; or (iii) pursue any other remedy in Beneficiary’s power. Upon the occurrence of any Event of Default, Beneficiary is hereby expressly given the right, at its option, to proceed in the enforcement of this Deed of Trust, independently of any other remedy or security Beneficiary may at any time hold in connection with the Obligations, and Beneficiary shall not in any way be obligated or otherwise required to proceed upon or against and/or exhaust any other security or remedy before proceeding to enforce this Deed of Trust. (d) Grantorhereby waives any defense arising by reason of: (i) any disability or other defense of Trustor or any other person; (ii) the cessation from any cause whatsoever, other than full payment and performance of the Obligations, of the Obligations of Trustor or any other person; or (iii) any act or omission by Beneficiary which directly or indirectly results in or 36 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 aids in the discharge or release of Grantor, or any other person, any Obligation, or any collateral by operation of law or otherwise. The waivers set forth in this Section 10 shall also apply, to the fullest extent permitted by law to all other real and/or personal property of Grantornow or hereafter assigned to Beneficiary as security for the Obligations. Grantorwarrants and agrees that each, of the waivers set forth above are made with Grantor’s full knowledge of their significance and consequences, with the understanding that events giving rise to any defense waived may diminish, destroy or otherwise adversely affect rights which Trustor otherwise may have against Beneficiary or others, or against collateral, and that under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any of the waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective to the maximum extent permitted by law. {signatures on following page} 37 WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 IN WITNESS WHEREOF, Trustor has executed this City Deed of Trust as of the date first written above. TRUSTOR: NORTH BROADWAY HOUSING PARTNERS LP, a California limited partnership By:JHC-North Broadway LLC, a California limited liability company, its managing general partner By:Jamboree Housing Corporation, a California non-profit public benefit corporation, its managing member By: Name: Title: WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 GROUND LESSOR JOINDER THE UNDERSIGNED (“Ground Lessor”) is joining in the execution of this Deed of Trust to evidence the subordination of its fee interest in the Property to the lien of this Deed of Trust, and Ground Lessor’s consent to the Affordability Restrictions on Transfer of Property (“Restrictions”) encumbering all right, title, and interest on the Property; provided that, by accepting delivery of this Deed of Trust, Beneficiary, on behalf of itself and its successors, and assigns and on behalf of all other parties who, pursuant to the terms of this Deed of Trust, shall be entitled to the benefit thereof, shall be deemed to have agreed that: (i) Ground Lessor's execution of this joinder to the Deed of Trust shall not give rise to any personal liability or obligation under any of the Loan Documents on the part of the Ground Lessor, its successors and assigns or any present or future officer, director, employee, trustee, member, agent or advisor of any of the foregoing, and (ii) all notices of default hereunder and under the other Loan Documents to the Trustor shall also be given to the Ground Lessor, and the Ground Lessor shall have the right to cure any such default on the terms and conditions set forth in the applicable Loan Document and Beneficiary shall accept or reject such cure on the same basis as if made by the Trustor. The address for notices to Ground Lessor is: WISEPlace 1411 N. Broadway Santa Ana, CA 92706 Attn: Executive Director Dated: ______, 2023 WISEPlace, a California nonprofit public benefit corporation By: ____________________________ Brateil Aghasi Executive Director WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 EXHIBIT A LEGAL DESCRIPTION WISEPlace Permanent Supportive Housing City HOME-ARP Deed of Trust EXHIBIT 3 All that certain real property situated in the County of Orange, State of California, described as follows: COMMENCING AT THE CENTERLINE INTERSECTION OF 15TH STREET AND SYCAMORE STREET AS SHOWN ON THE RECORD OF SURVEY NO 85-1067, RECORDED IN BOOK 111, PAGE 38, OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, SAID CENTERLINE OF SYCAMORE STREET BEING DESCRIBED IN THAT CERTAIN FINAL JUDGMENT, SUPERIOR COURT CASE NO. 23280, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 8, 1929 IN BOOK 227, PAGE 401 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, CALIFORNIA; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET SOUTH 00° 14' 46” WEST, 90 FEET AND SOUTH 00° 04' 48” EAST, 213.42 FEET TO THE POINT OF BEGINNING; THENCE LEAVING SAID CENTERLINE NORTH 89° 58' 21” WEST, 312.17 FEET TO THE CENTERLINE OF BROADWAY, THENCE NORTHERLY ALONG SAID CENTERLINE OF BROADWAY NORTH 00° 16' 10” EAST, 75.00 FEET TO THE SOUTHWEST CORNER OF THE LAND DESCRIBED IN A DEED TO T. J. MULLINIX RECORDED OCTOBER 29, 1897 IN BOOK 33, PAGE 197 OF DEEDS OF SAID ORANGE COUNTY; THENCE EASTERLY ALONG SAID SOUTHERLY LINE OF SAID DEED TO T. J. MULLINIX SOUTH 89° 58' 10” EAST, 181.72 FEET TO THE WESTERLY LINE OF THE EAST 130.00 FEET OF THAT PORTION OF THE LAND ALLOTTED TO JACOB ROSS, AS DESCRIBED IN THE FINAL DECREE OF PARTITION OF THE RANCHO SANTIAGO DE SANTA ANA, WHICH WAS ENTERED SEPTEMBER 12, 1869 IN BOOK “B”, PAGE 410 OF JUDGMENTS OF THE DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND FOR LOS ANGELES COUNTY, CALIFORNIA; THENCE NORTHERLY, ALONG SAID WESTERLY LINE NORTH 00° 04' 48” WEST, 77.08 FEET; THENCE SOUTH 89°58'10” EAST, 130.00 FEET TO THE ABOVE MENTIONED CENTERLINE OF SYCAMORE STREET; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET, SOUTH 00°04'48” EAST, 152.06 FEET TO THE POINT OF BEGINNING. SAID LAND IS SHOWN AS LOT 1 ON VOLUNTARY LOT MERGER NO. 2022-06 RECORDED JANUARY 26, 2023 AS INSTRUMENT NO. 2023000018589, OFFICIAL RECORDS OF SAID COUNTY. Assessor’s Parcel Number: 398-523-04 EXHIBIT 3 Exhibit E: City/HOME-ARP Loan Note EXHIBIT 3 CITY HOME-ARP LOAN NOTE SECURED BY SUBORDINATED DEED OF TRUST TO THE CITY OF SANTA ANA, CALIFORNIA (1411 North Broadway, Santa Ana, California (APN 398-523-04)) $5,256,327 [March 7], 2023 Santa Ana, California 1.PRINCIPAL AMOUNT OF LOAN. For value received, NORTH BROADWAY 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, 6th Floor, Santa Ana, California 92701, 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 FIVE MILLION, TWO HUNDRED AND FIFTY SIX THOUSAND, THREE HUNDRED AND TWENTY SEVEN DOLLARS AND NO CENTS ($5,256,327.00) or so much thereof as shall be disbursed hereunder, with three percent (3%) simple interest per annum and commencing from the date of issuance of the Certificate of Completion. City and Borrower have heretofore entered into that certain Loan Agreement dated concurrently herewith (the "Loan Agreement"), pertaining to the construction of certain real property described in the Loan Agreement as the "Property," commonly known as 1411 North Broadway, Santa Ana, California (APN 398-523-04), and the operation of the Property as affordable housing for Extremely-Low Income Households, and, with respect to the HOME-ARP Units, HOME-ARP Qualifying Populations. This City HOME-ARP Loan Note (the “Note”) is made pursuant to, entitled to the benefits of and referred to as the City/HOME-ARP Loan Note in the Loan Agreement; that certain “Affordability Restrictions on Transfer of Property” between Borrower and City, dated on or about the date hereof; and that certain Subordinated City/HOME-ARP Deed of Trust and Assignment of Leases and Rents by Borrower for the benefit of City, dated on or about the date hereof (the "City Deed of Trust"). This Note, the Loan Agreement, the City Deed of Trust and the Affordability Restrictions on Transfer of Property are sometimes collectively referred to herein as the "Loan Documents." The Loan Documents and the rights and responsibilities thereto inure to the benefit of the City. Any capitalized term that is not otherwise defined herein shall have the meaning ascribed to such term in the Loan Agreement. 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 Loan" shall mean the loan evidenced by this Note. 1 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 "City’s Percentage" with reference to the Residual Receipts, shall mean 28.45% of the total Residual Receipts from the Property, as further described in Section 5 hereof. “Calendar Year” means each consecutive twelve (12) month period from January 1 to December 31. "Closing Costs" shall mean: (i)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 marketplace, 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. (ii)In the case of a Refinancing, the reasonable and necessary costs of consummating such Refinancing, including, without limitation, loan fees, loan repayment charges, costs of title insurance premiums, escrow fees, recording fees, attorneys' fees and costs of Lender required repairs or reserves. “CPI” means United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index of Urban Wage Earners and Clerical Workers, Subgroup “All Items,” for the Los Angeles-Riverside-Orange County area, 1982-84 = 100, or successor or equivalent index in case such index is no longer published. "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 payments from leased and/or subleased spaces, governmental assistance housing payments or other operating subsidies, 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 does not include any insurance proceeds other than 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 to the extent interest is released from the Project Accounts. Gross Revenues do not include the proceeds of any loans or capital contributions made to Borrower, Refinancing Proceeds or Sale Proceeds. “Ground Lease” shall mean the lease between the WISEPlace, a California nonprofit corporation (“WISEPlace”), and North Broadway Housing Partners, LP, a California limited partnership, dated on or about the same date hereof. “Ground Lessor” shall mean WISEPlace. 2 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 “Interest” shall mean that the Note shall bear simple interest at the rate of Three percent (3%) per annum, from the date of issuance of the Certificate of Completion. “Operating Expenses” shall mean the sum of the following: (a)payments of principal and interest on or with respect to the Senior Loan(s); (b)payments of any other amounts on or with respect to the Senior Loan(s) beyond principal and interest (i.e. optional payments) as approved by the City; (c) a property management fee no greater than sixty-five dollars ($65)/per unit/per year, increased annually by the lesser of: (i) three percent (3%); or (ii) prior Year CPI, beginning the year following the issuance of the first certificate of occupancy for the Project; (d)Partnership related fees that are actually incurred and are reasonable and customary to the partners of Borrower for similar projects in Southern California, and which may include: (i) the partnership management fee payable to the Administrative General Partner and/or Managing General Partner not to exceed twenty thousand dollars ($20,000) per operating year and escalating at three percent (3%) per operating year; and (ii) a limited partner asset management fee of seven thousand five hundred dollars ($7,500) per year, escalating at (A) three percent (3%) per operating year; (e)Deposits into required reserves required by any lender or Borrower’s Partnership Agreement; (f)all other actual, reasonable cash operating costs and expenses, calculated on an annual basis, that are directly attributable to managing and operating the Property and the Borrower, 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: (i)Depreciation, amortization, and accrued principal and interest expenses on deferred payment debt and capital improvement expenditures shall not be considered Operating Expenses, except as otherwise provided herein. (g)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; 3 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 (h)Any other expenses necessary to meet Senior Lender requirements and requirements of Borrower’s Limited Partner, or its assignee, as set forth in the Partnership Agreement, including, without limitation, repayment of any loans to the Borrower by a partner or tax credit recapture or deficiency payments; (i)Deferred developer fees; and (j)The cost of social services and other housing supportive services provided at the Project consistent with the Developer’s approved Application to TCAC for the Project. The Executive Director reserves the right to at any time review and approve each or any annual budget during the Term hereof, and any changes to any said annual budget reasonably requested by Director shall be promptly implemented by Borrower. Notwithstanding the foregoing, in no event shall Operating Expenses include any costs, fees, fines, charges, penalties, awards, judgments or expenses (including, but not limited to legal and accounting fees and expenses) that are due to or arising out of the Borrower’s: (a) breach or default of this Note, any Loan Document or any Senior Loan Document; (b) fraudulent acts or willful misconduct; or (c) breach or default under any other contract, lease or agreement pertaining to the Project. "Project" shall mean the possession of a leasehold interest and construction of the Property by Borrower pursuant to the Loan Agreement. "Property" shall mean the real property located at 1411 North Broadway, Santa Ana, California (APN 398-523-04) described in the City Deed of Trust. "Refinancing" shall mean changing the then existing financing on the Property by, without limitation, modifying final maturity date of an existing Senior Loan, increasing the stated maximum principal amount of an existing Senior Loan, paying off an existing Senior Loan in full and obtaining a new Senior Loan. "Refinancing Proceeds" shall be 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 from the Property, applicable to each such year to the extent not already deducted as an Operating Expense. "Sale" shall mean any transfer, assignment, conveyance or lease (other than (a) to a tenant for occupancy, (b) a transaction set forth in Section 11.3 hereof, and (c) a Permitted Transfer as such term is defined in Section 9.13 of the Loan Agreement) of the Borrower’s leasehold interest in the Property or any portion thereof, or any interest therein by the Borrower, and includes any transfer, assignment or sale of any partnership interest in the Borrower by an individual or entity which is a General Partner in the Borrower, or any interest by any individual or entity which holds an interest in any such General Partner in the Borrower, which brings the cumulative total of all such direct and indirect transfers, assignments and sales by a General Partner during the term of this Note to more than forty- 4 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 nine percent (49%) of the ownership interests in the Borrower, and any such transfer, assignment or sale of a direct or indirect general 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, nor transfers of Limited Partnership interests or transfers of General Partner interests caused by the removal of the General Partner pursuant to the terms of the Partnership Agreement. "Sale Proceeds" shall be as set forth in Section 8 hereof. "Senior Loan" shall mean the senior loan being made by Bank of America, N.A., concurrent to the City Loan for payment of a portion of the construction costs, and shall include any other loan recorded senior in priority to this City Loan as approved by the City. "Syndication” shall mean the application for and obtaining by Developer or any successor or assign of Developer of a new allocation of federal and/or state low income housing tax credits for the Project; this term excludes the reservation of Tax Credits for this Project described and defined as part of the original financing of the Project under the Loan Agreement. "Term" the term for repayment of this Note shall mean fifty-five (55) years from the Certificate of Completion. 3.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.OPERATING CAPITAL IMPROVEMENT LOAN. If the replacement reserve account (“reserves”) is depleted due to unforeseen repairs and the General Partner(s) makes a loan to the Borrower, the reserves must be fully funded to the balance of the reserve prior to disbursement for such unforeseen repairs prior to repayment of said loan. Such loan shall be repaid with net cash flow prior to the Residual Receipt split. The outstanding loan balance will be reflected in the annual report. 5.ANNUAL LOAN REPAYMENT. 5.1. After any deferred developer fee has been paid, as set forth hereinabove, the Borrower shall thereafter make a loan payment to the City annually, in the amount of the lesser of the outstanding balance due under this Note, plus any accrued interest thereon, or the City’s Percentage of the Residual Receipts, as provided in this Section 5. 5.2.Within one hundred twenty (120) days after the year in which the construction of the Project is completed, and on or before the 120th day of each Calendar Year thereafter, the Borrower shall submit to the City a detailed statement of Gross 5 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 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 Loan payment then due. 5.3.Except as otherwise provided in Section 4, the Borrower shall pay to the City the City’s Percentage of the Residual Receipts as payment of principal and interest under this Note. The Borrower shall pay 8.12% of the Residual Receipts to the County and 13.43% of the Residual Receipts to the Orange County Housing Finance Trust. The remaining amount of the Residual Receipts shall remain with the Borrower to be used by Borrower in accordance with the terms of the Partnership Agreement, including, without limitation, for distribution to the partners of the Borrower. 5.4.The Residual Receipts payment shall be made not later than one hundred fifty (150) days after the close of the Calendar Year. Such payment shall be applied first to the payment of all expenses, charges, costs and fees incurred by or payable to City by Borrower pursuant to the terms of the Loan Documents; second to any accrued but unpaid interest, if any; and third, to reduce the principal balance of the City Loan. Notwithstanding anything to the contrary contained herein, after the occurrence and during the continuation of an Event of Default (as such term is defined in the Loan Agreement), all amounts received by City from any party shall be applied in such order as City, in its sole discretion, may elect. 6.RESERVED. 7.LOAN REPAYMENT FROM NET REFINANCING PROCEEDS/NET SYNDICATION PROCEEDS. The Borrower shall make a payment to the City from every approved Refinancing or Syndication 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 (28.45%) of the Net Refinancing Proceeds / Net Syndication Proceeds (if any). The “Net Refinancing Proceeds” shall be defined as the proceeds from the refinancing of any loan approved by the City as stipulated in the Loan Agreement, net of all of the following: the amount of the financing which is satisfied out of such proceeds, closing costs, costs to rehabilitate the Project, including the costs necessary to obtain refinancing proceeds (such as consultant, legal and other consultant costs), payments toward the Senior Loan required by the Senior Lender, payment of outstanding deferred developer fee, required reserve deposits, repayment of any General Partner loans to the Borrower, the soft costs related to the rehabilitation of the Project (such as architecture, engineering and other consultant costs, and all required relocation costs), and all hard costs of the rehabilitation, all of which have been reviewed and reasonably approved by the City. The “Net Syndication Proceeds” shall be defined as the syndication proceeds net of final Project hard and soft construction costs, including developer fee, based on a cost certification completed at the end of construction, and syndication costs all of which has been reviewed and reasonably approved by the City. 6 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 Such payment shall be due within 30 days of the date of such Refinancing or Syndication, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the City Loan. The City shall not be required to reconvey the lien of the City Deed of Trust if Net Refinancing/Net Syndication Proceeds are insufficient to repay the City Loan in full. 8.LOAN REPAYMENT FROM SALE PROCEEDS. The Borrower shall make a payment, not to exceed (i) the outstanding balance of principal and interest on this Note to the City from any approved sale or disposition of the leasehold interest as set forth in the Ground Lease that occurs during the term of the City Loan, to the extent of the City’s Percentage of the Sale Proceeds, as follows. The Sale Proceeds shall be calculated as follows: gross sale proceeds are applied first to pay Closing Costs, next to pay in full all amounts owing on any approved Senior Loan; next to pay any deferred developer fee, next the Borrower shall pay to the City the City’s Percentage of the then remaining unapplied Sale Proceeds, not to exceed the outstanding balance of principal and interest on this Note. 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 Loan. The City shall not be required to reconvey the lien of the City Deed of Trust if Sale Proceeds are insufficient to repay the City Loan in full. 9.RIGHT OF FIRST REFUSAL. The Borrower shall grant to the City a right of first refusal (subject to any purchase option and/or right for first refusal granted to one or more of the General Partner(s) of the Borrower and any rights of the Tax Credit Investor under the Partnership Agreement) (the “City Right of First Refusal”) to acquire the leasehold interest in the Property if Borrower desires to transfer the Borrower’s interest in the Property to an entity that is not affiliated with one or more of Borrower’s General Partners or any member of the Managing General Partner. The City Right of First Refusal shall be in form and substance reasonably acceptable to the City, shall comply with all applicable Tax Credit requirements (including, without limitation, Section 42(i)(7) of the Internal Revenue Code, as amended) and shall, at minimum, include that the purchase price will not be less than the amount of any bona fide third party offer received by Borrower. The City Right of First Refusal is hereby subordinated to the Senior Loan Deed of Trust and the other Senior Loan Documents. Senior Lender is hereby made a third party beneficiary of the immediately preceding sentence, and such sentence shall not be amended or deleted without Senior Lender’s prior written consent. 10.ACCELERATED LOAN PAYMENT. 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 City’s Percentage of the Sale 7 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 Proceeds are insufficient to repay in full the City Loan, the City approves such sale and the purchaser assumes the balance of the City Loan in accordance with the terms of this Note; or (ii) in the case of a Refinancing in which the City’s Percentage of the Refinancing Proceeds are insufficient to repay in full the City Loan, the City approves such Refinancing and the Borrower remains obligated pursuant to the terms of this Note; (b)if an Event of Default occurs pursuant to Section 16 hereof which remains uncured after the expiration of all applicable notice and cure periods; or (c)The date that is fifty-five (55) years after the date of execution of the Certificate of Completion. 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. In the event of prepayment by Borrower, the Loan Agreement (only with respect to any continuing obligations of Borrower that survive repayment in full of the City Loan) and the Affordability Restrictions on Transfer of Property shall remain intact, and shall be unaffected by the prepayment of this Note by the Borrower. 12.LAWFUL MONEY. Principal and interest are payable in lawful money of the United States of America. APPLICATION OF PAYMENTS; LATE CHARGES.13. (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 thirty (30) 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 twelve percent (12%) per annum, or the maximum amount allowed by law, whichever is less, 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 provisions. A certificate of the City setting forth the basis for the 8 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 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 corrected by Borrower notice to City within ten (10) days of receipt of such certificate from City. 14. SECURITY. This Note is secured by the City Deed of Trust. 15.ACCELERATION BY REASON OF TRANSFER OR FINANCING. 15.1. In order to induce City to make the City Loan evidenced hereby, Borrower agrees that in the event of any transfer of the leasehold interest in the Property without the prior written consent of City (other than a Permitted Transfer as defined in Section 9.13 of the Loan Agreement, or a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure, by the holder of the Senior Loan Deed of Trust), City shall have the absolute right at its option, upon at least 30 days’ prior written notice to Borrower, to declare all sums secured hereby immediately due and payable. Where consent is required, 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 and absolute 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 release Borrower from all liability thereunder from and after the date of such assumption. 