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HomeMy WebLinkAbout25B - AGMT - 815 N HARBOR LOANREQUEST FOR COUNCIL. ACTION CITY COUNCIL MEETING DATE: FEBRUARY 17, 2015 TITLE: LOAN AGREEMENTS — 815 N HARBOR, LP (STRATEGIC PLAN NO. 5,3) CITY MAN ER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1'� Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager, or designee, and Cleric of the Council to execute a loan agreement for HOME Investment Partnership Program funds not to exceed $380,000 and a Neighborhood Stabilization Program amendment to agreements not to exceed $880,000 with 815 N Harbor, LP for a total of $1,260,000, subject to non - substantive changes approved by the City Manager and City Attorney for 815 North Harbor Boulevard. FINANCE ECONOMIC DEVELOPMENT AND TECHNOLOGY COMMITTEE REVIEW The Finance, Economic Development and Technology Committee reviewed this matter at its meeting on January 14, 2015. The Committee has reviewed the recommended actions and recommends that the City Council adopt and authorize actions. On March 1, 2010, Orange Housing Development Corporation (OHDC), a non - profit 501(c)(3), and C &C Development (C &C), a for- profit developer, was selected through a competitive Request for Proposal process and awarded the contract to implement the multi- family rental program funded by the federal National Stabilization Program (NSP). They have formed a Limited Partnership named 815 N Harbor, LP ( "Developer") for financing purposes. In October 2013, the developer acquired NSP- qualified vacant lots at 815 N Harbor Boulevard (Exhibit 1) using $2,000,000 of the City's NSP funds. The entitlement process is being completed and the project is proceeding with funding in order to commence construction. The developer proposes to construct 70 multi- family rental units with 7 units rented to very low income families at or below 50 % of Area Median Income (AMI), 49 units will be rented to low income 25B -1 Loan Agreements - 815 N Harbor LP February 17, 2015 Page 2 families at or below 60% AMI, and 13 units will be rented to moderate income families at or below 110% of AMI. One unit will be designated as a manager unit. The project will have 1 two - bedroom and 69 three - bedroom units. The following table contains the breakdown of the units by bedroom size and affordability as well as maximum rents: No, of Bedrooms 50% AMI 60% AMI 110% AMI Gross Rent # of Units ent # of Units Gross Rent # of Units Two - bedrooms n/a -- ;Gross 1,219 1 n/a Limited Partner Equity Tax Credits) Three- bedrooms $1,174 7 1,409 48 $2,050 13 The total development cost is $22,404,867. The developer will be applying to the California Debt Limit Allocation Committee (CDLAC) for tax exempt financing and to the California Tax Credit Allocation Committee (TCAC) for low income housing tax credits; both sources will be used to help meet permanent and construction financing costs. There is a $1,260,000 gap and staff is recommending it be filled with $380,000 from the HOME Investment Partnership Program ( "HOME ") (Exhibit 2) and $880,000 from NSP Funds (Exhibit 3). The HOME loan agreement will be formally executed after all other financial commitments are in place, per the new HOME regulations. The following table summarizes the sources and uses: Sources Tax Exempt Bonds /Permanent Lender $ 11,092,380 HOME (City) $ 380,000 NSP Funds (City) $880,000 NSP Funds/Acquisition $2,000,000 Bank of America — Subordinate Loan Program $1,400,000 General Partner Equity $ 100 Deferred Developer Fee $925,000 Limited Partner Equity Tax Credits) $ 5,727,387 Total $22,404,867 Uses Acquisition $4,086,366 Hard Costs $11,029,402 _ Financing Costs $527,181 Other Soft Costs $3,918,387 Developer Overhead and Fee $2,216,731 Impounds and Reserves $626,800 Total $ 22,404,867 25B -2 Loan Agreements - 815 N Harbor LP February 17, 2015 Page 3 The Developer has submitted a proposal for eight (8) Project Based Vouchers in the recent Request for Qualifications (RFQ) to award vouchers to qualified projects. Submitted proposals for this RFQ are currently being reviewed and will be awarded at a later date. Construction of these units will assist the City in meeting the Regional Housing Needs Assessment (RHNA) goals identified in the Housing Element and the Consolidated Plan. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #5: Community Health, Livability, Engagement and Sustainability, Objective #3, (facilitate diverse housing opportunities and support efforts to preserve and improve the livability of Santa Ana neighborhoods). FISCAL IMPACT Funds are available in the NSP2 account (no. 14218761- 69152) and HOME account (no. 13018780 - 61952). Community Development Agency KR /SS /nv /sb APPROVED AS TO FUNDS AND ACCOUNTS: ramp � ., Francisco Gutierrez U Executive Director ` Finance and Management Services Agency Exhibit: 1. Map 2. HOME Agreement 3. NSP Amendment to Agreements 25B -3 25B -4 PROPOSED PROJECT LOCATION 803 -815 NORTH HARBOR BOULEVARD 0 cc w w w J 2 � N m HAZARD AVENUE w w H ¢ w J O w w Q m m ¢ LL. 2 4' rLIM, r FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 6103 & 27383 When Recorded Mail to: City of Santa Ana Conummity Development Agency 20 Civic Center Plaza (NI-25) P,O Box 1988 SwIta Ana,' California 92702 Attention: Housing Manager UST; 61031 LOAN AGREEMENT by and between the CITY OF SANTA ANA And 815 N Harbor, L.P, A California Limited Partnership (815 N. HadwBoulevard, &41,ita Ana, California) Dated: Nlarfdi.2015 LOAN AGREEMENT HOME PROGRAM THIS LOAN AGREENIENT (the 'AgrcemenV') dated, for identification purposes only, as of March - 2015, is made and entered into by and between the City of Santa Ana, a charter city and municipal corporation (refetTed to herein as "City") and 815 N l-larbor, LP, a California Invited partnership with reretonce to (he following: RECITALS: A. City has received as allocation (,X 11wids from the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnership Program (the "HOME Program") (42 U.S.C. §12701, of seq,,) to be used in accordance with applicable statutory requiretnents and regulations (the "HOME Regulations") (24 CFR Pail. 92), B. Among the purposes of the HOME Program arc (G) to expand tile supply of decent, sale, sanitary, and affordable housing, with primary attention to rental housing, for very low-income and low-income Americans,; and (2) to provide participating jurisdictions, on as coordinated basis, with the various forms of federal housing assistance, including capital investment, mortgage insurance, rental assistance, and other federal assistance, needed (a) to promote the development of partnerships ainong, the fedet-al govornment, states and units of general local government, private industry, and nonprofit organizations able to utilize all available resources to provide more of such housing, and (b) to expand the capacity of nonprofit community housing development organizations to develop and manage decent, safe, sanitary and affordable housing. C. Developer has purchased certain property commonly known 815 N. Harbor Boulevard, witbiu the City of Santa Ana, Califonria, and legally described in Exhibit A attached hereto (the "Property"). The loans referenced herein shall assist in the development of a multifamily residential housing development on the Property, D, In furtherance of the HOME Program, Developer has applied to City for a loan with which to: 1. provide deeper affordability for aloager term, as well as develop 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, desire tornake such loan to Dcvcl()per in order to make possible the development of the Property, thereby eliminating blight while expanding the supply of decent, safe, sanitary and affordable housing. F. If there is any discrepancy bebvecri Federal and State guidelines with regard to any of the terms and conditions contained herein, the more stringent shall apply, 41�46 G, The Loan Agreement arid all of its atta0urents shall be enforceable by City in accordance with the tennis thereof, Each of the Loan Agreement, the Affordability Restrictions on Transfer of Property, the City /HOME- Loan Note and the CitylfiOME 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 CPR 92.504 (c) (13)]. NC)`i'4', THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, City and Developer agree as fbIlows DEFINITIONS AND INTERPRETATION 1.1 Defined Terms, rill capitalized terns used herein, including, without limitation, in the Recitals above and in all other Project Documents, unless otherwise expressly defined, are defined where first used in this Agreement and /or as set. Corth in this Article 1. "Affordable Housing " tneuns housing operated in accordance with the requirements of 24 CPR 92.252 and the rents governed by HUD. ",Affordability Restrictions on Transfer or Property" rocans that certain document affecting real property benefiting the City, attached hereto as Exhibit G, "Affordable Rent" means the monthly rents than are set forth in More detail in 'Section 5 of this Agreement. "Building Permit" means the budding perinit(s) issued by City that are required for the construction; i r any. 'f lusiness Day" means any Monday, Tuesday; Wednesday, Thursday or Friday on which Santa .Ana City stall is open to the public for the conduct of 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. "City'" means the City of SauitaAna, California, a charter city and municipal corperatiom "City /1 --10ME Loan means the loan to be made to Developer by City from HOME funds pursuarit to Article 3 of this Agreement, "City/110ME Loan Deed of Trust" means the deed of trust encumbering the Property; in (lie form attached hereto as Exhibit E, to be executed by Developer pursuant it) Section 33 in order to secure (he Loan Note. 25B -9 "City/HOME Loan Note" means that certain promissory note in the original principal amount of $380,000.00, in the form attached hereto as Exhibit F, and to be executed by Developer in favor of City to evidence the obligation of Developer to repay the CityIHOME Loan. "County" means the County of [Orange, California, ,4(Developer" incans 815 N. Harbor, LP, is California limited partnership, its successors and aasigns. "'Developer's Representative" shall inein the Chief Executive Officer of the General Partner of Developer or his/her desigpee. "Event of Default" has the meaning set forth in Article 18, "Executive Director" means the Executive Director of the Community Development Agency, or her designee, "General Partner(s)" means the General Partners of Developer, consisting of OHDC 815 N Harbor, LLC (the Managing General Partner) and C 815 NI Harbor, LLC (General Partner) and their respective successors and assigns. "Governmental Authority" memos 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 flairmiable materials, explosives, radioactive materials, hazardous wastes, toxic substances and similar substances and materials, including all substances and materials defined as hazardous or toxic wastes, skibstarets; or materials under any applicable taw, including without limitation the Resource Conservation and Recovery Act, 42 U:&C. §§ 6901 et seq., and the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U S.C. §§ 9601, et sect., as arneuded, years. "ROME Compliance Period" the compliance period is fifteen (15) "HOME Program" has the meaning set forth in Recital "A" above 'PHOME Regulations" has the meaning set forth in Recital "A" above. "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 licreafter comprising any portion of the Property, including, without limitation, landscaping, trees and plant materials,; and offike improvements (including, without limitation, streets, curbs; storm drain,,,, and adjacent street lighting). 25B -10 "Indebtedness" of a person means (a) all indebtedacss, for bonrowcd money, (b) notes payable and drafts accepted representing extensions ol`credit, whether or not representing obligations for boTrowcd money, (c) any obligation for the purchase of property or services in excess of $10,000 in the aggregate that is (i) deferred for More, than six (6) an on th s, or () i) evidenced by a note or simiW instrument, and ( d) a 11 recourse and all noon- recourse indebtedness secured by any Lien on any property or asset of such person {whether or not assumed by such person), "Indemnitees" has the meaning set ibrth in Section 12.5. "Laws" nicansalt statutes, laws, ordinances, regulations, orders, -writs, judgments, injunctions, decrees or awards of the United State,,, or any state, county, municipality or other Governmental Authority. "Lien" means any lien, mortgage, pledge, security interest, (;barge or encumbrance of any kind {including any conditional sale or other title retention agreement, any lease in tbQ nature thereof, and any agreement to give any lien or security interest). "Limited Partnee' means the Limited Partners of Developer, C&C and its successors and assigns, "Loan Documents l means, collovtively, this Agreement, the City/fTOME Loan Note, the City/1-10ME Deed of Trust, the Affordability Restrictions on Transfer of Property, and any other agreement, document, or instrument that the City requires in cormection with the execution of this Agreement or from time to time to effectuate (lie p urp Dscs of this Agreemort- "Low Income" means an adjusted income which does not exceed eighty percent (80%) of the Orange County, California PMSA, adjusted for household size, as published by HUD. "Al,Ddlan Income for the Area" means the median income for the Orange County, Callfbrnia PMSA as most recently determined by HUD. Also may be referred to interchangeably in the Loan Documents as "Area, , Medi an InconW' or "AMP'. "Partnership Agreement" means the A67eernent of Limited Partnership of 815 M Harbor, LP dated August 30, 2013, " "Permitted Encumbrances for the Affordable Ilousing Restrictions" means, collectively, the Senior Loan Deed of Trust and all other title exceptions and limitations witli 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, 5 25B -11 "Project" means the construction of all of the affordable units on the Property by Developer pursuant to this Agreement. "Project Budget "" means the here -item budget for the Projoctattaclied hereto wi Exhibit C, as modified from time to time in accordance with this Agrecknerit. "Project Costs" ineans 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 815 N. Harbor Boulevard, within the City of Santa Ana, and is more fully described in the "Legal Description" of the Property attached hereto as Exhibit A kind incorporated herein by reference. "Senior Lender" means Grandpoint Bank or any other holder of the Senior Loan Note(s), "Senior Loan" shall nican the senior loan being made by Ojgndaqjpt Bank, concurrent to the City Loan for payment of a portion of the acquisition and construction costs, and shall include any subsequent loan that refinances the initial Senior Loan. "Senior Loan Deed of Trust" means the deed oFtrust securing the Senior Loan by encumbering the Property. "Senior Loan Documents" means, collectively, the loan aereement governing the Senior Goan, 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. "Senior Loan Note" means the promissory note evidencing the Senior Loan from Cirandpoint Batik. "Term" the terms and conditions contained herein shall remain in effect for fifty-five (55) years from the date of full occupancy of the Project. "Very Low Income" means an adjusted income w1hich does not exceed fifty percent (50014) of the arcii, median income for the Orange County, California PMSA, adjusted for household size, as published by HM 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 Inay 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. 25B -12 References to subparagrapfis shall be construed as rvlorenccs to the same Section in which the reference appears. The term "document" is used in its broadest sense and encompasses agreements, certificates, opinions, Qonsents, instruments and other written material of every kind. The tornis "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. 2, SCOPE OF WORIV PROJECT BUDGET A "Scope of Work" for the Property is attached hereto as Exhibit B. Any material change to the Scope of Work requested by the Developer shall be subject to the prior written approval of the Executive Director. A lint -item budget for the Project, including a N unn-nary statement of sources and uses of funds, is incorporated into Exhibit C ((he "project Budget" ), Any material change to the Project Budget requested by Developer shall be subject to the prior written approval of the Executive Director, 3. CITY LOAN A. Amount and Purpose. Subject to the terms and conditions of this Agreement, City agrees to make a Chan of HOME funds to Developer in the prmcipal amount of up to $380,000 (the "City4iOME Loan") for the construction or the development on the Property, B. City /HOME Note and Deed of Trust, The City/1-101NIE Loam shall be evidenced by the City/HOME Loan Note in the form attached hereto as Exhibit F. The City Loan shall be secured by the City/HOME Loan Deed of Trust in the form attached hereto as Exhibit E. The City/HOME Deed of Trust shall be a decd of trust encumbering the Property, subordinate to the Senior Loan(s) made to Developer. C. Cilly/fIONIE Loan Terms, The terms and conditions of the City/HOIVIE Loan tire as set forth in the City/HOME Loan Note which is a residual receipts note. The HOME compliance period is fifteen (15) years, oommencing on the date that all work is complete and the Property "is s fully o ecu pi cd. 4, CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS 4.1 Conditions Precedent, City's obligation to disburse the Loan Arnount 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 City, signed by the authorized officer or officers, of Developer, with such signature(s) acknowledged where necessary, each oRhe following document,,: 25B -13 (i) the Loan Agreement; (ii) Tile CityJHOME Loan Note; (iii) The City /ROME Deed of Trust, (iv) The Affordability Restrictions on Transfer of Property, and (b) Title Insurance, City shall have received an LP-1 0 ALTA Lender's 1,f7an policy of title insurance (1971) editirin), or evidence" of a commitment therefore satisfactory to City, issued by First American Title Insua °once Company and in fion a and substance satisfactory to City, together with all endorsements and hinders required, naanii g City as the insured, in a policy amount of not less than the City/HOME Loan Amount, showing Developer as the fee owner of the Piopeity and insuring the City/HOME Laced of Trust to be valid priority liens on the Property. The City/HOME Loran Note and Deed of Trust shrill be subordinate to the Senior Loan Note and First Deed. (c) Aff arda6rltyRestreionsanTransferofl?zotreriy. Developer shall have delivered to the City, in the Harm attached hereto as Exhibit G, the Affordability Restrictions on Transfer of Title pursuant to which, among other (hings, Developer agrees that the Property shall be used only for decent, sale, sanitary and affordable rental housing pursuant to the affordability requirements of Code of Federal Regulations C" C FR ") section 92.252 or 92,254 and California Health and Safety Code ('TI&S ") sections 50052.5, as applicable. (4) Documents Recorded. This Loan Agreement, the CitylHOME Load Deed of Toast and the Affordability ldestrictions as Transfer orPrciperty shall have been recorded in the Official Records ofthe County. (c) Request for Notice. For its own benefit, City shall have recorded a request for notice of def"irult of the Senior Loan (the "Request for Notice of Default "). (f) insurance. City shall have received evidence satisfactory to the City Attorney that all of the policies of insurance required by Section 17 of this Agreement are in fult force and effect. (g) Representations and Warranties. The representations and warranties of Developer contained in this Agreement and the other Loan Documents shall be correct at the time of execution of all documents, and if requested by the Executive Director, City shall have received a certificate to that ell'ect signed by Developer's Representative. (h) No Default. No Event of Default by Developer shall have occurred, anti on 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 25B -14 requested by the Executive Director, City shall have received a certificate to that effect signed by Developer's Representative. 4.2 Disbursement Procedures for Loan(s). (a) The Loan proceeds shall be disbursed to Developer to finance the construction of the Property (as evidenced in Exhibit Q. The Loan proceeds shall not be used for any purpose other than for construction costs, including a Developer fee and so ft costs related to development of (lie Project (costs all subject to City's prior review), (b) Developer shall provide City with monthly construction reports regarding status of construction and notify City Aaff of construction meetings. 4.3 Any Disbursement. City's obligation to rnake any disbursement of the funds (including the first and final disbursements) is subject to the satisfact-ion of the following conditions prcccdcnts (a) Satisfactory Progress. The Executive Director shall be satisfied, I ---Z— based on inspections performed or other reliable information, that the construction is progressing satisfactorily in conformance with all applicable laws and other requirements (including ROME regulations). (b) Condition of Title. Either (i) the Executive Director reasonably believes that no event has occurred execution (if Clio docurnerits that would gkc rise to a colorable clainkagairisit the Property ("., a rnoulianic's lien) superior to the claini of City against the, Property with respect to the subject, disbursement, or (ii) City most have received, at Developer's expense. but payable out of the loan proceeds, front the title insurer who issued City's 12-10 Title Policy, all endorsements thereto then reasonably required by City. (c) Representation,,; and WgrgLiLies. The mpresentations and warranties of Developer contained in this Agreement and the other City Loan Doculnents shall be correct as of the date of the disbursement as though made on and as of that date. (d) No Default, No Event of Default by Developer shall remain uncured and no event shall have occurred which, with the giving of notice or the passage o inie or both, would constitute an Event of Default by DevQlupor, 4A final disbursement. City's obligation to disburse that portion of the construction portion retained pursuant to Section 4.10 is subject to the satisfaction or the following additional conditions precedent: (9) Constrsrction Conrrtlete. The construction shall be complete. (h) Certificate of Occupgney lssuqd. Any portion of the construction requiring inspection or certification by any Governmental Authority shall have been 25B -15 inspected and certified as complete, Developer shall request that the Building Department issuoan Inspection Record Card with signed final inspection approvals, a copy of which shall be, delivered to (lie Executive Director, in order for final disbursement to occur, (c) Lien l,'ru At Icast Ono of (lie following shall have occurvedr (i)Thirty-five (35) days shall have. passed since the recording of a valid notice of completion for the construction, amid no mechanic's or material man's lien shall be outstanding; or (ii) Ninety-five (95) days shall have passed since actual completion of the construction, and no nivehanic's or materialtrian's lien shall be outstandin- or Developer shall have bonded over any such lien to City's reasonable satisfaction. 4,5 Waiver of Conditions. The conditions set forth pertaining to City's obligation to make disbursements are for City's benefit only and the Executive Director inay waive all or any part of such rights by written notice to Developer. 4,6 M5bursement Requests, Tae construction proceeds shall be disbursed on a line-item, by line-item, basis in accordance with the Project Budget and subject to the conditions in this section. fit no event shall City have any obligation to disburse any ainount for any item in excess of the amount allocated to such itom in the Project Budget. Disbursements shall be made only upon Developer's written request in the form of a Disbursement Roqaest showing all costs which Developer intends to fund With such disbursement, itemized in such detail as City may reasonably require, accompanied in each case by (a) invoices and lien releases satisfactory to City, including in any event partial lien releases executed by each contractor and subcontractor who has received any payment for work performed, and (b ) all other documents and information reasonably required by City. Disbursement Requests shall be submitted no less than ten (10) Business Days prior to the date of the requested disbursement, and shall not be submitted more often than monthly. Prior to each disbursement by City of proceeds of the City Loan, Borrower shall deliver to City and to Bank a draw request ("Draw Request"), and all required supporting information as set forth in the Loan Documents or as Otherwise reasonably required by City or Bank in order to provide information for evaluating the requested disbursement pursuant to customary construction lending practices of institutional lenders in Southern California, City and Batik shall notify the other and Borrower of approval or disapproval of each Draw Request within five (5) business days after receipt of the Draw Request, using the Bank's "DisbursomQnt/CliaagQ Order Approval Notice". City and Batik shall have the right, but not the obligation, to discontinue processing Draw Requests unless and until receipt of notification from the other of approval or disapproval of each outstanding Draw Request. 10 25B -16 4.7 Manner of Disbursement, City may make any disbursement by check payable to Developer; or on a voucher basis; or by check payable jointly to Developer and any contractor, subcontractor or ether claimant; or directly to any such claimant; or by any ether means reasonably selected by City, Disbursement will be made fifteen (15) days fronn approval, 43 Cast [Overruns. In the event that, at any time and for any reason, (a) the actual cost reasonably estimated by City or Developer to be required to complete all matters included in any line itern in the Project Budget exceeds the amount allocated to that line item in the Project Budget, (b) construction costs for any matters not covered by a specific tine item have been or will be incurred, or (e) the undishursed portion of the construction portion is of may be insufficient to pay all construction costs that may be payable under the City Loan Documents or otherwise in connection with the construction, Developer shall, within ten (10) days after it receives written notice thereof from City of any of the foregoing matters, do one or more o r the following; (a) provide satisfactory evidence to City that Developer has previously paid such excess or otherwise - provided for such insufficiency (collectively, the "Excess Cost ") with funds from .a source other than the City Lean; (b) reallocate sufficient funds to pay the Excess Cost from funds ,allocated to "Contingency" in the Project Budget; provided, however, that tlae Executive Director's consent to any such reallocation shall be required, or (c) deposit an amount equal to the Excess Cost in a non - interest bearing account (the "Overrun Account ") with City from rwbich withdrawals may be made tartly with the consent of the Executive Director but which will be exhausted prior to arty further disbursement for any line item, so that any resulting surplus in any line item of the Project Budget will them be reallocated to the Unc iterri(s) in which the Excess Costs are expected to be incurred. City shall have no obligation to rriaake further disbursements until Developer has paid or otherwise provided ftrr the overrun as required above. Amounts deposited by Developer in the Overrun Account for any Excess Costs shall be disbursed by City prior to the disbursement of :any remaining construction portion proceeds in the manner described in subsection 93(c), 4 i) Cost Savings, Upon completion of and disbursement for all matters covered by any line items in the Project Budget, any remaining undisbursed amounts allocated to that line item shall be reallocated to "Contingency" and thereafter be avi lable for disbursement in accordance with the teams of this Agreernent. 