15.2. As used herein, "transfer" includes the Sale, agreement to sell, transfer or conveyance of the leasehold interest in the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property, or the lease of all or substantially all of the Property. 'Transfer' shall not include the leasing of individual residential units on the Property, so long as Borrower complies with the provisions of the Loan Agreement and the affordable housing restrictions relating to such leasing activity, nor shall it include a conveyance of the Property to a limited partnership in which a General Partner of Borrower or an affiliate of a General Partner of Borrower is a general partner, or to a corporation that is wholly owned by the Borrower or a General Partner of Borrower or an affiliate of the General Partner of Borrower and that is formed for the sole purpose of owning and operating the Property, or the sale back to the Borrower. In the event of any Refinancing or partial Refinancing in an amount which results in Net Refinancing Proceeds, 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 Loan together with all accrued and unpaid interest, shall be repaid to the City at the time of each such Refinancing or partial Refinancing. 15.3. For the avoidance of doubt, a "transfer” shall not include (i) a transfer of any General Partner’s interest in Borrower 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 9 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 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 within a reasonable period and thereafter diligently proceeds to complete such substitution; (ii) any transfer of the Property to the Managing General Partner of Borrower pursuant to the right of first refusal or to the General Partners of Borrower pursuant to the purchase option, as provided for in the Partnership Agreement; (iii) any transfer of the Limited Partner’s interest in accordance with the Partnership Agreement; and (iv) any sale, transfer or other disposition of an interest in a Limited Partner of the Borrower. 16.EVENT OF DEFAULT. Subject to the provisions 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, and if such default is not made good within the earlier of fifteen (15) days of written notice to Borrower of such default or thirty (30) days after such payment was due; or (b) failure by Borrower to perform any covenant or agreement in the City Deed of Trust, the Loan Agreement, or the Affordability Restrictions on Transfer of Property 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). 17.CURE BY LIMITED PARTNER. The City acknowledges that the Limited Partner of Borrower shall have the right, but not the obligation to cure any default hereunder. Any cure made or tendered by such Limited Partner shall be accepted as if made by Borrower. 18.REMEDIES. Upon the occurrence and during the continuance 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-ARP 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 City may foreclose on the City /HOME-ARP Deed of Trust. City shall also deposit with Trustee the City HOME-ARP Deed of Trust, this Note and all documents evidencing expenditures secured thereby and evidenced hereby. 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. 10 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 19.ATTORNEYS' FEES. If this City 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, whether or not any action or proceeding is brought to enforce the provisions hereof. 20.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. 21.CALCULATION OF INTEREST. Interest hereunder shall be calculated on the basis of a three hundred sixty (360) day year consisting of twelve (12) months of thirty (30) days each, except that interest due and payable for a period less than a full month shall be calculated by dividing (a) the product of (i) the actual number of days elapsed in such period, (ii) the outstanding principal balance hereunder during that period and (iii) the Note interest rate in effect hereunder during that period by (b) 360. 22.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. 23.NON-RECOURSE. The City Loan is a nonrecourse obligation of the Borrower. Neither Borrower nor any other party, including Borrower’s partners, shall have any personal liability for repayment of the City Loan or for any other amounts under any of the documentation evidencing, securing or describing the City Loan. The sole recourse of City under this Note and the City/HOME-ARP Deed of Trust for repayment of the City Loan and for such other amounts arising therefrom shall be the exercise of its rights against the Property and related security thereunder. 24.SUBORDINATION. Any agreement by the City to subordinate the City Deed of Trust and/or Affordability Restrictions on Transfer of Property to an encumbrance securing and/or evidencing a loan that will be senior to the City Deed of Trust (“Proposed Senior Loan”), will be subject to the satisfaction of each of the following conditions: 11 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 1. All of the proceeds of the Proposed Senior Loan, less any transaction costs, are used to provide acquisition, construction and/or permanent financing for the Project, or any combination thereof; 2. The lender of a Proposed Senior Loan (each a "Senior Lender") must be a state or federally chartered financial institution, a nonprofit corporation or a public entity that is not affiliated with Borrower; 3. Borrower demonstrates to the City's reasonable satisfaction that subordination of the City Deed of Trust and/or Affordability Restrictions on Transfer of Property is necessary to secure adequate acquisition, construction and/or permanent financing to ensure the viability of the Project, including the operation of the Project as affordable housing, as required by the Loan Documents. To satisfy this requirement, Borrower must provide to the City, in addition to any other information reasonably required by the City, evidence demonstrating that the proposed amount of the Senior Loan is necessary to provide adequate construction and/or permanent financing to ensure the viability of the Project, and adequate financing for the Project would not be available without the proposed subordination; 4. The subordination agreement(s) is structured to minimize the risk that the City Deed of Trust and/or Affordability Restrictions on Transfer of Property will be extinguished as a result of a foreclosure by a Senior Lender or other holder of a Proposed Senior Loan. To satisfy this requirement, the subordination agreement must provide the City with adequate rights to cure any defaults by Borrower, including: (i) providing the City or its successor with copies of any notices of default at the same time and in the same manner as provided to Borrower; and (ii) providing the City with a cure period of at least sixty (60) days to cure any default; 5. The subordination(s) of the City Loan is effective only during the original term of the Proposed Senior Loan and any extension of its term that is approved in writing by the City; 6. No subordination may limit the effect of the City Deed of Trust and/or the Affordability Restrictions on Transfer of Property before a foreclosure, nor require the consent of the Proposed Senior Lender prior to the City exercising any remedies available to the City under the Loan Documents; and 7. Upon a determination by the City Executive Director that the conditions in this Section have been satisfied, the Executive Director or his/her designee, will be authorized to execute the approved subordination agreement without the necessity of any further action or approval by the City Council. Execution of any subordination agreement will evidence and constitute the determination of the City that all requirements of this Section have been satisfied or waived. 12 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 Notwithstanding anything to the contrary contained in the Loan Documents, with prior 30-days written notice to City, Borrower may refinance an existing senior loan with a non-profit, commercial, governmental or institutional lender without the prior consent of the City (“Refinanced Senior Indebtedness”), and the City hereby agrees to subordinate the lien of its Deed of Trust (but not the Affordability Restrictions on Transfer of Property) to the Refinanced Senior Indebtedness and the lien of any deed of trust or mortgage securing the Refinanced Senior Indebtedness, provided that the principal balance of the Refinanced Senior Indebtedness does not result in Net Refinancing Proceeds. 25. 26. 27. RESERVED. RESERVED. FORCE MAJEURE. 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. 28.ASSIGNMENTS. The City, and the assignee of the City, shall have the right to assign this Note and the City 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. {signatures on following page} 13 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 This Note is hereby agreed to and executed on the date first set forth above. “BORROWER” NORTH BROADWAY HOUSING PARTNERS LP, a California limited partnership By:JHC-North Broadway LLC, a California limited liability company, its managing general partner By:Jamboree Housing Corporation, a California non-profit public benefit corporation, its managing member By: Name: Title: 14 WISEPlace Permanent Supportive Housing City HOME-ARP Loan Note EXHIBIT 3 Exhibit F: Affordability Restrictions on Transfer of Property EXHIBIT 3 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council SPACE ABOVE THIS LINE FOR RECORDING USE FREE RECORDING REQUESTED [Government Code Section 6103] AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (1411 North Broadway, Santa Ana, California (APN 398-523-04) THESE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (the “Restrictions”) are entered into as of March 7, 2023, by and between North Broadway Housing Partners LP, a California limited partnership (“Developer”), and the City of Santa Ana, a charter city and municipal corporation (“City”), with WISEPlace, a California nonprofit public benefit corporation (“WISEPlace”), joining in the restrictions. RECITALS: A.WISEPlace is the owner of fee simple title to certain property located at 1411 North Broadway (APN 398-523-04), in the City of Santa Ana, totaling approximately 0.60 acres of land area (“the Property”). WISEPlace intends to ground lease the Property to the Developer (the “Ground Lease”) for sixty-five (65) years from the Commencement Date of the Ground Lease. The Property is located in the City of Santa Ana, more particularly described in Exhibit A, which is attached hereto and incorporated herein by this reference. WISEPlace is executing a joinder to these Affordability Restrictions on Transfer of Property to encumber its fee interests with the covenants contained herein. B.The Developer is a limited partnership, whose sole general partner is JHC-North Broadway LLC, a California limited liability company (the General Partner”). WISEPlace and Jamboree Housing Corporation, a California non-profit public benefit corporation (“JHC”), are the sole members of the General Partner. The Developer will adaptively reuse one existing building on the Property and construct, own and operate an additional building on the Property to accommodate a forty-eight (48) unit multifamily affordable housing project (“Project”). C.The Developer and the City have entered into that certain City/HOME-ARP Loan Agreement, dated on or about the date hereof (“Loan Agreement”), for the purpose of 1 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 making the City/HOME ARP Loan (“Loan”) and providing for the development of forty- seven (47) units of housing that will be affordable to Extremely Low Income Households (“Restricted Units”), with one un-restricted unit reserved for an on-site manager, to which these Restrictions are attached as Exhibit F (any capitalized term that is not otherwise defined in these Restrictions shall have the meaning ascribed to such term in the Loan Agreement). D.During the twenty (20) year HOME-ARP Compliance Period, sixteen (16) of the Restricted Units will be designated as HOME-ARP Units. The HOME-ARP Units will be rented to HOME-ARP Qualifying Populations as set forth in Housing and Urban Development (“HUD”) Community Planning and Development (CPD) Notice: CPD-21- 10 (the “HOME-ARP Notice”). E.The Loan Agreement provides, among other things, for the use of the Property for affordable housing with all Restricted Units being restricted to Extremely Low Income Households, at Affordable Rent(s), as well as the requirements imposed by the HOME- ARP Notice for the HOME-ARP Units, with a preference for individuals and families who are chronically homeless. F.The Loan Agreement contains certain provisions relating to the use of the Property. NOW, THEREFORE, CITY AND DEVELOPER COVENANT AND AGREE AS FOLLOWS: 1.Developer covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof) that Developer, such successors, and such assigns shall use the Property exclusively to provide affordable housing to Extremely Low Income Households, as provided in these Restrictions and in the Loan Agreement. 2.Developer covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof) that during the HOME-ARP Compliance Period the HOME-ARP Units will be leased to a HOME-ARP Qualifying Population as provided in these Restrictions, the Loan Agreement and the HOME-ARP Notice. 3.Developer, for itself and its successors and assigns, hereby covenants and agrees that all of the apartments in the Property (less one manager’s unit) (the “Units”) shall be rented exclusively, at Affordable Rent, to Extremely Low Income Households to the extent provided for herein, except to the extent a different eligibility or rent is required for HOME- ARP Units. Area median income levels and Affordable Rents are subject to adjustment from time to time as provided in Section 3 below. 2 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 4.DEFINITIONS “Affordable Rent” means monthly rent that does not exceed the amounts set forth in Section 5.2 of these Restrictions. “City Restriction Period” means a period of fifty-five (55) years after the date on which the Certificate of Completion is issued. “Chronically Homeless” means an individual or family who meets the definition of “chronically homeless” under HUD regulations and guidance, including 24 C.F.R. § 578.3. “Extremely Low Income” means an adjusted income that does not exceed thirty percent (30%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD. “Extremely Low Income Household” means an individual or family whose income qualifies as Extremely Low Income, adjusted for household size, as published by HUD. “HOME-ARP Compliance Period” means a period of twenty (20) years from the issuance of the Certificate of Completion, unless a shorter period is required by HUD or the HOME-ARP Program. “HOME-ARP Program” means the program established with the HOME- American Rescue Plan (HOME-ARP) funds from the United States Department of Housing and Urban Development ("HUD") under the Section 3205 of the American Rescue Plan Act of 2021 (P.L. 117-2)) (“ARP) to be implemented through the HOME Investment Partnerships Program (the "HOME Program") (42 U.S.C. §12701, et seq.,) and governed in accordance with applicable statutory requirements, regulations, and guidance, including but not limited to HUD Notice CPD-21-10 (the “HOME-ARP Notice”) and the HOME Regulations (24 CFR Part 92). “HOME-ARP Qualifying Populations” means any individual or family who meets the eligibility criteria of a “qualifying population” of the HOME-ARP Program. “HOME-ARP Units" the sixteen (16) units assisted under the HOME-ARP Program and subject to the HOME-ARP Compliance Period. “Limited Partner” means, collectively, the investor limited partner and special limited partner of the Developer, and their respective successors and assigns. “Low HOME Rent” means rent that does not exceed thirty percent (30%) of the adjusted income of a household whose annual income is equal to or less than fifty percent (50%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD for the HOME-ARP rent limits. 3 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 “Restricted Units” means the forty-seven (47) units restricted to Extremely Low Income Households during the City Restriction Period, which includes the sixteen (16) HOME-ARP Units assisted under the HOME-ARP Program and available for rental to HOME-ARP Qualifying Populations during the HOME-ARP Compliance Period. “Very Low Income” means an adjusted income that does not exceed fifty percent (50%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD. “Very Low Income Household” means an individual or family whose annual income qualifies as Very Low Income, adjusted for household size, as published by HUD. 5.AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY 5.1.Use Covenants and Restrictions. (a) Developer agrees and covenants, which covenants shall run with the land and bind Developer, its successors, its assigns and every successor in interest to the Property, that all Restricted Units on the Property will be made available for rent as follows: (i)Except as set forth in sub-paragraph (ii) of this Section 5.1(a), the Restricted Units shall be rented to Extremely Low Income Households for the City Restriction Period. (ii)During the HOME-ARP Compliance Period, all HOME- ARP Units must be rented to a HOME-ARP Qualifying Population as allowed by the HOME-ARP Program. After the HOME-ARP Compliance Period expires, all Units shall be restricted under sub-paragraph (i) of this Section 5.1(a). (b)The HOME-ARP Units shall be studio units, with comparable amenities to the other Restricted Units. The HOME-ARP Units shall be initially distributed throughout the complex, but thereafter shall be allowed to “float” . (c)It is anticipated that during the Term of Agreement the Project will be supported by Project-Based Section 8 rental subsidy payments provided by the Housing Authority of the City of Santa Ana (“Housing Authority”) for not less than twenty-five (25) of the Restricted Units (the “PBV Rental Subsidy”), and the HOME- ARP Subsidy Reserve will be utilized to cover operating deficits associated with the sixteen (16) HOME-ARP Units. To the extent allowed by the HOME-ARP Program, the HOME-ARP Subsidy Reserve cannot be used for HOME-ARP Qualifying Households with project-based vouchers or project-based rental assistance (but may be used for HOME-ARP Qualifying Households with tenant based rental assistance). The PBV Rental Subsidy may not be placed on any HOME-ARP Unit. (d)The Developer shall establish a preference for renting Restricted 4 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 Units to individuals and families who qualify as Chronically Homeless in accordance with Section 7.5, provided, however that any preference applicable to the HOME-ARP Units must comply with the HOME-ARP Program. (e)Rental increases in the Restricted Units shall be subject to and in conformance with federal, state law, and local law. (f)Maximum Occupancy for Restricted Units will be three persons per studio unit. (g)For all Restricted Units, Developer must have a written lease between tenant and owner for a period of at least one year, unless a shorter period is mutually agreed upon. All leases must be consistent with the applicable laws and regulations, including the HOME-ARP Program for the HOME-ARP Units. 5.2.Affordability Levels/Unit Mix: (a)All Restricted Units in the Property will be studios, except the one (1) manager unit will be a 2-bedroom unit reserved for the on-site manager. (b)Except as set forth in sub-paragraph (c) of this Section 5.2, the allowable rent for the Restricted Units in the Project shall not exceed the Affordable Rent for an Extremely Low Income Household as follows: 30% TCAC AMI Unit Size No. Units 47 Current Rent $711Studio Total 47 The remaining unit will be an un-restricted 2-bedroom unit reserved for the onsite manager. (c) During the HOME-ARP Compliance Period, the allowable rent for HOME-ARP Units in the Project shall not exceed the lesser of: (a) 30% of the tenant’s actual household income (inclusive of Supplemental Security Income (SSI) / State Supplementary Payment (SSP) payments); or (b) the Low HOME Rent in accordance with the HOME-ARP Program. The number of HOME-ARP Units and allowable rent shall be as follows: HOME-ARP Units # of HOME- ARP Units HOME-ARP Restriction Maximum Allowable Rent HOME-ARP Qualifying Population 16 Studio Units Low HOME Rent 5 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 (i)At the time of project completion, the Developer shall provide to the City the address and/or unit number of each of the units initially designated as the HOME-ARP Units. (ii) Annually with the financial statements, the Developer shall provide an annual report of rents and occupancy of all Restricted Units, including the HOME-ARP Units, to verify compliance with affordability requirements. For the HOME-ARP Units, information on unit substitution and filling vacancies shall be provided to ensure that the project maintains the required unit mix. (d)The Affordable Rents charged at the Project must comply with the standards set forth by TCAC as defined in this Affordability Restrictions on Transfer of Property, except that during the HOME-ARP Compliance Period, and if allowed by the HOME-ARP Program, the Affordable Rents for the HOME-ARP Units must comply with the most stringent of standards set forth by the HOME-ARP Program and TCAC. (e)At the time of this Agreement, the Project will pay for all utilities with no tenants being charged for utilities. If tenants are charged for utilities at any time during the term of this Agreement, a utility allowance must be deducted from the maximum affordable rent charged at the Project for each unit. With respect to the HOME-ARP Units, utility allowances must be based on project-specific allowances. (f)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. 5.3.Rent Increases. On an annual basis, the City shall provide Developer with the maximum allowable schedule of rents for the Property in accordance with changes in allowable rent and income tables published by HUD and TCAC, provided however that the rent for the HOME-ARP Units shall in no event be higher than the rent for the equivalent non-HOME-ARP Unit within the Project. In no event can Developer charge any tenant more than such amount. All rent increases on the Restricted Units are subject to City approval pursuant to the terms of this Section. No later than sixty (60) days prior to the proposed implementation of any rent increase, Developer shall submit to the City a schedule of any proposed increase in the rent. The City will disapprove a rent increase if it does not comply with the restrictions set forth in Section 5.2 above. (a)Termination of Tenancy. Developer may not terminate the tenancy or refuse to renew the lease of any tenant except for serious or repeated violation of the terms and conditions of the Lease; for violation of applicable federal, state, or local law; for completion of the transitional housing tenancy period (if the housing is transitional); or for other good cause. Any termination or refusal to renew must be preceded by not less than thirty (30) days by the Developer’s service upon the tenant of a written notice specifying the grounds for the action. 6 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 (b)Non-Qualifying Adjusted Income. Subject to the applicable requirements and provisions of, and changes to, the HOME-ARP Program, and Section 42 and 142(d) of the Internal Revenue Code of 1986, as amended (the “Code”), if, upon recertification of the income of a tenant of a Restricted Unit, the Developer determines that a tenant has an adjusted income exceeding 30% of the applicable Median Income for the Area in each case, adjusted for household size as provided in Section 5.2 above, such tenant may be permitted to continue to occupy the Restricted Unit at the rental rate as provided for in Section 5.2 above, until the tenant chooses to vacate the Restricted Unit. After the Restricted Unit is vacated, the Restricted Unit shall be re-rented to a tenant pursuant to the terms, covenants and conditions of these Restrictions. 