4.10 Retainage. City will witlrltold a retainage of 10 loom each Disbursernent for each of the hard cost tine items of the project cast breakdown (and other line items thereof designated for withholding of retainago) until all conditions to the final disbursement of hard costs have been satisfied. hi lieu of City's withholding rctainage, Developer can by written notice to City elect not to drain any overhead or profit as would I 25B -17 otherwise be pennitted under the Construction Contract until such finic as retainage would othQrwke have been released. City shall not retain farads for building material,; purchased by Developer 41or which Developer supplies documentation to City proving payraent in full or for soft costs. 4,10A Holdback. The retainage otherwise available for disbursement shall be subject to a holdback of one hundred twen(y -fivo porcent (125%) of the estunated cost (as determined by the Executive Director) for "punch-list" items. Such holdback will be released when all puncli-list items have been completed, to the satisfaction of City. 4,11 Waiver of Disbursement Conditions- Unless City otherwise agrees in writing, the making by City of ,my disbursement with knowledge that any condition to di- such burscment is not fulfilled shall constitute a waiver or such condition only with s s respect to the particular disbursement rude 4.12 Modifization of.Disbursement,Conclitioiis,.ind,Pi-ocecltires. 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 provision- of (he Construction Contract. 4.13 Other Terins and Conditions, of Loa . A. The Note shall become; immediately duo and payable, in the event cif any orthe rbllowing� (1) fifflure to complete the Project within four (4) years of the recording date; (2) HOME rental units must achieve initial occupancy within 18 months of project completion, (3) violation of any of the use covenants and restrictions contained in this Ngreement after the expiration of any applicable notice and cure periods; (4) an 'Event of Default by Developer which is not thnely cured a Rey rxpiratical of any applicable notice and cure periods pursuant to the terms of this Agreement, 4.t4 Closing Costs and Fees. Developer shall pay (a) all recording fees and charges on any document recorded pursuant to this Agreement, and (b) the prerniurn for the, title insurance required hereunder. 5. AFFORDABILYI-V REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY 5.1 Use Covenants and lZestrictions, 12 25B -18 A, Developer: agrees and covenants, which covenants shall fait with the land and bind Developer, its successors, its assigns and every= successor in interest to the property that Developer will Hulce all rental units on the Property available to very low households at rents affoiziable to such households for fifty -five (55) years from the date of full occupancy of the Project. The HOME restrictions for the two (2) HOME assisted units shall be enforced until the date that is fifteen (l5) years after the date €rat which the City reports the Project as complete to the Department of Housing and Urban Development. Developer shall report to City which units are the HOME assisted units (lay address number) upon lease tip and ,my subsequent changes thereto. 13, The Project shall consist of'sixty nine affordable units, with two (2) three- bedroom HOME assisted units. C. At initial lease tip, households in the HOME assisted units cannot earn more than 50% of AMi, however existing tenants at the Property who are otherwise eligible under the HOME Program may continue their tenancy at the Property. Rental increases shall be in conformance with federal and state law. A tier, the fi fteen (15) year HOME compliance period, the City shall require that the units remain affordable, with, rents calculated basal on aszaumed household size at the Same income levels At the time of project completion and initial lcase -rap, Developer and /or Owner must provide the mitt number for each HOME unit to the City, Tine two (2) HOME units will be floating units. D. Maximum Occupancy will be two (2) people per room plus one (1). For ex#unple for a three - bedroom unit, seven (7) people would be maxantnn occupancy. E. Affordable rents shall be governed by the HOME Regulations 24 CFR section 92.7. F. Developer must have a written lease behveen tenant and owner far a period o f at least one year, unless a shouter period is mutually agreed upon. Leases must be consistent with H 0 M E Regulations 24 CFR section 92.209(g), 5,2 Initial . rents maybe recalculated to allowable rental an at the time of initial lease -up Poll owing completion of construction in accordance with arty changes in allowable rent and income tables as published by WD. HOME Assisted [;nits 4 of Units Max Cross Monthly Rent Very Low 3 Bedroom 2 $ 1,252 (t) In no event shall the rent charged to the HONTF, assisted units be more that that amount o C the love rent as published by IIUD, as amended from time to tirne. (2) Ren ainint; non -I-IO lE units M]l bebasod on TCAC rents, 13 25B -19 5.3 Rept hneresases� On an annual basis, the City shall provide the Developer with the maximum allowable schedule of rents for the Property, to no event can Developer change any tenant more than such amount. 5.4 Prohibited Fees, The Developer and Owner is prohibited €hanr charging fees that are not customary, consistent with HOME Regulations 24 C.FR section 92,504(c)(Wxi). 11io Developer and Owner can charge reasonable application fees to prospective tenants; other fees (such as laundry) only to the extent that they are reasonable and custornary lets the project area; and fees for services provided to tenants, provided that these services are not tnandatcry. 5,5 Maintenance of the Property. Solely at Developer's 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 tails 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 camiot reasonably be eared within thirty (3q) days, in which case Developer sh=all hale such additional trine: as reasonably ae essary to complete such cure, the City may perform the necessary maintenance and Developer shall pay all reasonable costs incurred for such maintenance. The City shalt inspect the Property annually after the date of issuance of the final Inspection Card from the City's Planning and Building Agency as described in Article 17 of this Agreement. During the affordability period, the Property must meet all applicable State and local codes. The Property must be fi -ee of all health and safety defects during the affordability periad 5.6 Obligation to Refrain -hrom 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 Berson or group of persons on amount of race, color, creed, religion, sex, mental or physical disability, marital status, atacestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Developer itst l f or any person claiming under- or through him establish or permit any such practice orpraet ees of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublerswes or vendees of the Property. The foregoing covenants shall run with the land and shall remain in effect for the term, of the Agreement. o. DEFAULTS AND REMEDIES 6.1 Event of default. Failure or delay by either party to perform any terra of provision of this Agreement within the time periods provided herein for sueli performance constitutes a default under the Agreement. if any party defaults in performance of its obligations, covenants or agreements hereunder, the defaulting party shall be entitled to cure the default in accordance with this seetion. The injured party shall give written notice ofdel'ault to the party in default, specifying the default complained of by the injure panty. Delay in g[ving such notice shall not constitute a waiver of any default nor shall it change the time of default. The defaulting party roust, within thirty (30) days following service of said written 14 25B -20 notice, conunence to cure, correct or remedy such failure or delay and shall complete such cure, correction, or remedy with reasonable diligence. Upon a default by Developer which is not creed within thirty (30) days following service of said notice, unless such default cannot roasonably be cured within thirty (00) days, in which case Developer shall have such additional time as reasonably necessary to complete such cure but no more than ninety (40) flays, the City shall have the right to terminate this Agreement by delivery of written notice of termination to Developer. 6.2 Institutiou of LcEal Actions. In addition to any o lrur rights or remedies, either party may institute legal action to cure, correct or remedy any default to recover darnages for any default, or to obtain any otherremedy consistent with the purpose of this Agreement. 6:3 Rights and Renredles are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in This Agreement, the right and remedies of the patties arc cumulative and the exercise by either party of one or more of such lights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the -surge default or any other default by the other panty. 6.4 Damage& in the event that the City is liable for darnages to Deveioper, such liability shall not exceed costs incarred by the Developer in the peforrance o f this Agreemmt and shall not extend to compensation for loss of future income, profits or assets; provided, however, Developer 's only t'emedy for any breach ofthis Agreementby the City shall bean action for specific performance of such party's obligations. 6.5 Nonrecourse Liability. Neither Developer, nor any partner of Developer, shall have any personal liability under this Agreement, or the attached Note and Deed of Trust, and airy judgatrant, decree or order for the pay3norat of mrincy obtained in any action to enforce the obligation of Developer to repay the loan evidenced by such documents shrill be enforceable against Developer only to the extent ofDeveloper "s interest in the Property. 7, GENERAL PROVI=5TONS ANL1 WARRANTIES As a material inducernent to City to enter into this Agreement, Developer represents and warrants as follows. T t Formation, Qualification and Compliance, Orange Haausitag Development Corporation, the sole member the managing general partner of Developer (a) is a non- profit public-benefit corporation, validly existing and in good standing sander the laws of the State of California, (h) has all requisite authority to conduct its business and own trod lease its properties, and (o;) is qualified and in good, standing in every jurisdiction in which the nature o£its business makes qualification necessary or Nvhere failure to qualify corder have ,a material adverse effect on its financial condition or the performance in its obligations under the Loan DoCumcriti, Developer is in compliance with all laws applicable to its business kind has obtained all approvals, licenses, exemptions and other authorizations horn, and has accomplished all fi3ings, registrations and qualifications with any Cioverxunental Authority that are necessary £or the transaction of its business. 7;2 Execution and Performance of Loan Documents. 15 25B -21 7.2,[ Developer has all requisite authority to execute and perfonn its obligations tinder the Ioan Docurnents, 7.2.2 The execution and delivery oMeveloperal, and the performance by Developer of its obligations under, each Ulan Document has beer) authorized by all necessary action and does not and will riot: (a) require any consent or approval not herelofiore obtained of any person having any interest in Developer, (b) violate any provision of, or require any consent or approval not heretofore obtained under, any articles of incorpo ration, by-laws or other governing document applicable to Developer; (c) result in or rciprirc the creation of any lien, claim, charge or offier right of others of any kind (other than tinder the City Loan Docuinents) on or with respect to any property now or bereafter owned or leased by Developer; (d) violate any provision of any lave presently in effect; or (c) constitute a breach or default under; or permit the acceleration of obligations owed tinder, any contract, loan agreement, lease or other agreement or doQuniorit to which Developer is a party or by which Developer or any of its property is bound. 7.2.3 Developer is not in default, in any respect that is materially adverse to the interests of City under the Loan Dour merits or that would have any material adverse effect on the financial condition of Developer or tire conduct of its business, under arty law, contract, lease or other agreement or document described in wb pa,ragraph (d) or (c) of the previous subsection. 7.14 No approval, license, exemption or other authorization from, or filing, registration or qualification with, any Governmental Authority is required which has riot been previously obtained in coruiection with: (a) the execution of Developer of, and the performance by Developer of its obligations under,. the Loan Documents; and (b) the creation of liens described in the Loan Documents, 73 Financial and Other Information. To the best of Developer's knowledge, all financial information furnished to City with respect to Developer in eonriectioa with the Loan (a) is complete and correct in all material respects as of the date of preparation thereof, (b) accurately present,; the financial condition of Developer, and (0) has been prepared in afwordancQ with generally aceepted accounting principles consistently 16 25B-22 applied or in accordance with such other principles or methods as are reasonably acceptable to City, To the best of Developer's knowledge, all rather documents and information furnished to City with respect to Developer, in cutinactton with the Loans, are Qorreet and complete insofar as completeness is necess €n�y to give the City accurate knowledge of the subject matter; To the hest 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 retainer) security titles of conditional vendors) on any property of Developer not disclosed in such financial statements or otherwise disclosed to City in writing. 7.4 No Material Adverse Change. There has been no material adverse change in the condition, fimmchd or otherwise; of Developer since the dates of the latest financial statements fitrnishcd 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; 7.5 TaxUability, Developer has tiled 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) rather than taxes being promptly aril 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 inetthods as are reasonably acceptable to City.. 7.6 Governmental I;te€tuir ments. Developer is ill compliance with all laws relating to the Property and all Governmental Authority approvals, including zoning, land rise, planning requirements, and requirements arising from or relating to the adoption fir amendment of, any applicable general plan, subdivision and parcel map requirement; environmental requirements, including the requirements of the C'alirornia Fnvirorunental Quality Act and the National Environmental Policy Act and the preparation and approval of all required environmental impact statements and reporis, use, occupancy and building permit requirements; and public utilities requirement& 7.7 Right of t3tltera, Developer is in compliance with all covenants, conditions, restrictions, easements, rights of way and other rights of third parties relating to the Property: 7;8 Litigation. There are no inuterial actions or proceedings pending or, to the best of the Developer's knowledge, threatened against or affecting Developer or any property o Developer before any Governmental Authority, except its disclosed to City in writing prior to the execution of this Agreement, 7.9 Banhrnaatcy To the best of Developer's knowledge, no attael urents, 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. 17 25B -23 7U 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, correct and sufficiently complete to give City true and accurate knowledge of its subject matter, and does not contain any misrQpresentation or emission. 7.[t Conflicts of Jude -rnber, official or employee, of the City shall have any _r rest, No me personal interest, direct or indirect, in this Agreement, nor shalt any such mernber, official or employee partitt pate in any decision relating to this Agreement wbicli affects his her personal interests or the interests of any corporation, partnership of association in which lwlsho 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 corr4dcration for obtaining this Agreement. 7.t2 NonhablI1!Xof City 0fficiaj1 �dFm loges. No inember, official or employee of the City shall be personally liable tin the Developer in the event ofany default or breach by the City or ror any amount which iriny become due to Developer or on w-Ly obligations tinder the tennis of this Agretsuent, 7,13 No Assigrimen : Developer expressly acknowledges and agrees that the City has ortly agreed to assist (he Developer as a incans by which to induce the development of the Property, Accordingly, Developer further expressly acknowledges and agrees that this Agreement is a perwnal right of Developer that is neither negotiable, transferable, nor asignable except as set forth herciii. developer may assign some or all of its rights Linder the Agreement only with the prior written consent of the ftecutive Director (,such consent not to be unreasonably withheld), except that no prior consent is necessary for an assignment by a limited partner of Developer town affiliate, or as otherwise provided in the Deed ofTrkist. 7.14 Applicable Lnsv: This Agreement shall be interpreted, governed and enforced under federal and state laws. 7J5 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 nights 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 fivm any default by Developer, nor shall the City owe any duty whatwever to any claimant for labor performed or materials famished in connection with the construction of the Proporty, 7,16 Control of Property. The parties acbmowledge that neither the City has at anytime participated in any mainier in the rawragement or operation of the Property, and will not so participate at any time hereafter. 8. CONDITIONS FOR CONSTRUCTION 8.1 Permits and Approvals Developer shall diligently obtain all permits, including all building permits, licenses, approvals, exemptions and other authorisations of Governmental Agencies required in connection with the construction and conversion of the Property. 18 25B-24 8,2 !Commencement and C:ou1 1p efioaY of Construction. The construction shalt be considered :complehe 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 (including required final certificates of occupancy) have been obtained, 93 Change Orders. The Construction Contract shall not be modified except pursuamt to change orders. All change orders: (a) shall be in writing, numbered in sequence, signed: by Developer and submitted to City prior to the proposed effectiveness thereof and accompanied by any working drawings and a written narrative of the proposed change. (b) Shall be subj ect to the Executive Director's and Bank's prior written approval of the Executive Director and Bank: &A Entry and Inspection. At all times prior to completion of the construction, upon reasonable notice, 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 cons ruction are steered, (b) the right to inspect all labor performed and materials furnished for the construction, and (c) the right to _inspect and copy all documems pertaining to the construction. 8.5 Con7RIbince with Section d Clause, Section 3 of the Housing and Urban Development act of 1963, 12 U,S.0 1701u, as amended by Section 915 of the Housiug surd Community Development Act of 1992 requires that economic opportunities generated by HUD financial assistance for housing and coma -amity development programs be targeted toward 7dwv- and very low- income persons, Whenever Hill assistance generates opportunities for employment or contracting, state and lueail grantees, as well as other recipients of hilt) 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 shave of project costs exceeds $200,000 anal, contracts and subcontractor aww udetl on projects for which HUD's share or proleet costs exceeds $200,000 and the contractor subcontract exceeds S 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 vontractor and subcontractor(s), if any. The particular text to be utilized in any mid 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 oi- its reprewntatiwe, and shall be executed by the applicable contractor under penalty of perjury: 19 25B -25 "(a) The work to be performed tinder Chic contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1 968, its amended, 12 U,S:C. 1701 u ( "Section 3'). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by KID assistance or ]-TUT)- assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to law -and very low-income persons [inclusive of Very Low Income Persons, Very Low Income 1-louselnolds, and Very Low Income Tenants served by the project], particularly persons who are recipients ol` HUD assistance for housing. (b) The parties to this contract agree to comply with HUD's regulatiomi in 24 CPR part 115, which implement Section 3, its evidenced by their execution of this contract, the parties to this contract certify that they are tinder 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 arty, a notice advising the labor organization or workers' repireserttativo of the contractor's corimitmetnts under this Section 3 clause, and will past 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 persons) 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 eery subcontract subject to compliance with regulations in 24 CPR part 135, aad agrees to talon appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon -a finding that the subciautractor is in violation of the regulations 24 CPR part 135. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found to viohition of the regulations in 24 CPR 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 CPTt part 135 require employment opportunities to be directed; were riot filled to circumvent the contractor's obligations under 24 CFR part 135. (f) Noncompliance with HUD's regulations in 24 CPR 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 Clauwe, there shall be a signature block for the contractor, as applicable, the lbllowing text shall be included immediately above the 20 25B -26 signature block; `Fhc contractor/provider by hise'll" signature affixed hereto declares under penalty of perjury that contractor has read die requirements of the Section 3 Clause and accepts all its requirements contained therein for all of histhor operations related to t this contract." , ro 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 cotitraQtoT(s)/subcotitractor(s) hire(s) fall time employees, rather than volunteer labor or materials, Section 3 is applicable and all disQlosurr Find reporting requirements apply. 8.6 Construction Information. From time to time during the course oCtlio construction, within ten (10) Business Da)+s following City's written demand therefore, Developer shall furnish requested reports ot'projeut costs, progress schedules and contractors' cost breakdowns for the construction, itemized as to trade description and item, showing the name of the contractor(s) and/or subcontractor(i), and including such indirect costs as real estate taxes, legal and accounting Fce,6, insurance, architects' and engineers' fees, lean fees, interest during construction and contractors' overhead, 8.7 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 Fictions reasonably required to prevent the assertion of claims of lion against the Property, In the event that any claim of lien is asserted against the property or any stop notice or claim 65 asserted ugairist the City by any person furnishing labor or materials to the Property, Developer shall immediately give owitwft notice or the sairle 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 boad complying with the requirement of applicable laws that such release, or (c) take such oflier action as City may require to release City !Porn airy obligation or liability with respect to such stop notice or claim, 9. FE, DE RAL (IIOME PROGRAM) COVENANTS 9.1 Qualification its Affordable flonsing, As more particularlyprovided in the A ffibirdabil ity Restrictions on Transfer of Property, Developer sliall use, manage and operate the Property in accordance with the reqviremonts, of 24 CFR 92.252 so as it) qualify the housing on the Property as Afrordoble Housing with affordable rents, 9.2 Tenant andParticipaiitProtection, Developer shall comply with the requirements of 24 CFR 92,253, 9.3 Handicapped Access ibil ity. 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 die ROME, Program; and (b) the Americans with Disabilities Act of 1990, and iniplen-writing regulations at 28 CFR 35-36 in order to provide handicapped accessibility to the extent readily achicvahlo. 21 25B-27 9.4 Use of Debarred. Suspended, or ineligible Participants. Developer shall comply with the provisions of 24 t; ER 24 relating to the crnploytnaent, engagement of services, awarding of contracts,, or funding; of any contractor or subcontractor during any period of debarment, suspension, orplaconhent in ineligibility status. 9, 5 Maintenance of Trt -T ce 5traricce, Developer shall certify that Developer will provide a drug-free workplace in accordance with 24 CFR $411 9.6 Lead -Based Faint, Developer shall comply with the requirements of the Load -Based Paint Poisoning Prevention Act (42 U.S.C. 4821 -4846) and implementing regulations at 24 CFR 35, as applicable. 9.7 Affirmative Marketing. Developer shall implement and perform such affirmative marketing procedures and requirements for the Property (24 CFR 92.351) in compliance with the City's adopted Program (a copy of which is attached hereto and filem -por ated herein as Exhibit 11). 9:8 dual 0tuporttmf4 and Fair Housing • Developer shall carry out the construction and perform its obligations tinder this Agreement in compliance with all of the state and federal laws acrd regulations regarding equal ,;opportunity and fair housing described in 24 C FIZ 423511. 9.9 PropertyoStandards. Developer shall cause the Property to meet the housing quality standards set Fouls in 24 CFR 882.109, as well as all applicable local, state and federal codes and ordinances, including zoning ordinances. Developer shall also cause the Property to meet the current edition of the Model Energy Code published by the Council of American Building Officials. 9.t0 Other Program Reguirements. 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 92.35-2 or the intergovernmental review process in 24 CFR 92.359. 9,11 Reouest for Disbursements of Funds. Notwithstanding anything ecnrtafned 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 development of the Property). The amount of each request small be limited to the amount needed. 9.12 Eligible Costs. Developer shall use HOME Funds to pay costs defined as "eligible costs" pursuant to 24 CFR 9126e5, 9.13 Records and Resorts, 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 92.50$, 22 25B -28 9. C4 Un Worm Aclmisyistratiya Rcautrements. Developer shall comply with the requirements and standards of OMB; Circular No. A -122, "Cost Principles for Non - Profit Organizations," and with the following Attachments to OMB Circular Nti: A -110} (a) Attachment A, "Cash Depositories ", except for paragraph 4 concerning deposit insurance; (b) Attachment B, "Bonding and Insurance (e) Attachment C, "Retention and Custodial Requirements for Records ", except that in lieu of the provisions in paragraph 4, the retention period for records pertaining to individual Cf; BG activities starts From the date of submission of the annual performance and evaluation report, as prescribed in 24 CFR 570,507, iu which the specific activity is reported on for the final' time; (d) Attachment F, "Standards for Financial Management Systems" (c) Attachment H, "Monitoring and Reporting Program Performance ", Paragraph 2 (f) Attachment 0, Trocurement Standard& 9.15 Conflict of Interest, Developer shall comply with and be bound by the conflict of interest provisions set forth at 24 S FR 570 611, as well as state regulations pertaining to conflict oFintorest. 9,16 Monitoring, Developer shall allow the City to conduct periodic inspections of the HOME assisted units on the Property as required by the Program after the elate of construction completion, with reasonable notice, 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 sole discretion of the City, 9,17 Recertificationof Tenant Income (A) Developer shall take all necessary steps to review the incorne of all tenants prior to routing to them, as well as reviewing current tcn&ints on an annual basis, in a oordance with HOME regulations and guidelines. Every fifth (5a) year; Developer shall require- new original income documents to he'submitted -hy tenants, Tenants in 110�N1E assisted units whose incomes no longer comply with fedend income guidelines shall have their rents adjusted in accordance with federal HOME guidelines (24 CFR92.252 °92,253), (B) HOME assisted units continue to qualify as affordable hoasing despite a terilporatry-non-complialice eauseclby increases in the incomes of existing tenants 23 25B -29 if actions satisfactory to RUD are being taken to ensure that all vacancies are filled in accordance with this section until the non-compliance is corrected. 9,18 Other II[3ME Program Requirements. Developer shall comply with all other applicable requirements of the ROME Prograart. 9,19 Controlligg Covenants, If there is a discrepancy behvccrr State and Federal law with regard to any of the aforementioned covenants, the more stringent shall apply. 10, MAINTENANCE, MAINAGEMENT, OPERATION, PRESERVATION .&ND REPAIR OF PROPERTY 10.1 Maintenance, Developer shall maintain the Property (and ail abutting grounds, sidewulks, roads, parking and landscape areas which Developer is othenvise required to maintain) in goad 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 pennrit any Waste or deterioration of the Property (excerpt for normal wear and tear); shall not abandon any portion of the Property or leave the Property unguarded or unprotected; and shad 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 irapairnreat of City's interests udder the Loan Documents. Without limiting the generality of the foregoing, and except us otherwise agreed by City in writing from titre to time, Developer shall promptly and faithfully perform and observe each of the following provisions; tt7,2 Alterations and Reya €r. Developer shall not remove, demolish or materially alter any Improvement without City's prior consent, except to make tron- structural repairs which preserve or increase the Property's value, and shall promptly restore;, in a goad and professional manner, any Improvement (or other aspect or portion of the Property) that is damaged or destroyed from any cause. 10.3 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 thereat,. 117 xl Taxes and Impositions.. Developer sltdll 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 (err 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 %vith the Property), including, without limitation, non - governmental levies and assessments pursuant to applicable covenants, conditions or restrictions; and (c) all license fees, taxes and assessment,,; 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 24 25B -30 permitted by law, Developer may pay any Imposition in instal linen (together with any accrued interest). 10.4.1 _Right to Contest. ontest. 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 otberwise impair City's interests under (lie Loan Documents, and (c) Developer has furnished City with a bond or other security satisfactory in an amount not less them 100% of the applicable claim (including interest mid penalties). 1 0A.2 Evidence of Payment. Upon demand by City irom tune to time, Developer shall deliver to City, within thirty (30) days following the dice date of any Imposition, evidence of payment reasonably satisfactory to City. 10.413 Books and Records: Developer shall maintain complete books of account and other records reflecting its operations (in connection with any other businesses as well as with respect to the Property), in accordance with generally accepted accotuiting principles applied on a consistent basis or in accordance with such other principles or methods as arc reasonably acceptable to City, in accordance with 24 CFR 92,508. 10;5 Project Operating Budget. Developer must promptly deposit all project income directly into a segregated depository account established exclusively for the Project ( "Project Operating Account'), Withdrawals from this account may be made only in accordance with the provisions of this Agreement and the approved Project Budget, as it may be revised from tune to time with City approval. Developer may make withdrawals from this acearunt solely for the payment of project expenses kind project fee,-,, Withdrawals from this account for other purposes may be made only with the prior written approval of the City. 10.6 Replacement Reserve Account. Developermust establish or cause to be. established a segregated interest-bearing replacement reserve depository account ( "Replacement reserve Account ") no later than sixty (60) days after tile Certificate of Completion is filed. Developer must make rnouthly deposits from project income into the Replacement Reserves in accordance with Developer's Budget, as amended from time to trove. Developer may withdraw funds from the Replacement Reserve Account solely to food capital improvemcnis for the Project, such as replacing or repairing structural elements, furniture, fixtures or equipment of the Project that are reasonably required to preserve the Project. Developer may not withdraw funds from the Replacernem Reserve Account for any other purpose without the prior written approval of the City, 11, NONDISCRIMINATION COVENANTS ! 1J Obligation to Mrain from Discrimination. Developer covetna its and agrees drat: 25 25B -31 X In Use of Property. There shall be no discrimination against or segregation of any person, or group of persons, on account or race, color, creed, religion, sex, mental, or physical disability, marind status, national origin, or ancestry in the sale, lease, sublease, UWISI'Or, use, OCCLIPMICY, tenure or enjoyment of the Pvoperty, nor shall Developer or any person claiming tinder or through, it, establish or pen-nit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy or tenants, lessees, subtenants, sublessecs, or vendors of the Property. B. la Affordable Housing Restrictions. The foregoing covenant shall (a) be included in the Affordability Restrictions on Transfer of Property, (b) run with the land, and (e) retrain effective for the term of the contract (for 55 years), C. In Employment. In construction err the Property, Developer shall not discrimina Fiagainst any employee or applicant because of race, color, creed, teligion, sex, marital status, mental or physical disability, national origin, or ancestry. Developer shall take affinnative 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 arcestTy. 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 for the benefit of City, provided that the foregoing covenant shall not apply to contracts Or subcontracts for standard commercial supplies or raw materials, 12, ENVIRONMENTAL MATTERS 12.1 Representation and Warranty. Except as disclosed in writing to the City, Developer has no knowledge (a) of the presence on, under or about the Property, now or in the past, or any Hazardous Nlaterials, or of the transportation to or from the property of any Hazardous Materials, (b) that asbestos or polychlorinated biplienyls (PCBs) are contained in or stored on t1tv Property, or (c) that (bere are any underground storage tanks located in, an or under the Property. 12,2 ' Compliance wltb Frivironraeutal Laws, Developer shall (a) comply with all environmental laws; and environmental permits applicable to the Construction of the Property, (b) immediately pay or cause to be paid all costs and expenses incurred by reason of such compliance, (c) keep the Properly free and clear of any environmental claims or liens imposed pursuant to any environmental law, and (d) obtain and renew all environmental permits required for ownership or use of the Property. 123 Presence of Hazardous Hattrials, Developer shall not, and shall not pen-nit anyone else to, generate, use, treat, store, bundle, release, or dispose of Hazardous Materials on the Property, or trursport or permit the transportation of Hazardous Materials to or from the Property except for do minirnis quantities used at the Property in 26 25B-32 compliance with all applicable environmental laws and required in connection with the routine operation and maintenance of the Property. 12.4 Notice of Environmental Matters, Developer shall immediately advise City in writing of any of the following: (a) ally pending or threatened environmental claim against Developer or the Property, (b) any condition or occurrence that (i) results in noncompliance with any applicable environmental Wv, (ii) could reasonably be anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use or transferability of die Property under any environmental Law, or (iii) could reasonably be anticipated to form the basis of an environmental claim against the Property or Developer, 12.5 Environmental Indeninification 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 consultants, and attorneys' fees) of whatever Mild or nature, whatsoever diat may at any time be inourred by, imposed on, or asserted against the Indernnitees directly or indirectly based oil, or arising or resulting from the actual or alleged presence of Hazardous Materials on the Property. 13. OTHER AFFIRMATIVE COVENANTS While any obligation of Developer under the City Loan Note or Deed of Trust remain outstanding, the following provisions shall apply, except to the extent that FxQcutivc Director otherwise consents in writing: 13.1 Existence. Developer's managing general partner (OHDC) 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. 13.2 Protection of Lien Developer shall maintain the lien of the City 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 tllerovvitll: 13.3 Notice of Certain Matters. Developer shall give notice to City, within tell (10) days ofDoveloper's learning thereof, of cacti of the folly wjng� (a) any fi led litigation or claim affecting or relating to the Property and involving an atnount in excess of S5,000; and any litigation or clairit that might sub�jcct Developer or any general partner to liability in excess of $5,000, whether covered by insurance or not; (b) any dispute botwten Developer and a Governmental Authority relating to the Property, the adverse determination of which might traterially affect the Property; 27 25B-33 (0) any change in Developer's principal place of business; (d) any aspect of the Improvernent,, that is not in substantial conformity with the plans or code; (e) ariyEvent of Default or event which, with the giving of notice or the passage of time or both, would constitute an Event of eCault; (f) any material default by Developer or any other party tinder 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 materiatnums' lien or other lien against the Property which might materially affect the Property; and/or (h) any material adverse change in the financial condition ition o f Developer, 13.4 Further Assurance&, Developer shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to City all documents, and talre all actions, reasonably required by City Ii�orn 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 Deed of Trust; to subject to the Deed of Trust any property intended by the terms of any Loan Doculnent(g) to be covered by the City Deed of Trust or otherwise to carry out the purposes of the Loan Documents and the tratisactions contemplated thereunder. 1;h5 ,Annual Finandal Statements. Developer shall deliver to City, within ninety (90) days after the end of each Calendar Year, (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 ceiniectiou 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 requirenients, and ((i) a certificate of Developer's chief financial officer 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 Doveloper's Imancial condition, (iii) show all material liabilities, direct and contingent, and (iv) fairly present the results of Developer's operations. Developer shall also provide the City with any other annual audit reports issued by other monitoring agencies. 116 Audits and Access to Records. Developer agrees that City, the U.S. Department of Housing and Urban Development, the Comptroller General of the Unitcd States or ally of their authorized representatives shall have the right of access, upon reasonable notice, to any books, documents, papers, or other records ofDvveloper which are pertinent to 28 25B-34 this Agreement in order to make audits, exarninations, abstracts, excerpts or transcripts. Developer will maintain all books and accords 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 whet a period of affordability or recapture applies to Developer's activities, for a period of not less than five (5) years alter the affordability period ends. 13.7 Termite Inspection Report. Developer shalt deliver a termite report pertaining to the Property to the City every fifth (Sih) year beginning January 2022. 14 OTHER COVENANTS While any obligation of Developer under the City Note or City Deed of Trust remain outstanding, the following provisions shall apply, except to the extent that .Executive Director otherwise consents in writing: 11.1- Default on .Senior Loan. Developer shall not default on any of the Senior Load documents, provided however, that Developer dealt have such period as is provided in the Senior Loan Documents during, which to effectuates cure. 14.2 Salt or Lease of Propertvt.- Unless and until Developer has received a Certificate of Completion for the construction from City, Developer shall not sell, lease, sublease or otherwise transfer all or any part of the Properly or any interest therein without the prior written consent of the Executive Director, which consent may be withheld in the Executive Direetoes reasonable discretion, In comiection with the foregoing consent requirements, Developer acknowledges that City 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 heroin, a "transfer" shall not include (i) a transfer o Ca General Partner's interest in Developer when made in connection with the exercise by the Developer's limited partner (the "Limited Partner' ") of its rights upon a default by a General Partner under the Developer's Partnership Agreement (the "Partnership Agreement ") or ttpon 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 (:ICI) days of such default or, irsuch removal and substitution camaot reasonably be completed within thirty (30) days, so long as the Limited Partner commences to take action to romove anti substitute the General Partner with a reasonable period and thereafter t&ligently proceeds to complete such substitution; (ii) any transfer or the Property to the ManiaginA General Partner pursuant to the right of first refusal or to the General Partners pursuant to the purchase option, as provided for in the Partnership Agreement, (iii) any trans rota of the Limited Partner's interest in connection with a default by the Limited Partner under and in accordance with the Partnership agreement; and (iv) any sale, transfer or other disposition of an interest in a limited partner of the Developer, 15. CERTIFICATE GE COMPLETION 29 25B -35 Upon satisfactory completion of the construction and upon the request of Developer, or at its own election, the City of Santa Ana shall issue a Certificate of Completion. Stich Certificate of Completion shall be, and shall so state, conclusive determine Lion of satisfactory completion of the construction. If City declines to furnish a Certificate of Completion after written request from Devcloper, the F-eculive Director Nfiidl, within thirty (30) (lays after receipt of the request, provide Developer with r, written statement of the reasons therefore. The statement shall contain a description of the action Developer must take to obtain a Certificate of Completion. If the reason therefore 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 fern] of security acceptable to the Executive Director in the amount of the fair value of the uncompleted work, ek 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 11 notice of enrnpletion" referred io in Section 3093 ofthe California Civil Code, 16. INDEMNIFICATION 6.1 Noir-llabilt!y of Q L. Developer acknowledges and agrees that; (a) The relationship between Developer and City is and shall remain solely that of borrower and leader, 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 woL&k,. (ii) archileck, 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 patty is entitled to rely on it" (b) Notwithstanding any other provision of any Loan Document: (i) the City are not a partner, joint venture, alter-ego, manager, controlling person or other business associate or purtioipartt of any kind of Developer and City does not intend to ever ass-Lime any such status; (ii) City's activities in connection with the Loari(s) shall not be "outside the scope of the activities of a lender of money" within the meaning or 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 ally acts, omissions or decisions of Dcvcloper; 30 25B-36 (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 fronn any construction on, or occupancy or use of (lie Property, whether arising from: (i) any deFect in any building; grading, landscaping or other onsite or offsite improvernont; (rf) 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 (ci) By accepting or approving anythnlg required to be performed or given to City tinder the ,Loan Documents, including any certificate, financial statement, survey, appraisal or insurance policy, City shall not be deemed to have warranted or represented the suf1!Qietacy or legal, effect of the saute, runt no such acceptance or approval shall constitute a warranty or representation by City to anyone. 16.2 Indemnity. Developer agrees to defend (by counsel satisfactory to City), indemnify and held harmless the City and its respective officers, directors, employees and agents (collectively the "Indcannitees ") from and against all claims, damages, demands, actions, losses, liabilities, costs and expenses (including, without imitation, attorneys' fees and court costs) arising from or relating to- (i) this Agreement; (ii) the freaking; of the Loan(s); (iii,) a claim; demand or cause of action that any person has or asserts against Developer; (iv) any act or ornissio n of Developer, any contractor, subcontractor or material supplier, engineer, architect or other person with respect to the Property; or (vi) 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 gross negligence or willful misconduct of City. Developer's obligations under this Section shall survive the cancellation of the City Loan Note, release and reconveyance of the City Deed of Trust, issuance of the Certificate of Completiou, and termination of this Agreement, 16.2.1 Nothwithstandirng the foregoing, neither Developer, nor any of its partner, shall be personalty liable for any ludemnifrcatioi obligation hereunder which would result as the repayment of principal and/or interest under the Loan. 16.3 Reimbursenient of City. Developer shrill 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 contracto." or employees of City) in connection with the enforcement of the Loan Documents and all related matters including ail claims, demands, causes o €' action, liabilities; losses, commissions and other costs against which City is indennnified runner the Loan Document,,,. Suclrreimbursement obligations shall bear interest from the date occurring twenty "(20) days after City gives written demand to Developer and shall be scoured by the City Deed of Trust. Such rein-ibursement obligations shall Survive the cancellation of the Loran Mote, release and reconveyancc of the city Deed of Trust; issuance of a Certificate of Completion; and termination of this Agreement 17. INSURANCE, CASUALTY AND CONDEMNATION 31 25B -37 17.1 Policies Regained. While any obligation of Developer tinder the, Loan Documents rornains outstanding, Developer shall maintain at Devolopci's sole expense, with imarm either (i) admitted in California or (ii) are not admitted to California but have im A.M. Best Rating of "A,' or above and reasonably approved by the City, the following policies of insurance in form and substance reasonably satisfactory to the City Attorricy: (a) worker's compensation insurance and any other insurance reqaired by law in connection with the construction, (b) prior to commencement and following completion of the construction, fire and hazard "all risk" insurance covering 100% of the replacement cost of the Improvements in the event of fire, lignming, witidstonrf, vandalism, malicious tniqchicf and all other risks normally covered by "tall risk" coverage policies in the area where the Property is located (including loss by flood if the Property is in an area designated as subject to the danger of flood); (c) ripen cornami neon tint 0 r the construction and at all times prior to completion of the construction, boulder's risk-all risk insurance covering 100% of the replacement cost of all Triaprovements (including offshc materials) during the course of construction in the event of fire, lightning, windstorm, vandalism, earthquake, malicious mischief and all other risks normally covered by "all risk" coverage policies in the Brea where the Property is located (including loss by flood if the Property is in art area designated as subject to the danger ofilood); (d) public liability insurance in amourits reasonably required by City from time to time, mid in no event less than $ 1,000,000 for "single occurrence;" (c) -property damage insurance in amounts reasonably required by City from time to time, and in no event less than $1,000,0ft and any other insurance reasonably required by City. All such insurance shall provide that it may not be canceled or materially modified without thirty (30) days prior written notice to City. The policies required undQr subparagraphs (b) and (c) shall include a "'gender's loss payable endorsement!' in form and substance satisfactory to City, showing the City as encumbrance. The City shall be named as an additional insured(s) in the policies required under subparagraphs (d) and (c) with primary coverage. Certificates of insurance for the above policies (and/or original policies, if required by City) shall be delivered within ton (10) days after dermind therefore, and prior to start of any construction work, All policies insuring against damage to the Itaprovetrionts shall contain an agreed value clause sufficient to eliminate any risk of car- insurance. No loss than thirty (30) days prior to the expiration of each policy, Developer shall deliver to City evidence of renewal or replacement of such policy reasonably satisfactory to City Attorney. 17.2 City Attorney May Nfodifl, The City Attorney may modify 32 25B-38 the type and arnounts of insurance required pursuant to this section 17.3 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 lake all action reasonably required by City in connection therewith to protect the_inwrests of Developer andlor 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 Glaian, action, adjustment or proceeding; without prior written approval,.wbrcll approval shall not be unreasonably withheld or delayed. 17A Delivery of proceeds -ta City. In the event that, notwithstanding the "lender's loss payable endorsement" requirement set forth above, the proceeds of any casualty insurance policy described heroin are paid to Developer, Developer shall, subject to any superior rights of the Senior Lender, deliver such proceeds to the City immediately upon receipt. 17;5 Application of C asuelty 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 eaoh of the following conditions (the "Restoration Conditions ") within ninety (90) days (unless extended by mutual agreement of Developer and City) roNwing' the occurrence of the damage "ICU wbichthe Proceeds are collected. (a) Developer shall derrionstmW to City's reasonable satisfaction that the proceeds (together with amounts deposited by Developer pursuant to subparagraph (b) will be adequate to repair tlae Improvements and to restore the fair market value or the Property, within a 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 () plans and spocficatioas reasonably satisfactory to City, and (ii) a construction contract In farm 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 Rands (the "Shortfall Funds ") in the 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 requires to evidence and secure Devcloper`s obligation to use all aunounts ,disbursed for the diligent restoration of theProperty. (d) No Event of Default shall remain uncured. 33 25B -39 17,E Method of Disbursement and Undishur,"d Funds, Any Proemls 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 he 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 0 lien on the Property, as they elects in their sole and absolute discretion, 17.7 Failury to Satisfy Conditions. In the event that Developer fails to fulfill the Restoration Conditions within ninety (90) days (unless extended pursuant to Section 17.5) 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 Propeny, and the selection of which such obligations to apply the Proceeds against shall be made by City in their sole and absolute discretion. 17,8 Restoration, Nothing in this Article 17 shall be construed to excuse Developer From repairing and restoring all damage to (he Property in accordance with other Loan Document provisions, regardless of whether insurance proceeds are available or sufficient, 17.9 Condemnation; Treatment of Compensation, Subject to any superior rights of Senior Lender, Developer hereby assigns to the City, m, security for all obligations to City secured by a lien on the property, all amounts payable to Devetcpor in connection with any Condenination, 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 109", Of the Property to an extent that, in the reasonable opinion of City, Tenders or is likely to render the Property not economically viable or if, in City's reasonable judgrrient Developer's security is otherwise, impaired, City may apply the Compensation received due to jadgi-nent or settlement in connection with any condemnation or other taking to reduce the unpaid obligations scoured in such order as City may detcrinine, and without any adjustment in the arnount or due dates of payTnciits due under the Note. If so applied, any award in excess of the unpaid balance of the 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, 17.9,1 Notwithstanding the foregoing, as long as the value of City's Hems arc not impaired, any condeinuation proceeds may be used by the Borrower for repair andor restoration of the Project. 