5.4.Maintaining Financial Stability. It is anticipated that during a portion of the Term of Agreement the Project will be supported by a PBV Rental Subsidy for not less than twenty-five (25) of the Restricted Units, and the HOME-ARP Subsidy Reserve for the sixteen (16) HOME-ARP Units. These subsidies will not overlap on the same units. If, during the Term of Agreement and through no fault of Developer, (a) the HOME-ARP Subsidy Reserve is depleted, (b) there is a reduction, termination or nonrenewal of the PBV Rental Subsidy, or (c) the Project generates insufficient income to cover its operating costs, required deposits to replacement reserves, and debt service on approved financing as shown on the Operating Budget, and as is necessary to maintain the financial stability of the Project, with the exception of the HOME-ARP Units during the HOME-ARP Compliance Period, Developer may request approval of the City (a) to allow households with adjusted incomes that do not exceed sixty percent (60%) of AMI, adjusted for actual household size, to occupy the Restricted Units (i.e., a unit previously restricted to households with adjusted incomes that do not exceed 30% of AMI), and (b) to increase the rent on one or more of the Restricted Units to rents that are affordable to households with an adjusted income that does not exceed sixty percent (60%) of AMI, adjusted for actual household size . The rent increase is subject to the following requirements: (a) concurrently with the request, Developer shall provide the City with evidence of the anticipated reduction, termination, or nonrenewal of the Rental Subsidy and/or depletion of the HOME-ARP Subsidy Reserve and/or evidence that the Project is not operating at a financially stable level, (b) a Management Plan (as defined in Section 6.1(d) of the Loan Agreement) for the Project for the City’s approval pursuant to Sections 6.1(d) and Exhibit G of the Loan Agreement, showing the impact of the depletion of the HOME-ARP Subsidy Reserve and/or loss, termination, or reduction of the Rental Subsidy; (c) a proposed operating budget reflecting the requested rent increases (the “Operating Budget”); and (d) a description of efforts to obtain alternate sources of rental subsidy and/or maintain financial stability. The number of the Restricted Units subject to the rent increase and the amount of the proposed increase may not be greater than the number or amount required to ensure that the Project generates sufficient income to cover its operating costs, required deposits to replacement reserves, and debt service on approved financing as shown on the Operating Budget, and as is necessary to maintain the financial stability of the Project. In addition , Developer hereby agrees to the following: (a)Developer shall use good faith commercially reasonable efforts to obtain alternative sources of rental subsidies and shall provide the City with annual 7 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 progress reports on efforts to obtain alternative sources of rental subsidies that would allow the rents to be reduced. Upon receipt of any alternative rental subsidies, Developer shall reduce the rents back to the original restrictions to the extent that the alternative rental subsidies provide sufficient income to cover the operating costs, required replacement reserves and debt service of the Project as shown on the Operating Budget. (b)Developer shall provide tenants in the Restricted Units with notice of any rent increase pursuant to this Section 5.4, and shall notify the tenant that if they have received a tenant-based voucher from the Housing Authority they may use the tenant-based voucher for their Restricted Unit. (c)All rent increases for the Restricted Units are subject to City approval pursuant to the terms of this Section 5.4. No later than sixty (60) days prior to the proposed implementation of any rent increase, Developer shall submit to the City a schedule of any proposed increase in the rent. The City will disapprove a rent increase if it does not comply with the restrictions set forth in this Section 5.4. Notwithstanding the foregoing, rent increases for the Restricted Units shall be subject to review and approval of the City. (d)Developer shall give tenants of all Restricted Units written notice at least sixty (60) days prior to any rent increase. With respect to any Restricted Units for which City has authorized Developer to increase rents pursuant to this Section, the preference to rent to Chronically Homeless households shall automatically terminate. The City’s local preferences as Section 7.5 of these Restrictions shall remain. 6.Developer, its successors and assigns shall not charge rents for the Units in excess of the amounts set forth herein, as adjusted on the basis of the revised schedules of area median incomes issued from time-to-time by HUD. The City shall notify Developer in writing of the adjusted allowable maximum incomes and rents. 7.Developer shall adopt and include as part of its Management Plan (described in Section 13 below), written tenant selection policies and criteria for the Units that meet the following requirements: 7.1.Are consistent with the purpose of providing housing to HOME-ARP Qualifying Populations (applicable only with respect to the HOME- ARP Units), Extremely Low Income Households, and individuals or families who qualify as Chronically Homeless; 7.2. Are reasonably related to program eligibility and the applicants’ ability to perform the obligations of the lease; 7.3.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); 8 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 7.4.Provide for: (a)The selection of tenants through the Coordinated Entry System, except as necessary to comply with the HOME-ARP Program; (b)To the extent practicable, and in a manner consistent with sub- paragraph (a), selection of tenants from a written waiting list in the chronological order of their application; and (c)The prompt written notification to any rejected applicant of the grounds for any rejection. 7.5.With regard to the leasing of the Restricted Units, inclusive of the persons referred off of the County of Orange coordinated entry system for the HOME-ARP Units, and subject to compliance with the HOME-ARP Program, the HOME Regulations and applicable California and federal fair housing laws, and the requirements of Section 142(d) and Section 42 of the Internal Revenue Code, Developer’s tenant selection plan shall include a preference for individuals or families who qualify as Chronically Homeless and satisfy the criteria below, in the following order of priority: (a)First priority shall be given to persons who are either: (i)Residents of Santa Ana; and/or (ii)Working in Santa Ana at least 32 hours per week for at least the last 6 months. (b)The Restricted Units will still be available to the general public, as required under Section 142(d) of the Code and Section 42 of the Code, and these preferences do not restrict the availability of the units to the general public. 7.6.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 units. Developer shall cooperate with the City to effectuate this provision prior to the initial renting, or upon occurrence of a vacancy, and the re-renting of any HOME-ARP assisted units (24 CFR 92.351). 8.Developer, its successors and assigns, shall not refuse to lease a 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 and/or HOME-ARP 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 and/or HOME-ARP tenant-based assistance document. Total rents charged to the tenant for the tenant’s share of rent shall not exceed the allowable rents as described above. 9 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 9.Any lease of any of the units must be maintained in the tenant’s rental file held by the Developer. The lease may not contain any of the following provisions (in which references to “owner” shall mean the Developer, its successors or assigns): 9.1. 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; 9.2.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 housing Unit after the tenant has moved out of the Unit. The owner may dispose of this personal property in accordance with state law; 9.3. 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; 9.4. Agreement of the tenant that the owner may institute a lawsuit without notice to the tenant; 9.5.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; 9.6.Agreement by the tenant to waive any right to a trial by jury; 9.7.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 9.8. 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. 10 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 10. Developer, its successors or assigns, must adhere to state law requirements with regard to termination of tenancy. 11.Developer shall maintain the improvements on the Property in compliance with all applicable housing quality standards [24CFR 92.504 (c)(6)] and state and local code requirements (California Health and Safety Code section 33418), and shall keep the Property free from any unreasonable accumulation of debris or waste materials. Developer shall also maintain in a healthy condition any landscaping planted on the Property. 12.Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, mental or physical disability, marital status, national origin or ancestry in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Developer itself or any person claiming under or through it 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, as required by the Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations. 13.Not later than fifteen (15) business days prior to the Close of Escrow on the Loan Agreement, Developer shall submit to the Executive Director a Management Plan in a form reasonably 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 Close of Escrow. Developer shall manage the Restricted 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: 13.1. Management Agent. Developer shall submit the name and qualifications of the proposed Management Agent. The Executive Director shall approve (such approval not to be unreasonably withheld or delayed) or disapprove the proposed Management Agent in writing based on the experience and qualifications of the Management Agent. 13.2. Management Agreement.Developer shall submit a copy of the proposed management agreement specifying the amount of the management fee, and the relationship and division of responsibilities between Developer and Management Agent. 13.3. Annual Budget and Projected Cash Flows. Prior to the Closing, and annually thereafter not less than sixty (60) days prior to the close of each calendar year thereafter until the Loan is repaid in full, Developer shall submit a projected operating budget and cash flow to the Executive Director for the following calendar year. The budget and cash flow shall be in a form that is acceptable to the Executive Director. 13.4. Tenant Selection Policies.Developer shall include in the Management 11 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 Plan the tenant selection policies in accordance with Section 5, above. 14. If at any time the City determines that the units are not being managed or maintained in accordance with the approved Management Plan, the City shall send the Developer a detailed description of the management deficiencies (a “Deficiency Notice”). If the deficiencies set forth in the Deficiency Notice are not cured within sixty (60) days (or such longer period as may be reasonably required to cure the deficiency), with the exception of any applicable HOME-ARP Program regulations that require a shorter period, the Executive Director may require Developer 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 Developer without penalty, upon thirty (30) days prior written notice, at the direction of the Executive Director upon failure to cure a Deficiency Notice within the time period specified above. Within thirty (30) days following a direction of the Executive Director to replace the management agent in accordance with the terms hereof, the Developer shall select another management agent or make other arrangements satisfactory to the Executive Director or designee for continuing management of the units. 14.1. Marketing Plan. The marketing plan will apply to all of the units in the Project, except the one manager’s unit. The Developer shall submit a marketing plan for review and approval by the Executive Director which approval will not be unreasonably withheld, conditioned or delayed. The marketing plan must contain procedures that ensure marketing of the Restricted Units to Extremely Low Income Households, and the HOME- ARP Units to HOME-ARP Qualifying Populations, with a preference for Chronically Homeless households for the Restricted Units. Such procedures shall be applicable for initial rent-up and ongoing marketing of the units throughout the term of these Restrictions. Developer shall advertise vacancies of the Restricted Units in general distribution newspapers that circulate throughout the City. Where the Developer utilizes other forms of advertising, such advertising shall also be distributed throughout the City. The marketing plan shall be consistent with the County of Orange coordinated entry system. 15.Covenants Binding on the Property. 15.1. The covenants established in these Restrictions and any amendments hereto approved by the City, Developer, and WISEPlace shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City and their respective successors and assigns. 15.2. These Restrictions shall remain in effect for fifty-five (55) years from the issuance of the Certificate of Completion and the HOME-ARP Units shall be subject to the HOME-ARP Compliance Period. 15.3. In its discretion, the City may defer repayment of the HOME-ARP Loan or the City 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 Restricted Units. The covenants against discrimination shall remain in effect for the period of these Restrictions. 12 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 15.4. WISEPlace, as owner of the Project's fee estate and as Lessor under the Ground Lease with respect to the Project, has joined herein to evidence its consent to these Restrictions and its agreement that the Restrictions bind the Project, the fee estate, and the leasehold estate created by the Ground Lease (both landlord and tenant’s interests) and run with the land. WISEPlace agrees and understands that its agreement to these Restrictions being imposed upon and recorded against the Ground Lease and the fee estate is part of the consideration for City entering into a Loan Agreement. 16.Developer shall not request disbursement of HOME-ARP Loan until the funds are needed to pay eligible costs. The City shall have the right to disapprove any request if the City reasonably determines the request is for an ineligible item or is otherwise not in compliance with or inconsistent with the Loan Agreement, these Restrictions, the HOME- ARP Notice and/or the applicable HOME Programs [24 CFR 92.504(c)]. 17.Maintenance; Compliance with Law. During the term of these Restrictions, Developer agrees to maintain all interior and exterior improvements, including landscaping, on the Project in good condition, repair and sanitary condition (and, as to landscaping, in a healthy condition) and in accordance with any Management Plan approved by the City under these Restrictions (including without limitation any landscaping and signage), as the same may be amended from time to time, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having jurisdiction over the Property and all their respective departments, bureaus, and officials. Developer acknowledges the great emphasis the City places on quality maintenance to protect its investment and to provide quality low income housing for its constituents and to ensure that all City subsidized affordable housing projects within the City are not allowed to deteriorate due to deficient maintenance. In addition, Developer shall keep the Project free from all graffiti and any accumulation of debris or waste material. Developer shall promptly make all repairs and replacements necessary to keep the Project in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials. In the event that Developer breaches any of the covenants contained in this Section 15 and such default continues for a period of five (5) days after written notice from the City (with respect to graffiti, debris, waste material, and general maintenance) or thirty (30) days after written notice from the City (with respect to landscaping and building improvements), then the City, in addition to whatever other right or remedy it may have under the Loan Agreement, the other Loan Documents, these Restrictions or at law or in equity, shall have the right to enter upon the Project and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the City shall be permitted (but is not required) to enter upon the Project and perform all acts and work necessary to protect, maintain and preserve the improvements and landscaped areas on the Project. Developer shall promptly pay to the City, as applicable, the amount of the expenditure arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, including a fifteen percent (15%) administrative charge. 13 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 18.Developer shall prepare, maintain and submit to the City, as appropriate, the following records and reports in compliance with the HOME-ARP Program and 24 CFR 92.504(c): 18.1. Annual Reports. Developer shall file with the City an Annual Report (herein referred to as the “Annual Report”) by June15th of each calendar year, commencing with the end of the calendar year (or portion thereof) in which the Ground Lease is executed. The Annual Report shall contain a certification by Developer as to such information as the City Executive Director may then reasonably require, including, but not limited to, the following: (a)The fiscal condition of the Project, including the Annual Budget and Project Cash Flow report required by Section 13.3 which shall include a 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; a detailed itemized listing of income and expenses; and the amounts of any fiscal reserves. Such Annual Budget and financial statement shall be prepared in accordance with generally accepted accounting practices. The City Executive Director may require that the financial statement be audited at Developer’s expense by an independent certified public accountant acceptable to the Executive Director. (b)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 Developer 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. (c)The occupancy of the 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-ARP Program. (d)General management performance, including tenant relations and other relevant information. (e)Records that demonstrate that the Restricted Units meet the applicable affordability requirements for the required period of affordability. (f)Evidence of a currently paid hazard insurance policy in accordance with the requirements of Section 3 of the City/HOME-ARP Deed of Trust, with a loss payable endorsement naming the 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 Developer 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. 14 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 (g)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. (h) (i) Termite reports pertaining to the Property every fifth (5th) year. Such other information as may be reasonably required by the Executive Director or his/her designee. 18.2. Records and Audits. During the HOME-ARP Compliance Period, Developer shall maintain the following general program records, and make them available for inspection by the City, the State or HUD: (a)records which demonstrate that the HOME-ARP Units meet the property standard specified in 24 CFR 92.251; (b)records, for each HOME-ARP Unit, which demonstrates that such units meet the requirements of 24 CFR 92.252; (c)records which demonstrate compliance with the tenant and participant protections, as specified in 24 Section 29.253; (d)records which demonstrate compliance with the Equal Opportunity and Fair Housing requirements outlined in these Restrictions, including: (i)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-ARP funds; (ii)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. 1701u); (iii)documentation and data on the steps taken to implement Developer’s outreach programs to minority-owned and women-owned businesses to meet the minority outreach requirements of 24 CFR 92.350; (e)documentation of the steps taken to carry out an affirmative marketing program in accordance with 24 CFR 92.351, if applicable; (f)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 Closing (i.e., the date on which Developer obtained site control); (g)records concerning lead-based paint in accordance with 24 CFR 15 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 92.355; (h)if applicable, records which support any requests for waivers of the conflict of interest prohibition as stated in 24 CFR 92.356; (i)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 (j)any other reports required by other monitoring agencies with jurisdiction over the Property. 18.3. All records pertaining to each calendar year of HOME-ARP funds must be retained for the most recent five year period, except that 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 the affordability period terminates (24 CFR 92.508). Developer 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 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 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. 18.4. If so directed by the City, the State or HUD upon termination of the Loan Agreement, Developer shall cause all records, accounts, documentation and all other materials relevant to the work to be delivered to the City, the State or HUD, as depository. 18.5. All records, accounts, documentation and other materials relevant to the Project shall be accessible at any time to the authorized representatives of the City, the State or HUD, on not less than seventy-two (72) hours’ prior written notice, for the purpose of examination or audit. 18.6. 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. Developer shall reasonably cooperate with City in performing such audit. 16 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 19.If an event of default occurs under the terms of these Restrictions, prior to exercising any remedies hereunder, City shall give Developer written notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Developer shall have such period to effect a cure prior to exercise of remedies by the City under these Restrictions. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Developer: (i) initiates corrective action within said period; and (ii) diligently, continually, and in good faith works to effect a cure as soon as reasonably possible, then Developer shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by City. The City shall provide the Developer’s Limited Partner with an opportunity to cure any default. Any cure made or tendered by Limited Partner shall be accepted as if made by Developer. The City is a beneficiary of the terms and provisions of these Restrictions and the covenants herein, 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. Upon the occurrence of and continuation of an event of default following written notice to Developer thereof and the expiration of the cure period specified above, the City shall have the right 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. 20.Default. Each of the following shall constitute an "Event of Default" by Developer under these Restrictions: 20.1. Failure to Make Payments. Developer fails to make any payment due the City under these Restrictions within thirty (30) days after receiving written notice for said payment from the City; 20.2. Non-Monetary Failure to Perform. Developer fails to timely perform, comply with or observe any of the terms, covenants, or conditions of these Restrictions (other than those provisions elsewhere referred to in this Section 18) and such failure continues uncured or without Developer commencing to diligently cure for thirty (30) days after notice thereof in writing is given by the City to Developer, provided that if Developer has commenced cure but cannot complete such cure reasonably within thirty (30) days, Developer shall have one hundred and twenty (120) days from the date of notice to cure such failure without such failure constituting an event of default; 20.3. Senior Loan Document Breach. Any default or breach of Developer which continues uncured after the expiration of any applicable cure period under the Loan Agreement (including, but not limited to, the obligations of the Developer under Section 6 of the Loan Agreement), or any Loan Document or any default or breach of Developer under the Senior Loan Documents, which continues uncured after the expiration of any applicable cure period thereunder; 17 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 20.4. Voluntary Suspension. The voluntary suspension of Developer's business or the dissolution or termination of the partnership (if any) constituting Developer; 20.5. Unauthorized Transfer. Developer’s sale or other transfer of the Project in violation of the Loan Agreement; 20.6. Fraud or Material Misstatement or Omissions. Any fraudulent act or intentional material omission of Developer pertaining to or made in connection with the Loan, Loan Documents or the Project that is not cured within thirty (30) days after written notice to Developer, unless such act or omission is not capable of cure; 20.7. Insolvency. A court having jurisdiction shall have made or entered any decree or order: (i) adjudging Developer to be bankrupt or insolvent; (ii) approving as properly filed a petition seeking reorganization of Developer or seeking any arrangement for Developer under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of Developer in bankruptcy or insolvency or for any of their properties; or (iv) directing the winding up or liquidation of Developer, if any such decree or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days, unless a lesser time period is permitted for cure under any other mortgage on the Property, in which event such lesser time period will apply under this section as well; or Developer shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note; or 20.8. Project Monies. Developer’s intentional misapplication or embezzlement of Project monies. 21. 22. Reserved. Remedies. The occurrence of any Event of Default shall, either at the option of the City or automatically where so specified, relieve the City of any obligation to make or continue the Loan and shall give the City the right to proceed with any and all remedies set forth in these Restrictions or otherwise available at law or in equity or by statute (and all of the City's rights and remedies shall be cumulative), including but not limited to the following: 22.1. Acceleration of Note. The City shall have the right to cause all indebtedness of the Developer to the City under the Note, together with any accrued interest thereon, to become immediately due and payable. The Developer waives all right to presentment, demand, protest or notice of protest, or dishonor. The City may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the City as a creditor and secured party under the law, including the Uniform Commercial Code, including foreclosure under the City/HOME-ARP Deed of Trust. The Developer shall be liable to 18 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 pay the City on demand all expenses, costs and fees (including, without limitation, reasonable attorneys' fees and expenses) paid or incurred by the City in connection with the enforcement of this provision, provided that such expenses, costs and fees shall be subordinate to the Senior Loan made to Developer and the Senior Loan Documents. 22.2. Specific Performance. The City shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Developer to perform its obligations and covenants under these Restrictions or to enjoin acts on things, which may be unlawful, or in violation of the provisions of these Restrictions. The Developer shall be liable to pay the City on demand all expenses, costs and fees (including, without limitation, reasonable attorneys’ fees and expenses) paid or incurred by the City in connection with the enforcement of these Restrictions. 22.3. Right to Cure at Developer's Expense. The City shall have the right to cure any monetary Event of Default by Developer under these Restrictions. The Developer agrees to reimburse the City for any funds advanced by the City to cure a monetary default by Developer upon demand therefore, together with interest thereon at the rate of twelve percent (12%) per annum or the maximum rate permitted by law, whichever rate is lesser, from the date of expenditure until the date of reimbursement. 22.4. Remedies Cumulative. No right, power, or remedy given to the City by the terms of these Restrictions is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against Developer and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. 22.5. Waiver of Terms and Conditions. No waiver of any default or breach by Developer hereunder shall be implied from any omission by the City to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and such waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition. The consent or approval by the City to or of any act by Developer requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default under these Restrictions or the Loan Documents, nor shall it invalidate any act done pursuant to notice of default, or prejudice the City in the exercise of any right, power, or remedy hereunder or under the Loan Documents, unless in the exercise of any such right, power, or remedy all obligations of Developer to City are paid and discharged in full. 19 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 23.The covenants and agreements contained herein shall run with the land and not be personal obligations of Developer. Upon the sale, conveyance or other transfer of the leasehold interest in the Property (a “Transfer”) and the assumption of the obligations hereunder by a transferee, Developer’s liability for performance shall be terminated as to any obligation to be performed hereunder after the date of such Transfer. 24.The Loan Agreement and all of its attachments shall be enforceable by City in accordance with the terms thereof. Each of the Loan Agreement, the Affordability Restrictions on Transfer of Property, the City/HOME-ARP Loan Note and the City/HOME-ARP Deed of Trust provide a means of enforcement by the City if Developer is in breach of its obligations hereunder and thereunder, including liens on the Property, use and deed restrictions and covenants running with the land [24 CFR 92.504(c)]. 25.Additional Terms. 25.1. Indemnity. To the fullest extent permitted by law, the Developer agrees to indemnify, hold harmless and defend the City and its elected officials, officers, governing members, employees, attorneys and agents (collectively, the "Indemnified Parties"), from and against any and all losses, damages, claims, actions, liabilities, costs and expenses of any and every conceivable nature, kind or character (including, without limitation, reasonable attorneys’ fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or any of them, may become subject to under any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to: (a)these Restrictions or the execution or amendment thereof in connection with the transactions contemplated thereby; (b)Developer’s ownership of a leasehold interest in or operation of the Property and the Project or any act or omission of the Developer or any of its agents, contractors, servants, employees or licensees in connection with the Property and the Project, the operation of the Project, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, installation, operation or rehabilitation of, the Project or any part thereof; (c)any lien or charge upon payments by the Developer to the City, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the City in respect of any portion of the Project; (d)any violation of any applicable environmental law, rule or regulation with respect to, or the release of any toxic substance from, the Property or the Project or any part thereof; or (e)any untrue or misleading statement of a material fact by the Developer, which Developer knew or should have known to be untrue or misleading, that is contained in any Loan Document or any of the documents or instruments relating to said 20 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 Loan Documents that the City relied upon in making the Loan; except to the extent such damages are caused by the active negligence or willful misconduct of such Indemnified Party. In the event that any action or proceeding is brought against any Indemnified Party with respect to which indemnity may be sought hereunder, the Developer, upon written notice from the Indemnified Party, shall assume the investigation and defense thereof, including the employment and payment for of counsel selected by the Indemnified Party, and shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same; provided that the Indemnified Party shall have the right to review and approve or disapprove any such compromise or settlement. 25.2. Time. Time is of the essence in these Restrictions. 25.3. Construction. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, words imparting persons shall include firms, associations, partnerships and corporations, and words of either gender shall include the other gender. 25.4. Waiver of Jury Trial. Unless prohibited by Federal, State or local laws, each party to these Restrictions hereby expressly waives any right to trial by jury of any claim, demand, action or cause of action arising under any Loan Document or in any way connected with or related or incidental to the dealings of the parties hereto or any of them with respect to any Loan Document, or the transactions related thereto, in each case whether now existing or hereafter arising, and whether sounding in contract or tort or otherwise; and each party hereby agrees and consents that any such claim, demand, action or cause of action shall be decided by court trial without a jury, and that any party to these Restrictions may file an original counterpart or a copy of this section with any court as written evidence of the consent of the parties hereto to the waiver of their right to trial by jury. 25.5. Nonliability. By accepting or approving anything required to be performed or given to City under these Restrictions, City shall not 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 to anyone. 25.6. Obligations Unconditional and Independent. Notwithstanding the existence at any time of any obligation or liability of City to Developer, or any claim by Developer against City, in connection with these Restrictions or otherwise, Developer hereby waives any right it might otherwise have: (a) to offset any such obligation, liability or claim against Developer’s obligations under these Restrictions; or (b) to claim that the existence of any such obligation, liability or claim excuses the nonperformance by Developer of any of its obligations under these Restrictions. 21 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 26.Whenever this Agreement or any other Loan Document references a request that requires the approval or consent of a party, then each party shall act reasonably and in good faith in making any such request and responding to the request, but in no event shall either party be required to agree to terms that are not specified in this Agreement or waive any rights or privileges set forth herein. Whenever this Agreement references a party having “sole and absolute” discretion, then that party may exercise its discretion for any reason or no reason at all as that party may determine in its exclusive and independent judgment. 27.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 Developer:During Construction: North Broadway Housing Partners LP c/o 17701 Cowan Ave., Suite 200 Irvine, CA 92614 Attention: Chief Executive Officer Following construction: North Broadway Housing Partners LP c/o Jamboree Housing Corporation 17701 Cowan Ave., Suite 200 Irvine, CA 92614 Attention: Asset Management With a copy to:Rutan & Tucker, LLP 18575 Jamboree Road, 9th Floor Irvine, CA 92612 Attention: Patrick D. McCalla Limited Partner Bank of America, N.A. 100 Federal Street MA5-100-04-11 Boston, MA 02110 Attention: Asset Management Facsimile: 617-346-2257 and and Banc of America CDC Special Holding Company, Inc. 100 Federal Street MA5-100-04-11 Boston, MA 02110 Attention: Asset Management Facsimile: 617-346-2257 Buchalter, a Professional Corporation 1000 Wilshire Blvd., Suite 1500 22 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 Los Angeles, CA 90017-2457 Attn: Michael A. Williamson, Esq. If to Lessor: If to City: WISEPlace 1411 N. Broadway Santa Ana, CA 92706 Attn: Executive Director City of Santa Ana Executive Director (CDA) 20 Civic Center Plaza (M-26) P .0. 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 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. {signatures on following page} 23 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 IN WITNESS WHEREOF, the parties hereto have caused these Affordability Restrictions on Transfer of Property to be executed on the date set forth hereinabove. ATTEST:CITY OF SANTA ANA ___________________________ Norma Orozco _______________________ Kristine Ridge Clerk of the Council City Manager Dated:Dated: APPROVED AS TO FORM: SONIA R. CARVALHO, City Attorney By: ________________________ Special Counsel to the City Best, Best & Krieger 2/23/23Dated: RECOMMENDED FOR APPROVAL: _______________________________ Michael L. Garcia Executive Director Community Development Agency 24 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 DEVELOPER NORTH BROADWAY HOUSING PARTNERS LP, a California limited partnership By:JHC-North Broadway LLC, a California limited liability company, its managing general partner By:Jamboree Housing Corporation, a California non-profit public benefit corporation, its managing member By: Name: Title: 25 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 GROUND LESSOR JOINDER THE UNDERSIGNED (“Ground Lessor”) is joining in the execution of these Affordability Restrictions on Transfer of Property (“Restrictions”) to evidence its consent to these Restrictions and its agreement that the Restrictions bind the fee simple interest in the Property and the leasehold interest created by the Ground Lease, and further these Restrictions run with the land; provided that, by recording these Restrictions, the City, on behalf of itself and its successors, and assigns and on behalf of all other parties who, pursuant to the terms of these Restrictions, shall be entitled to the benefit thereof, shall be deemed to have agreed that: (i) Ground Lessor's execution of this joinder to the Restrictions shall not give rise to any personal liability or obligation under these Restrictions or any of the Loan Documents on the part of the Ground Lessor, its successors and assigns or any present or future officer, director, employee, trustee, member, agent or advisor of any of the foregoing, and (ii) all notices of default hereunder and under the other Loan Documents to the Trustor shall also be given to the Ground Lessor, and the Ground Lessor shall have the right to cure any such default on the terms and conditions set forth in the applicable Loan Document and Beneficiary shall accept or reject such cure on the same basis as if made by the Trustor. The address for notices to Ground Lessor is: WISEPlace 1411 N. Broadway Santa Ana, CA 92706 Attn: Executive Director Dated: ______, 2023 WISEPlace, a California nonprofit public benefit corporation By: ____________________________ Brateil Aghasi Executive Director 26 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 EXHIBIT A LEGAL DESCRIPTION 27 WISEPlace Permanent Supportive Housing City HOME-ARP Affordability Restrictions on Transfer of Property EXHIBIT 3 All that certain real property situated in the County of Orange, State of California, described as follows: COMMENCING AT THE CENTERLINE INTERSECTION OF 15TH STREET AND SYCAMORE STREET AS SHOWN ON THE RECORD OF SURVEY NO 85-1067, RECORDED IN BOOK 111, PAGE 38, OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, SAID CENTERLINE OF SYCAMORE STREET BEING DESCRIBED IN THAT CERTAIN FINAL JUDGMENT, SUPERIOR COURT CASE NO. 23280, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 8, 1929 IN BOOK 227, PAGE 401 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, CALIFORNIA; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET SOUTH 00° 14' 46” WEST, 90 FEET AND SOUTH 00° 04' 48” EAST, 213.42 FEET TO THE POINT OF BEGINNING; THENCE LEAVING SAID CENTERLINE NORTH 89° 58' 21” WEST, 312.17 FEET TO THE CENTERLINE OF BROADWAY, THENCE NORTHERLY ALONG SAID CENTERLINE OF BROADWAY NORTH 00° 16' 10” EAST, 75.00 FEET TO THE SOUTHWEST CORNER OF THE LAND DESCRIBED IN A DEED TO T. J. MULLINIX RECORDED OCTOBER 29, 1897 IN BOOK 33, PAGE 197 OF DEEDS OF SAID ORANGE COUNTY; THENCE EASTERLY ALONG SAID SOUTHERLY LINE OF SAID DEED TO T. J. MULLINIX SOUTH 89° 58' 10” EAST, 181.72 FEET TO THE WESTERLY LINE OF THE EAST 130.00 FEET OF THAT PORTION OF THE LAND ALLOTTED TO JACOB ROSS, AS DESCRIBED IN THE FINAL DECREE OF PARTITION OF THE RANCHO SANTIAGO DE SANTA ANA, WHICH WAS ENTERED SEPTEMBER 12, 1869 IN BOOK “B”, PAGE 410 OF JUDGMENTS OF THE DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND FOR LOS ANGELES COUNTY, CALIFORNIA; THENCE NORTHERLY, ALONG SAID WESTERLY LINE NORTH 00° 04' 48” WEST, 77.08 FEET; THENCE SOUTH 89°58'10” EAST, 130.00 FEET TO THE ABOVE MENTIONED CENTERLINE OF SYCAMORE STREET; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET, SOUTH 00°04'48” EAST, 152.06 FEET TO THE POINT OF BEGINNING. SAID LAND IS SHOWN AS LOT 1 ON VOLUNTARY LOT MERGER NO. 2022-06 RECORDED JANUARY 26, 2023 AS INSTRUMENT NO. 2023000018589, OFFICIAL RECORDS OF SAID COUNTY. Assessor’s Parcel Number: 398-523-04 EXHIBIT 3 Exhibit G: Additional Terms and Conditions for Federal HOME-American Rescue Plan (HOME-ARP) and HOME Investment Partnership (HOME) Funds EXHIBIT 3 EXHIBIT G ADDITIONAL TERMS AND CONDITIONS FEDERAL HOME INVESTMENT PARTNERSHIP – AMERICAN RESCUE PLAN (HOME-ARP) FUNDS The City has received an allocation of HOME-American Rescue Plan (HOME-ARP) funds from the United States Department of Housing and Urban Development ("HUD") under the Section 3205 of the American Rescue Plan Act of 2021 (P.L. 117-2)) (“ARP) to be implemented through the HOME Investment Partnerships Program (the "HOME Program") (42 U.S.C. §12701, et seq.,). On September 13, 2021, HUD issued Community Planning and Development (CPD) Notice: CPD-21-10 (the “HOME-ARP Notice”) that implements the applicable statutory requirements and regulations for the use of HOME-ARP Funds. Specifically, the HOME-ARP funds must be used in accordance with both the requirements of the HOME-ARP Notice and the HOME Regulations (24 CFR Part 92), as applicable, including but not limited to 24 C.F.R. § 92.504, 92.305, 92.351, and 24 CFR 92.359, or as may be amended from time to time. In addition to the requirements set forth in other provisions of the Agreement, Developer shall comply, and shall cause all Developer personnel and/or subcontractors to comply, with the following regulations and requirements to the extent applicable to the Project.1 1.Use of the HOME-ARP Funds. The Loan shall be used only for eligible costs (see, e.g., the HOME-ARP Notice, and 24 C.F.R. § 92.206, 92.214, 92.300(c), and 92.301), and any development work shall be completed within the times referred to in the Affordable Housing and Loan Agreement between City and Developer. The HOME-ARP Notice waives 24 CFR 92.206 to the extent that it conflicts with the eligible costs for eligible activities identified in the HOME-ARP Notice. In addition, HUD waives 24 CFR 92.206(d)(5) and imposes the requirement outlined in the HOME-ARP Notice. 2.Affordability. At initial lease up, there shall be a total of sixteen (16) units restricted for rental to a HOME-ARP Qualifying Population (“HOME-ARP Units”). The HOME- ARP Units shall meet the qualifying population and affordability requirements as outlined in the HOME-ARP Notice or this Agreement and the Affordability Restrictions on Transfer of Property, whichever is more restrictive. If the HOME-ARP Units do not meet the affordability requirements of the HOME-ARP Requirements for the specified time period, it shall be a breach of the Loan Agreement and Developer shall repay the Loan to City promptly upon demand by City, subject to all applicable notice and cure periods. In such event, Developer shall not be released from the 1 This exhibit is a list and summary of some of the applicable legal requirements and is not a complete list of all Developer requirements. The description set forth next to a statute or regulation is a summary of certain provisions in the statute or regulation and is in no way intended to be a complete description or summary of the statute or regulation. In the event of any conflict between this summary and the requirements imposed by applicable laws, regulations, and requirements, the applicable laws, regulations, and requirements shall apply. WISEPLACE PERMANENT SUPPORTIVE HOUSING EXHIBIT G HOME-ARP FUNDING ADDITIONAL TERMS AND CONDITIONS EXHIBIT 3 affordability and other covenants and restrictions set forth in this Agreement and the Regulatory Agreement, which shall continue to apply independent of the HOME-ARP Requirements. 3.Equal Opportunity and Nondiscrimination. a. Title VI of the Civil Rights Act of 1964, as amended, including Public Law 88-352 implemented in 24 CFR Part 1. This law provides in part that no person shall, on the grounds of race, color, or national origin be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance. In regard to the sale or lease of the Property, Developer shall cause or require a covenant running with the land to be inserted in the deed and leases prohibiting discrimination under this Title, and providing that City and the United States are beneficiaries of and entitled to enforce such covenants. Developer shall enforce such covenant and shall not itself so discriminate. b.Fair Housing Act, Title VIII of the Civil Rights Act of 1968, as amended, including Public Law 90-234. The Fair Housing Act provides in part that there shall be no discrimination in housing practices on the basis of race, color, religion, sex, and national origin. The Fair Housing Act was amended in 1988 to provide protections from discrimination in any aspect of the sale or rental of housing for families with children and persons with disabilities. The Fair Housing Act also establishes requirements for the design and construction of new rental or for-sale multi-family housing to ensure a minimum level of accessibility for persons with disabilities. c.Section 109 of Title I of the Housing and Community Development Act of 1974, as amended, including 42 U.S.C. 5301 et. seq., 42 U.S.C. 6101 et. seq., and 29 U.S.C. 794. This law provides in part that no person on the grounds of race, color, national origin, sex, or religion shall be excluded from participation in, be denied the benefits of, or otherwise be subject to discrimination under any activity funded in whole or part with funds under this Title. d.Section 104(b) of Title I of the Housing and Community Development Act of 1974, as amended, including 42 U.S.C. 5301 et. seq. This law provides in part that any grant under Section 106 shall be made only if the grantee certifies to the satisfaction of the Secretary of HUD that the grantee will, among other things, affirmatively further fair housing. e.Executive Order 11246, as amended. This order includes a requirement that grantees and subrecipients and their contractors and subcontractors not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. f.Executive Order 11063, as amended, including 24 CFR Part 107. This order and its implementing regulations include requirements that all actions necessary be taken to prevent discrimination because of race, color, religion, sex, or national origin in the use, occupancy, sale, leasing, rental, or other disposition of property assisted with Federal loans, advances, grants, or contributions. WISEPLACE PERMANENT SUPPORTIVE HOUSING EXHIBIT G HOME-ARP FUNDING ADDITIONAL TERMS AND CONDITIONS EXHIBIT 3 g.Section 504 of the Rehabilitation Act of 1973, as amended. This Act specifies in part that no otherwise qualified individual shall solely by reason of his or her disability or handicap be excluded from participation (including employment), denied program benefits, or subjected to discrimination under any program or activity receiving Federal assistance. Developer must ensure that its programs are accessible to and usable by persons with disabilities. h.The Americans with Disabilities Act (ADA) of 1990, as amended. This Act prohibits discrimination on the basis of disability in employment by state and local governments and in places of public accommodation and commercial facilities. The ADA also requires that facilities that are newly constructed or altered, by, on behalf of, or for use of a public entity, be designed and constructed in a manner that makes the facility readily accessible to and usable by persons with disabilities. The Act defines the range of conditions that qualify as disabilities and the reasonable accommodations that must be made to assure equality of opportunity, full participation, independent living, and economic self-sufficiency for persons with disabilities. i.The Age Discrimination Act of 1975, as amended. This law provides in part that no person shall be excluded from participation in, be denied program benefits, or subjected to discrimination on the basis of age under any program or activity receiving federal assistance. j.EEO/AA Statement. Developer shall, in all solicitations or advertisements for employees placed by or on behalf of Developer, state that it is an Equal Opportunity or Affirmative Action employer. k.Minority/Women Business Enterprise. Developer will use its best efforts to afford small businesses and minority and women-owned business enterprises the maximum practicable opportunity to participate in the performance of the Agreement. As used in the Agreement, the term “small business” means a business that meets the criteria set forth in Section 3(a) of the Small Business Act, as amended (15 U.S.C. 632), and “minority and women- owned business enterprise” means a business at least fifty-one percent (51%) owned and controlled by minority group members or women. For the purpose of this definition, “minority group members” are Afro-Americans, Spanish-speaking, Spanish surnamed or Spanish-heritage Americans, Asian-Americans, and American Indians. Developer may rely on written representations by businesses regarding their status as minority and female business enterprises in lieu of an independent investigation. l.Nondiscrimination. Developer shall comply with the federal requirements and nondiscrimination provisions in 24 C.F.R. § 92.350, which include requirements on nondiscrimination and equal opportunity, disclosure requirements, debarred, suspended or ineligible contractors, and maintaining a drug-free workplace. k.Violence Against Women Act. Developer shall comply with obligations to meet the Violence Against Women Act requirements set forth in 24 C.F.R. § 92.359, including but not limited to notice obligations and obligations under the emergency transfer plan, and any local requirements imposed by the City. WISEPLACE PERMANENT SUPPORTIVE HOUSING EXHIBIT G HOME-ARP FUNDING ADDITIONAL TERMS AND CONDITIONS EXHIBIT 3 4.Environmental. a. Air and Water. Developer shall comply with the following regulations insofar as they apply to the performance of the Agreement: Clean Air Act, 42 U.S.C. 7401, et seq.; Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251, et seq., as amended, 1318 relating to inspection, monitoring, entry, reports, and information, as well as other requirements specified in said Section 114 and Section 308, and all regulations and guidelines issued thereunder; and the U.S. Environmental Protection City regulations pursuant to 40 CFR Part 50, as amended. b.Flood Disaster Protection Act of 1973. Developer shall assure that for activities located in an area identified by FEMA as having special flood hazards, flood insurance under the National Flood Insurance Program is obtained and maintained. c.Lead-Based Paint. Developer shall comply with the Lead-Based Paint Regulations referenced in 24 C.F.R. 92.355, including 24 C.F.R. Part 35, et. al. d.Historic Preservation. Developer shall comply with the historic preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. 