17.10 WalverofStibrog anon. Developer hereby waives all rights to recover against the City (or any officer, eniploycc, agent or representative of the City) for any loss incurred by Developer from any cause insured against or required by any Loan Document, to bc insured against; provided, however, that this waiver of subrogation shall not, be effective with respect to any insurance policy if the coverage thereunder would be 34 25B-40 materially reduced or impaired as a result. Developer shall use its best efforts to obtain only policies which permit the foregoing waive` o f subrogation. I& DE FAULTS AND REVILDIE S 11.1 Events of Default. The occurrence of any of the following, whatever the reusun tllerefore, shall constitute an Event o f Default by Developer: (a) Developer: fails to make any payment of principal or interest under' the City Loan Note when due, and such failure is not cured within fifteen (15) BusiDUSS Days after Developer's receipt oCwritten notice that such payment was not received when date; (a) Developer fails to perform any other obligation for the payment of rrroney under any Loan Document, and such failure is not cured within fifteen (15) 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 deserihed in subparagraphs (a) and (b) above) under any Logan Document, amd such faihire is not cured within thirty (30) days after Developers 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 shalt not he an Event of [default so ImS as Developer (iii any event, within ten (10) days after receipt of such notice) commences to cure, and thereafter diligently (in any event within ninety (90) days after receipt of such notice) prosecutes such cure to completio z (d) Any representation or warranty in any Lean Document prove% to have been incorrect in any material respect when in ale; (e) The Propeity is maternally damaged or destroyed by fire or other casualty Gutless Developer fulfills the Restoration Conditions sot 'forth in the insurance provisions of this Agreement within ninety (90) days (unless extended pursuant to "Section IT5) and thereafter diligently restores the Property in accordance with this Agreement; (t) Work on the construction ceases for thirty (34) Consecutive days for any reason (other than governmental orders, decree., or regulations, acts of God or any other deity, strikes or other causes beyond Developer's reasonable control), provided that the same do not, in the aggregate and in the City's reasonable judgment, threaten to delay the, completion of the construction beyond the required completion date set forth to this Agreeinent; (h) Developer is enjoined or otherwise prohibited by any Government Authority from constructing and /or occupying the improvements and such injunction or prohibition continues unstayed for sixty (60) days orinore for arty reason; 35 25B -41 li) Developer is dissolved, liquidated or terminated, or all or substantially all of the -assets of Developer are sold or othenvise transferred without the Executive Director's prior written consent; 0) Deicloper is thesubjecL of an order forr rplieFby abankruptcy 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, rebabilitator or similar officer for it or any part of its property; or any receiver, trustee., custodian, conservator, liquidator, rebabilitator 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, reaqjustrnont of debt, dissolution, custodianship, conservatorship, liquidation, construction 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 riot released, vacated or fully borided within ninety (90) days after its issue Or levy; or (k) (i) tiny of the Senior Loan documents is revoked or terminated, ill whole or in part and for any reason, (except due to repayment of such loans), without the Executive Director's prior written consent, or {fl) Developer defaults of Otherwise fails to perfonn any of its duties or obligations under or in connection with any of the Senior Loan documents, subject to all applicable notice and cure periods, or (iii) any of the Senior Loan documents is amended, suppli-inented or otherwise modified without City's prior written consent, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary contained herein, City hereby agrees that any cure of any default made or tendered by Developer's Limited Pariner shall be decined to be a cure by Developer and shall be accepted or rejected on the same basis as if made or tendered by Developer, 182 Remedies Upon Default, Upon the occurrence of any Event of Default, City may, at its option and in its 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 (late; pf ovided that any Event of Default described in Section IS shall automatically, without notice or other action on City's part, cause all such arnounts 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 ftinds; (c) Fxerciso any of its rights under the Loan Documents and any rights 36 25B-42 Provided by law, including, without limitation, the right to seek- specific perfonnaince and the right to foreclose or 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; and, (d) Suspend or terminate the award of HOME funds if Developer fails to comply with any term of that award. 18.3 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 oinission by City to take action on account of such default if such default persists or is repeatcdL No waiver of any default shall affect ally 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 or 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 upprowil 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 Ito 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 figIrts, 19, MISCELLANEOUS 19.1 Obligations Unconditional and ](ndEpcndent. 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 Loan or otherwise, Developer hereby waives any right it might otheRvise 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 i is obligations under the Loan Documents, 19.2 Notices. All notices, demands, approvals and othQr communications provided rot in the Loan Documents shall be in writing kind be delivered to the approl-.iriaite party by personal service or U.9' mail at its address as follows: If to Developer: 415 N Harbor, LP clo 815 N I larbor, LLC 414 East Chapman Avenue Orange, Cali1omia 92866 Attn: Executive Director With a copy to C&C 815 N Harbor, LLC 37 25B-43 loll l Yorba St., 5uitr 200 Tustin, CA 92754 If to City, City of Santa Ana Executive Director (CDA) 20 Civic Center Plaza (M -37) P.0, Brix 1988 Santa Ana, California 92702 With a copy to. City Attorney City of Stinta Aria 24 Civic Center Plaza, 7th Floor (M -29) Santa }Ana, California 92702 Addresses for notice may be charged as required by written notice to all other parties, All notices personally served shall be effective when actually received. All notices trailed shall be effective three (3) days after deposit iii the U3, Mud; postage prepaid. The foregoing notwithstandrng, - the - non - receipt of any notice as the result of a change of address of whiub the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such notice. 193 Survival of Re2resentatians and 4Var°runtics. All representations and warranties in the Loan Documents shall survive the making of the Loan described Herein and have been or `,will be relied on by City notwithstanding any investigation made by either party. 19.4 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 car by reason hereof. 19.5 Binding Effect-, Assiynineut of Obligations. This Agreement shall hind, and shall inure to the b¢ nefit o£ Developer and City and their respective successors and assigns. Other than as expressly provided to the contrary in this Agreement, Developer shall not assign any of its rights or obligations under any Loan Document without the prior written consent of City, which consult may be withheld in City's sale and absolute discretion. Any such assignment without such consent shall, at City's option, be void. 19,6 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 Loan. raid the Property, and all prior negotiations, understandings and agreements are superseded by this Agreement and such either Latin Documents, -No modification of any Loan Document (including waivers of rights and conditions) shall be effective unless in writing and sigrxed by the party against whom enforcement of such modification is sought, and then only in (tie specific instance and For the specific purpose given. 19.7 Governinu Law, All of the Loan Documents shall be governed by; and construed and enforced in accordance with, the lawns of the State of California and 38 25B -44 Federal law, whii;buver is more -stringent, Developer irrevocably and unconditio nail y 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 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 rern jurisdiction or venue, 19.8 SeverabilitX, of Provisions. No provision of any Loan Document, that is hold to be unenforoeable or invalid shall affect the remaining provisions, and to this end all provisions of the Loan Documents are hereby declared to be severable, 19,9 Headings, Article and section headings are included in the Loan Documents far convenience of reference only and shall not be used in construing the Loan Document& 19,10 Conflicts. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, this Agreement, unless otherwisio 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 Lhan the other shall not be deemed a conflict tinless the applicable provisions are inconsistent and could not be simultaneously enforced or perfornied, 19.11 Time of the Essence. Thric is of the essence tinder this Agreement and in the performance of every term, covenant,, and obligation contained herein, 19.12 Conflict of Internt. No tricraber, official or employee of the City shall have any director indirect interest in this Ag7cement, nor participate in any decision relating to the Agreement which is prohibited by law. 19.13 Warrants= Ag-,tinstPai�mentofConsid(rtition, Developerwarrantstliat it has not paid or given, and will not pay or give, any third person any inoney or other consideration for obtaining this Agreement, 19.14 Nonriabifi_",,,ofC!IyOfFicials and Eml2loyee,4, Nornernbcrofficialor employee of City shalt be personally liable to Developer, or any successor in interest, in the event of any default or breach by City or for any amount which may become due to Developer or successor, or on any obligation tinder the terms of this Agreement. 19.15 Plans and Data, Where Developer does not proceed with the development of the Ptoporty, and when this Agreement is terminated with respect thereto for any reason, Developer shall deliver to City any and all plans and data concerning the Property, and City or any person or entity designated by City shall have the right to use such plans and data without compensation in Developer, Snub right of City shall be subject to any right of the preparer or the plans to their use, 19.d6 Am tho rity to Enter A . igned represents Indwarrants greement, Each undcra that its signature liercinbelov,, has the power, authority and right to bind their respective 39 25B-45 parties to each, of the terms of ttais Agreement, and shall indemnify the Cate fully, including reasonable costs and aattorney's feed, for any injuries cr dmna,ges to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. EM 25B -46 IN WITNESS WHEREOF, the parties hereto have caused this AgreQmcm to be executed on the date set forth at the beginningof this Agreement. ATTEST: Maria D, -Huizar Clerk or the Council APPROVED AS TO FORNt SOINIA R. CARVALHO, City Attorney Lisa Storck, Assistant City Attorney DEVELOPER: 815 N Harbor, LP a California limited partnership MANAGING GENERAL PARTNER CITY OF SANTA ANA David Cavazos City Manager RECOMMEND APPROVAL: Kelly L. ReeTaders, Executive Director Community Development Agency OHDC 815 N Harbor, LLC a California nonprollit, public benefit corporation By; Eunice Bobert, Chief Fxecutivie Officer DEVELOPER GENERAL PARTNER C&C 515 N Harbor, LLC a California limited liability company BY: Cottle Family Trust Dated 3/8/87, its Member By; Barry Cottle, 'Trustee 41 25B-47 Exhibit A —Legal Description Exhibit 6 — Scope of Work Exhibit c —Project Budget Exhibit D — Project Schedule and Tasks Exhibit E — City /HOME Loan Deed of Trust Exhibit F —City/HOME Loan Note Exhibit G — Affordability Restrictions on Transfer of Property Exhibit H — City's Affirmative Marketing Program pqp -* Exhibit "A" Legal Description Real property in the City of Santa Ana, County of Orange, State of California, described as follows; LOTS 1 TO 6 INCLUSIVE, AND 11 TO 16 INCLUSIVE, ALL IN BLOCK C OF TRACT NO. 490, AS SHOWN ON A MAP RECORDED IN BOOK 17, PAGE 22 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY„ CALIFORNIA. EXCEPTING FROM SAID LOTS 13 AND 14, THE LAND DESCRIBED IN A DEED TO THE CITY OF SANTA ANA RECORDED NOVEMBER 19, 1971 IN BOOK 9894, PAGE 267 OF OFFICIAL RECORDS OF SAID ORANGECOUNTY. ALSO EXCEPTING FROM SAID LOTS 14 AND 15, THE LAND DESCRIBED IN A DEED TO THE CITY OF SANTA ANA RECORDED OCTOBER 02, 1978 IN BOOK 12865, PAGE 1879 OF SAID OFFICIAL RECORDS. APN: 198 =162 -44 and 198- 162 -444 and 198- 162-44 and 198-162 -44 and 198- 162 -44 and 198-162 -44 and 198 - 152-46 and 198162 -46 and 198 - 162 -46 and 198 - 162-02 and 198- 162 -02 and 198- 162 -02 and 198- 162-03 and 198-162-03 and 198 - 162 -03 and 198 - 162 -03 and 198 16203 and 198 - 162 -03 and 198 -162- 45 and 198-162-45 and 198-162 -45 and 198- 162 -42 and 198 - 162-42 and 198 - 162-42 and 198 - 162 -43 and 198- 18243 and 198 - 162 -43 and 198 =162 -43 25B -49 ExnrBIT H SCOPE OF NVORK SCOPH OF 17FVEI-O?N1H',,NJ The proposed project, located at M N. Harbor Blvd, Santa Ana, CA 92703 will consists of the construction of an affordable, multifamily rental project compi-Li4cil of 70 units with a 3,195 sf community room, lewdrig office and laundry facility, The development will be constructed on approximately 2.26 acres (131,916 sX) and will have 69 three - bedroom units and I two-bedroorn unit. The three bedroom units will range from 1,022-1,050 qE 7 units will be rented to, very -low income families with household incomes at or below 50% of the AMC (Area Median lncornc}, 49 units will be rented to low irworne families with household incomes at or below 60% of AMT, and 13 units will be rented to families with household incomes at or below I I 0%� The one reinainki.- unit will be deAgrvited as a manager's unit, The pi-Ljoct will consist of 4 three story on grade wood framed buildings with a wrabination or tack under and surface parking, One of the buildings will contain the leasing 0ffieo/cUM1nLMityS'Pace. The project provides parking through a combination of tuck Linder and surface parking. The property will feature a tot lot, onqite laundry facilities, community room, leasing office and ample open space. The umits shall incorporate, design element-; and building, practices that will reduce the maintenance and utility cost,; and also reduce the adverse environmental impacts otherwise associated with residential construction. Such design elements and practices may include, but Eire not limited to crivironmenially sensitive landscaping, installation of energy efficient furnaces and water heaters flinergy Star Appliances), and installation of high efficiency toilets, The Project will be fully landscaped including irrigation. Landscape materials'will be low maintenance and drought resistant, Landscaping All areas of the Site that are not occupied by buildings, driveways, walkways, and parking shall be landscaped and maintained, Landscaping may consist of grass [awns, groundeovors, shrubs, trees, decorative block walls, screenings, and terraces' as reasonably approved by the Planning Department. A perniancia water sprinkler system shall be provided in all landscaped areas to insure proper maintenance. Refuse An enclosed refuse area or areas shall be provided at locations in accordance with the requirements of (lie City of Santa Ana. Refuse areas shall be designed with building materials compatible with those used for the other structures on the site. utilities Developer shall be responsible for all utility relocation or installations an the premises; and hookups to Howers, drains, water and gas distribution lines, electric, telephone, and telegraph lines, and for hook-up to all other public utility lines. Ail utility services on-side shall be installed underground or concealed within buildings and no mechanical equipment or rotors shall be exposed at ground level as required by the Santa Ana Municipal Code. 25B-50 Public Improvements Developer, at its sole cast and expense, including casts of design plans and specifications, shall construct all on -and off site improvements required for the premises all in accord an" with technical specifications, standards and practices of the City of Santa Ana, 25B -51 bor Versiow 70 Units- Mixed Income; 50%,60%, and 110✓ AMI SOURCES OF FUNDS =PERMANENT SOURCES Total Term Amount Interest [Yes) Comments CCRC $10,340,990 5.10% 35 Bond Rate (Inc. Cushion) CCRC(Tranche B) $758,500 5110% 1.5 Eight (a) Project Based Vouchers City of Santa Ana - NSP $2,000,000 City of Santa Ana - NSP $880,000 BofA Subordinate Loan Program $1,400,000 15 City of Santa Ana - HOME $380,000 Deferred Developer Fee $918,300 General Partner Equity $100 Limited Partner Equity $5;.727,447 Federal Tax Crealt Pricing: $1.00 TOTAL $22,405,337 vs. TDC $2,x,405;337 Financing Suriiolvs/(GapJ $0 Total Term 'URCES Amount Interest (Mats] Comments Bank of America $14,085,889 2.81% 24 Bonds sized at 66.82% orAggrega te Sods City of Santa Ana • NSP $2,000,000 City of Santa Ana - NSP $880,000 BofA Subordinate Loan Program $1,400,000 City of Santa Ana - HOME $380,000 Deferred Developer Fee $918,300 General Partner Equity $100 Limited Partner Equity $1,431,862 25% or Total Equity. Dev. Fee Deferred Undl Completion $649,226 Other Costs Deferred Until Completion $659,960 Refer to Development Oudger for Details. TOTAL $22,405,337 vs. TDC $22,405,337 Financing Suppiusl(Gap) $C 25B-52 £nNSFflUCT9Q(Y W9fsBV 'I} e .M vclmA Cti #AYTdf. iA'gVVGASSON RW'0xxM4>,YEaFbv: .4t�ma,•an[ QPtia"k'4 p¢enp (. keAVl*merc Reserve iGM.kurlk „olij lahl. 9udiataYUgY4ttnd iUAts' ii�y' nE H JCWA) 6ty's Flnxxial AO.lsia e:4n nlikma 1wnNigNl�4nll LNn GAOb.£6 2. C 11 g- , hl1111 kw., Wall .., WPd, £Pg: Seas PeM1n lulilly itta Penn Lendx+.Lequl YILLtW ACtr cEUC r cmncrae ieiisrpM kr,IIrvl Pl,rvy,e;kn, 51.bldt'Pf SHatiti43y <`aRlS TnTALOava4apmRMTCM Y �fS d49 gr] fl ta- -KQ05,U90 $2AGO.CM tBROAGO ,14 p 0 tlf 0. a ,3 t6 25B -53 iiWiYrtlpB @: 1`% Bynkd 2114a14Mn 94o-llyl In .fell'MSntl V M PVI,WI livA lad AMrllr¢Pd P. Qtq¢uMl1 £Oi13 Id9Il W yaW ergrtx4re S dP $Ik., Pm'Imp! 6s i It �+'I V,lyq ..hn�n L .Iv Wad Qp MV" fE,RKU4 g1;lrir.,ye4 2,O C40 gaulmo }546136} 5°1}WI 4Yp,IXA bbeultlnn }kU,G(O }Q RCtl,GOQ I Qa MtlIM1CNn yy 6C0 9 tl[4441TIy14Ri[fuu gi3OaN SP4 {b,p45,Jan 0 }E,QW.6f1tl }9QO,Qtlk L]gS.9bb y]Np 40a --- cniinat+C+iox ILryltgllllrll:ilrlrtillr+4' }➢ A0,}➢1 51W WK "l ¢1,k5{{w? f0 SL 3s'A"➢J B iL "#ES i6 Ykdd,02 oCO. 4(461) 0ClY5vrheh (t.Rs. _ "M,lSP 914PAE2. SQ C4np3,lal txG%. {dA} tiYSeIq IS }Q' VLa.4'a S}{p;5;ri (a ELLCnn etl.T.G -tS15.GC l Sn i3E„YC knlM bl iblillrrv4pYi�¢'Y MO d] 50 2a696t3 34M4¢al CUt avwNmp 5 } }. �1 kp LECSb0012]9 4tl $IX VI pY ! 1p }5 YS 50 -M/ - ldralCeSWaryml41ml�1'xe9 51,$.R+,1'ICIY 1zYa0yfA6 sl,E50,0W W.1 N.1 RS.vssWt F01P 521im %S 1219,CUQ ULDIUM fmlrynnlenEd MUe, -iaa 9q4" 'O'C10 €4.1110" AIgImIYd ". #14,Ct4 W.Wfl {15 an b Paw^fi yl if3li 8545arvLaun }Y1M *l Tq,SW .3910,901 sa&ear5w, zv5,M $15p➢ UMN vim E�IrvCY ki Elr�nev4y 31G6,CLC i390,Cga 13191r Qi1 .iy1t3I41Umv i'11mIM4n( }6y.hC $01cm4. }6`+Wv wpm IaaW.64n xdf,hv: }A6,WU nla,M LI'M'..PttII1P"6PI.. }2£,CCO R,Uma 01;03 1Al 11�tlaPlt:¢VI SIVf IgtlPoflJ 1. .A24CYA; }.3. "D }iT3,4[ik Lptl Sy"bl.,, .a Wu fA3,lAN) ;1gEK3 Tt4`ftxxdxgESetVrc yp lsxl'.vk vu n Rp,00➢ fi3U.ma 1 R N4a IQy`C +t C Un f1i111 M64P SEQ,G➢Q }2900 cl.n, W.a law. (W WAI V14,P10 . $n Y3P5,5d9 Y+,429 NnM[4-q {I[v:a- Op�fWtenK[t3TeC; stt.j Y40,L4.0 ytl j✓J,pttl Lelltle'[.110.111, N!( w, S15,ac $0 $19,001 irillu4696.vudIWM ➢tn ca+p�iF {St"ru 10 $".am &su'gs<L =Mfl }60,1!p0 UM.:ly, KeWCIW4 10.1 sRl',&10. }94,00 $01,903 iGlUhtKlNkuLimr- ;k5,v,fkLUlreyfde u,,S) e`,'/16 $1,730 $7,? i ^gttiC* nnEn9a'fi' #e"l "Ca. }iOP.w $db'3,111n .wg4NT R, glgrlica '}W;5tl0 $55,,500 gSLf?yF PnOXW fnrllllkgMll 5]C,[4O $0 p36A3 Gr+SOpu fm PT+ ➢IiaOH'r ;S51,k6U 51 ;,w 93 $5mjts .M vclmA Cti #AYTdf. iA'gVVGASSON RW'0xxM4>,YEaFbv: .4t�ma,•an[ QPtia"k'4 p¢enp (. keAVl*merc Reserve iGM.kurlk „olij lahl. 9udiataYUgY4ttnd iUAts' ii�y' nE H JCWA) 6ty's Flnxxial AO.lsia e:4n nlikma 1wnNigNl�4nll LNn GAOb.£6 2. C 11 g- , hl1111 kw., Wall .., WPd, £Pg: Seas PeM1n lulilly itta Penn Lendx+.Lequl YILLtW ACtr cEUC r cmncrae ieiisrpM kr,IIrvl Pl,rvy,e;kn, 51.bldt'Pf SHatiti43y <`aRlS TnTALOava4apmRMTCM Y �fS d49 gr] fl ta- -KQ05,U90 $2AGO.CM tBROAGO ,14 p 0 tlf 0. a ,3 t6 25B -53 EXHIBIT D PROJECT SCHEDULF &TASKS A. GENEPUkl, 1, insurance. Dovelopei -sliaitftti-nishorcaLsetobefumistic(I As a Condition Precedent to appropriate certificates of insurance and/or endorsements to disbursement of any portion of City which meet all requirements (if the Agreeme= the loans, but no latci, than ten (10) days after close o r escrow. B. PROJECTFINANCING 1, Developer shall submit Not I ate r than thirty (3 0) days to City evide nee of financing for the Prr l ect lifter allocation of tax exempt bond finaticing for the Project by CDLAC and1or tax credit financing by CTCAC, but no later than July 31, 2015. 1 Receipt of All Funduhig Commitments �omntitmentsNeceNsary to Complete �Cp ljruc _d o , Developer shall use its best and good faith efforts to secure ixtevocalitc funding commitments from CDLAC andlor TCAC, Senior Lender, and other available funding sources which when, combined with the Loaris shall equal no toss than the total cost to construct the Improvornents, as set forth in the approved Project Budget, Developer shall submit such comantments to City for review, 3, A - ro.val of Develol er's Evidence ofFiriancitig. City must approve Developer's evidence (if linancing as required by the Agreement. C. CONSTRUCTION OF IMPROVE NIENITS Not later than thirty (30) days oiler allocation ortax exempt bond financing for the Project by CDLAC andlor tax credit financing by CTCAC, but no later than July 31, 2015, Not later than twenty (20) business days after receipt of a complete submittal from Developer t, Design Ltcvclar occur I7rawin s. Developer shall prepare and Within seven (7) months Submit Design Dtivelopment Drawings to City for review and following the date of the approval. Agreement. 2, Approval of DcsigaL!g� i?rs4vinsa. City Housing staff shall review and approve, approve with conditions, or disapprove the Design Developinent Drawings 25B-54 Witlain fourteen (14) days of Developer's complete submittal of the Design Development Drawings, 3, Rovisio n n to Desist Developer shall Wilhin fourteen (14) days of revise and resubmit Design Development Drawings to address conditional approval or conditions or disapproval to the satisfaction orCity, disappruval, subject to extension based upon extent of revisions requestc& 4. ManaMinqntllan. Developer shall submit its proposed Within thirty (30) days of Management Plan to City forruview and approval. approval o F Agreornent, but no later than October 20, 2016, S. Approval of Management Plata. City shall review and approve, Within fourteen (14) days of approve with conditions, or disapprove the Management Plan. receipt of a complete submittal front Developer. 6. Revision to Management Flan . Developer shall revise Within fourteen (14) days of Management Plan if conditionally approved or disapproved by receipt of disapproved City. Management Plan Iturn City. 7. Approval of Revised Management Plan. City shall review and Within fourteen (14) days of approve, approve with conditions, or disapprove revised receipt of a complete submittal Management Plan. of revised Martagotacat Plan Item Developer, but not later than 120 days prior to project completion. R. Pro l es Reports, During construction Developer shall prepare Commencing thirty (30) days 0 monthly written progress reports Lind submit to City Manager, allot start or the construction work through completion. 9. Curaitiencementeff onstratction cf the lmpio atnenES, No later than 12 months after Developer shall cause the Construction ortho hnprovernont5 to the execution of HOME Loan be conmienced by Coll I-raCtOr. Agreement and commitment of HOME funds, 10, Completion ofConstrurtionof the Improvements, Developer 0n or before October 20, 2017 shall complete all work- of the Cortstructio,, —ofthe (Subject to extension by City Improvements, based upon substantial progress toward completion of construction by Developer). 11, Release Q'[_QoIIxtR1Ction Covenants. City to furnish Developer Within thirty (30) days or with a Release of Construction Covenants. rcccipt, of Developer request and only after Developer's satisfactory eompletion of the Construction of the fmpr event eats. 25B-55 The Schedule of PerfonuancQ is subject to revision from 6111C to tints as mutually agreed upon in writing between Developer and the City Manager or hi&qiq.�r designee ("City Managcr"), and City Manager is authorized on beliall of City to agroe to make such revisions as lie deems reasonably uccemary. The City Manager, in his/her solo discretion, may elect to bring (o the City Council Cor consideration and action any modificafions to this Schedule of Performance, It is understood that the Schedule of Performance is subject to all of the teens and conditions set forth in the text of the Agreement. The surnmary of the items of performance in the Schedule of Performance is not intended to supersede or modify the more complete description in the text of the: Agreement; in the event of any inconsistency between the Schedule of Performance and the text of the Agmclucnt, the text Aall govern, In the event the City Manager docins, it necessary to bring to City Counell for consideration one or more modifications to this Schedule of Performance, the diserrotion to do & is expressly resew, d to the City Manager. The time periods sot forth herein for City approval (if plans and drawings and other subminals that arc subit-Hued to City by Developer shall only apply and corranence upon-DuvolopLr's complete submittal of all the required information. In no event shall an incomplate submittal by Developer trigger any City obligations of review and/or approval hereunder; provided, however, that City shall notify Developer of an incomplete submittal as soon as is practicable and in lit) event later than the applicable tune set forth for, City action on the particular item in question. If any of the foregoing perfmnance measurements are not untn: then it tvill be deemed a default as defined in Section 20 and any remedies shall be cured according to said Section of the Agreement, 25B-56 FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27353 When Rccorded Mail to: Community Development Agency City of Santa Ana' 24 Civic Center Plaza P.O. Box 1985 (M -37) Santa Ana, Cali tiirnia 92702 Attn: Housing Manager CI'T'Y DOME DEED OF TRUST AND ASSIGNMENT OF RENTS THIS CITY HOME DEED OF TRUST AND ASSIGNMENT OF RENTS (the "Deed ofTraast") made this _day of March, 2015, bybetween 815 N Harbor, LP , n California limited partnership compriml. of OHDC 815 N harbor, LLC "., ( "OHDC "), a California Limited Liability Company, said CRC 815 N !harbor, LLC, a California Limited Liability Company (together the ""lTraastor ") ArneriNational Community Services, a California corporation (tire "Tr astee "), and the City= of Santa Ana, a charter city and municipal corporation (the "Bone5ciary ") Truster, in consideration of" the promises herein recited and the trust herein created, irrevocably grants, transfers, conveys and assigns to Trustee, in trust, ovith power of sale, the property located in the City of Santa Ana, County of Orange, State of California, described irr the attached Exhibit A and more commonly kamvn as 515 N. Harbor Boulevard, Santa #uia, California (the "Property "); TOGETHER with all the improvements now or htra affar erected tin the Property, and all easernenta; rights, appurtenances and all fixtures now or hereafter attached to the Property, all of which, including replacements and additions thereto, shall be €!corned to he and remain as pail, of the Property covered by this City Deed of Trust; provided that so long as Trustor is not in default hereunder, it shall be permitted to control the Property in accordance with the requirements of that certain HOME Loan Agreement entered into between the Ttustor and the Benehuiary, dated concurrently herewith and the Affor- &bility Restrictions on Transfer of Property ( "Loran Agreements"), dated concurrently herewith, whrich Loran Agreements .are all on file with the Bencfitciary, as a public. record I 25B -57 TOGLiTfHH R with the right, power and authority during the continuance of these Trusts, to collect the rents, issues, and profits of the Property, reserving; unto the Trustor the righit, prior to aray default by Trustor in payment of the uidebtedness secured by this Deed of TT Uqt or in the peribunani e of any agreement under this Deed of Trust, to collect and retain these rents, issues and profits as they become due and payable; anti, TOGETHER with all articles o rpei:.onal pivperty or fixtures now or hereafter attached to or used in and about the building or buildings now erected, or hereafter to be erected, on the Property which are necessary to the complete and comfortable use and -- occupancy of such building or buildings for the purposes ror which they were or are to be crested, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the orke herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner, and all ofthe foregoing, together with the Property, is herein referred to as f -IQ "Security To have and to hold the Security together with acquittances to the Trustee„ its successors and assigns forever„ TO SECURE to the Beneficiary (a) the repayment o£the surns evidenced by a. Promissory Note to the Beneficiary executed by Trustor of even date herewith in the principal amount of Three hundred Eighty Thousand Dollars ($380,000,00) (the "c ity Promissory Note'); (b) the performaricc of the covenants and agreements of Borrower contained in a certain Agreement as hereinafter defined; and (c) the payinent of all other :sums, with interest therefr, advanced in accordance herewith to protect the sccutity of"this Deed of Trust, and the peifonnauace of the covenatits and agreements of Tmstor contained herein. TRUSTOR AND THE BENEFICIARY COVENANT AND AGREE AS FOLLOWS. 