470) and the procedures set forth in 36 C.F.R. Part 800, Advisory Council on Historic Preservation Procedures for Protection of Historic Properties and related laws and Executive Orders, insofar as they apply to the performance of this Agreement. In general, this requires concurrence from the State Historic Preservation Officer for all rehabilitation and demolition of historic properties that are fifty years old or older or that are included on a federal, state, or local historic property list. e.Limitation on Activities Pending Clearance. In accordance with 24 C.F.R. § 58.22 entitled “Limitations on activities pending clearance,” neither a recipient nor any participant in the development process, including public or private nonprofit or for-profit entities, or any of their contractors, may commit HUD assistance under a program listed in 24 C.F.R. § 58.1(b) on an activity or project until HUD or the state has approved the recipient’s Request for Release of Funds (RROF) and the related certifications have been approved. Neither a recipient nor any participant in the development process may commit non-HUD funds or undertake an activity or project that would have an adverse environmental impact or limit the choice of reasonable alternatives. Upon completion of environmental review or receipt of environmental clearance, City shall notify Developer. HUD funds shall not be utilized before this requirement is satisfied. The environmental review or violation of the provisions may result in approval, modification of cancellation of the Loan. If a project or activity is exempt under 24 C.F.R. § 58.34, or is categorically excluded (except in extraordinary circumstances) under 24 C.F.R. § 58.35(b), no RROF is required and the recipient may undertake the activity immediately after the City has documented its determination that each activity or project is exempt and meets the conditions specified for such exemption under this section by issuing a Notice to Proceed. 5.Uniform Administrative Requirements. Developer shall comply with applicable uniform administrative requirements as described in 24 C.F.R. §§ 92.205. WISEPLACE PERMANENT SUPPORTIVE HOUSING EXHIBIT G HOME-ARP FUNDING ADDITIONAL TERMS AND CONDITIONS EXHIBIT 3 6.Other Program Requirements. Developer shall carry out each activity under the Agreement in accordance with all applicable federal laws and regulations described in the HOME- ARP Notice and Subpart H of 24 C.F.R. § 92 as applicable, except for City’s responsibility for initiating the environmental review process under the provisions of 24 C.F.R. Part 58. 7.Project Requirements. Developer shall comply with all project requirements set forth in the HOME-ARP Notice and 24 C.F.R. §§ 92.250-92.258, as applicable in accordance with the type of project assisted. 8.Property Standards. Developer shall perform any construction work and maintain the Project units in compliance with the property standards in 24 C.F.R. § 92.251 and the lead-based paint requirements in 24 C.F.R. § 92 Part 35, Subparts A, B, J, K, M and R, as applicable. Developer shall comply with Broadband Infrastructure, as this term is defined in 24 CFR 5.100, requirements as stipulated in 24 CFR 92.251(a)(2)(iv). 9.Records and Reports. Developer shall provide to City all records and reports relating to the Program Activities that may be reasonably requested by City in order to enable it to perform its recordkeeping and reporting obligations pursuant to the HOME-ARP and HOME Requirements, including 24 C.F.R. §§ 92.508 and 92.509. 10.Conflict of Interest. Developer will comply with 2 C.F.R. Part 200 and 24 C.F.R. 84.42, 85.36 and 92.356, as applicable, regarding the avoidance of conflict of interest, which provisions include (but are not limited to) the following: a.Developer shall maintain a written code or standards of conduct that shall govern the performance of its officers, employees or agents engaged in the award and administration of contracts supported by Federal funds. b.No employee, officer or agent of the Developer shall participate in the selection, or in the award, or administration of, a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved. c.No covered persons who exercise or have exercised any functions or responsibilities with respect to HOME-ARP-assisted activities, or who are in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a financial interest in any contract, or have a financial interest in any contract, subcontract, or agreement with respect to the HOME-ARP-assisted activity, or with respect to the proceeds from the HOME-ARP-assisted activity, either for themselves or those with whom they have business or immediate family ties, during their tenure or for a period of one (1) year thereafter. For purposes of this paragraph, a “covered person” includes any person who is an employee, agent, consultant, officer, or elected or appointed official of the Grantee, the Developer, or any designated public agency. 11.Affirmative Marketing. If the Loan will be used for housing containing 5 or more assisted units, Developer shall establish for City’s review and approval a plan and procedures to affirmatively market the units. The objective of the plan shall be to provide information and attract eligible persons from all racial, ethnic and general groups in the housing market area to the WISEPLACE PERMANENT SUPPORTIVE HOUSING EXHIBIT G HOME-ARP FUNDING ADDITIONAL TERMS AND CONDITIONS EXHIBIT 3 available housing. In connection therewith, Developer shall perform those affirmative marketing responsibilities set forth in 24 C.F.R. § 92.351(a) and the marketing plan shall include the following: a.methods for informing the public, owners, and potential tenants about federal fair housing loans and the City’s affirmative marketing policy; b.requirements and practices Developer must adhere to in order to carry out the affirmative marketing procedures and requirements; c.procedures to be used by Developer to inform and solicit applications from persons in the housing market area that are not likely to apply for the housing without special outreach; d.records that will be kept describing actions taken by Developer to affirmatively market units and records to assess the results of those actions; and e.a description of how Developer will assess the success of affirmative marketing actions and what corrective actions will be taken where affirmative marketing requirements are not met. 12.Displacement. Consistent with the other goals and objectives of Subpart H of 24 C.F.R. § 92, Developer shall take all reasonable steps to minimize the displacement of persons (families, individuals, businesses, nonprofit organizations, and farms) as a result of the Program Activities. 13.Debarment and Suspension. As required in 24 C.F.R. § 92.357, Developer shall comply with all debarment and suspension certifications. 14.Enforcement of Agreement. In addition to the other provisions set forth in the Agreement, City shall have the authority to enforce Developer’s obligation to comply with the HOME-ARP Requirements. 15.Return of HOME-ARP Funds. a. HOME-ARP Construction Component. Upon the completion of the Project or earlier termination of the Agreement, Developer shall transfer to City any HOME-ARP Construction Component funds on hand for which expenses have not been incurred and any accounts receivable attributable to the use of HOME-ARP Construction Component funds. In addition to the foregoing, in the event the expenses for which any disbursement of HOME-ARP Construction Component funds are disbursed to Developer are not incurred by Developer within thirty (30) days after City’s (or escrow holder’s) disbursement to Developer, or such longer time as City approves in its sole discretion, City shall have the right to require that Developer immediately return the HOME-ARP Construction Component proceeds to City. Disbursement of proceeds by the City to an escrow holder shall not constitute disbursement to Developer for purposes of this provision. b.HOME-ARP Subsidy Reserve Component. The HOME-ARP Subsidy Reserve is intended to assure affordability of the HOME-ARP assisted units during the HOME- WISEPLACE PERMANENT SUPPORTIVE HOUSING EXHIBIT G HOME-ARP FUNDING ADDITIONAL TERMS AND CONDITIONS EXHIBIT 3 ARP Compliance Period. Unexpended funds in the HOME-ARP Subsidy Reserve at the end of the HOME-ARP Compliance Period must be returned to the City and deposited in the City’s HOME account and recorded as HOME Program income. 16.Monitoring. Not less than once per year, City shall review Developer’s activities and operations under the Agreement and Developer’s compliance with the HOME-ARP Requirements. Such review may include an on-site inspection of the Project units (including unit interiors). If such an on-site inspection of the Project units is to be undertaken, City shall coordinate such inspection with Developer. The monitoring required pursuant to this paragraph shall be in compliance with the requirements of 24 C.F.R. § 92.504. 17.Tenant Participation Plan. Developer shall provide to City for approval the form of the lease agreement to be used for the rental units, which lease must be fair and provide for a grievance procedure. In addition, Developer shall provide to City for approval a plan that provides for tenant participation in management decisions. (24 C.F.R § 92.303.) 18 Anti-Lobbying Certification. By its execution of the Agreement, Developer hereby certifies that: i.No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. ii.If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions. iii.It will require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. This certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S.C. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. At the request of City, Developer shall execute a separate document that contains the certifications set forth above. WISEPLACE PERMANENT SUPPORTIVE HOUSING EXHIBIT G HOME-ARP FUNDING ADDITIONAL TERMS AND CONDITIONS EXHIBIT 3 19.Drug-Free Workplace Requirements. Developer shall comply with and be subject to the requirements of the federal drug-free workplace requirements, which include the following actions be taken: i.Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the grantee’s workplace and specifying the actions that will be taken against employees for violation of such prohibition. ii. employees about: (a) the dangers of drug abuse in the work place; (b) the grantee’s policy of maintaining a drug-free workplace; (c) any available drug counseling, Establishing an ongoing drug-free awareness program to inform rehabilitation, and employee assistance programs; and (d) the penalties that may be imposed upon employees for drug abuse violations occurring in the workplace. iii.Making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by paragraph (i). iv.Notifying the employee in the statement required by paragraph (i) that, as a condition of employment under the grant, the employee will: (a) abide by the terms of the statement; and (b) notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five calendar days after such conviction. v.Notifying the agency in writing, within ten calendar days after receiving notice under sub-paragraph (iv) (b) from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position title, to every grant officer or other designee on whose grant activity the convicted employee was working, unless the Federal agency has designated a central point for the receipt of such notices. Notice shall include the identification number(s) of each affected grant. vi.Taking one of the following actions, within 30 calendar days of receiving notice under subparagraph (iv)(b), with respect to any employee who is so convicted: (a) taking appropriate personnel action against such an employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended; or (b) requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State or local health, law enforcement, or other appropriate agency. vii.Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs (i), (ii), (iii), (iv), (v), and (vi). 20.Procurement. If applicable, Developer will comply with the procurement standards under 24 CFR 85.36 for governmental subrecipients and 24 CFR 84.40-48 for subrecipients that are non-profit organizations. Developer shall comply with all existing and future City policies concerning the purchase of equipment. WISEPLACE PERMANENT SUPPORTIVE HOUSING EXHIBIT G HOME-ARP FUNDING ADDITIONAL TERMS AND CONDITIONS EXHIBIT 3 21.Hatch Act. The Developer agrees that no funds provided, nor personnel employed under this Agreement, shall be in any way or to any extent engaged in the conduct of political activities in violation of Title V United States Code Section 1501 et seq. 22.Labor Provisions. a. Section 3 of the Housing and Community Development Act of 1968. Developer shall comply with and cause its contractors and subcontractors to comply with the requirements of Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. § 1701u), the HUD regulations issued pursuant thereto at 24 C.F.R, Part 135, and any applicable rules and orders of HUD issued thereunder. The Section 3 clause, set forth in 24 C.F.R § 135.38 provides: i.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. § 1701u (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, particularly persons who are recipients of HUD assistance for housing. ii.The parties to this contract agree to comply with HUD’s regulations in 24 C.F.R. 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. iii.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 the contractor’s commitments under this Section 3 clause, and will post copies of the notice 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 and job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin. iv.The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 C.F.R. 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 in 24 C.F.R. Part 135. The contractor will not subcontract with any subcontractor where the WISEPLACE PERMANENT SUPPORTIVE HOUSING EXHIBIT G HOME-ARP FUNDING ADDITIONAL TERMS AND CONDITIONS EXHIBIT 3 contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 C.F.R. Part 135. v.The contractor will certify that any vacant employment positions, including training positions, that are filled (1) after the contractor is selected but before the contract is executed, and (2) with persons other than those to whom the regulations of 24 C.F.R. Part 135 require employment opportunities to be directed, were not filled to circumvent the contractor’s obligations under 24 C.F.R. Part 135. vi.Noncompliance with HUD’s regulations in 24 C.F.R Part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts. Developer shall abide by the Section 3 clause set forth above and will also cause this Section 3 clause to be inserted in all contracts relating to the construction of the Project. 23.Compliance with 2 C.F.R. Part 200. All costs must comply with the Cost Principles contained in subpart E of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR part 200, as amended (Uniform Administrative Requirements). WISEPLACE PERMANENT SUPPORTIVE HOUSING EXHIBIT G HOME-ARP FUNDING ADDITIONAL TERMS AND CONDITIONS Subordination Agreement (City of Santa Ana) Form 6456 Page 1 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Davis Wright Tremaine LLP 865 S. Figueroa Street Suite 2400 Los Angeles, California 90017 Attention: Nancy Clapp, Esq. SPACE ABOVE THIS LINE FOR RECORDER’S USE SUBORDINATION AGREEMENT (City of Santa Ana) This SUBORDINATION AGREEMENT (this “Agreement”) dated as of ____________________, 2023, is executed by and among (i) BANK OF AMERICA, N.A., a national banking association (“Senior Lender”), (ii) CITY OF SANTA ANA, a charter city and municipal corporation (“Subordinate Lender”), (iii) NORTH BROADWAY HOUSING PARTNERS LP, a California limited partnership (“Borrower”), and (iv) WISEPLACE, a California nonprofit public benefit corporation (“Ground Lessor”, and together with Borrower, “Trustor”). RECITALS: A.Senior Lender has determined to make a mortgage loan to the Borrower in the maximum aggregate principal amount of $_______________ (the “Senior Loan”) to provide for the financing of a 48-unit rental housing development project (the “Project”) on certain real property more particularly described on Exhibit A attached hereto (the “Land”). The Senior Loan will be made pursuant to that certain Construction Loan Agreement dated as of even date herewith (as amended from time to time, the “Senior Loan Agreement”), between Senior Lender, as lender, and Borrower, as borrower. The Senior Loan is evidenced by, among other things, that certain Promissory Note dated as of even date herewith (the “Senior Note”), made by Borrower to the order of Senior Lender in the face principal amount of $_______________. B.To secure Borrower’s obligations under the Senior Loan Agreement and the Senior Note, the Borrower is executing and delivering that certain Construction Deed of Trust, Assignment, Security Agreement and Fixture Filing dated as of even date herewith (as amended from time to time, the “Senior Security Instrument”), executed by Borrower for the benefit of Senior Lender, encumbering, among other things, Borrower’s leasehold interest in the Land, Ground Lessor’s fee simple interest in the Land, and certain personal property more particularly described therein (collectively, the “Mortgaged Property”), which is being recorded in the Official Records of the County of Orange, State of California (the “Official Records”), substantially concurrently herewith. EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 2 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. C. The Senior Loan Agreement, the Senior Note, the Senior Security Instrument and all of the other “Loan Documents” (as defined in the Senior Loan Agreement) are collectively referred to herein as the “Senior Loan Documents”. D. Borrower has requested Senior Lender to permit that certain subordinate loan in the amount of ///[$5,256,327]/// (the “Subordinate Loan”) from Subordinate Lender to Borrower and to allow the Subordinate Loan to be secured by mortgage liens against the Mortgaged Property. The Subordinate Loan is being made pursuant to that certain HOME-American Rescue Plan (HOME-ARP) Loan Agreement dated as of March ___, 2023 (the “Subordinate Loan Agreement”), by and between Borrower and Subordinate Lender. The Subordinate Loan is evidenced by that certain City HOME-ARP Loan Note Secured By Subordinated Deed of Trust to the City of Santa Ana, California dated as of March ___, 2023 (the “Subordinate Note”), executed by Borrower to the order of Subordinate Lender in the face principal amount of ///[$5,256,327]/// and secured by that certain City HOME-ARP Deed of Trust and Assignment of Rents dated as of March ___, 2023 (the “Subordinate Mortgage”), executed by Borrower for the benefit of Subordinate Lender and recorded in the Official Records substantially concurrently herewith. In connection with the Subordinate Loan, Borrower and Subordinate Lender will also enter into that certain Affordability Restrictions on Transfer of Property dated as of March ___, 2023 (the “Unsubordinated City Regulatory Agreement”) and recorded in the Official Records substantially concurrently herewith. Borrower and Subordinate Lender also entered into that certain Density Bonus Agreement dated as of June 21, 2022 (the “Density Bonus Agreement”), by and between Borrower and Subordinate Lender and recorded in the Official Records on June 29, 2022 under Instrument No. 2022000231667. E. Senior Lender has agreed to permit the Subordinate Loan and to allow the subordinate mortgage liens against the Mortgaged Property subject to all of the conditions contained in this Agreement. AGREEMENTS: NOW, THEREFORE, in order to induce the Senior Lender to permit the Subordinate Lender to make the Subordinate Loan to Borrower and to place a subordinate mortgage lien against the Mortgaged Property, and in consideration thereof, Senior Lender, Subordinate Lender and Trustor agree as follows: 1. Recitals. The recitals set forth above are incorporated herein by reference. 2. Definitions. In addition to the terms defined in the Recitals to this Agreement, for purposes of this Agreement the following terms have the respective meanings set forth below: “Affiliate” means, when used with respect to a Person, any corporation, partnership, joint venture, limited liability company, limited liability partnership, trust or individual Controlled by, under EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 3 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. common Control with, or which Controls such Person, and in all cases any other Person that holds fifty percent (50%) or more of the ownership interests in such Person. “Borrower” means the Person named as such in the first paragraph on page 1 of this Agreement, any successor or assign of Borrower, including without limitation, a receiver, trustee or debtor-in- possession and any other Person (other than Senior Lender) who acquires title to the Mortgaged Property after the date of this Agreement. “Business Day” means any day other than (a) a Saturday, (b) a Sunday, (c) a day on which Senior Lender or Subordinate Lender is not open for business, or (d) a day on which the Federal Reserve Bank of New York is not open for business. “Condemnation Action” means any action or proceeding, however characterized or named, relating to any condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect. “Control” (including with correlative meanings, the terms “Controlling,” “Controlled by” and “under common Control with”), as applied to any entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or operations of such entity, whether through the ownership of voting securities, ownership interests or by contract or otherwise. “Default Notice” means: (a) a copy of any written notice from Senior Lender to Borrower and Subordinate Lender stating that a Senior Loan Default has occurred under the Senior Loan Documents; or (b) a copy of any written notice from Subordinate Lender to Borrower and Senior Lender stating that a Subordinate Loan Default or a default under any Unsubordinated City Regulatory Agreement or the Density Bonus Agreement has occurred, as applicable. Each Default Notice shall specify the default upon which such Default Notice is based. “Official Records” means the Official Records of Orange County, California. “Person” means an individual, an estate, a trust, a corporation, a partnership, a limited liability company or any other organization or entity (whether governmental or private). “Senior Lender” means the Person named as such in the first paragraph on Page 1 of this Agreement, its successors and assigns and any other Person who becomes the legal holder of the Senior Loan after the date of this Agreement. “Senior Loan Agreement” has the meaning set forth in Recital A, above. “Senior Loan Default” means the occurrence of an “Event of Default” as that term is defined in the Senior Loan Documents. “Senior Loan Documents” has the meaning set forth in Recital C, above. “Senior Note” has the meaning set forth in Recital A, above. EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 4 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. “Senior Security Instrument” has the meaning set forth in Recital B, above. “Subordinate Assignment” means that certain Assignment of Lessor’s Interest in Leases, Rents and Profits dated as of __________________, 2023, executed by Borrower for the benefit of Lender, which is recording in the Official Records substantially concurrently herewith, encumbering the Mortgaged Property as security for the Subordinate Loan. “Subordinate Lender” means the Person named as such in the first paragraph on page 1 of this Agreement, any successor or assign of Subordinate Lender, or any other Person who becomes the legal holder of the Subordinate Note after the date of this Agreement. “Subordinate Loan Agreement” has the meaning set forth in Recital D, above. “Subordinate Loan Default” means a default by Borrower in performing or observing any of the terms, covenants or conditions in the Subordinate Loan Documents to be performed or observed by it, which continues beyond any applicable period provided in the Subordinate Loan Documents for curing the default. “Subordinate Loan Documents” means the Subordinate Loan Agreement, Subordinate Note, the Subordinate Mortgage, the Subordinate Assignment, any UCC-1 financing statement filed showing Borrower, as debtor, and Subordinate Lender, as secured party, filed in connection with the Subordinate Loan, and all other documents evidencing, securing or otherwise executed and delivered in connection with the Subordinate Loan, but specifically excluding the Unsubordinated City Regulatory Agreement and the Density Bonus Agreement. “Subordinate Loan” has the meaning set forth in Recital D, above. “Subordinate Mortgage” has the meaning set forth in Recital D, above. “Subordinate Note” has the meaning set forth in Recital D, above. “Unsubordinated City Regulatory Agreement” has the meaning set forth in Recital D, above. 3. Permission to Place Mortgage Lien Against Mortgaged Property. Senior Lender agrees, notwithstanding the prohibition against inferior liens on the Mortgaged Property contained in the Senior Loan Documents and subject to the provisions of this Agreement, to permit Subordinate Lender to record the Subordinate Mortgage, the Unsubordinated City Regulatory Agreement, and other recordable Subordinate Loan Documents against the Mortgaged Property to secure Borrower’s obligation to repay the Subordinate Note and all other obligations, indebtedness and liabilities of Borrower to Subordinate Lender under and in connection with the Subordinate Loan. Such permission is subject to the condition that each of the representations and warranties made by the Borrower and the Subordinate Lender in Section 4 is true and correct on the date of this Agreement and on the date on which the proceeds of the Subordinate Loan are disbursed to the Borrower. If any of the representations and warranties made by the Borrower and the Subordinate Lender in Section 4 is not true and correct on both of those dates, the EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 5 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. provisions of the Senior Loan Documents applicable to unpermitted liens on the Mortgaged Property shall apply. 4. Borrower’s and Subordinate Lender’s Representations and Warranties. Borrower and Subordinate Lender each makes the following representations and warranties to Senior Lender: (a) Subordinate Loan Documents. Each Subordinate Loan is evidenced by the Subordinate Note and is secured by the Subordinate Mortgage, the Subordinate Loan Agreement and the Subordinate Loan Documents. (b) Relationship of Borrower to Subordinate Lender and Senior Lender. The Subordinate Lender is not an Affiliate of the Borrower and is not in possession of any facts which would lead it to believe that the Senior Lender is an Affiliate of the Borrower. (c) Term. The term of the Subordinate Note does not end before the stated term of the Senior Note. (d) Subordinate Loan Documents and Unsubordinated City Regulatory Agreement. The executed Subordinate Loan Documents and the Unsubordinated City Regulatory Agreement are substantially in the same forms as those submitted to, and approved by, Senior Lender prior to the date of this Agreement. Upon execution and delivery of the Subordinate Loan Documents and the Unsubordinated City Regulatory Agreement, Borrower shall deliver to Senior Lender an executed copy of each of the Subordinate Loan Documents and the Unsubordinated City Regulatory Agreement, certified to be true, correct and complete. 5. Deliveries. Upon execution and delivery of the Senior Loan Documents, Borrower shall deliver to Subordinate Lender an executed copy of each of the Senior Loan Documents, certified to be true, correct and complete. 6. Terms of Subordination. (a) Agreement to Subordinate. Senior Lender and Subordinate Lender agree that (1) the Unsubordinated City Regulatory Agreement and the Density Bonus Agreement shall remain senior to the lien of the Senior Security Instrument and all other Senior Loan Documents, (2) subject to the terms of paragraph (c) below in this Section 6, the indebtedness evidenced by the Subordinate Loan Documents is and shall be subordinated in right of payment, to the extent and in the manner provided in this Agreement, to EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 6 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. the prior payment in full of the Indebtedness evidenced by the Senior Loan Documents, and (3) the liens, terms, covenants and conditions of the Subordinate Mortgage and the other Subordinate Loan Documents are and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the Senior Security Instrument and the other Senior Loan Documents and to all advances heretofore made or which may hereafter be made pursuant to the Senior Security Instrument and the other Senior Loan Documents (including but not limited to, all sums advanced for the purposes of (1) protecting or further securing the lien of the Senior Security Instrument, curing defaults by Borrower under the Senior Loan Documents or for any other purpose expressly permitted by the Senior Loan Documents, or (2) constructing, renovating, repairing, furnishing, fixturing or equipping the Mortgaged Property). (b) Subordination of Subrogation Rights. Subordinate Lender agrees that if, by reason of its payment of real estate taxes or other monetary obligations of Borrower, or by reason of its exercise of any other right or remedy under the Subordinate Loan Documents or the Unsubordinated City Regulatory Agreement, it acquires by right of subrogation or otherwise a lien on the Mortgaged Property which (but for this subsection) would be senior to the lien of the Senior Security Instrument, then, in that event, such lien shall be subject and subordinate to the lien of the Senior Security Instrument. (c) Payments Before Senior Loan Default. Notwithstanding anything to the contrary in this Agreement, until Subordinate Lender receives a Default Notice (or otherwise acquires actual knowledge) of a Senior Loan Default, Subordinate Lender shall be entitled to retain for its own account all payments made under or pursuant to the Subordinate Loan Documents. (d) Payments After Senior Loan Default. Borrower agrees that, after it receives a Default Notice (or otherwise acquires knowledge) of a Senior Loan Default, it will not make any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late payment charges, default interest, attorneys’ fees, or any other sums secured by the Subordinate Loan Documents) without Senior Lender’s prior written consent. Subordinate Lender agrees that, after it receives a Default Notice from Senior Lender with written instructions directing Subordinate Lender not to accept payments from Borrower on account of the Subordinate Loan, it will not accept any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late payment charges, default interest, attorneys’ fees, or any other sums secured by the Subordinate Loan Documents) without Senior Lender’s prior written consent or until the Senior Loan has been repaid in full. If Subordinate Lender receives written notice from Senior Lender that the Senior Loan Default which gave rise to Subordinate Lender’s obligation not to accept payments has been cured, waived, or otherwise suspended by Senior Lender, the restrictions on payment to Subordinate Lender in this Section 6 shall terminate, and Senior Lender shall have no right to any subsequent payments made to Subordinate Lender by Borrower prior to Subordinate Lender’s receipt of a new Default Notice from Senior Lender in accordance with the provisions of this Section 6(d). EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 7 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. (e) Remitting Subordinate Loan Payments to Senior Lender. If, after Subordinate Lender receives a Default Notice from Senior Lender in accordance with Section 6(d), Subordinate Lender receives any payments under the Subordinate Loan Documents, Subordinate Lender agrees that such payment or other distribution will be received and held in trust for Senior Lender and unless Senior Lender otherwise notifies Subordinate Lender in writing, will be promptly remitted, in kind to Senior Lender, properly endorsed to Senior Lender, to be applied to the principal of, interest on and other amounts due under the Senior Loan Documents in accordance with the provisions of the Senior Loan Documents. By executing this Agreement, Borrower specifically authorizes Subordinate Lender to endorse and remit any such payments to Senior Lender, and specifically waives any and all rights to have such payments returned to Borrower or credited against the Subordinate Loan. Borrower and Senior Lender acknowledge and agree that payments received by Subordinate Lender, and remitted to Senior Lender under this Section 6, shall not be applied or otherwise credited against the Subordinate Loan, nor shall the tender of such payment to Senior Lender waive any Subordinate Loan Default which may arise from the inability of Subordinate Lender to retain such payment or apply such payment to the Subordinate Loan. (f) Notice of Payment from Other Persons. Subordinate Lender agrees to notify (telephonically or via email, followed by written notice) Senior Lender of Subordinate Lender’s receipt from any Person oth er than Borrower of a payment with respect to Borrower’s obligations under the Subordinate Loan Documents, promptly after Subordinate Lender obtains knowledge of such payment. (g) Agreement Not to Commence Bankruptcy Proceeding. Subordinate Lender agrees that during the term of this Agreement it will not commence, or join with any other creditor in commencing any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings against or with respect to Borrower, without Senior Lender’s prior written consent. 7. Default Under Subordinate Loan Documents, Unsubordinated City Regulatory Agreement or Density Bonus Agreement. (a) Notice of Subordinate Loan Default and Cure Rights. During the term of this Agreement, Subordinate Lender shall deliver to Senior Lender a Default Notice within five (5) Business Days in each case where Subordinate Lender has given a Default Notice to Borrower. Failure of Subordinate Lender to send a Default Notice to Senior Lender shall not prevent the exercise of Subordinate Lender’s rights and remedies under the Subordinate Loan Documents, the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement, as applicable, subject to the provisions of this Agreement. Senior Lender shall have the right, but not the obligation, to cure any Subordinate Loan Default or any default under the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement within sixty (60) days following the date of such notice; provided, however that Subordinate Lender shall be EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 8 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. entitled, during such sixty (60) day period, to continue to pursue its rights and remedies under the Subordinate Loan Documents, the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement, as applicable, to the extent permitted under Section 7(b). All amounts paid by Senior Lender in accordance with the Senior Loan Documents to cure a Subordinate Loan Default or a default under the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement shall be deemed to have been advanced by Senior Lender pursuant to, and shall be secured by, the Senior Loan Agreement and the Senior Security Instrument. (b) Subordinate Lender’s Agreement to Standstill. If a Subordinate Loan Default or a default under any Unsubordinated City Regulatory Agreement occurs and is continuing, the Subordinate Lender agrees that, without the Senior Lender’s prior written consent, it will not accelerate the Subordinate Loans, commence foreclosure proceedings with respect to the Mortgaged Property, collect rents, appoint (or seek the appointment of) a receiver or institute any other collection or enforcement action. (c) Cross Default. Trustor and Subordinate Lender agree that a Subordinate Loan Default and/or a default under the Unsubordinated City Regulatory Agreement shall constitute a Senior Loan Default under the Senior Loan Documents and Senior Lender shall have the right to exercise all rights or remedies under the Senior Loan Documents in the same manner as in the case of any other Senior Loan Default. If Subordinate Lender notifies Senior Lender in writing that any Subordinate Loan Default or of any default under the Unsubordinated City Regulatory Agreement of which Senior Lender has received a Default Notice has been cured or waived, as determined by Subordinate Lender in its sole discretion, then provided that Senior Lender has not conducted a sale of the Mortgaged Property pursuant to its rights under the Senior Loan Documents, any Senior Loan Default under the Senior Loan Documents arising solely from such Subordinate Loan Default or default under the Unsubordinated City Regulatory Agreement shall be deemed cured, and the Senior Loan shall be reinstated, provided, however, that Senior Lender shall not be required to return or otherwise credit for the benefit of Borrower any default rate interest or other default related charges or payments received by Senior Lender during such Senior Loan Default. 8. Default Under Senior Loan Documents. (a) Notice of Senior Loan Default and Cure Rights. Senior Lender shall deliver to Subordinate Lender a Default Notice within five (5) Business Days in each case where Senior Lender has given a Default Notice to Borrower. Failure of Senior Lender to send a Default Notice to Subordinate Lender shall not prevent the exercise of Senior Lender’s rights and remedies under the Senior Loan Documents, subject to the provisions of this Agreement. The Subordinate Lender shall have the right, but not the obligation, to cure any such Senior Loan Default as provided below. Subordinate Lender shall have up to thirty (30) days from the date of the Default Notice to cure any monetary default under the Senior Loan Documents; provided, however, that the Senior Lender shall be entitled during such 30-day period to continue to pursue its remedies with respect to the Mortgaged Property. Subordinate Lender shall have up to EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 9 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. sixty (60) days from the date of the Default Notice to cure a non-monetary default if during such 60- day period Subordinate Lender keeps current all payments required by the Senior Loan Documents. In the event that such a non-monetary default creates an unacceptable level of risk relative to the Mortgaged Property, or Senior Lender’s secured position relative to the Mortgaged Property, as determined by Senior Lender in its sole discretion, then Senior Lender may exercise during such 60- day period all available rights and remedies to protect and preserve the Mortgaged Property and the rents, revenues and other proceeds from the Mortgaged Property. All amounts paid by the Subordinate Lender to the Senior Lender to cure a Senior Loan Default shall be deemed to have been advanced by the Subordinate Lender pursuant to, and shall be secured by the lien of, the Subordinate Mortgage. (b) Cross Default. Subordinate Lender agrees that, notwithstanding any contrary provision contained in the Subordinate Loan Documents, a Senior Loan Default shall not constitute a default under the Subordinate Loan Documents (if no other default has occurred under the Subordinate Loan Documents) until either (1) Senior Lender has accelerated the maturity of the Senior Loan, or (2) Senior Lender has taken affirmative action to exercise its rights under the Senior Loan Documents to collect rent, to appoint (or seek the appointment of) a receiver or to foreclose on (or to exercise a power of sale contained in) the Senior Loan Documents. At any time after a Senior Loan Default is determined to constitute a default under the Subordinate Loan Documents, Subordinate Lender shall be permitted to pursue its remedies for default under the Subordinate Loan Documents, subject to the restrictions and limitations of this Agreement. If at any time Borrower cures any Senior Loan Default to the satisfaction of Senior Len der, as evidenced by written notice from Senior Lender to Subordinate Lender, any default under the Subordinate Loan Documents arising from such Senior Loan Default shall be deemed cured and the Subordinate Loan shall be retroactively reinstated as if such Senior Loan Default had never occurred. 9. Conflict. Trustor, Senior Lender and Subordinate Lender each agrees that, in the event of any conflict or inconsistency between the terms of the Senior Loan Documents, the Subordinate Loan Documents, the Unsubordinated City Regulatory Agreement, the Density Bonus Agreement and the terms of this Agreement, the terms of this Agreement shall govern and control solely as to the following: (a) the relative priority of the security interests of Senior Lender and Subordinate Lender in the Mortgaged Property; (b) the timing of the exercise of remedies by Senior Lender and Subordinate Lender under the Senior Loan Documents and the Subordinate Loan Documents and/or the Unsubordinated City Regulatory Agreement, respectively; and (c) solely as between Senior Lender and Subordinate Lender, the notice requirements, cure rights, and the other rights and obligations which Senior Lender and Subordinate Lender have agreed to as expressly provided in this Agreement. Trustor acknowledges that the terms and provisions of this Agreement shall not, and shall not be deemed to: extend Trustor’s time to cure any Senior Loan Default or Subordinate Loan Default and/or default under the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement, as the case may be; give Trustor the right to notice of any Senior Loan Default or Subordinate Loan Default and/or default under the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement, as the case may be other than that, if any, EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 10 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. provided, respectively under the Senior Loan Documents or the Subordinate Loan Documents, Unsubordinated City Regulatory Agreement and/or the Density Bonus Agreement; or create any other right or benefit for Trustor as against Senior Lender or Subordinate Lender. 10. Rights and Obligations of Subordinate Lender Under the Subordinate Loan Documents and of Senior Lender under the Senior Loan Documents. Subject to each of the other terms of this Agreement, all of the following provisions shall supersede any provisions of the Subordinate Loan Documents covering the same subject matter: (a) Protection of Security Interest. Subordinate Lender shall not, without the prior written consent of Senior Lender in each instance, take any action which has the effect of increasing the indebtedness outstanding under, or secured by, the Subordinate Loan Documents, except that Subordinate Lender shall have the right to advance funds to cure Senior Loan Defaults pursuant to Section 8(a) and advance funds pursuant to the Subordinate Loan Documents for the purpose of paying real estate taxes and insurance premiums, making necessary repairs to the Mortgaged Property and curing other defaults by Borrower under the Subordinate Loan Documents. (b) Condemnation or Casualty. Following the occurrence of (1) a Condemnation Action, or (2) a fire or other casualty resulting in damage to all or a portion of the Mortgaged Property (collectively, a “Casualty”), at any time or times when the Senior Security Instrument remains a lien on the Mortgaged Propert y the following provisions shall apply: (A) Subordinate Lender hereby agrees that its rights (under the Subordinate Loan Documents or otherwise) to participate in any proceeding or action relating to a Condemnation Action or a Casualty, or to participate or jo in in any settlement of, or to adjust, any claims resulting from a Condemnation Action or a Casualty shall be and remain subject and subordinate in all respects to Senior Lender’s rights under the Senior Loan Documents with respect thereto, and Subordinate Lender shall be bound by any settlement or adjustment of a claim resulting from a Condemnation Action or a Casualty made by Senior Lender; provided, however, this subsection or anything contained in this Agreement shall not limit the rights of Subordinate Lender to file any pleadings, documents, claims or notices with the appropriate court with jurisdiction over the proposed Condemnation Action or Casualty; and (B) all proceeds received or to be received on account of a Condemnation Action or a Casualty, or both, shall be applied (either to payment of the costs and expenses of repair and restoration or to payment of the Senior Loan) in the manner determined by Senior Lender in its sole discretion; provided, however, that if Senior Lender is entitled to and elects to apply such proceeds to payment of the principal of, interest on and other amounts payable under the Senior EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 11 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. Loan, any proceeds remaining after the satisfaction in full of the principal of, interest on and other amounts payable under the Senior Loan shall be paid to, and may be applied by, Subordinate Lender in accordance with the applicable provisions of the Subordinate Loan Documents, provided however, Senior Lender agrees to consult with Subordinate Lender in determining the application of Casualty proceeds, provided further however that in the event of any disagreement between Senior Lender and Subordinate Lender over the application of Casualty proceeds, the decision of Senior Lender, in its sole discretion, shall prevail. (c) Insurance. Subordinate Lender agrees that all original policies of insurance required pursuant to the Senior Security Instrument shall be held by Senior Lender. The preceding sentence shall not preclude Subordinate Lender from requiring that it be named as a loss payee, as its interest may appear, under all policies of property damage insurance maintained by Borrower with respect to the Mortgaged Property, provided such action does not affect the priority of payment of the proceeds of property damage insurance under the Senior Security Instrument, or that it be named as an additional insured under all policies of liability insurance maintained by Borrower with respect to the Mortgaged Property. (d) No Modification of Subordinate Loan Documents or Unsubordinated City Regulatory Agreement. Borrower and Subordinate Lender each agree that, until the principal of, interest on and all other amounts payable under the Senior Loan Documents have been paid in full, it will not, without the prior written consent of Senior Lender in each instance, increase the amount of any Subordinate Loan, increase the required payments due under any Subordinate Loan, decrease the term of any Subordinate Loan, increase the interest rate on any Subordinate Loan, or otherwise amend any Subordinate Loan terms or the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement in a manner that creates an adverse effect upon Senior Lender under the Senior Loan Documents. Any unauthorized amendment of the Subordinate Loan Documents, the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement, or assignment of Subordinate Lender’s interest in any Subordinate Loan without Senior Lender’s consent, shall be void ab initio and of no effect whatsoever and Subordinate Lender agrees that it shall not transfer or assign the Subordinate Loan or any Subordinate Loan Document without the prior written consent of the Senior Lender. 11. Modification or Refinancing of Senior Loan. Subordinate Lender consents to any agreement or arrangement in which Senior Lender waives, postpones, extends, reduces or modifies any provisions of the Senior Loan Documents, including any provision requiring the payment of money. Subordinate Lender furt her agrees that its agreement to subordinate hereunder shall extend to any amendments or additional documents executed in connection with any new mortgage debt which is for the purpose of refinancing all or any part of the Senior Loan (including reasonable and necessary costs associated with the closing and/or the refinancing) and, in the event of new mortgage debt, Subordinate Lender shall execute EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 12 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. and deliver to Senior Lender a new subordination agreement on the same terms and conditions as this Subordination Agreement; and that all the terms and covenants of this Agreement shall inure to the benefit of any holder of any such refinanced debt; and that all references to the Senior Loan, the Senior Note, the Senior Loan Agreement, the Senior Security Instrument, the Senior Loan Documents and Senior Lender shall mean, respectively, the refinance loan, the refinance note loan agreement, the mortgage securing the refinance note, all documents evidencing securing or otherwise pertaining to the refinance note and the holder of the refinance note. 12. Default by Subordinate Lender or Senior Lender. If Subordinate Lender or Senior Lender defaults in performing or observing any of the terms, covenants or conditions to be performed or observed by it under this Agreement, the other, non-defaulting lender shall have the right to all available legal and equitable relief. 