1. Tire A€tracinent. This deed of Trust is executed and delivered, along with the City HOME promissory Note and the Loan Agreements, to benefit the Property. A copy of said Agreements is on file as a public meovd, with the Beneficiary and is incorporated herein by reference. Trtistor acknowledges that but for the execution of this Decd or Trust, the Beneficiaty would not enter into the Agreement or City KOME Promissory Note secured by this Heed of Trust. 2, Trustur'ts Estate. Truster is lawfully seized of the estate hereby conveyed and has the right to grunt and convey the Security; thatother thavri this Deed of Trust, the Security is not encumbered except for obligations secured by deeds of trust, or any other security agreement, to secure financing or refinancing for the purchase and rehabilitation of the Property.. 25B -58 3, Repg pent of the Loan. Trustor will promptly repay, when due, ffic principal loan amount, as required by the City HOME Promissory Note secured by this Deed of Trust. 4. Subordination. This obligunon secured by this Deed of Trust shall be subordinated to the Senior Loan, but the City's Affordability Restrictions onTransfier of Property shall remain in first place. 5. Prior Mortgages and Deeds of Trust Charges; Liens. Trustor shall perform all of` ruster's obligations tinder any mortgage, decd of trust or other secutityagrecinent with a lien which has priority over this instrument, including Trustor's covenants to make payments when due (subject to an applicable notice and cure provisions). Trustor will pay all (axes, assessments and other charges, Rues and impositions attributable to the Seculity which may attain a priority over this Deed of Trust, byThistor making any payment, when due., directly to the payee thereof. Truster will promptly furnish to the Beneficiary all notices of amounts due tinder this paragraph, and in the event Trustor makes payment directly, Trustor will promptly discharge any lien which lifts priority over this Deed of Trust; provided that Trustor will not be required, to discharge the lien of the Deed of Trust scouring any senior lender or tiny other lien described in this paragraph so long as Trustor will agree in ,writing to the payment of the obligation secured bysuch lien in a manner acceptable to (lie Beneficiary, or will, in good faith, con(est such lien by, or deforid enforcement of such lien in, legal proceedings which operate to prevent the criforccuient of the lien or forfeiture of the Security or any part thereof. 6. flaZard Insurance. Truster will keep the Security insured by such insurance, policies in such aniounts, and for such periods as called lbr in the Agreement All insurance policies and renewals thercof will include a standard uwwtgagee clause - with standard lender's endorsement in Cavor of the holder of any senior lender and the Beneficiary as their The Beneficiary shall have thierigitt to hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the Beineficiary, or its designated agent, the original insunntce policies or certificates of insurance, all Mnewal notices and all receipts of paid premiums. In (lie event of loss, Trustor will give prompt notice to the insurance carrier and the Beiieficitu-y or its designated agent, `the Beneficiary, or its designated agent, may make proof of loss if not made promptly by Trustor. Via Burieficiary shall receive 30 days advance notice of cancellation of any insurance policies required tinder this Section. Unless the BenQficiary and,rrustor otherwise agree in writing, insurance proceeds, subject to the rights of any senior lender, will be applied it) restoration or repair of the Security damaged, provided such restoration or repair is economically reasihic and the s sceurity of this Deed of Trust is not thereby impaired, If such restoration or repair is not economically f4asibic or if the security of (his Deed of Trust would be impaired, again, subject to the rights of tiny senior lender, the insurance proceeds will be used to repay the loan secured by this Deed of Trust, tkrith the excess,, if any, paid to Trustor. Ir the See unity is abandoned by Trustor, or if Trustor ffiils to respond to the Beneficiary, or its designated agent within 30 days froin the (late notice is mailed by either of them to Trustor that the 25B-59 insurance carrier offers to settle a claim for insurai Lee benefits, the Beneficiary! or its designated agent, is authorized to collect and apply the insurance proceeds at the 13cncficiary's option either to restoration or repair of the Security or to repay the loan, If the Security is rrcdluirod by the Beneficiary, all right, title and interest o f Truster in and to any insurance policy and in and to the proceeds thereof reitilting from darriagc to the Security prior to the sale or acquisition will pass to the Beneficiary to the extent of the sums secured by this Deed (if Trust immediately prior to such sale or acquisition sulijut to the rights o f any senior lender. 7_ Freservution and Maintenance of _Secant , Trastor will keep the Securty in good repair and will not ctammrt waste or permit unpainuent or deterioration of the Security: 8. Protection i f the Benehcraav's Security: If Truster fails to perfu�rn the covenants and agreements caantaincd in this Deed of Trust or if inay action or ptocceding is commenced which materially affects the Beneficiary's interest in the Security; including, but not limited to, default under the Deed of Trust securing, any senior lender, eminent domain, insolvency; code cnforccrncnt, or arrangements or proceedings involv=ing a bankrupt or decedent, theca the Benei ciaary, at the Beneficiary's option; upon notice to Truster, may make such appearances, disburse such scans and take Such action as it deterinines necessary to protect the Beneficiary's interest, including,, but not limited to, disbursement ,o reasonable attorneys' fees and entry upon the Security to rake repairs. Any a mounts disbursed by the Beneficiary pursuant to this paragraph, with interest thereon, will become an indebtedness ofTrustor secured by this Teed of Trust. Unless Truster and the Beneficiary agree to other terms of payment, such aanrount will be payable upon notice from the Beneficiary tai Truster requesting payment thercof, and will bear intere t from the date of disbursement at the rate payable from time to brae on outstanding principal under the City Note unless payinent of interest at such rate would be contrary to applicable law, in which event such amounts will bear interest at the highest rate permissible udder applicable law Nothing contained in this paragraph will require the Beneficiary to insure any expense or tales any action hereunder. 9. Inspection. The Beneficiary may make, or cause to be made, reasonable entries upon and inspections of the 'Security during normal business hours; provided that the Beneftciaryivill give Truster reasonable; notice o f inspection 1f1, Forbearance by the Benefiiciary.Lot a Waiver. Any Forbearance by the Beneficiary in exercising any rita it or remedy will not be a waiver of the exercise of any such right orremedy, The procurement ofinsurniceor the payment ci f taxes, or other liens or charges by the Beneficiary will not be a waiver of the'l3eneficiary's right to accelerate the maturity of the indebtedness secured by this Deed of Trust. t 1. Remedies Cumulative. All remedies provided in this Decd of Trust are distinct and cumulative to any other right or remedy under this Decd ofTrusl or any other 25B -60 document, or afforded by lave or equity, and may be exercised concurrently, independently or successively; 12. Successors: and Assi its Bound The covenants and agreernoils :herein contained shall bind, and the rights hereunder shall inure to, the respective successors and ussil is of khe Beneficiary and Trustor subject to the provisions of this Decd ofTrust. 13. Joint and Several Liability, All covenants and agreements of Trustor shall be joint and severs 14. Notice. Except for any notice required under applicable law to be giveri.in another manner, (a) any notice to Truster provided for in. this City Deed of Trust will be given by certified trail, return receipt requested, addressed to Trustor at 414 Fast Chapman Avenue, Orange, California, 92866; with copies to C&C Properties Group t, LLC at 11211 Yorba St., State 200, Tustin; Califurntiia 92870 (b) any notice to the floneficiary will be given by certified mail, return receipt requested, to the Benc riic lry at 20 Civic Center Plaza, P.O. Box 1988, Santa Ana, California 927012, Attentiow Rousing Manager, or at such other address as the Beneficiary may designate by notice to Truster as provided above, and (c) to Trustee at 8121 C. Florence Avenue, Downey, California 90240. Notice shall be effective as of the date received as shown on the return receipt. 15, Governing L aw, This Decd ofTntst shall be governed by the haws of the State ofCalifornia with venue in Orange County. 16. 5everability. in the event that any provision or clause of this Deed of Trust or the City Loan Note conflicts wv itb applicable law, such conflict will not affect other provisions o r this Dmi of Trust or the City Note which can be given affect without the conflicting provision, and to this end the provisions of the Deed of "rust and the City Loan Note are declared to be severable. 17. Captions, The captions and headings in this Decd of Trust are for convenience only and are not to be used to interpret or dcfrne the provisions- herenf. 18. Default in Foreclosure; Rernedi , Upon Truster's breach of any oovenant or agreement of Trustor in this Deed of Trust or the City Note: secured by this Deed orTrust, inclWing, but not limited t©, the covenants to pay, when due, any sutras secured by this Decd of Trust, the Beneficiary may declare all sums secured by this Doed of Trust inanediately due and payable by delivering to Trustornotice thereof specifying; (l) The breach„ (Z) the action required to cure such breach; (d) a date not less than 30 days from the date the notice is received by Trtistor as shown on the return receipt, by which such breach is to be cured provided, however, that if such default is not reasonable susceptible to being cured within 30 clays, Trustor shall have a reasonable period to cure the defect so long as Tivstor is diligently prosecuting the cure to completion, and (4) that failure to cure such breach on or before the date specified in rite notice may result in acceleration of the sums secured lay this Deed of Trust and sale of the Security The notice will also inform Truster ol'Trustor's right to 5 25B -61 reinstate after acceleration aid the right to bring a court action to assert the non - existence of default or any other defense of Trustor to acceleration and sale. Notwithstanding anything to the contrary contained herein, a "default" shall not include (i) a transfer of a general partner's interest in Trustor when made in connection With the exercise by the Truster's limited partner (the "Limited Partner ") of its rights upon a default by a general partner under the Trustor'; Arn¢nded and Restdted Limited Partnership Agreement (the "Partnership Agreement") or upon a general partner's withdrawal in isolation of the Partnership Agreement, so long as'the removal and substitution of the defaulting general partner is made within thirty (30) whys 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 uitse 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 (lie managing general partner of Trustor pursuant to the tight of first rofusal or to the general partners of Trustor pursuant to the purchase option, as provided for in tine Partnership Agreement; (iii) any transfer o f the Limited P'artner's interest in curtneetion With a default by the Limited Partner under and in aocordance with the Partnership Agreement; and (iv) any sale, transfer or other disposition of limited partner interest or an interest in a limited partner of the Trustor, provided that after any such sale, transfer or other disposition an affiliate of the Trustor's limited partner is the managing anennber or geuertal partner of sntctn transferee limited partner, If the breach is not ca red on or before the date speei f ed in the notice or such longer period as provided above or in the City Note or the Agreement, the Boneliaiary, at the Beneficiary's option, nnay: (a) declare all of the sums secured by this City Deed of Trust to be immediately due and Payable nvitlsout further demand acid may invoke the power of Sale and any other remedies permitted by California law, (b) either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regain( to the adequacy of its security, enter upon the Security and take possession thereof (or any part thercoo and of any of the Security, in its own name or in the name of the Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not core or waive any breach hereunder or invalidate array act done in response to such breach and, notwithstanding the continuance in possession of the Security, the Benericiary Shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (c) commence an action to foreclose this Deed o (Trust as a mortgage, appoint a receiver, or specifically enforce any of floe covenants hereof; (d) deliver to the'Trustee a written declaration ot'defarrU and deanand for sale, pursuant to the provisiows for notice of salty found at Calif -brnia Civil Code Sections 2924, p4 g ., as amended from time to tame; or (e) exercise all other rights and remedies provided heroin, in the instruments by which Truster acquires title to any Security, or in any other doctuuent or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by lain. 25B -62 Notwithstanding anything to the contrary herein, Beneficiary hereby agrees that any cure of any default made or tendered by Trustoes limited partner shall be deemed to be a cure by Truster and shall be accepted or rejected on the saane basis as if made or tendered by Truster, The Beneficiary shall be entitled to collect all reasonable costs and expenses incurred in pursuing; the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees. R Trustee's Rigit to Reinstate:. Notwithstanding the Beneficiary's acceleration of the sums secured by this Deed of Trust, Truster will Have the right to have ally proceedings begun lay the Beneficiary to enforce this Deed of Trust discontinued at anytime prior to S days before sale of (lie Security pursuant to the power of sale contained in this Deed of Trust or at any titre prior to eutay of a judgnrient ettfureing, this Deed of Trust if-, (ta) Truster pays the Beneficiary all sums which would be then due under this Deed of Trust and no acceleration under the City Note has occurred; (la) Truster cures all breaches of any other covenants or ag;recnaents of Truster contained in this Deed ot`Tratst, (c) TMst€ spays all reasonable expenses incurred by the Beneficiary and the Trustee in enforcing the covenants and agreements of Truster contained in this Deed of Trust and in enforcing the Beneficiary's and the Trustee's remedies, including;, but not limited to, reasonable attorneys' fees; and (d) Truster takes such action as the Beneficiary rnay reasonably require to assure that the lien of this Deed of Trust, the Beneficiary's interest in the Security and Trusters obligation to pay the stuns secured by this Deed of Trust %hail continue unimpaired. Upon such payment and cute by Truster, this Deed of Trust and the obligations seeared hereby will Ternain in full force and effect as if no acceleration had occurred. 20, Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is rrade a public record as pntvided bylaw, Trustee is not obligated to Notify tiny patty to this Dceod of Trust of pending sale underany other deed of trust or any action or proceeding in which T'rustor, Beneficiary, or Trustee shall be a pail), unf ess brought by Trustee. 21. Ileconveyanee; Upon payment of all suers securedby this Heed ofTrost the Beneficiary will request the Trustee to reconvey the Security and will surrender this Deed of Trust and the, City Note to the Trustee. The Trustee will reconveythe Security without warranty and without change to the person or persons legally entitled thereto. Such person or persons will pay all costs ofreuwrdation, if any, 22. SubstituteTrustee. The Beneficiary, at the Beneficiary's option, rnayfrrorn time to time rctnew e the " rustcc and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee wvill succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 23. &quest for Notice. Truster mIucsts that copies of the notice of default and notice cif sale be sent to Trustee at the address set forth in Section 14 above,. 7 25B -63 2. Nonrucourse Liability. Neither Trustor nor any partner ofTwstoi- shall have any pemnal liability under the. Agreement, City Note, and this Deed of Trust mad any judgnew, decree or order for payment of money obtained in any action to enforce the obligation of Ttus-tor to repay the loan evidenced by such documents shall be enforceable aggtzinst Truster only to the extent of Trustor's intorest in the property. (Signatures On Irollattiirq�pcagc) 25B -64 IN WITNESS WHERE OF, Trustorhas executed this Deed oMust as of the date fu-St written above. TRUSTOR: 815 HARBOR, LP, a California Hinited parniership MANAGING GFNIEPkL PAWIFNER OHDC 815 N Harbor, LLC a California limited liability company ORANGE HOUSrNG DEVELOPMENT CORPORATION a California nonprofit corporation, its sole mernber By: Eunice Bobert, Chief Executive Officer DEVELOPER GENERAL PAKIFNER C&IC 815 N Harbor, LLC a California limited liability company By; Todd R. Cottle, its member By: Cottle FarnilyTrust Dated 318/87, By: Barry A. Cottle, its Trustee 9 25B-65 CITYHOME LOAN PRONTISSORY NOTE S1:CURED BY SUBORDlNATE13 f FED OF TRUST TO THE CITY Ole SANTA ANA, CALIVORNIA (815 N. Harbor Boulevard) S3s01000 00 I. Principal rAniou t of Loftin March 2015 Santa Ante, California FOIi VALUE REXEIVED, 815 N. harbor, LP, a linrit4d partnership comprised of OHDC 815 N ELtrbor, LLC, ( "'01lDC" ), a California Limited Liability Company, and C &C 815 N l L;arbor, LLC =,'ai California LitTiled Liability Company ('Borrower "), hereby nornises as pay to the CITY OF SANTA ANA, a chador city acid municipal corporation ( "Citj ), or order, a principal amount not to exceed THREE HUNDRED Eim iw DOLLARS ($380,000,00) or so much lira not <as may be advanced by the City to the Borrower, due; aatd payable with 0% interest by residual receipts over the dilly -five (SS) year term, pursuant to the I,oan Agrcement between Borrower and the City dated concurrently herowith. The obligation of Burrower to City hereunder is subject to the terms ofsaid the Loan Agreement, Affordability Restrictions on Transfer of Property, Deed of Trust kind this Note, Said documents are public records on file in the offices of the City, and the provisions oI`said documerats are incorporated herein by this reference, This Note, the Loan Agreement and Affordability ftegtrictions on Transfer of Property, and the Deed of Trust are sometiiucs collectively referred to herein as the "HC]ME loan Doetanents." `Tire HOME Loan Doeuments and the rights and responsihihties Inure to the benefit of the City, of Santa Arad: Any capitalized term which is not otherwise defined herein shall have the meaning aseribed to such term in the Agreement. 21 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: "Agreement" means the HOME Loan Agrectuent between the City and the Developer dated concurrently herewith, and any attachments or amendments thereto, "applicable Law" shall tucan those Federal, state and local Laws, ordinances, regulations, policies mid proceelurcS Rpplickible to She 110M r-, Funds (the "HOME Regulations ") (24 CFI( Part 92). "Area Median Income" means the median income figures for Orange County as published by the U.S. Dupartment of 1lousirag and Urbatt Development (I I,UD). Also duty be referred to as "A`.vll" herein, "Borrower" means 815 N. Harbor, LP, a California limited partnership comprisotl of 0l-1DC 815 N Harbor, LLC, a California limited liability company as managing general partner and C&C 815 N Harbor, LLC, a California limited liability company ns developer general patiner; "C;alundayr Year" means each consecutive twelve (12) month period from January 1 to December 31. I 0653AR9384. r 25B -66 "C Lfty_j.qqW' shall mean the loan evidenced by this Note repayable to the City in accordance with the teens of this Note and secured by the Deed of Trust. with reference to the Residual Receipts, shall mean filly percent (50%) of the total Residual Receipts from the Property as further de6cribcd in Section 5 hcreof. I'Qqs 11 shaltmeaw W In the case of a Sale, rcasonablo brokerage commissions payable to a broker as a result of the Sale, which shall riot in any event exceed the customary amount charged-for similar transactions in the imirkedim market place, costs of title insurance premiums, documentary stamp taxes, escrow fees, recording charges, loan repayment charps and other costs reasonably ineurrud with respect to the Property, in each case actually paid by Borrower as a condition cif the Sak (ii) In the case of a Refinancing, the reasonable and necessary costs of completing such Refinancing, including, without limitation, loan fees, loan rLTaymoat charges, costs of title insurance premiums, escrow fees. recording fees and altoracys'few. "Deed of Trust" shall mean the Deed ofTrUSt in finvor of the City, securing the City HOME Loan. "Qross Revenues" shall mean all revenues and receipts of every kind actually received by Borruwcr froun operating the Property, and all parts thereof, including, but not limited to, income frorn both cash and credit transicL[ous, i-enuil from leased and/or subleased spaces and parking foes and chirges (but not including sccuriiy deposits and other tenant deposits, except to the extent such deposits are forfeited to the Borrower under the tenant's Gros% Revenues also includes any casualty insurance proceeds in excess of those used to restore the Property and any rental interi-aption insurance proceeds. Any credit consideration shall be included in Gross Revenues at the tirne cash proceeds (principal an0or other) are received. Borrower shall establish and maintain accounts fur the Gross Revenues (the "'Project Accounts") that are segregated from ruvenuos and income received by Borrower from all other projects, Gross Revenues shall also inolude all interest carried on the Project Accounts, "LIOMF AqsLs!-qdJQnqs" shall mean those rental units constructed on the Property which are ti- aubj ect to the tortir orriffordabIlity, "I IOME Fund "'W-W shall mean the money provided under the I IONIE Program for 1110 dovelopmenIt of the rental units hercunder, "Low Income" nions an a(k1usted income which does not exceed eighty percont (80%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by 11M "0 werating Expew"es" shall mean the sum of the following; 0) payments orpriticipal and interest and all other cluirgus relating to the Senior Loan(s)� a property rawtagemein fee equal to 8% of &ross rents; (Iii) Owner Administration ree of 5% of gross routs; 107011MIMM4.1 2 25B-67 (iv) deposits into required reserves; (v) all other actual, reasonable cash operating costs and expenses, cilculated, on all annual basis, that ire directly attributable to roatitig4ig and operating, the Pmperty, hictuding, without Hiniting the gencrality of the foregoing, the fallowing; costs and expenses for real and personal property taxes, special assessments or similar charges; water, fuel, electricity and other utilities; lieuting, ventilation and air condidonitig expenses; labor; supplies: tools; equipment; insurance; advertising and marketing; accounting and legal fcos; brokerage commissions and other leasing experisos; reasonable reserves for all anticipated expenses as approved by the City; and other such items constituting alteration, main(enatice and repair costs actually paid by the Borrower, subject to the following conditions: (a) Depreciation and amortization expenses Shall not he comidered Operating Expenses, except as otherwise provided lit',rein. (b) Any expenses, aompcn&ation or fees paid to any affiliate of Borrower shall only be included as Dpvratiug 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 sfirtilar sera ices in (lie Santa Ana, California area. (Vii) Ally other expenses riccessary to snout senior lender requirements and rcquirements or Borrower's limited partner, or its assignee, as w forth in Boi-rower's Agreement of Limited Partnership (the -Partnership Agreement"), "RtMiert all nicatt that property located at 111 5 N. Harbor Boulevard, Santa Ara, California. A," shall "Relinatioinz" shall mcan clu t singing the then existing financing on the Property by, without linu'Lation, modifying the interest rate aud/or the tent of the existing Senior Loan, increasing or reducing the amount of the existing Senior Loan, paying off the existing Senior Loan and obtaining new Senior Loin, except for the payoff of the conventional lender's acquisition [Dan for the Property. "ROitianoineProcood " shell tic disbursed as set torch h-tSoction 6 hereof. "Residual Receipts" shall mean the Gross Reventics from the Property for each year, less deductions for Operating Fxpenscs front the saine building, applicable to each such year to the event not already deducted as an Operating fixpense. "Sale" shall mean tiny transfer, assignment, or conveyance or lease of [he Property or any fortiori thereof, or any interest therein by the Borro%ver, and includes any transfer, assignment or Sale of any, partnership interest in the Borrower by an individual or entity which is a general or limited pirtxicr in the Borrower, or any interest by any individual or entity which holds an interest in any such general or limited partner in the Borrower, t iehich brings the cumulative total of ill such direct and indirect transfers, assignuient€ and sales during thc term of this Note to more than thO-}'-fivc pereent (35%) of the Ownership interests in the Borrower, and any such transfer, assignment or Rule of direct Or Indireet partaeNbip interest (.hereafter. Sale inctUdesa sale in condeirination, Or Linder threat thereoL Sale does not include dedications and grants of caqtauents to public and private utility companies of the kind customary in real estate development, Notwithstanding anything to the contrary contained heroin, a "Salt" shall not include any transaction not considered a "transfer' under Section 13. [ 0705 N 189 3841 pqpl�' go "Senior Loan "'shall mean any senior loan made to Borrower, for payment of Acquisition andior Construction Costs, a nd shall includo any subsequent loan that refinances said SernorLoan. "Term" the term for repayment of this Note shall mean fifty -five (55) years from the date of full occupancy and rental of the Project, Terns ot"Affordabilit " the term of affordability .9 hall be fitly -five (55) years. "'Very Low Income " means an adjusted income which does not exceed fifty,percent (50%) of the area median income for the Orange County, California PNTSA, adjusted for household size, as published by RUD. 3. This Note evidences the obligation of Borrower to the City for (lie repayment of the City Loan of HOME Funds attributable to the development of the Property, and related sell costs, A. This Note is payablc at 1110 principal office of City of Santa Ana, Community Development Agency, M— Civic Center DrNc, Santa Ana, California 92702, Att: I Iouqing Division, or at such otherplaoc as the holder horcof may infornir Borrower in writing, in Jawful money of the United States. 