13. Special Provisions Regarding Unsubordinated City Regulatory Agreement. (a) Transfers. Notwithstanding anything set forth in the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement to the contrary, nothing in the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement shall be deemed to restrict or limit, or require the consent of Subordinate Lender to, the following: (i) any foreclosure or deed in lieu of foreclosure of the Senior Security Instrument by Senior Lender or its successor, assigns, or nominee (a “Foreclosure Action”), or (ii) the first subsequent transfer by Senior Lender or its successors, assigns or nominee following a Foreclosure Action. Neither the successor owner initially acquiring title to the Mortgaged Property as a result of a Foreclosure Action, nor its immediate successor in interest, shall be subject to any of the limitations upon creation of indebtedness nor creation of any lien securing indebtedness set forth in the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement; provided that any subsequent mortgagee or lienholder with respect to such indebtedness shall agree that in the event of foreclosure or deed in lieu of foreclosure, the transferee under such foreclosure agrees that it will take subject to the Unsubordinated City Regulatory Agreement and the Density Bonus Agreement; and provided further that all other subsequent encumbrances shall be subject to Subordinate Lender’s approval under the Unsubordinated City Regulatory Agreement and the Density Bonus Agreement. Any sale, assignment or transfer of the Mortgaged Property following a transfer pursuant to a Foreclosure Action (other than the first transfer thereafter) shall be subject to Subordinate Lender’s rights under the Unsubordinated City Regulatory Agreement and the Density Bonus Agreement to approve such transfer, except that Subordinate Lender agrees that its decision to approve any such sale, assignment or other transfer will be based solely upon whether the proposed transferee is qualified to manage and operate affordable housing projects similar to the Mortgaged Property, and the Subordinate Lender will not unreasonably withhold, delay or condition its consent to any such proposed transfer; (b) Compliance with Subordinate Loan Documents. Notwithstanding anything to the contrary set forth in the Unsubordinated City Regulatory Agreement, from and after any foreclosure or deed in lieu of foreclosure, neither Senior Lender nor any successor in interest to the Property following any foreclosure or deed in lieu of foreclosure of the Senior Deed of Trust (collectively, the “Successor Owner”), shall be obligated to comply with the terms of any EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 13 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. Subordinate Loan Document and neither Senior Lender, nor any Successor Owner have any obligation to repay the Subordinate Loan. (c) Indemnification Provisions in Unsubordinated City Regulatory Agreement. Notwithstanding anything to the contrary set forth in the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement, in no event shall Senior Lender or any Successor Owner be liable to Subordinate Lender for amounts due to the Subordinate Lender under the Unsubordinated City Regulatory Agreement or the Density Bonus Agreement as the result of an act or a failure to act occurring prior to the date on which Senior Lender or its successor, assign, or nominee acquires title to the Mortgaged Property by foreclosure or deed in lieu of foreclosure. (d) Default Under Unsubordinated City Regulatory Agreement. No Successor Owner shall be required to cure any default under the Unsubordinated City Regulatory Agreement first occurring prior to the date upon which such Successor Owner acquired title to the Mortgaged Property, except that each Successor Owner shall be required to cure continuing defaults under the Unsubordinated City Regulatory Agreement related to the Mortgaged Property; provided further, however, that each such Successor Owner shall have 120 days after the date upon which it acquires title to the Mortgaged Property to cure such continuing defaults, or, if any such continuing default is not reasonably susceptible to a cure by such Successor Owner within such period, to commence curing such default (and in such latter case, such owner shall thereafter continuously and diligently pursue the cure of such default to completion). 14. Reinstatement. To the extent that Borrower makes a payment to Senior Lender or Senior Lender receives any payment or proceeds of the collateral securing the Senior Loan for Borrower’s benefit, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable doctrine, then to the extent of such payment or proceeds received and not retained by Senior Lender, this Agreement shall be reinstated and continue in full force and effect until full and final payment shall have been made to Senior Lender. Subordinate Lender agrees to hold in trust for Senior Lender and promptly remit to Senior Lender any payments received by Subordinate Lender after such invalidated, rescinded or returned payment was originally made. 15. Notices. Each notice, request, demand, consent, approval or other communication (hereinafter in this Section referred to collectively as “notices” and referred to singly as a “notice”) which the Senior Lender or the Subordinate Lender is required or permitted to give to the other party pursuant to this Agreement shall be in writing and shall be deemed to have been duly and sufficiently given if: (a) personally delivered with proof of delivery thereof (any notice so delivered shall be deemed to have been received at the time so delivered); or (b) sent by Federal Express (or other similar national overnight courier) designating early morning delivery (any notice so delivered shall be deemed to have been received on the next Business Day following receipt by the courier); or (c) sent by United States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 14 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. maintained by the United States Postal Service (any notice so sent shall be deemed to have been received two days after mailing in the United States), addressed to the respective parties as follows: SENIOR LENDER: Bank of America, N.A. Mail Code #CA4-704-06-06 2000 Clayton Road 6th Floor Concord, California 94520-2405 Attention: Loan Administration Manager SUBORDINATE LENDER: City of Santa Ana City Manager 20 Civic Center Plaza P.O. Box 1988 Santa Ana, California 92702 With a copy to: City of Santa Ana City Attorney 20 Civic Center Plaza 7th Floor (M-29) Santa Ana, California 92702 Either party may, by notice given pursuant to this Section, change the person or persons and/or address or addresses, or designate an additional person or persons or an additional address or addresses for its notices, but notice of a change of address shall only be effective upon receipt. 16. General. (a) Assignment/Successors. This Agreement shall be binding upon Trustor, Senior Lender and Subordinate Lender and shall inure to the benefit of the respective legal successors, transferees and assigns of Trustor, Senior Lender and Subordinate Lender. Trustor shall not assign any of its rights and obligations under this Agreement without the prior written consent of Senior Lender and Subordinate Lender. (b) No Partnership or Joint Venture. Senior Lender’s permission for the placement of the Subordinate Loan does not constitute Senior Lender as a joint venturer or partner of Subordinate Lender. Neither party hereto shall hold itself out as a partner, agent or Affiliate of the other party hereto. EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 15 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. (c) Senior Lender’s and Subordinate Lender’s Consent. Wherever Senior Lender’s consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by Senior Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement. Wherever Subordinate Lender’s consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by Subordinate Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement. (d) Further Assurances. Subordinate Lender, Senior Lender and Trustor each agrees, at Borrower’s expense, to execute and deliver all additional instruments and/or documents reasonably required by any other party to this Agreement in order to evidence that the Subordinate Mortgage is subordinate to the lien, covenants and conditions of the Senior Loan Documents, or to further evidence the intent of this Agreement. (e) Amendment. This Agreement shall not be amended except by written instrument signed by all parties hereto. (f) Governing Law. This Agreement shall be governed by the laws of the jurisdiction in which the Mortgaged Property is located without giving effect to any choice of law provisions thereof that would result in the application of the laws of another jurisdiction. Senior Lend er, Subordinate Lender and Trustor agree that any controversy arising under or in relation to this Security Instrument shall be litigated exclusively in the jurisdiction in which the Mortgaged Property is located. The state and federal courts and authorities with jurisdiction in such locale shall have exclusive jurisdiction over all controversies that arise under or in relation to this Agreement. The parties hereto irrevocably consent to service, jurisdiction, and venue of such courts for any such litigat ion and waive any other venue to which any might be entitled by virtue of domicile, habitual residence or otherwise. (g) Severable Provisions. If any provision of this Agreement shall be invalid or unenforceable to any extent, then the other provisions of this Agreement, shall not be affected thereby and shall be enforced to the greatest extent permitted by law. (h) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall together constitute one (1) and the same instrument. EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page 16 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. (i) Sale of Senior Loan. Nothing in this Agreement shall limit Senior Lender’s (including any assignee or transferee of Senior Lender) right to sell or transfer the Senior Loan, or any interest in the Senior Loan. The Senior Loan or a partial interest in the Senior Loan (together with this Agreement and the other Loan Documents) may be sold one or more times without prior notice to Trustor. [Remainder of Page Intentionally Left Blank] EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page S-1 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. IN WITNESS WHEREOF, Trustor, Senior Lender and Subordinate Lender have signed and delivered this Agreement under seal (where applicable) or have caused this Agreement to be signed and delivered under seal (where applicable) by a duly authorized representative. Where applicable law so provides, Trustor, Senior Lender, and Subordinate Lender intend that this Agreement shall be deemed to be signed and delivered as a sealed instrument. SENIOR LENDER: BANK OF AMERICA, N.A., a national banking association By: __________________________________ Michael K. Petty Senior Vice President Address: Bank of America, N.A. Mail Code #CA4-704-06-06 2000 Clayton Road 6th Floor Concord, California 94520-2405 Attention: Loan Administration Manager EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page S-2 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. BORROWER: NORTH BROADWAY HOUSING PARTNERS LP, a California limited partnership By: JHC-North Broadway LLC, a California limited liability company, its Managing General Partner By: Jamboree Housing Corporation, a California non-profit public benefit corporation, its Managing Member By: __________________________________ Michael Massie Chief Development Officer Borrower’s address for notice purposes: North Broadway Housing Partners LP c/o Jamboree Housing Corporation 17701 Cowan Avenue Suite 200 Irvine, CA 92614 Attention: Asset Management With a copy to: Rutan & Tucker, LLP 18575 Jamboree Road 9th Floor Irvine, CA 92612 Attention: Patrick D. McCalla, Esq. EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page S-3 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. GROUND LESSOR: WISEPLACE, a California nonprofit public benefit corporation By: __________________________________ [Name] [Title] Ground Lessor’s address for notice purposes: WISEPlace ______________________________ ______________________________ ______________________________ Attention: _____________________ EXHIBIT 4 _ _ ____ ___ __ SUBORDINATE LENDER: CITY OF SANTA ANA, a charter city and municipal corporation By: ___________________________________ Kristine Ridge City Manager ATTEST: By: __________________________________ Norma Orozco Clerk of the Council Dated: _________________________________ APPROVED AS TO FORM: SONIA R. CARVALHO, City Attorney By: _ _ _ _ _ __________________ Special Counsel to the City Best, Best & Krieger Dated: _________________________________ RECOMMENDED FOR APPROVAL: By: __________________________________ Michael L. Garcia Executive Director Community Development Agency Subordination Agreement (City of Santa Ana) Form 6456 Page S-4 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. 2/23/23 EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Page A-1 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. EXHIBIT A Legal Description APN: ____________________________ EXHIBIT 4 All that certain real property situated in the County of Orange, State of California, described as follows: COMMENCING AT THE CENTERLINE INTERSECTION OF 15TH STREET AND SYCAMORE STREET AS SHOWN ON THE RECORD OF SURVEY NO 85-1067, RECORDED IN BOOK 111, PAGE 38, OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, SAID CENTERLINE OF SYCAMORE STREET BEING DESCRIBED IN THAT CERTAIN FINAL JUDGMENT, SUPERIOR COURT CASE NO. 23280, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 8, 1929 IN BOOK 227, PAGE 401 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, CALIFORNIA; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET SOUTH 00° 14' 46” WEST, 90 FEET AND SOUTH 00° 04' 48” EAST, 213.42 FEET TO THE POINT OF BEGINNING; THENCE LEAVING SAID CENTERLINE NORTH 89° 58' 21” WEST, 312.17 FEET TO THE CENTERLINE OF BROADWAY, THENCE NORTHERLY ALONG SAID CENTERLINE OF BROADWAY NORTH 00° 16' 10” EAST, 75.00 FEET TO THE SOUTHWEST CORNER OF THE LAND DESCRIBED IN A DEED TO T. J. MULLINIX RECORDED OCTOBER 29, 1897 IN BOOK 33, PAGE 197 OF DEEDS OF SAID ORANGE COUNTY; THENCE EASTERLY ALONG SAID SOUTHERLY LINE OF SAID DEED TO T. J. MULLINIX SOUTH 89° 58' 10” EAST, 181.72 FEET TO THE WESTERLY LINE OF THE EAST 130.00 FEET OF THAT PORTION OF THE LAND ALLOTTED TO JACOB ROSS, AS DESCRIBED IN THE FINAL DECREE OF PARTITION OF THE RANCHO SANTIAGO DE SANTA ANA, WHICH WAS ENTERED SEPTEMBER 12, 1869 IN BOOK “B”, PAGE 410 OF JUDGMENTS OF THE DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND FOR LOS ANGELES COUNTY, CALIFORNIA; THENCE NORTHERLY, ALONG SAID WESTERLY LINE NORTH 00° 04' 48” WEST, 77.08 FEET; THENCE SOUTH 89°58'10” EAST, 130.00 FEET TO THE ABOVE MENTIONED CENTERLINE OF SYCAMORE STREET; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET, SOUTH 00°04'48” EAST, 152.06 FEET TO THE POINT OF BEGINNING. SAID LAND IS SHOWN AS LOT 1 ON VOLUNTARY LOT MERGER NO. 2022-06 RECORDED JANUARY 26, 2023 AS INSTRUMENT NO. 2023000018589, OFFICIAL RECORDS OF SAID COUNTY. Assessor’s Parcel Number: 398-523-04 EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ) ) ss County of _______________________ ) On ________________________, 2023 before me, ____________________________________, a Notary Public, personally appeared __________________________________________, who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/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. WITNESS my hand and official seal. Signature (Seal) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ) ) ss County of ____________________ ) On ________________________, 2023 before me, ____________________________________, a Notary Public, personally appeared __________________________________________, who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/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. WITNESS my hand and official seal. Signature (Seal) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ) ) ss County of ____________________ ) On ________________________, 2023 before me, ____________________________________, a Notary Public, personally appeared __________________________________________, who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/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. WITNESS my hand and official seal. Signature (Seal) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. EXHIBIT 4 Subordination Agreement (City of Santa Ana) Form 6456 Fannie Mae 08-13 © 2013 Fannie Mae WISEPlace 4893-9038-0110v.4 4900000-002383 NOTE: NO CREDIT APPROVAL HAS BEEN RECEIVED. THIS IS NOT A COMMITMENT. CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ) ) ss County of ____________________ ) On ________________________, 2023 before me, ____________________________________, a Notary Public, personally appeared __________________________________________, who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/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. WITNESS my hand and official seal. Signature (Seal) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. EXHIBIT 4 1 FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail to: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council _________________________________________________________________ SUBORDINATION AGREEMENT CITY OF SANTA ANA AND COUNTY OF ORANGE This Subordination Agreement (this "Subordination Agreement") is dated for reference purposes as of ____________, and is executed by and between the CITY OF SANTA ANA, a California charter city (the “City”), and the COUNTY OF ORANGE, a political subdivision of the State of California (the "County"). Factual Background A.City has agreed to make a permanent loan to North Broadway Housing Partners L.P., a California limited partnership (the "Borrower"), in the original principal amount of up to Five Million Two Hundred Fifty Six Thousand Three Hundred Twenty Seven Dollars ($5,256,327) (the “City Loan”) to assist in financing the construction of an affordable multifamily residential development (the “Project”) on property located at 1411 N. Broadway in Santa Ana, and more particularly described in Exhibit A attached hereto and incorporated herein (the “Property”). B.The City Loan is evidenced by a City HOME-ARP Loan Agreement dated as of ________________, and executed by and between Borrower and the City (the “City Loan Agreement”) and a City HOME-ARP Promissory Note executed by the Borrower in favor of the County dated as of ______________ (the “City Note”). The City Loan is secured by a City HOME-ARP Deed of Trust________, dated as of _________, that will be recorded in the official records of Orange County (“Official Records”) substantially concurrently herewith (the “City Deed of Trust”). The City Loan Agreement, the City Note, and the City Deed of Trust are collectively referred to herein as the “City Loan Documents.” In connection with the City Loan, Borrower and City will execute that certain Affordability Restrictions on the Transfer of Property, which will be recorded substantially concurrently herewith (the “City Regulatory Agreement”). C.Pursuant to a County of Orange ARPA Loan Agreement dated as of _____________, between County and Borrower (“County Loan Agreement”), County has made or is EXHIBIT 5 2 making a loan to Borrower in the maximum principal amount of One Million Five Hundred Thousand Dollars ($ 1,500,000) (“County Loan”). The County is secured by a County of ARPA Deed of Trust dated as of _______________ (“County Deed of Trust”) encumbering all or a portion of the Mortgaged Property. In connection with the County Loan, Borrower and County have entered into that certain Amended and Restated Rent Limitation and Regulatory Agreement by and between Borrower and City to be recorded with the Recording Office on or about the date hereof (the “County Regulatory Agreement”). AGREEMENT 1. Subordination. 1.1 The City Deed of Trust, and any and all renewals, modifications permitted hereunder, extensions, or protective advances (including those costs to cure Borrower’s default) thereunder (including interest thereon), is and will remain at all times, a lien, claim, or charge on the Property prior and superior to the County Deed of Trust. County acknowledges that it has had an opportunity to review the City Loan Documents, and County intentionally subordinates the lien of the County Deed of Trust to the City Deed of Trust. 1.2 The City Regulatory Agreement, and any and all renewals, modifications permitted hereunder, extensions, or protective advances (including those costs to cure Borrower’s default) thereunder (including interest thereon), is and will remain at all times, a lien, claim, or charge on the Property prior and superior to the County Regulatory Agreement. County acknowledges that it has had an opportunit y to review the City Regulatory Agreement, and County intentionally subordinates the County Regulatory Agreement to the City Regulatory Agreement. 2. Amendments Require Consent. County agrees that it will not amend or modify the County Loan Documents to shorten the maturity date, increase the principal amount, accelerate the repayment schedule (excluding any acceleration of the County Note due to Borrower’s default) or increase the interest rate payable under the County Loan Documents without City’s prior written consent. City agrees that it will not amend or modify the City Loan Documents to shorten the maturity date, increase the principal amount, accelerate the repayment schedule (excluding any acceleration of the County Note due to Borrower’s default) or increase the interest rate payable under the City Loan Documents without County’s prior written consent. 3. Notice and Cure Rights. 3.1 Definitions: For purposes of this Section 3, the following capitalized words and terms shall have the following meanings. "Cure Period" means a period of a ninety (90) consecutive days from the giving of a Default Notice. "Defaulted Lender" means the party giving a Default Notice. EXHIBIT 5 3 "Default Notice" means written notice of the default(s) or Event(s) of Default giving rise to a party's right to complete a Foreclosure Remedy. "Foreclosure Remedy" means the completion of a foreclosure sale of the Property or the recording of a deed-in-lieu of foreclosure with respect to the Property. "Noticed Defaults" means the noticed default(s) or Event(s) of Default set forth in a Default Notice. "Notice Party" means the party receiving a Default Notice. 3.2 Notice and Cure Rights. (a) Notice and Cure Rights of City. County agrees that concurrently with County’s provision of any notice of default (including without limitation any Default Notice) to Borrower under the County Loan Documents, County shall provide a copy of such notice to City at the address specified below. County agrees that City shall have the right to cure any default of Borrower within the same period of time provided to Borrower under the County Loan Documents, extended by a period of ninety (90) days. County further agrees that it shall not complete a Foreclosure Remedy unless and until City has first been given a Default Notice, and City has failed to cure the Noticed Defaults within the Cure Period or such longer period provided pursuant to this Section; provided, however, that County shall be entitled during the Cure Period to continue to pursue all of its rights and remedies under the County Loan Documents, including but not limited to acceleration of the County Note (subject to the de- acceleration provisions set forth below), commencement and pursuit of foreclosure (but not completion of the foreclosure sale), any guaranty (subject to any notice and cure provisions contained therein), and/or any other County Loan Document. It is the express intent of the parties hereunder that County shall have the right to pursue all rights and remedies except completion of a Foreclosure Remedy without liability to City for failure to provide notice to City, and that the County's liability hereunder shall be expressly limited to actual damages to City directly caused by the County's completion of a Foreclosure Remedy without City receiving the notice and opportunity to cure described above. Except as specifically provided herein, or otherwise agreed in writing, County's failure to give any such notice for any reason shall not act to impair or waive any remedy or right of County under this Subordination Agreement or any of the Loan Documents. (b) Notice and Cure Rights of County. City agrees that concurrently with City’s provision of any notice of default (including without limitation any Default Notice) to Borrower under the City Loan Documents, City shall provide a copy of such notice to County at the address specified below. City agrees that County shall have the right to cure any default of Borrower within the same period of time provided to Borrower under the City Loan Documents, extended by a period of ninety (90) days. City agrees that it shall not complete a Foreclosure Remedy unless and until County has first been given a Default Notice, and County has failed to cure the Noticed Defaults with the Cure Period; provided, however, that City shall be entitled during the Cure Period to continue to pursue all of its rights and remedies under City Loan Documents including but not limited to acceleration of the City Note (subject to the de-acceleration provisions set forth below), commencement and pursuit of foreclosure (but not EXHIBIT 5 4 completion of the foreclosure sale), any guaranty (subject to any notice and cure provisions contained therein), and/or any other City Loan Document. It is the express intent of the parties hereunder that City shall have the right to pursue all rights and remedies except completion of a Foreclosure Remedy without liability to County for failure to provide notice to County, and that the City's liability hereunder shall be expressly limited to actual damages to County directly caused by the City's completion of a Foreclosure Remedy without County receiving the notice and opportunity to cure described above. Except as specifically provided herein, or otherwise agreed in writing, City's failure to give any such notice for any reaso n shall not act to impair or waive any remedy or right of City under this Subordination Agreement or any of the City Loan Documents. 3.3 Exercise of Cure Rights. With respect to the exercise of the cure rights provided in Section 3.2 above, the following shall apply: (a) Each Notice Party, whether County or City, shall have the right, but not the obligation, to elect to cure the Noticed Defaults by giving the Defaulted Lender written notice of its intention to cure the Noticed Defaults within the Cure Period and thereafter curing all Noticed Defaults within the Cure Period. (b) If a cure of all the Noticed Defaults is completed within the Cure Period, the Defaulted Lender will rescind any notice of default recorded and request dismissal of any receiver who has been appointed, after reimbursement of all of Defaulted Lender's costs, including, without limitation, reasonable attorneys' fees and costs. (c) Following the timely cure of all Noticed Defaults by a Notice Party, the Defaulted Lender will not exercise its right to accelerate (or will de-accelerate) the amounts due under the Defaulted Lender's loan documents by reason of the Noticed Defaults cured by such Notice Party; provided, however, that nothing herein shall be construed to waive or limit any of Defaulted Lender's rights or remedies as to any uncured Noticed Default, or any subsequent default, by Borrower. (d) Nothing in this Section is intended to limit or modify any covenant, term, or condition contained in the County Loan Documents or the City Loan Documents, including, without limitation, any covenant against creating or recording any liens or encumbrances against the Property without County's or City's prior written approval, and any acceleration clause in the County Deed of Trust and/or the City Deed of Trust. 4. Integration; No Waiver. This Subordination Agreement is the whole and only agreement with regard to the subordination of the liens, claims, and charges of the City Deed of Trust to the County Deed of Trust. This Subordination Agreement may not be modified o r amended except by a written agreement signed by the party against whom enforcement is sought. No waiver shall be deemed to be made by any party of any of its rights hereunder unless the same shall be in writing signed by such party, and each such waiver, if any, shall be a waiver only with respect to the specific matter or matters to which the waiver relates and shall in no way impair the rights of such party or the obligations of Borrower to City or County in any other respect at any other time. EXHIBIT 5 5 5. Successors and Assigns. This Subordination Agreement is binding on and inures to the benefit of the legal representatives, successors, and assigns of the parties. 6. Creditor's Rights. City and County each agree not to commence or join with any other creditor of Borrower in commencing any bankruptcy, reorganization, or insolvency proceedings against the Borrower without the prior written consent of the other party. 7. Governing Law. This Subordination Agreement shall be governed by, and construed in accordance with, the laws of the State of California, without regard to the choice of law rules of that State, except to the extent that any of such laws may now or hereafter be preempted by Federal law. The parties hereto consent to the jurisdiction of any Federal or State court having jurisdiction within the County of Orange, California, submits to venue in such jurisdiction, and also consents to service of process by any means authorized by Federal law or the law of the State of California. Without limiting the generality of the foregoing, the parties hereby waive and agree not to assert by way of motion, defense, or otherwise in such suit, action, or proceeding, any claim that (i) any such party is not subject to the jurisdiction of the courts of the above-referenced jurisdiction or the United States District Court for such jurisdiction, or (ii) such suit, action, or proceeding is brought in an inconvenient forum, or (iii) the venue of such suit, action, or proceeding is improper. 8. Notices. All notices given under this Subordination Agreement shall be in writing and be given by personal delivery, overnight receipted courier (such as Airborne, UPS, or Federal Express) or by registered or certified United States mail, postage prepaid, sent to the party at its address appearing below its signature. Notices shall be effective upon the first to occur of receipt, when proper delivery is refused, or the expiration of forty-eight (48) hours after deposit in registered or certified United States mail as described above. Addresses for notice may be changed by any party by notice to any other party in accordance with this Section. 9. Counterparts. This Subordination Agreement may be executed in counterparts, and all counterparts constitute but one and the same document. 10. Exhibits and Recitals. The above Recitals and the attached exhibits are incorporated into this Agreement. (Remainder of page intentionally left blank.) EXHIBIT 5 _____ ____ IN WITNESS WHEREOF, the parties have executed this Subordination Agreement. ATTEST: CITY OF SANTA ANA ___________________________ _______________________ Norma Orozco Kristine Ridge Clerk of the Council City Manager Dated: Dated: APPROVED AS TO FORM: SONIA R. CARVALHO, City Attorney By: ____ _ __________ Special Counsel to the City Best, Best & Krieger Dated: RECOMMENDED FOR APPROVAL: _______________________________ Michael L. Garcia Executive Director Community Development Agency County Subordination Agreement 6 2/23/23 EXHIBIT 5 7 COUNTY: COUNTY OF ORANGE, a political subdivision of the state of California By:____________________________________ Julia Bidwell, OC Community Resources, Housing and Community Development APPROVED AS TO FORM By: ______________________________________ Deputy County Counsel Address for notices to County: County of Orange OC Community Resources/ Housing & Community Development 1501 E. St. Andrew Place, 1st Floor Santa Ana, CA 92705 Attn: Director EXHIBIT 5 Exhibit A EXHIBIT A LEGAL DESCRIPTION EXHIBIT 5 All that certain real property situated in the County of Orange, State of California, described as follows: COMMENCING AT THE CENTERLINE INTERSECTION OF 15TH STREET AND SYCAMORE STREET AS SHOWN ON THE RECORD OF SURVEY NO 85-1067, RECORDED IN BOOK 111, PAGE 38, OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, SAID CENTERLINE OF SYCAMORE STREET BEING DESCRIBED IN THAT CERTAIN FINAL JUDGMENT, SUPERIOR COURT CASE NO. 23280, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 8, 1929 IN BOOK 227, PAGE 401 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, CALIFORNIA; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET SOUTH 00° 14' 46” WEST, 90 FEET AND SOUTH 00° 04' 48” EAST, 213.42 FEET TO THE POINT OF BEGINNING; THENCE LEAVING SAID CENTERLINE NORTH 89° 58' 21” WEST, 312.17 FEET TO THE CENTERLINE OF BROADWAY, THENCE NORTHERLY ALONG SAID CENTERLINE OF BROADWAY NORTH 00° 16' 10” EAST, 75.00 FEET TO THE SOUTHWEST CORNER OF THE LAND DESCRIBED IN A DEED TO T. J. MULLINIX RECORDED OCTOBER 29, 1897 IN BOOK 33, PAGE 197 OF DEEDS OF SAID ORANGE COUNTY; THENCE EASTERLY ALONG SAID SOUTHERLY LINE OF SAID DEED TO T. J. MULLINIX SOUTH 89° 58' 10” EAST, 181.72 FEET TO THE WESTERLY LINE OF THE EAST 130.00 FEET OF THAT PORTION OF THE LAND ALLOTTED TO JACOB ROSS, AS DESCRIBED IN THE FINAL DECREE OF PARTITION OF THE RANCHO SANTIAGO DE SANTA ANA, WHICH WAS ENTERED SEPTEMBER 12, 1869 IN BOOK “B”, PAGE 410 OF JUDGMENTS OF THE DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND FOR LOS ANGELES COUNTY, CALIFORNIA; THENCE NORTHERLY, ALONG SAID WESTERLY LINE NORTH 00° 04' 48” WEST, 77.08 FEET; THENCE SOUTH 89°58'10” EAST, 130.00 FEET TO THE ABOVE MENTIONED CENTERLINE OF SYCAMORE STREET; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET, SOUTH 00°04'48” EAST, 152.06 FEET TO THE POINT OF BEGINNING. SAID LAND IS SHOWN AS LOT 1 ON VOLUNTARY LOT MERGER NO. 2022-06 RECORDED JANUARY 26, 2023 AS INSTRUMENT NO. 2023000018589, OFFICIAL RECORDS OF SAID COUNTY. Assessor’s Parcel Number: 398-523-04 EXHIBIT 5 1 FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail to: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council _________________________________________________________________ SUBORDINATION AGREEMENT CITY OF SANTA ANA AND ORANGE COUNTY HOUSING FINANCE TRUST This Subordination Agreement (this "Subordination Agreement") is dated for reference purposes as of ____________, and is executed by and between the CITY OF SANTA ANA, a California charter city (the “City”), and the ORANGE COUNTY HOUSING FINANCE TRUST, a joint powers authority (the "OCHFT"). Factual Background A.City has agreed to make a permanent loan to North Broadway Housing Partners L.P., a California limited partnership (the "Borrower"), in the original principal amount of up to Five Million Two Hundred Fifty Six Thousand Three Hundred Twenty Seven Dollars ($5,256,327) (the “City Loan”) to assist in financing the construction of an affordable multifamily residential development (the “Project”) on property located at 1411 N. Broadway in Santa Ana, and more particularly described in Exhibit A attached hereto and incorporated herein (the “Property”). B.The City Loan is evidenced by a City HOME-ARP Loan Agreement dated as of ________________, and executed by and between Borrower and the City (the “City Loan Agreement”) and a City HOME-ARP Promissory Note executed by the Borrower in favor of the City dated as of ______________ (the “City Note”). The City Loan is secured by a City HOME-ARP Deed of Trust________, dated as of _________, that will be recorded in the official records of Orange County (“Official Records”) substantially concurrently herewith (the “City Deed of Trust”). The City Loan Agreement, the City Note, and the City Deed of Trust are collectively referred to herein as the “City Loan Documents.” In connection with the City Loan, Borrower and City will execute that certain Affordability Restrictions on the Transfer of Property, which will be recorded substantially concurrently herewith (the “City Regulatory Agreement”). C.Pursuant to an Orange County Housing Finance Trust (“OCHFT”) Loan Agreement dated as of _____________, between OCHFT and Borrower (“OCHFT Loan EXHIBIT 6 2 Agreement”), OCHFT has made or is making a loan to Borrower in the maximum principal amount of Two Million Four Hundred Eighty Thousand Thirty Dollars ($ 2,480,030) (“OCHFT Loan”). The OCHFT Loan is secured by an OCHFT Deed of Trust dated as of _______________ (“OCHFT Deed of Trust”) encumbering all or a portion of the Mortgaged Property. In connection with the OCHFT Loan, Borrower and OCHFT have entered into that certain Amended and Restated Rent Limitation and Regulatory Agreement by and between Borrower and City to be recorded with the Recording Office on or about the date hereof (the “OCHFT Regulatory Agreement”). AGREEMENT 1. Subordination. 1.1 The City Deed of Trust, and any and all renewals, modifications permitted hereunder, extensions, or protective advances (including those costs to cure Borrower’s default) thereunder (including interest thereon), is and will remain at all times, a lien, claim, or charge on the Property prior and superior to the OCHFT Deed of Trust. OCHFT acknowledges that it has had an opportunity to review the City Loan Documents, and OCHFT intentionally subordinates the lien of the OCHFT Deed of Trust to the City Deed of Trust. 1.2 The City Regulatory Agreement, and any and all renewals, modifications permitted hereunder, extensions, or protective advances (including those costs to cure Borrower’s default) thereunder (including interest thereon), is and will remain at all times, a lien, claim, or charge on the Property prior and superior to the OCHFT Regulatory Agreement. OCHFT acknowledges that it has had an opportunity to review the City Regulatory Agreement, and OCHFT intentionally subordinates the OCHFT Regulatory Agreement to the City Regulatory Agreement. 2. Amendments Require Consent. OCHFT agrees that it will not amend or modify the OCHFT Loan Documents to shorten the maturity date, increase the principal amount, accelerate the repayment schedule (excluding any acceleration of the OCHFT Note due to Borrower’s default) or increase the interest rate payable under the OCHFT Loan Documents without City’s prior written consent. City agrees that it will not amend or modify the City Loan Documents to shorten the maturity date, increase the principal amount, accelerate the repayment schedule (excluding any acceleration of the OCHFT Note due to Borrower’s default) or increase the interest rate payable under the City Loan Documents without OCHFT’s prior written consent. 3. Notice and Cure Rights. 3.1 Definitions: For purposes of this Section 3, the following capitalized words and terms shall have the following meanings. "Cure Period" means a period of a ninety (90) consecutive days from the giving of a Default Notice. "Defaulted Lender" means the party giving a Default Notice. EXHIBIT 6 3 "Default Notice" means written notice of the default(s) or Event(s) of Default giving rise to a party's right to complete a Foreclosure Remedy. "Foreclosure Remedy" means the completion of a foreclosure sale of the Property or the recording of a deed-in-lieu of foreclosure with respect to the Property. "Noticed Defaults" means the noticed default(s) or Event(s) of Default set forth in a Default Notice. "Notice Party" means the party receiving a Default Notice. 3.2 Notice and Cure Rights. (a) Notice and Cure Rights of City. OCHFT agrees that concurrently with OCHFT’s provision of any notice of default (including without limitation any Default Notice) to Borrower under the OCHFT Loan Documents, OCHFT shall provide a copy of such notice to City at the address specified below. OCHFT agrees that City shall have the right to cure any default of Borrower within the same period of time provided to Borrower under the OCHFT Loan Documents, extended by a period of ninety (90) days. OCHFT further agrees that it shall not complete a Foreclosure Remedy unless and until City has first been given a Default Notice, and City has failed to cure the Noticed Defaults within the Cure Period or such longer period provided pursuant to this Section; provided, however, that OCHFT shall be entitled during the Cure Period to continue to pursue all of its rights and remedies under the OCHFT Loan Documents, including but not limited to acceleration of the OCHFT Note (subject to the de-acceleration provisions set forth below), commencement and pursuit of foreclosure (but not completion of the foreclosure sale), any guaranty (subject to any notice and cure provisions contained therein), and/or any other OCHFT Loan Document. It is the express intent of the parties hereunder that OCHFT shall have the right to pursue all rights and remedies except completion of a Foreclosure Remedy without liability to City for failure to provide notice to City, and that the OCHFT's liability hereunder shall be expressly limited to actual damages to City directly caused by the OCHFT's completion of a Foreclosure Remedy without City receiving the notice and opportunity to cure described above. Except as specifically provided herein, or otherwise agreed in writing, OCHFT's failure to give any such notice for any reason shall not act to impair or waive any remedy or right of OCHFT under this Subordination Agreement or any of the Loan Documents. (b) Notice and Cure Rights of OCHFT. City agrees that concurrently with City’s provision of any notice of default (including without limitation any Default Notice) to Borrower under the City Loan Documents, City shall provide a copy of such notice to OCHFT at the address specified below. City agrees that OCHFT shall have the right to cure any default of Borrower within the same period of time provided to Borrower under the City Loan Documents, extended by a period of ninety (90) days. City agrees that it shall not complete a Foreclosure Remedy unless and until OCHFT has first been given a Default Notice, and OCHFT has failed to cure the Noticed Defaults with the Cure Period; provided, however, that City shall be entitled during the Cure Period to continue to pursue all of its rights and remedies under City Loan Documents including but not limited to acceleration of the City Note (subject to the de-acceleration provisions set forth below), commencement and pursuit of foreclosure (but not EXHIBIT 6 4 completion of the foreclosure sale), any guaranty (subject to any notice and cure provisions contained therein), and/or any other City Loan Document. It is the express intent of the parties hereunder that City shall have the right to pursue all rights and remedies except completion of a Foreclosure Remedy without liability to OCHFT for failure to provide notice to OCHFT, and that the City's liability hereunder shall be expressly limited to actual damages to OCHFT directly caused by the City's completion of a Foreclosure Remedy without OCHFT receiving the notice and opportunity to cure described above. Except as specifically provided herein, or otherwise agreed in writing, City's failure to give any such notice for any reason s hall not act to impair or waive any remedy or right of City under this Subordination Agreement or any of the City Loan Documents. 3.3 Exercise of Cure Rights. With respect to the exercise of the cure rights provided in Section 3.2 above, the following shall apply: (a) Each Notice Party, whether OCHFT or City, shall have the right, but not the obligation, to elect to cure the Noticed Defaults by giving the Defaulted Lender written notice of its intention to cure the Noticed Defaults within the Cure Period and thereafter curing all Noticed Defaults within the Cure Period. (b) If a cure of all the Noticed Defaults is completed within the Cure Period, the Defaulted Lender will rescind any notice of default recorded and request dismissal of any receiver who has been appointed, after reimbursement of all of Defaulted Lender's costs, including, without limitation, reasonable attorneys' fees and costs. (c) Following the timely cure of all Noticed Defaults by a Notice Party, the Defaulted Lender will not exercise its right to accelerate (or will de-accelerate) the amounts due under the Defaulted Lender's loan documents by reason of the Noticed Defaults cured by such Notice Party; provided, however, that nothing herein shall be construed to waive or limit any of Defaulted Lender's rights or remedies as to any uncured Noticed Default, or any subsequent default, by Borrower. (d) Nothing in this Section is intended to limit or modify any covenant, term, or condition contained in the OCHFT Loan Documents or the City Loan Documents, including, without limitation, any covenant against creating or recording any liens or encumbrances against the Property without OCHFT's or City's prior written approval, and any acceleration clause in the OCHFT Deed of Trust and/or the City Deed of Trust. 4. Integration; No Waiver. This Subordination Agreement is the whole and only agreement with regard to the subordination of the liens, claims, and charges of the City Deed of Trust to the OCHFT Deed of Trust. This Subordination Agreement may not be modified or amended except by a written agreement signed by the party against whom enforcement is sought. No waiver shall be deemed to be made by any party of any of its rights hereunder unless the same shall be in writing signed by such party, and each such waiver, if any, shall be a waiver only with respect to the specific matter or matters to which the waiver relates and shall in no way impair the rights of such party or the obligations of Borrower to City or OCHFT in any other respect at any other time. EXHIBIT 6 5 5. Successors and Assigns. This Subordination Agreement is binding on and inures to the benefit of the legal representatives, successors, and assigns of the parties. 6. Creditor's Rights. City and OCHFT each agree not to commence or join with any other creditor of Borrower in commencing any bankruptcy, reorganization, or insolvency proceedings against the Borrower without the prior written consent of the other party. 7. Governing Law. This Subordination Agreement shall be governed by, and construed in accordance with, the laws of the State of California, without regard to the choice of law rules of that State, except to the extent that any of such laws may now or hereafter be preempted by Federal law. The parties hereto consent to the jurisdiction of any Federal or State court having jurisdiction within the OCHFT of Orange, California, submits to venue in such jurisdiction, and also consents to service of process by any means authorized by Federal law or the law of the State of California. Without limiting the generality of the foregoing, the parties hereby waive and agree not to assert by way of motion, defense, or otherwise in such suit, action, or proceeding, any claim that (i) any such party is not subject to the jurisdiction of the courts of the above-referenced jurisdiction or the United States District Court for such jurisdiction, or (ii) such suit, action, or proceeding is brought in an inconvenient forum, or (iii) the venue of such suit, action, or proceeding is improper. 8. Notices. All notices given under this Subordination Agreement shall be in writing and be given by personal delivery, overnight receipted courier (such as Airborne, UPS, or Federal Express) or by registered or certified United States mail, postage prepaid, sent to the party at its address appearing below its signature. Notices shall be effective upon the first to occur of receipt, when proper delivery is refused, or the expiration of forty-eight (48) hours after deposit in registered or certified United States mail as described above. Addresses for notice may be changed by any party by notice to any other party in accordance with this Section. 9. Counterparts. This Subordination Agreement may be executed in counterparts, and all counterparts constitute but one and the same document. 10. Exhibits and Recitals. The above Recitals and the attached exhibits are incorporated into this Agreement. (Remainder of page intentionally left blank.) EXHIBIT 6 _ IN WITNESS WHEREOF, the parties have executed this Subordination Agreement. ATTEST: CITY OF SANTA ANA ___________________________ _______________________ Norma Orozco Kristine Ridge Clerk of the Council City Manager Dated: Dated: APPROVED AS TO FORM: SONIA R. CARVALHO, City Attorney By: _____________ __________ Special Counsel to the City Best, Best & Krieger Dated:2/23/23 RECOMMENDED FOR APPROVAL: _______________________________ Michael L. Garcia Executive Director Community Development Agency OCHF 6T Subordination Agreement EXHIBIT 6 7 ORANGE COUNTY HOUSING FINANCE TRUST, a political subdivision of the State of California By: ______________________________________ Date: ______________ APPROVED AS TO FORM AND LEGALITY By: ______________________________________ Address for notices to OCHFT: Orange County Housing Finance Trust Attn: Adam Eliason, Manager 1 League #62335 Irvine, CA 92602 EXHIBIT 6 Exhibit A EXHIBIT A LEGAL DESCRIPTION EXHIBIT 6 All that certain real property situated in the County of Orange, State of California, described as follows: COMMENCING AT THE CENTERLINE INTERSECTION OF 15TH STREET AND SYCAMORE STREET AS SHOWN ON THE RECORD OF SURVEY NO 85-1067, RECORDED IN BOOK 111, PAGE 38, OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, SAID CENTERLINE OF SYCAMORE STREET BEING DESCRIBED IN THAT CERTAIN FINAL JUDGMENT, SUPERIOR COURT CASE NO. 23280, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 8, 1929 IN BOOK 227, PAGE 401 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, CALIFORNIA; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET SOUTH 00° 14' 46” WEST, 90 FEET AND SOUTH 00° 04' 48” EAST, 213.42 FEET TO THE POINT OF BEGINNING; THENCE LEAVING SAID CENTERLINE NORTH 89° 58' 21” WEST, 312.17 FEET TO THE CENTERLINE OF BROADWAY, THENCE NORTHERLY ALONG SAID CENTERLINE OF BROADWAY NORTH 00° 16' 10” EAST, 75.00 FEET TO THE SOUTHWEST CORNER OF THE LAND DESCRIBED IN A DEED TO T. J. MULLINIX RECORDED OCTOBER 29, 1897 IN BOOK 33, PAGE 197 OF DEEDS OF SAID ORANGE COUNTY; THENCE EASTERLY ALONG SAID SOUTHERLY LINE OF SAID DEED TO T. J. MULLINIX SOUTH 89° 58' 10” EAST, 181.72 FEET TO THE WESTERLY LINE OF THE EAST 130.00 FEET OF THAT PORTION OF THE LAND ALLOTTED TO JACOB ROSS, AS DESCRIBED IN THE FINAL DECREE OF PARTITION OF THE RANCHO SANTIAGO DE SANTA ANA, WHICH WAS ENTERED SEPTEMBER 12, 1869 IN BOOK “B”, PAGE 410 OF JUDGMENTS OF THE DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND FOR LOS ANGELES COUNTY, CALIFORNIA; THENCE NORTHERLY, ALONG SAID WESTERLY LINE NORTH 00° 04' 48” WEST, 77.08 FEET; THENCE SOUTH 89°58'10” EAST, 130.00 FEET TO THE ABOVE MENTIONED CENTERLINE OF SYCAMORE STREET; THENCE SOUTHERLY ALONG SAID CENTERLINE OF SYCAMORE STREET, SOUTH 00°04'48” EAST, 152.06 FEET TO THE POINT OF BEGINNING. SAID LAND IS SHOWN AS LOT 1 ON VOLUNTARY LOT MERGER NO. 2022-06 RECORDED JANUARY 26, 2023 AS INSTRUMENT NO. 2023000018589, OFFICIAL RECORDS OF SAID COUNTY. Assessor’s Parcel Number: 398-523-04 EXHIBIT 6