31 Loan Renavinent. Borrowcr shatl make payments to the City as provided in Sections 5 (Residual Receipts), 6 (Refinancing Proceeds), 7 (Sale Proceeds? and 9 (Amvtorated Loan Repayment) of the Agreement. 4. Operating Capital If the relflaQement reserve account. ('reserves') Is depleted due to unforuscen repairs and the General Partner makes a loan to the Partnership, the reserves most be fully funded prior to payment of said loan" The outstanding loan balance will be reflected in the annual report. 5. Annual Loan Repffnionti Residual Receipts rl. Commencing on the date one hundred fifty (150) (lays after the close of the initial Calendar Year followirig the issuance of the Certificate of Completion and on or before the 150"' day of each Calendar Year thereafter the Borrower shall thereafter make a toan payment to the City annually, in the amount of the lesser of the outstanding balance dqc under this Note or the City's Percentage of the Residual Receipts, aq provided in this Section 5, b. Within one hundred fifty (150) days after the close of the initial Calendar Year fo[lowing.tho Issuance or the Cerrificaw of Completion and on or before the 150[h (lay of each Calendar Year thereafter, the Borrower -,hall submit to the City on audited financial statement of Gross Revenues and Operating Expenses attributabIc 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 alak(, a City Loan payment then due, c. Except as otherwise provided, the Borrower shall pay to the City the City's Percentage of the Residual Rcccipts w payment of principal, AL least fifty percent (50%) of the Residual Reeciptq shall 107611.53%.138V3811 1 4 25B-69 remain wfth the Borrower, with all ResidualAcecrpsrcnaining with Borrower onto all or the City Loans have been fully repaid. d. Burrower shrill retain fifty percent of the Residual Receipts The other fifty percent shall be divided with thirty -driw percent (331K) to be applied to the first NSP Loran elated October ` 013, thirty - three percent (331x) applied to the 1-TOME loan of current date herewith, and thirty -three percent (33%) applied to the second lkSP loan dated concurrently hermwith As Borrower repays its loans, the payment percentage applied to the remaining loans shall increase: c. The Rosidual Keecipts payment shall be made not later than one hundred fifty( t5o)'days after the close of the Calendar Year, Such payment shall be applied first to any late fees, then to reduce the principal balance of the loam 6. Loom Reriavtnent from Refinancing Proceeds. The, Bormwer staiIt make a loan payment to the City train every Refinancing that occurs during the term of this Note (othorthan refinancing of the conventional tender acquisition loan) not to exceed the outstanding bnlaricc or principal on this Note, to the extent of the City's Percentage of the Refinancing proceeds (if any), as follows: (he cash proceeds from such Refinancing shall be applied first to pay Closing Crusts; next, the amount necessaty to pay in Cull the balance remaining on the Senior Loan; next, the aaacuttt necessary to pay any deferred developer fee in full, and next, the Doi-rower shall pay to time City the City's Percentage of the Refinancing P rouc'ccis to the extent of the outstanding balance, on this Note, At least fifty percent {50%) of the Refinancing pooceWs, shrill remain with Borrower, with all remaining Refinancing proceeds remaining with the Developer to the extent Lite outstanding balance of the (dote has been fully paid. Such payment shall be tame on the date of sucli Refinancing, and shall be applied to r€`rJum the principal balance; of the Loan. The City shall not be rcaluircd to reconvey the lien of the Deed ofTrust if Refinancing Proceeds are insufficient to repay the Loan in full. Laaaa RMavment from .Sale Proceeds. The Borrower shall ma", a loan payment, not to exceed the outstanding balance of principal on this Note subject to Section 14 herein, to the City fiem any Sale that olccum during the terra of the City Loan, to the extent of the City's Percentage of the Sala Proceeds, as follows: gross sale proceeds are applied first to pay Closing Coasts, next to pay in full the balance remaining on (he Senior Lotus; next, the amount necessary to pay tiny deferred developer fee it) full', and next„ the Borrower shall pay to the City the City's Percentage of the total Sale Proceeds, not to exceed the outstanding amount of principal due on this Note. At least fifty percent (50 %) of the Sail: Proceeds shall remain with Borrower, with all ronio ring Salts proceeds remaining with the Develop" to the extent the Outstanding balance of the Note has been fully paid. Such payment shall be due on the date ofsuoh Sale, and shall be applied to reduce (lid principal balance of the Loan. The City shall not be required to reconvey the lieu of the Deed of Trust if Sale Proceeds are insufficient to repay the Loran in felt. H. Accelerated Loan Ps �ty neat" The full principal amount outstanding shall be due and payable on the earlier to occur of the £ollvwing: a. sale or Refinancing orthd Property as provided further in Section 13 lietoof; a076 +5 Y 1339384. t 25B -70 unless: (f) in the case of a Sale in winch the eSale Proceeds are insufficient to repay in Rill the City Loam, the City apprnves such sale and the purehascr assunates the balance of the City Loin in accordance with the terms of this Note; or (ii) in the case of a Refinancing in which the Refinancing Proceeds are fnsufticient to repay in full the City Loan, the City approves inch Refinancing and the Borrower remains obligated pursuant to the terms of this Note; la. In evem of default (sul�leut to any applicable notice and cure, provisions) pursuant to any of the Loan Documents or the Senior Loan Documents. c: Any default (su[?Icot to any applicable notice and cure provisions by Borrower as to any other loan or loans by City to Borrower with respect to -the Property; or d. The date that is fifty live (55) years after the date of execution of this bete. On that date, the City agrees to review the performance of the Property and _conslder in good faith any reasonable request. by Borrower to modify the terms or extend the Term of this City Note . p, preninlisent Borrower may propay the outstanding principal balance; under this Note, in whole or in part, at any time without penalty, however the Affordability Restrictions on Transfer orProperty still remain for the entire Affordability Period of fifty-five (55) Years. to, Lawful Moll , Principal is payable in lawful stoney of trio United States of America. M App lica lWin of Pavments Late +Charge4. a. Any payments revolved by the City pursuant to the tet'nis hereof shall be applied first to sums, other than principal, due the City pursuant to this Note, and the balaicc, it any; to the payment of principal. b. Many payment is not received by the City witJairi fifteen (15) Business Days after Developer's receipt of written notice that such payment was not received when duc, then in addition to the retncdies conferred upon the City pursuant to this Note and the other loan Documents, (i) a Into charge of four percent (4%) of the amount due and unpaid will be added in the delinquent amount to coaipensato the Chy for the expense of handling (Io dolincluency and (ii) the atnount clue* and unpaid, excluding the late cLarge; shall bear interest at the highest annual rate which may 1awtiilly be ch r d and collected under applicable law on the obligation evidenced by= this Note, computed from the date on which the amount was due and payable -until paid. Without prejudice to the riglits of the City hereunder or under any - of'the other loan fiuouments, Harrower shall iadouinity the City against, and shall pay the City on deniand; any expense or loss Willett it niay sustain or incur as a result of the failure by Borrower to pay when dine any installment of principal, fees, or other amounts payable to the City under this Note or any other Loran Document, to the extant that tiny such expense or loss is not recovered pursuant to such foregoing provnstans. A certific atc of the City setting forth the basis for the determination of the amounts rrecessary` to indemnify the City in respect of such expenses or direct loss, submitted to Bon ower by the City, shall Lie conclusive and binding for all purposes except as €inruediattely corrected by Borrower notice to City, L 0?615 3%B893 94. 1 25B -71 12. Set Rrit This Note is securcd by the recorded Deed ofTrus;- 13. Acceleration by Reason of Transfer or Financing. a. I order to lntluce City to make the loran evidenced hereby; Borrowcr agrees that in [he event of any transfer of The property without the prior written consent of City (other than a transfer resuhing from a furectosure, or cans eyance by dectl in liou of foreclosure, by the holster of the Senior Loan Deed of Trust),, City shall have (lie absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable= Consent to one such transaction shall itot be drained to be a waiver of the right to require consent to future or successive transactions. City may grant or deny such consent in its sp1e discretion and, if consent should be given, any such transfer shall be subject to this Section 13, and any such transferee shall assume all obligations herOUnder and agree to be bound by all provisions contained herein. Such assumption shall not., however, release Borrower from any liability thereunderwithoul the prior written consent ofCity. lr. M used herein, "transfer" includes the Sale, agree +neat to sell, transfer or conveyance of the property, or any portion thereof cr interrsl therein, whether voluntary, involuntary, by operation of law Or otherwise; the cxecution 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, "Transfers shall not include die leasing of individual residential units on the Property,- so long Ua Borrower complies with the provisions of the Loran Agreement and the Affordability Covenants and Restrictions relating to such leasing activity, nor shall it include a conveyance of the Property to a limited partnership in which Borrower is a general partner, cr to a corporation or hooted liability company that is wholly owned by the Borrower of its affiliates and that is formed For the sole propose of [Owning and operating the Property, or the sale back to the borrower. In the event of any Relinatncing or partial Refinancing in an amount in excess of the balance of the Senior Loan, without the prior written consent or City (which consent City may grant or deny in its sole discretion), then the entire outstanding balance of the City Loan shall be repaid to the City at the time of each Refinancing or partial Refinancing, c. Notwithstanding anything to the contrary containc d herein, a "transfee' shall not include (and it shall not be deemed a Sall) (i) a transfer of a general partner's interest in Bot over when autdc in connection with theexereise by the Borrower's limited partner (the "Limited Partner ") of its rights upon a default, by a general partner under the Borrower's partnership agreement (the "Partnership Agreement ") or ulion a general partner ,4 withdrawal in violation of the Partnership Agrecanent, 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, sir long as the Limited partner commences to take action to remove and substitute the general partner with a reasonable period and Ihercaf)or diligently proceeds to complete such substitution; (ii) any transfer of (lie 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 Lirnited Partner's interest in councetion with a dehrult by the Limited Partner, udder and in accordance with the Partnership Agreement; and (iv) any sate, transfer or other disposition of an interest in a limited partner of they Borrower, 14. Event of Default M% _a:r assisa. p 25B -72 Subject to the provisions of Sections 23 hereof, the occurrence of any of the following shall be deemed to be an event of default C "'Event of Default ") hcrcunder: (a) failure by Borrower to make any payments provided for herein, and if such default 19 riot: matte good within litleen (tS) Business Days after Developer's receipt of written notice that such payment was not received when due; (b) failure, by Borrower to perform any covenant or agreement in the Dccd of Trust, the Agra meat, 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 coinmtu re, Such cure, and diligently and coutinuously prosecute satric to completion), or (e) a default under the Senior Loan Dccxl of Trust that remains uncured after any applicable nodex tuts been provided and the expiratiou of any applicable cure period therefore„ if lily, provided therein. 15. Rymetiies. Upon the occurrence 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 slims evidenced herby iiinnediately due and payable by delivery to the Trustee named in the Deed of Trust securing this Note, and to Borrower, written (10CIRrittibn 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 Deed of'rnrst. City shall also deposit with Trustee the Deed of'1 rust, this Mote and all documents cvideicing expenditures secured thereby and evidenced hereby. Upon the occurrence of an Event of Default {and so long as such Event of Default shall continue), the entire balance of p¢mclpal shall bear interest It the Bark of America reference rate on the due date of the delinquent Payment plies four pemeut(4%). No delay or omission on the part of the City in exercising any tight under this Foote or underany of the other Loan Docrunems shall operate as a waiver of such right. 16. Attorney Fees w If this City Promissory: Note is not paid when clue or if any Event of Default occurs, Borrower promises to pay all costs of enforcement and collectioti, inotudiag but not linail"I to, reasonable attoracy s.' fees, whedier or not any action or procccdmg is brought to enforce the provisions hereof. 17. Severability, Every provision of this Note is intended to be severable. In [lie; overt any term or provision hereof is declared by a court of competent jurlischction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall riot affect the balance of the terms and provisions Hereof, which tertus. and provisions shall remain binding and enforceable. 18. Number arid Gender. In this Note the singular shall include the plural and the masculine shall include the ferninirte and neuter gender, and vico versa, if the context so requires; 19, Noti - recourse. The City Loan is a noarccourw obligation of the Borrower. Neither Borrower, heir its partners nar any other party shall have any personal liability for mpayruent of tits City :Loan or for any other amounts under arty of the documentation evidencing, securing or describing the City Loan. The sole recourse of 1 076,53' %.1389334.1 d 25B -73 City tinder this Note and the Deed of Trust for repayment of the City Loan and for sawn other arnounts arising therefrom shall be the exercise of its rights against the Property and related security thereunder, 20. Subordination, It is hereby expressly agreal and acknowledged by Borrower, and City that the Deed of Tr is a subordinate deed of trust, and that this Note is subject and subordinate to any Senior Deed of Trust. 21. Notice of Default. a. Subject to the applicable cure period,, set forth in Soctiort 14 and subject to the flarthur provlaons of this Soctiort 21, failure or delay by the Borrower to perform any term or provision of dais Note constitutes a default tinder this Note, The Borrowcr must immediately canintenco to cure;, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence b The City shall give written notice of default to the Borrower specifying the default complained of by the City- Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. G. Except in the case of a monetary event of default, the Borrower shall not be in default so lorry as it endeavors to complete such cure, correction or re,,tnedy with remanable ditigere provid ed such c cure, correction or remedy is completed Nviddn the applicable time period set forth hecohi after receipt of written notice (or Such additional time as inay be deernal by [tic City lo be reasonably necessary to correct the default). d. Any failures or dclaysby the City in asserting any oftts rights and remedies as to any default shall not operate as a waiver of any default or Of any such rights or remedies, Delays by the City in asscrLingany of its rights and remedies shall not deprive the City of its right to institute and maintain any actions or proceedings which it tangy doom necessary to protect, assert, or enforce any such rights or revialics• c. If a monetary event of default occurs under the terms of this Note Or the Deed of Trust, prior to exorcising arty remedies thereunder City ;hall give Bormwcr written notice of such default, Borrower shall have a period of fil'Itcer (15 Business Days after such notice is received within which to cure the default prior to exercise of remedies by City under this Note and the Deed, of Trust, f, If a non-monerary event of default occurs under the tertins Of this Note or the Deed ofTrust, prior to oxercishigany remedies thereunder, City shall give Borrower notice of such default, Tf tlic default is reasonably capable, of-'being rural within thirty (30) days, Borrower shall have such period to effect a cure prior to exercise of rannedies by the City under this Note and the Deed of Trust, If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Borrower (i) initiates corrective action within said period, and (ii) diligently, continually, and iii good faith works to effect a cure as soon as possible, then burrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by City. In no event shall City be precluded from exercising remedies if its security, becomes or is about to become materially jeopardized by any failure to cure a dcfault or the default is not cured within one hundred eighty (180) days after the first aertice or default is given. 107663%. 1 -1 25B-74 22, Insurance lend Condemnation. In the cvont, OC any fire or other casualty to the Property or eminent domain proceedings resulting in condemnation of the Property or any part thereof, Borrower shal I have the right to rebuild the Property, and to use all available insurance or condemnation proceeds therefor, pmvided that (a) such proceeds are ,qufflicierit to keep the City Loan in balance and rebuild the Property in a rrianner that provides adequate security to City for repayment of the City Loan or if such proceeds are iusulficiont then Borrower shall have funded tiny deficiency, (b) City shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condenination proceeds for rebuilding under a construction escrow sir similar arrangement,, and (c) no material default then exists tinder this Note or the Deed of Trust, If the casualty or coadentramion affects only part of the Property and total rebuildin.- is hifeasible, than proceeds may be used forpartial rebuilding and partial repayment of (tic City Loan in a manner that priwides adequate security for repayment of the remaining balance of the City Loan. 23. Force Majeure. Notwithstanding specific provisions of this Note, perfbrmance h�ourrdcr shall not be deemed to be in default where delays or defaults arc due to; war,' insurrection; strike,,; lock-outs; riots; floods; earthquakes; fires; casuallics; acts of God or other deities; acts of tho public enonry; epidemics; quarantine restrictions; freight embargoes; lack of Watisportation; governmental restrictions or priority, litigation; unusually scvoro weather; inability to secure necessary labor, nutterials 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 o f f ity shall not excuse peribrinance by City); or any other causes beyond the reasonable control or without the fault (if tho party claiming an extension of tittle to pLrforin, All extension of tirne for any such cause shatt be for the period of the enforced dchty and shall corranerrec to run from [he thrit, the party ctm mlng such extension gives notice to the other party, provid"I notice by the party claiming such extension is given within thirty (30) days after fltic cornincircernent of the cause. Times of performance under this Note may also be extended in writing by the City and [he Borrower. 24, Assignment, The City, and the assignee of the City. shall have, the right to assign this Note and tho Deed of Trust securing this Note, without any further act of Borrower. The rssignoc shall give notice to Borrower as soon as practicable after such assignment... I A76$K1 389M4.1 10 25B-75 This City HOME Promissory Note is hereby agreed to and tx=Led oa the date first set forth above, "BORROWER" MSHARBOV� LP, a California limited parwersbip MANAGING GENMRAL PARTNER OHDC 815 N I [arbor, LIX a California limited liabitily company 01R,WGEHOUSING DEVELOPMhNTCORPORATION a Czlifornia ronprofft corporation, its sole member By: runice Bobert, Chief FxeCutivc Officer MNELOPER GENERAL PARTNER C&C 8] 5N Harbor, LLC a Califorma Iii-Wited liability company By: Todd R. Cottle, its raernber By Cottle Family Trust, Dated 3/8/87, by Barry A, Cottle, ils Trusloc I VM5,1,t-I89IN4,1 25B-76 Exhibit G RECORDING REQUESTED BY AND WHEN RECORDED RETURN M City of Santa Ana Community Development Agency Housing Department M-37 20 Civic Center Plaza, 6th Floor P,O, Box 1989 Santa Ana, California 927()2 FREE RECORDING REQUESTED [Government Code Section 61031 AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (815 N. Harbor Boulevard, Santa Ana, CA) THESE AFFORDABLE HOUSING RESTRICTIONS ON TRANSFER OF PROPERTY (the " estricrtions ") are entered into as of February ._; 2015, by and among and 4l5 Harbor, L,P,, (referred to herein as the `Developer") -a California limited prratnership, the City of Santa Ana, a charter city and municipal corporation (tire "City"). RECITALS A. Developer is the twiner of that certain real. property located at 815 North Harbor Boulevard, (the "Property") located- in the Cite of Santa Ana more particularly described in Exhibit A, which is attached hereto and incorporated herein by this reference. & For the burl oso of providing two units of bousing that will be affordable to Vorw Low and Low income households ("HOME Assisted Units"), the Developer and the City have entered into that certain Loan Agreement for the loan of HOME fiords, dated on or about the date hereof (the "Loan Agreerneuf,) to which these R"triotions are attached as Exhibit G, which, along with all of its attachments, is incorporated herein by (his reference (any capitalized term that is not otherwise defined in these Restrictions shall have the meaning ascribed to such term in the Tian Agreement), C. The Loan Agreement provides, among other things, for the use of the Property for affordable housing with 56 units being restricted to Very Low and Low Income 11Ouse110lds and 13- units restricted to Moderate Income Households, at Affbrdable Rent(s). D, The Loan Agreement contains certain provisions relating to the use of the. Property. 1 orlo 25B -77 NOW, THEREFORE, CITY AND DEVELOPER COVENANT AND AGREE AS FOLLOWS: 1. Developer covonarits and agrees (for itself, its succossors, its assigns, and every successor in interest to the Property or any part theroo t) that Developer, such successors, and such assigns shall use the Property exclusively to provide affordable housing of Very Low, Low, and Moderate Income households, as provided in these Restrictions and in the Loan Agreement, 1 DovelopiQr, for itself and its successors and assigns, hereby covenants and agrees that all of the apartments in the Property (the "Units) shall C ll be rented exclusively, v ely, at Affordable Rcat, to Very Low and Low Income households. Area median income levels and Affordable Reri(s are subject to adjustment from time to time as provided in Section 3 below. 3. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY 3.1 Use Covenants and Restrictions A. Developer agrees and covenants, which covenants shall run with the land and bind Developer, its successors, its assign and every successor in interest to the Ptoperty that Developer wit I make all units (in thePropcily available to very low,low, and moderateiricoine hoiiwsholds at rents affordable to such households for fatty -five (55) years fivin the date of full occupancy of the Project. Thol-IOME restiietions tbr the two (2) HOME assisted units shall, be enforced until the date that is fifteen (15) years after the date on which the City reports the Project as complete to the Department of Flousing and Urban Development. Upon expiration of the 15 year HOME compliance period, the City will enforce affordability of the Wo (2) HOME assisted vnits with the same income and rent resniotions as the other units, pursuant to City guidelines and the California Health and Safety Code. B The Project shall consist of seventy units; 69 affordable units, with one On-site manager unit. There shall be two (2) three-bedroorn HOME, assisted units. The HOME assisted units shall be floating units and shalt be distributed throughout the complex with comparable amenities to the other units, C. Rental increases ,,,hall be in conformance with federal and state lain, After the fifteen (15) year HOME complinuce period, the City shalt require that the units remain affordable., with rents calculated based on assumed household size at the same income levels, as required by the California Health & Safety Code. D. Affordable rents shall be governed by California Health and Safety Code Section's 500.52,5 and 50053(b)(1), arid as provided in the HOME Regulations 24 CFR section 911 3.2 Affordable Gross Starting Rents (tyss. Reasonable Utility Allgivance �: Initial ronts 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 incorne tables as published by I IU D. 2 of 10 25B-78 A, ROME. Assisted 1frilts # of Units Max Gross Monthly Rent Very Low 3 Bedroom 2 $1,252 (1) In no event shall the rent ofiargedto the 1.102✓ E assisted units be more than that amount of the low rent as published by FUD, as amended froin time to tine. (2) Rernainingrion-ROME units will be prised on TCAC rents, 3.3 Rent Increases: On an annual basis, the City shall provide (ho Developer with-the maximum till owablesofi edull e of rents for the Property. In no event can Developer charg gt! any tenant more than such amount, 4. Developer, its successors and assigns, shall not charge rents for the Units it, 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 Executive Director shall notify Developer in writing of the adjusted allowable maximum incomes and rents, 5. Developer shall adopt and include as part of its Management Plan {described in Section I I below), written tenant selection policies and criteria for the Units, that meet the following reqairernents. (a) Are consistent with the purpose of providing housing fbi- Very Low, Low, and Moderate Income household:,, (b) Are, reasonably related to program eligibility and the applicants' ability to perform the obligations of the lease; (c) Give reasonable consideration to the housing needs of households that Nvould have a preforence under 42 CF R §906.21 t (Federal selection prefcrenocs for admission to Public Housing); (d) Provide for: (i) The. selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable., and (ii) The prompt written notification to any rejected applicant of the grounds for any rejection; (c) Provide first priority in the selection of qualified eligible tens rits to households that are referred by the City; and (1) Carry out the Affirmative TvIarWing procedures of tho City of Santa Ana, wNuh are designed to provide information and otherwise attract eligible persons 3 ol'10 25B-79 from all racial, ethnic. and gender groups, in the housing market area to the units. Developer, the City shall cooperate to effectuate this provision prior to the initial renting, or upon occurrence of a vacancy, and the re- renting of anyltestrieted Chits (14 rR 92,351], G. Developer, its successors and assigns, shall not mftwa to lease a unit to a holder -taf a rental voucher under 24 CFR part 887 (Housing Choice Wencher Program) or to a holder of a comparable document evidtmchig participation in a HOME 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 FTONIF tenant- -based assistance docurnenL Total rents charged to such tenants, including the tenant contribution and rental assistance, shall not exceed the allowable rents as described above, T Any lease of any of the units must be foie riot less than one year, unless by mutual agreement between the tenant and the Developer. Should the tenant and Developer agree to a tenra of less then one year, said agreement shall be expressed in some type of written form, signed by the tenant, and maintained in the tenant's rental pie held by the Developer. The lease may not contain anyof the following prowis otxs (in which references to "owner" shall mean the Developer, its successors or assigns); (a) Agreement by the tenant to be suet, to admit guilt, or to a judgment to favor of the owner in a lawsuit brought in connection with the lease, (b) Agreement by tire tenant that the owvner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the fights of the parties. This prohibition, however, sloes 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 dispw;e of this personal property in accordance with state law; (c) 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; (d) Agreement of the tenant that the owner €unsay institute a lawsuit wvithout notice to the tenant; (e) Agreement by the tenant that the owner may evict the tenant or household ntcaubers without instituting a civil court proceeding its which the tenant has the opportunity to present a defense, or before as court decision on the rights of the parties; (t) Agreement by the, tenant to waive any right to a trial hyjury, (g) 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 (h) Agreement by the tenant to pay attprnoy'w 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, 4of10 25B -80 R. Developer, it% successors, or assigns, must adhere to state law requirements with regard to termination of tenancy, 9. Developer shall maintain the improvements on the Property in compliance with all applicable housing quality standards [24C ER 92,504 (c)(6)], and state and local code requirements (California Health and Safety Code section 33418), and shall keep. the Property Free front any unreasonable accumulation of debris or waste materials. Developer shall also maintain in a healthy condition any landscaping planted on the Property. 10. 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 an 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, temire or enjoyment of the Property nor shall -the Developer itself or any person claiming tinder 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 vcndoes of the Property, as required by the Title Vl of the Civil Rights Act of 1964, the Fair Housing Act (42 L " " °.S.C. 3601 -20) and all implementing regulations, and the Age Diseotirnination .Act of 1975, and all implementing regulations, , 11. Not later than five (5) business clays prior to the execution of the documents, Developer shall submit to the Executive Director a Management Phan in a form that is acceptable to the Executive Director, including, but not limited tea, the components listed below, Approval of the Management Plan must be obtained front the Executive Director not later than the time for the Closing. Developer >shall manage the Assisted Units in accordance with the approved Management flan; including such amendments as may be approved in writing f om tuue to time by the Executive Director, for the terns of the income and rent restrictions contained in these ices €ructions: The components of the Management Plan shall include: (ia) It9aaigggIIent A enL Advanced Property Services, LLC is approved as the Management Agent.. The Executive Director shall approve or disapprove any proposed change o rthe Management Agent in writing Rased on the experience and qualifications of the Management Agent. (b) Manag?ernent A;?a e4ment. 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. (c) AnnuaI Budget and Proiected Cash Flows. Prior to the Closing and annually thareafter notlater than ninety (90) days after the close .ofeach calendar year tboreaiter, Developer shrill submit a projected operating budget and casli flow to the Executivc, Director. The budget and cash glow shall bens a font-, that is acceptable to the Executive Director. 5of10 25B -81 (d) Tenant Selection Policies, Developer shrill include in the Management Plan the tenant selection policies in accordance with Section 4, abovc, M If at any time the City determines that the units are not being managed or maintained in accordance with the approved Management Plan, Developer shall change the management agent or the practices complained of, upon receipt of written notice from the Executive Director, Tlie Executive Director may require Developer to change management practices or to terminate the maragernent contract and designate and retain a different maiLagerrient 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 dircetiotlof the Executive director. Within ten (10) days following a, direction of the Fxvcutive Director to replace the management agent, the Developer shall select another management agent or make other arrangements satisfactory to the Executive Director or designee for continuing management of the units. 13, The covenants established in these Restrictions and any amendments hereto approved by the City and Developer shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City and their respective succogsors and assigns, These Restrictions shall remain in effect for fifty-five (55) years from the date of fall occupation of the Project. In its discretion, the City may defer repayment of the HOME Loan or the City may agree to such reasonable rriodifications to the requirements of these Restrictl0os, as they rnay determine are necessary for the continued maintenance and operation of the Assisted Units. The covenants against discrimination shall remain in effect for the period of these Restrictions. 14. Developer shall not request dkbursecwnt of HOME funds until the funds are needed to pay eligible costs. The City shall have the right to disapprove any request if the City determines the request is for an ineligible item or is otherwise not in compliance with or inconsistent with the Loan Agreement and these Restxictions [24 CrR, 92.504 (000)1- 15. Developer shall prepare, maintain and submit to the City, as appropriate, the following records and reports in complhince with 24 CFR 92.504 (c) (12): a. Annual Reports. Developer shall rile with the City an Annual Repol (herein referred to as the "Annual Report") within ninety (90) days following the end of each calendar year, commencing with the eral of the calendar year (or portion thereof) in which the Real Estate Closing occurs. The Annual Report shall contain a certification by Developer as to such information as the City Executive Director may then require, including, but not limited to, the following: (1) The fiscal condition of the Project, including the Annual Budget and Project Cash Flow report required by Section 10 (c) of theNff"eadable Housing Restrictions which shall include a financial statement for the previous calendar year that indudes a balance sheet and a profit and loss statement indicating any surplus or deficit in operating accounts; -,i detailed itcinizcd listing of income and expenses, and tile 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 6 or lfl 25B-82 may require that the financial statement be audited at Developer`8 expense by an independent certified public accountant acceptable to the ExcQutivc Director, (2) Any substantial physical defects in the Project, including a description of any major repair or maintenance work- -undertaken or needed in the provioas., and current year& Such statement shall describe what stops 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. (3) The occupancy of the units indicating (be income of cach current resident and the current rents charged each resident and whether those rents incl uJQ utilities, incl aiding records that dcincustf ate that the Project triects the requirements of 24 CFR 92.253 for tenant and participant protection under the HOME Program. (4) General management Performance, including tenant relations and other relevant nilbrmution, (5) Records that demonstrate that the unit;, meet the affordability requirements of 24 CFR 92.252, 50052.5 and 50053(b)(1) of the California Health and Safety Code, for the required Period of affordability according to section 33334.3 of the California Health and Safety Code. (6) Evidence of a currently paid hazard insurance policy in accordance with the requirements of Section 6 of the City/I-IOME Deml of Trust, with a loss payable endorsement naming g the City as a lo ss pa yee(s) toge Lb or witil other appr v d 0 ed len els as their interests tray - appear), with "Replacement Cost Endorsement" in amount sufficient to prevent Developer or City from becoming a co-insurer under the tenors 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. (7) Evidence of a currently paid liability insurance policy, naming the City as additional insured and in a tomi approved by the City Attorney with coverage as described in the Loan Agreement. (8) Totinite reports pertaining to the Property every Will (5') yean (19) Stich other inFormation as may be reasonably required by the Executive Director or hisibor designee. by Records and Audits. Developer shall maintain the following general ppogq,ajn records, and make them available for inspection -by the City, the State or HUD� (1) recoMs -which demonstrate that the project moors the property standard specific( in 24 CFR 92.251; (2) records, for each HaME Assisted Unit, which demonstrates that the project mocts the requirentcrvits of 24 CFR 91252. 7 of 10 25B-83 (3) records which demonstrate compliance with the tenant and participant proteetions, as specified in 24 Section 29,253; (4) records which demonstrate compliance with. the. Equal Opportunity and Fair Housingrequirernents outlined in these Restrictions, including: (A) data on the extent toohich 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 wit li HOME funds, (B) 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); (C) documentation and data on the steps taken to implement Developer's Outreach programs to ininority-owned and women-owned businesses to meet the minority outreach requirements of 24 CFR 92.350; (5) documentation of the steps taken to carry out an affirmative irtarketing program in accordance with 24 CFR 92.35 1, if upplicable; (6) VappliQable, records which demonstrate compliance with the requirements relating to relocation of displaced persons, as described in 24 CFR 92353, At a roininium, these shall include project occupancy lists identir)ring the name and address of all persons occupying the project property tip until the (late of the Real Estate Closing (i.e., the date on which Developer obtained site control); (7) records concerning lead-based paint in accordance with 24 CFR 92 55; (8) if applicable, records which support any requests for waivers of the conflict of interest prohibition as stated in 24 CFR 92.356, (9) records ofeertifications, of contractor qualifications as they relate to the debarment and suspension requirement as stated in 24 CFR 92,357 and 24 CFK Part 24; and (10) any other reports issued by other monitoring agencies C, All records pertaining to cacti calendar year of HOME ftinds must be retained for the most recent five (5) year period, except that for rental housing projects, reciuds maybe retained for five years after clip project completion date; except that records of individual tenant iticome 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 Agr"nient for a minimum of five years after the 8 of 10 25B-84 expiration of the Loan Agreement and any and all amendinents 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 ofthe Auditor General of HUD, and(or their representatives shill 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. d, If so directed by the City, the State or HUD upon termination of the Loan Agreement, Developer shall cause all records, accounts, documentation and alt other materials relevant to the work to be delivered to the City, the State or HUD, as depository, e; All records, accounts, documentation and other iaterials relevant to the Project shall be accessible at any time to the authorized representatives of the City, the State or HUD, on reasonable prior notice, for the purpose of examination or audit. f, Pursuant to 24 CFR Part 44, the City shall perl€rrm 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, The City is a beneficiary of the terms and provisions ar these Restrictions and the covenants herein, bath for and in their own rigl€tand ror 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. The City shall have the right i f tike covenants are breached, 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. 17. The covenants and agrccnictus contained herein shall run with the lard € nd not be personal obligations of Developer, Upon the sale, conveyance or other transfer of the Property (a "Transfer ") and the assumption. of the obligations hereunder by a transferee, Developer's liability ror perfon -mince shall be €enninated as to any obligation to be performed hereunder after the date of such Transfer, 18. The groan Agreement and all of its attachments shall be enforceable by City in accordance with the terms thereof. Each of the Loan A" ga-eetuent, the Affordability Restrictions on Transfer of Property, the CityiH0ME Loan Note and the City./HOME Deed_of`Trust provide a means of enforcernont 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 91504 (e) (13)]. 4 of 10 25B -85 IN WITNESS WHEREOF, die parties hereto have causQd this Agreement to be executed on the date set forth at the beginning o this Agrveinent: ATTEST: Maria D. Huizar Clerk of the Council APPROVED AS TO FORM: SONTA R. LARVA HO, City Attorney Li-;a Storck, Assistant City Attorney DEVELOPER: 915 ,Harbor, LP a California livaited pzutnership MANAGING GENERAL PARTNER CITY OF SANTA ANA David Cavazos City Manager IIECOMMEND APPROVAL: Kelly L. Reenders, Em=tive Director Community Development Agency OHDC 815 N Harbor, LLC a California nonj)rof1t, public benefit corporation, By: Eunice Bobert; Chief Rxt-.cutive Officer DEVELOPER GENERAL PARTNER C&C815 N Harbor, LLC a Califoinia limited liability company BY: Cottle Family Trust Dated 1181 87, its Member By� Barry Cottle, Trustee 10 of 10 pqp -* I ExhibiL H - 2, °2�CJt13LS, CITY OF SANTA ANNA AT-MMATIVEr MARKETING AND lw i'I lTY CtIJTU,,ACH pRor. N �T -VE LMA l�T il�l�c�Ahz The City of Santa Ana is a Participating jurisdiction in the federal HOME, investment Partnership Prograna (HOME) and the community, Development Block Grant Program (CIiT3G). Federal late requires that alt.participating jurisdietions Adapt affirmative marketing policies that:irtolude: A.. Methods to inform tha public about federal fair housing laws and the City's aiTaranativa marketing policy; 13. Requirements and practices owners must adhere to in Larder to carry out this Policy; C. Procedures owners must use to inform and solicit trPPlicatians from persons in the housing .market area whir are not likely to apply for the housitrg without special outa�aciix D. Records that Owners and the City will keep describing the actions they have taken to affirmatively market units and records to assess the results of these, actions; and D. A description of horY the City 1v111' azrriuilly assess the success of affirmative marketing actions and dele tillao what corrective actions Lire needed. The 6ity's a irmative,marketing procedures and requireiiaents for rental and hornebuyer Projects cbtztaicing five or mare HOW or.CD13C- assisted housing units are set foith below. These proceduaes and requirements constitute the City *s .Afrrnative Marketing Program. These procedures and hquirenioni.s do not apply to:farnilies with .Section: tenant --based rental housing assistance or families with tenant- based rental, assistance provided with HOME funds. rl. Aft111 uds rr nforPll tha public vbn¢tf fideraf fair laoirsr`no 1(1ia+sa The City mill display the Equal Housing logotype or slogan in hottsint - relatcd Press releases and solicitations for owners, and on the wcbsite page for the M(Y's Housing and Neighborhood Development Division, *.* The City will requae t drat tl a County of Change include 'information on the City's HOME trnd CD130- as,Sisted rental units In its countywide Affordable housing List mahitaintd by the Counts. This list can be found on the interret at 1=14,14VWrr crc,, ca. gc)yr' hotzsin�i `llttardallex3tacssir�List htni. The City rviil nratntain t link to this vwbsite, on the vrehslte page 'kOr the City's 'Hoatsing and ResOlutict7 No, 20i}3 -031 page. 3 of U 25B -87 Neighborhood Development I3iv sign and fear the Santa ~Ana Fousi.ng Authority. ,Copies Of the list will be available at the ptabllc,reception counters for the Eiotising and Neighborhood I eveloprnezat Division, and the Santa Aria Housing Authority. A RePlrenaents €arid pracllces Owners rmin adliere to. The City will requure Owners of City I•IOMB and M13G- assisted rental units covered under this Marketing plan to display the Equal Housing opportunity logotype or slogan in all cOrresparideuce 4v-A current or Pot -mial tenants, and on lease agreemetlts. the City will require them to display the fair housing poster in their leasing offices, and to develop writteri procedures for selecting tenants: These procedures must meet the following eriteria: 0 They must be consistent with the purpose Of'prpvid ng housing for v =ery low-income and low - income families; o They must, be reasonably related to •prngram eligibility and the ap plicants! ability to perform the obligations of the lease o They must give reasonable COMidcratian to the housing needs of families that would have a federal preference under sect4on 40 {4}(A ) afthe'Art, o They must provide for the selection of tenants froara a written walling list in chronclogioal order of their application, insofar its is practicable; er They must call for prompt written notification to any rejected applicant of the grounds for any rejectiOIL C: ,f'r °aterltrresfr�rarvners•: . y' The City will require M tiers of City TIOME and CDBG- assisted rental tacit$ to continuously review the demogmphic makeup of their tenants, jr and when such review indicates that their tenants no longer reflect the City's minority population, they will be required to inform the-City of that fact and request City review and approval of steps they will take to correct that delipiency. .* Compliance with the City's affirmative zraarketingiequirements and procedures will be made an obligation of all rental Property owners receiving l-fOME or CDBG assistance fiord the City of Santa Arta, and will be enforceable by means Of appropriate actions describer) in loan documents recorded through the County ofCarange. *: 'the City will require owners of its Flt NOS and- CI)BO-assisted rental units covered under this markeling plan to make an annual report to the City detailing the steps they have taken to comply NVith this program, They will also be required to report oat the ethnicity oftbeirtenants, as well as rents, income levels, grad other household character €s rs, Reports will be made on a form) that is aeceptabic to Rasotution No, 20OM3 t Page 4 of 5 r - •• arz4roat_s the Ci ty of Santa Ana; and that wiIt enable the City to capture the data it needs to evaluate otivn.er compliance wiilx this program. The City will maintain records on Owner reports and its evaluation of those reports for a period of not less than ten years after expiration of the affordability period required by applicable HUD regulations. Z. Armatal er_nsessviant., 16 upon receipt of 'owner reports, the City will evaluate the ethnic and racial characteristics of tenants'being served "to determine if they reflect the City's housing maritet. If they do not, the'City will direct the owner to take further aff'Arntadve rrrarketing steps to correct the" unbalance. The City will track and evaluate the steps taken to ensure they have the desired effect. A s a participating jurisdiction, the City is also required to adopt certain affirmative steps to ensure roaxitmun feasible participation in 140ME -and HCi -ft nded Projects by minority business enterprises, women's business enterprises, labor surplus area ptmns and Other small business , These aflirrnative steps are listed below and constitute the Cltys ivtinority outreach Procedures and Requireratnts Program for HC}IVM and CI)RO- handed projects, The City 'will, place qualified small and raiziority businesses and womeri's business enterprises on solicitation lists; '0 The City will assure that small and minority businesses, and women's business enterprises arc solicited whenever they are potential sources; ❖ The City will divide total .tequiraments, when economically feasible, into smaller tasks or quantities to permit nnaxnaurn participation by small and rninority business, and women's business enterprises, *« Thd City will use the services and .assistance of tiie Sinall Business Administration and the Miaority business Development Agency of the Departtneht of Commerce; and '- The City will require the prince contractor, if subcontracts are to be let, to take the affirmative steps listed above. The City will annually review the results of tbose p ocecltrres to determine if additional steps should be taken, EXEH TII l Resolution No 200"31 Pago 5 of 6 r - • • 25B -90 FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 6103 & 27383 When Recorded Mail to: City of Santa Ana Community Development Agency 20 Civic Center Plaza P.O. Box 1988 (M -37) Santa Ana, California 92702 Attn: Housing Manager AMENDMENT TO AGREEMENTS BY AND BETWEEN THE CITY OF SANTA ANA AND 815 N. HARBOR L.P. This Amendment to Agreements is executed by and between the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (hereinafter "City ") and 815 N. Harbor, L.P. ( "Developer ") with reference to the following: RECITALS: A. On March 1, 2010, Orange Housing Development Corporation ( "OHDC ") anon-profit 501(c)(3), and C &C Development, a for- profit developer, were awarded the contract to implement the multi - family rental program funded by the Federal Neighborhood Stabilization Program ( "NSP "). They have formed a Limited Partnership named "815 Harbor, LP" for financing purposes. B. On September 16, 2013, City and Developer entered into the following, - gre.emeals for Developer to purchase the property located at 815 N. Harbor Street, within the City of Santa Ana, California, to develop a mixed use project consisting of approximately seventy (70) unit multi - family residential housing development with a community room (the "Project "): Loan Agreement By and Between the City of Santa Ana and 815 N. Harbor L.P. which was recorded in the Official Recoils, Orange County California on November 4, 2013 (42013000613987), and the Affordability Restrictions on Transfer of Property which was recorded in the Official Records, Orange County California on November 4, 2013 ( 42013000613986) (collectively said "Agreements "). The parties now - — _- -- _--- - - - - - -- -- - --- -. __...._._-. ..- _ —.__. desire to amend said Agreements to increase the City Loan and revise the affordability levels and unit mix. WHEREFORE, in consideration of the covenants contained in said Agreement, and subject to all the terms and conditions of said Agreement, except those amended in this Amendment to Agreements, the parties agree as follows: W -•o 1. Section 3 of the Loan Agreement, "City Loan ", and the definitions of "City Loan" and "City Promissory Note" in the Definitions Section of said Agreements, shall be amended to include an additional Eight Hundred Eighty Thousand Dollars ($880,000.00) in NSP fluids. An additional City Promissory Note shall be executed by Developer in favor of the City to evidence the obligation of Developer to repay the City Loan through residual receipts as further described in the Promissory Note in the form attached hereto as Exhibit A. The total City Loan of NSP funds to Developer for this Project shall not exceed $2,880,000.00 pursuant to said Agreement and this Amendment of Agreements. 2, The definition of "Extremely Low Income" and any references thereto in said Agreements is removed in its entirety. 3. The "Use Covenants and Restrictions" found in section 3.1(b) of the Affordability Restrictions on Transfer of Property and Section 7.1(b) of the Loan Agreement with the accompanying Affordability Levels/Unit Mix set forth in Section 7.2 are hereby deleted in their entirety and replaced as set forth below: Bedroom Size 50% AMT 60% AMI 1 l0% AMI Total 2 Bedroom - 1 - 1 3 Bedroom 7 48 13 68 Totals 7 49 13 69 "The remaining unit will be a 3- bedroom unit reserved for the on -site manager. 4. Except as hereinabove modified, the terms and conditions of said Agreements remain unchanged and in full force and effect. (Signatures on Following Page) 2 25B -92 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Agreements to be executed on the date set forth at the beginning of this Agreement, ATTEST: Maria D. Huizar Clerk of the Council APPROVED AS TO FORM: SONIA RyCARVALHO, City Attorney f- Lisa Storck Assistant City Attorney DEVELOPER: 815 N Harbor, LP a California limited partnership MANAGING GENERAL PARTNER CITY OF SANTA ANA David Cavazos City Manager RECOMMEND APPROVAL: Kelly L. Reenders, Executive Director Community Development Agency OHDC 815 N Harbor, LLC a California nonprofit, public benefit corporation In Eunice Bobert, Chief Executive Offrcer DEVELOPER GENERAL PARTNER C &C 815 N Harbor, LLC a California limited liability company BY: Cottle Family Trust Dated 318187, its Member By: Barry Cottle, Trustee 40 25B -93 FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail to: Community Development Agency City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 (M -37) Santa Ana, California 92702 Attn: Housing Manager CITY NSP DEED OF TRUST AND ASSIGNMENT OF RENTS THIS CITY NSP DEED OF TRUST AND ASSIGNMENT OF RENTS (the "Deed of Trust ") made this _ day of February, 2015, by between 815 Harbor, LP , a California limited partnership comprised of OHDC 815 N Harbor, LLC, ( "OHDC" ), a California Limited Liability Company, and C &C 815 N Harbor, LLC, a California Limited Liability Company (together the "Trustor "), AmeriNational Community Services, a California corporation (the "Trustee "), and the City of Santa Ana, a charter city and municipal corporation (the "Beneficiary "). Trustor, in consideration of the promises herein recited and the trust herein created, irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the property located in the City of Santa Ana, County of Orange, State of California, described in the attached Exhibit A and more commonly known as 815 N, Harbor Boulevard, Santa Ana, California (the "Property "); TOGETHER with all the improvements now or hereafter erected on the Property, and all easements, rights, appurtenances and all fixtures now or hereafter attached to the Property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by this City Deed of Trust; provided that so long as Trustor is not in default hereunder, it shall be permitted to control the Property in - accordance -with the- requirements of that certain- Neighborhood - Stabilization- Program -- - - (Program 2) Rental Housing Development Agreement entered into between the Trustor and the Beneficiary, dated March 1, 2010 and the Amendment to Agreements, dated concurrently herewith, which Agreements are both on file with the Beneficiary as a public record; 1 25B -94 TOGETHER with the right, power and authority during the continuance of these Trusts, to collect the rents, issues, and profits of the Property, reserving unto the Trustor the right, prior to any default by Trustor in payment of the indebtedness secured by this Deed of Trust or in the performance of any agreement under this Deed of Trust, to collect and retain these rents, issues and profits as they become due and payable; and, TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected, or hereafter to be erected, on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner; and 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; TO SECURE to the Beneficiary (a) the repayment of the sums evidenced by a new additional Promissory Note to the Beneficiary executed by Trustor of even date herewith in the principal amount of Fight Hundred Eighty Thousand Dollars ($880,000.00) (the "City Promissory Note "); (b) the performance of the covenants and agreements of Borrower contained in a, certain Agreement as hereinafter defined; and (c) the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and the performance of the covenants and agreements of Trustor contained herein. TRUSTOR AND THE BENEFICIARY COVENANT AND AGREE AS FOLLOWS: I . The Agreement. This Deed of Trust is executed and delivered, along with the City N SP Promissory Note and the Amendment to Agreements, to benefit the Property. A copy of said Amendment to Agreements is on file as a public record with the Beneficiary and is incorporated herein by reference (the "Amendment "). Trustor acknowledges that but for the execution of this Deed of Trust, the Beneficiary world not enter into the Amendment or City NSP Promissory Note secured by this Deed of Trust. 2. Trustor's Estate. Trustor is lawfully seized of the estate hereby conveyed and has the right to grant and convey the See that other than this Deed of Trust Security is not encumbered except for obligations secured by dccds of trust, or any other security agreement, to secure financing or refinancing for the purchase and rehabilitation of the Property. 2 25B -95 3. Repayment of the Loan. Trustor will promptly repay, when due, the principal loan amount, as required by the City NSP Promissory Note secured by this Deed of Trust. 4. Subordination. This obligation secured by this Deed of Trust shall be subordinated to the Senior Loan, but the City's Affordability Restrictions on Transfer of Property shall remain in first place. 5. Prior Mortgages and Deeds of Trust; Charges; Liens. Truster shall perform all of Tnustor's obligations under any mortgage, deed of trust or other security agreement with a lien which has priority over this Instrument, including Trustor's covenants to make payments when due (subject to an applicable notice and cure provisions). Trustor will pay all taxes, assessments and other charges, fines and impositions attributable to the Security which may attain a priority over this Deed of Trust, by Truster making any payment, when due, directly to the payee thereof. Trustor will promptly furnish to the Beneficiary all notices of amounts due under this paragraph, and in the event Trustor makes payment directly, Trustor will promptly discharge any lien which has priority over this Deed of Trust; provided that Trustor will not be required to discharge the lien of the Deed of Trust securing any senior lender or any other lien described in this paragraph so long as Trustor will agree in writing to the payment of the obligation secured by such lien in a manner acceptable to the Beneficiary, or will, in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof. 6. Hazard Insurance. Trustor will keep the Security insured by such insurance policies in such amounts and for such periods as called for in the Agreement. All insurance policies and renewals thereof will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of any senior lender and the Beneficiary as their interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the Beneficiary, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the Beneficiary or its designated agent. The Beneficiary, or its designated agent, may make proof of loss if not made promptly by Trustor. The Beneficiary shall receive 30 days advance notice of cancellation of any insurance policies required under this Section. Unless the Beneficiary and Trustor otherwise agree in writing, insurance proceeds, subject to the rights of any senior lender, will be applied to restoration or repair of the Security damaged, provided such restoration or repair is economically._feaaible and the _ security of this Deed of Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the security of this Deed of Trust would be impaired, again, subject to the rights of any senior lender, the insurance proceeds will be used to repay the loan secured by this Deed of Trust, with the excess, if any, paid to Trustor. If the Security is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its designated agent within 30 days from the date notice is mailed by either of them to Trustor that the 3 25B -96 insurance carrier offers to settle a claim for insurance benefits, the Beneficiary, or its designated agent, is authorized to collect and apply the insurance proceeds at the Beneficiary's option either to restoration or repair of the Security or to repay the loan. If the Security is acquired by the Beneficiary, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the Beneficiary to the extent of the stuns secured by this Deed of Trust immediately prior to such sale or acquisition subject to the rights of any senior lender. 7. Preservation and Maintenance of Security, Trustor will keep the Security in good repair and will not commit waste or permit impairment or deterioration of the Security. 8. Protection of the Beneficiary's Securi ty, If Trustor fails to perform the covenants and agreements contained in this Deed of Trust or if any action or proceeding is commenced which materially affects the Beneficiary's interest in the Security, including, but not limited to, default under the Deed of Trust securing any senior lender, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the Beneficiary, at the Beneficiary's option, upon notice to Trustor, may make such appearances, disburse such sums and take such action as it determines necessary to protect the Beneficiary's interest, including, but not limited to, disbursement of reasonable attorneys' fees and entry upon the Security to make repairs. Any amounts disbursed by the Beneficiary pursuant to this paragraph, with interest thereon, will become an indebtedness of Trustor secured by this Deed of Trust. Unless Trustor and the Beneficiary agree to other terms of payment, such amount will be payable upon notice from the Beneficiary to Truster requesting payment thereof, and will bear interest from the date of disbursement at the rate payable from time to time on outstanding principal under the City Note unless payment of interest at such rate would be contrary to applicable law, in which event such amounts will bear interest at the highest rate permissible under applicable law. Nothing contained in this paragraph will require the Beneficiary to insure any expense or take any action hereunder. 9. Inspection. The Beneficiary may make, or cause to be made, reasonable entries upon and inspections of the Security during normal business hours; provided that the Beneficiary will give Trustor reasonable notice of inspection. 10. Forbearance by the Beneficiary Not a Waiver. Any forbearance by the Beneficiary in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy. The procurement of insurance or the payment_of taxes or_other liens - -- - - or charges by the Beneficiary will not be a waiver of the Beneficiary's right to accelerate the maturity of the indebtedness secured by this Deed of Trust. 11. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust or any other 4 25B -97 document, or afforded by law or equity, and may be exercised concurrently, independently or successively. 12. Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the Beneficiary and Truster subject to the provisions of this Deed of Trust, 13. Joint and Several Liability. All covenants and agreements of Trustor shall be joint and several. 14. Notice. Except for any notice required under applicable law to be given in another manner, (a) any notice to Truster provided for in this City Deed of Trust will be given by certified mail, return receipt requested, addressed to Truster at 414 East Chapman Avenue, Orange, California, 92866, with copies to C &C 815 N Harbor, LLC at 14211 Yorba St., Suite 200, Tustin, California 92870 (b) any notice to the Beneficiary will be given by certified mail, return receipt requested, to the Beneficiary at 20 Civic Center Plaza, P.O. Box 1988, Santa Ana, California 92702, Attention: Housing Manager, or at such other address as the Beneficiary may designate by notice to Truster as provided above, and (c) to Trustee at 8121 E. Florence Avenue, Downey, California 90240. Notice shall be effective as of the date received as shown on the return receipt. 15. Governing Law. This Deed of Trust shall be governed by the laws of the State of California with venue in Orange County, 16. Severability. In the event that any provision or clause of this Deed of Trust or the City Loan Note conflicts with applicable law, such conflict will not affect other provisions of this Deed of Trust or the City Note which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust and the City Loan Note are declared to be severable. 17. Cautions. The captions and headings in this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 18. Default in Foreclosure: Remedies. Upon Truster's breach of any covenant or agreement of Truster in this Deed of Trust or the City Note secured by this Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this Deed of Trust, the Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustor notice thereof specifying: (1) The breach; (2) the action required to cure such breach; (3) a date not less than 30 days from the date the notice is received by Truster as shown on the return receipt, by which_ �ich.bxeash.is_to- re_cured_ _. provided, however, that if such default is not reasonable susceptible to being cured within 30 days, Trustor shall have a reasonable period to cure the defect so long as Truster is diligently prosecuting the cure to completion; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Security. The notice will also inform Trustor of Trustor's right to 5 25B -98 reinstate after acceleration slid the right to bring a court action to assert the non - existence of default or any other defense of Trustor to acceleration and sale, Notwithstanding anything to the contrary contained herein, a "default" shall not include (i) a transfer of a general partner's interest in Trustor when made in connection with the exercise by the Trustor's limited partner (the "Limited Partner ") of its rights upon a default by a general partner under the Trustor's Amended and Restated Limited Partnership Agreement (the "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 Trustor pursuant to the right of first refusal or to the general partners of Trustor pursuant to the purchase option, as provided for in the Partnership Agreement; (iii) any transfer of the Limited Partner's interest in connection with a default by the Limited Partner under and in accordance with the Partnership Agreement; and (iv) any sale, transfer or other disposition of a limited partner interest or an interest in a limited partner of the Trustor, provided that after any such sale, transfer or other disposition an affiliate of the Trustor's limited partner is the managing member or general partner of such transferee limited partner. If the breach is not cured on or before the date specified in the notice or such longer period as provided above or in the City Note or the Agreement, the Beneficiary, at the Beneficiary's option, may: (a) declare all of the sums secured by this City Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by California law; (b) 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 the Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (c) commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the _covenants hereof ;_(d)_deliver to the Trustee a _ _ _..... written declaration of default and dernand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924, et SeMc ., as amended from time to time; or (e) exercise all other rights and remedies provided herein, in the instruments by wlvch Trustor 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. 6 25B -99 Notwithstanding anything to the contrary herein, Beneficiary hereby agrees that any cure of any default made or tendered by Tiustor's limited partner shall be deemed to be a cute by Trustor and shall be accepted or rejected on the same basis as if made or tendered by Truster. The Beneficiary shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees. 19. Trustees Right to Reinstate. Notwithstanding the Beneficiary's acceleration of the sums secured by this Deed of Trust, Truster will have the right to have any proceedings begun by the Beneficiary to enforce this Deed of Trust discontinued at any time prior to 5 days before sale of the Security pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if, (a) Truster pays the Beneficiary all sums which would be then due under this Deed of Trust and no acceleration under the City Note has occurred; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by the Beneficiary and the Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust and in enforcing the Beneficiary's and the Trustee's remedies, including, but not limited to, reasonable attorneys' fees; and (d) Trustor takes such action as the Beneficiary may reasonably require to assure that the lien of this Deed of Trust, the Beneficiary's interest in the Security and Trustor's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred. 20. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed, and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party to this Deed of Trust of pending sale under any other deed of trust or any action or proceeding in which Truster, Beneficiary, or Trustee shall be a party unless brought by Trustee. 21. Reconvevance. Upon payment of all sums secured by this Deed of Trust, the Beneficiary will request the Trustee to reconvey the Security and will surrender this Deed of Trust and the City Note to the Trustee. The Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. 22, Substitute Trustee._ The Berleficiary,.at the Benef ciaiy's_aption,may.fiorn time to time remove the Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 23. Request for Notice. Trustor requests that copies of the notice of default and notice of sale be sent to Trustee at the address set forth in Section 14 above. 7 25B -100 24. Nonrecourse Liability. Neither Truster nor any partner of Truster shall have any personal liability under the Agreement, City Note, and this Deed of Trust and any judgment, decree or order for payment of money obtained in any action to enforce the obligation of Trustor to repay the loan evidenced by such documents shall be enforceable against Truster only to the extent of Tr stor's interest in the Property. (Signatures on Following Page) 8 25B -101 IN WITNESS WHEREOF, Trastor has executed this Deed of Trust as of the date first written above. TRUSTOR: 815 HARBOR, LP, a California limited partnership MANAGING GENERAL PARTNER OHDC 815 N Harbor, LLC a California limited liability company ORANGE HOUSING DEVELOPMENT CORPORATION a California nonprofit corporation, its sole member By: Eunice Bob or1, Chief Executive Officer DEVELOPER GENERAL PARTNER C &C 815 N Harbor, LLC a California limited liability company S Todd R. Cottle, its member By: Cottle Family Trust Dated 3/8/87, IC Barry A. Cottle, its Trustee 9 25B -102 CITY NSP PROMISSORY NOTE SECURED BY SUBORDINATED DEED OF TRUST TO THE CITY OF SANTA ANA, CALIFORNIA (815 N. Harbor Boulevard) $880,000.00 February , 2015 Santa Ana, California 1. Principal Amount of Loan FOR VALUE RECEIVED, 815 N. Harbor, LP, a limited partnership comprised of OHDC 815 N Harbor, LLC, ( "OHDC "), a California Limited Liability Company, and C &C 815 N Harbor, LLC, a California Limited Liability Company ( "Borrower "), hereby promises to pay to the CITY OF SANTA ANA, a charter city and municipal corporation ( "City"), or order, a principal amount not to exceed EIGHT HUNDRED EIGHTY DOLLARS ($880,000,00) or so much thereof as may be advanced by the City to the Borrower, due and payable with 0% interest by residual receipts over the fifty -five (55) year term, pursuant to the Amendment to Agreements ( "Amendment") between Borrower and the City dated concurrently herewith which amends the Loan Agreement By and Between the City of Santa Ana and 815 N. Harbor L.P. and the Affordability Restrictions on Transfer of Property which are both incorporated herein by this reference. This loan is made pursuant to the "Neighborhood Stabilization Program" or "NSP" with money funded through the Program as "NSP Funds ". With all fiords coming from the "NSP2" funds which refers to the second appropriation of NSP Funds provided under the Housing and Economic Recovery Act of 2008 (Section 2301 -2304 of HERA). Any capitalized term not otherwise defined in this Note shall have the meaning ascribed to such term in the Agreement. The obligation of Borrower to City hereunder is subject to the terms of said Amendment, the Loan Agreement and Affordability Restrictions on Transfer of Property (previously recorded), Deed of Trust and this Note. Said documents are public records on file in the offices of the City, and the provisions of said documents are incorporated herein by this reference. This Note, said Amendment, the Loan Agreement and Affordability Restrictions on Transfer of Property, and the Deed of Trust are sometimes collectively referred to herein as the "Loan Documents." The Loan Documents and the rights and responsibilities inure to the benefit of the City of Santa Ana. Any capitalized term which is not otherwise defined herein shall have the meaning ascribed to such term in the Agreement. 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: 1076 \53 \1389384.1 25B -103 "A eement" means the Loan Agreement between the City and the Developer dated September 16, 2013, and any attachments or amendments thereto. "Applicable Law" shall mean those federal, state and local laws, ordinances, regulations, policies and procedures applicable to the NSP, and the NSP Funds. "Area Median Income" means the median income figures for Orange County as published by the U.S. Department of Housing and Urban Development (HUD). Also may be referred to as "AMI" herein. "Borrower" means 815 N. Harbor, LP, a California limited partnership comprised of OHDC 815 N Harbor, LLC, a California limited liability company as managing general partner and C &C 815 N Harbor, LLC, a California limited liability company as developer general partner. "Calendar Year" means each consecutive twelve (12) month period from January I to December 31. "City Loan" shall mean the loan evidenced by this Note repayable to the City in accordance with the terms of this Note and secured by the Deed of Trust. "City's Percentage" with reference to the Residual Receipts, shall mean fifty percent (50 %) of the total Residual Receipts from the Property as further described in Section 5 hereof. "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 market place, 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 completing such Refinancing, including, without limitation, loan fees, loan repayment charges, costs of title insurance premiums, escrow fees, recording fees and attorneys' fees. "Deed of Trust" shall mean the Deed of Trust in favor of the City, securing the City Loan. Cross Revenues "s - ialz 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 from leased and/or subleased spaces 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 also includes any casualty insurance proceeds in excess of those used to restore the Property and any 1076 \53 \1389384.1 25B -104 rental interruption insurance proceeds, Any credit consideration shall be included in Gross Revenues at the time cash proceeds (principal 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, "Low Income" means an adjusted income which does not exceed eighty percent (80 %) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD. "Neighborhood Stabilization Program" (NSP) has the meaning set forth in Section 1 above. "NSP Assisted Units" shall mean those rental units constructed on eligible Properties which are subject to the term of affordability, "NSP2 Funds" shall mean the money provided under the NSP2 Program for the development of the rental units hereunder. "Operating Expenses" shall mean the sum of the following: (i) payments of principal and interest and all other charges relating to the Senior Loan(s); a property management fee equal to 8% of gross rents; (iii) Owner Administration Fee of 5% of gross rents; (iv) deposits into required reserves; (v) all other actual, reasonable cash operating costs and expenses, calculated on an annual basis, that are directly attributable to managing and operating the Property, 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: (a) Depreciation and amortization expenses shall not be considered Operating Expenses, except as otherwise provided herein, 1076 \53 \1389384.1 25B -105 (b) 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. (vii) Any other expenses necessary to meet senior lender requirements and requirements of Borrower's limited partner, or its assignee, as set forth in Borrower's Agreement of Limited Partnership (the "Partnership Agreement "). " Propert y" shall mean that property located at 815 N. Harbor Boulevard, Santa Ana, California. "Refrnancine" shall mean changing the then existing financing on the Property by, without limitation, modifying the interest rate and /or the term of the existing Senior Loan, increasing or reducing the amount of the existing Senior Loan, paying off the existing Senior Loan and obtaining new Senior Loan, except for the payoff of the conventional lender's acquisition loan for the Property.. "Refinancing Proceeds" shall be disbursed as set forth in Section 6 hereof. "Residual Receipts" shall mean the Gross Revenues from the Property for each year, less deductions for Operating Expenses from the same building, applicable to each such year to the extent not already deducted as an Operating Expense, "Sale" shall mean any transfer, assignment, or conveyance or lease of 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 or limited partner in the Borrower, or any interest by any individual or entity which holds an interest in any such general or limited partner in the Borrower, which brings the cumulative total of all such direct and indirect transfers, assignments and sales during the tern of this Note to more than thirty -five percent (35 %) of the ownership interests in the Borrower, and any such transfer, assigmnent or sale of a direct or indirect 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. Notwithstanding anything to the contrary contained herein, a "Sale" shall not include any transaction not considered a "transfer' under Section 13. "Senior Loan" shall mean any senior loan made to Borrower, for payment of Acquisition and/or Construction Costs, and shall include any subsequent loan that refinances said Senior Loan. "Term" the tern for repayment of this Note shall mean fifty -five (55) years from the date of full occupancy and rental of the Project. Teri of Affordability" the term of affordability shall be fifty -five (55) years. 1076 \53 \1389384.1 25B -106 "Very Low Income" means an adjusted income which 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. 3. This Note evidences the obligation of Borrower to the City for the repayment of the City Loan of NSP2 Funds attributable to the development of the Property, and related soft costs. 4. This Note is payable at the principal office of City of Santa Ana, Community Development Agency, 20 Civic Center Drive, Santa Ana, California 92702, Aft: Housing Division, or at such other place as the holder hereof may inform Borrower in writing, in lawfuul money of the United States. 3. Loan Repayment. Borrower shall make payments to the City as provided in Sections 5 (Residual Receipts), 6 (Refinancing Proceeds), 7 (Sale Proceeds) and 9 (Accelerated Loan Repayment) of the Agreement. 4. Operating Capital Improvement Loan. If the replacement reserve account ( "reserves ") is depleted clue to unforeseen repairs and the General Partner malces a loan to the Partnership, the reserves must be fully funded prior to payment of said loan. The outstanding loan balance will be reflected in the annual report. 5. Annual Loan Repayment/ Residual Receipts a. Commencing on the date one hundred fifty (15 0) days after the close of the initial Calendar Year following the issuance of the Certificate of Completion and on or before the 150 "' day of each Calendar Year thereafter 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 or the City's Percentage of the Residual Receipts, as provided in this Section 5. b. Within one hundred fifty (150) days after the close of the initial Calendar Year following the Issuance of the Certificate of Completion and on or before the 150th day of each Calendar Year thereafter, the Borrower shall submit to the City an audited financial statement of Gross 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-w th which to make a City loan payment then due. c. Except as otherwise provided, the Borrower shall pay to the City the City's Percentage of the Residual Receipts as payment of principal. At least fifty percent (50 %) of the Residual Receipts shall remain with the Borrower, with all Residual Receipts remaining with Borrower once all of the City Lowis have been fully repaid. 1076\53 \1389784.1 25B -107 d. Borrower shall retain fifty percent of the Residual Receipts. The other fifty percent shall be divided with thirty -three percent (33 %) to be applied to the First NSP Loan dated October 2013, thirty -three percent (33 %) applied to the HOME loan of current date herewith, and thirty -three percent (33 %) applied to the second NSP loan dated concurrently herewith. As Borrower repays its loans, the payment percentage applied to the remaining loans shall increase. e. The Residual Receipts payment shall be made not later than one lumdred fifty (150) days after the close of the Calendar Year. Such payment shall be applied first to any late fees, then to reduce the principal balance of the loan. 6. Loan Repayment from Refinancins Proceeds. The Borrower shall make a loan payment to the City from every Refinancing that occurs during the term of this Note (other than refinancing of the conventional lender acquisition loan) not to exceed the outstanding balance of principal on this Note, to the extent of the City's Percentage of the Refinancing Proceeds (if any), as follows: the cash proceeds from such Refinancing shall be applied first to pay Closing Costs; next, the amount necessary to pay in full the balance remaining on the Senior Loan; next, the amount necessary to pay any deferred developer fee in full; and next, the Borrower shall pay to the City the City's Percentage of the Refinancing Proceeds to the extent of the outstanding balance on this Note. At least fifty percent (50 %) of the Refinancing proceeds shall remain with Borrower, with all remaining Refinancing proceeds remaining with the Developer to the extent the outstanding balance of the Note has been fully paid, Such payment shall be due on the date of such Refinancing, and shall be applied to reduce the principal balance of the Loan. The City shall not be required to reconvey the lien of the Deed of Trust if Refinancing Proceeds are insufficient to repay the Loan in fall. Loan Repayment from Sale Proceeds. The Borrower shall make a loan payment, not to exceed the outstanding balance of principal on this Note subject to Section 14 herein, to the City from any Sale that occurs during the term of the City Loan, to the extent of the City's Percentage of the Sale Proceeds, as follows: gross sale proceeds are applied first to pay Closing Costs, next to pay in full the balance remaining on the Senior Loan; next, the amount necessary to pay any deferred developer fee in fall; and next, the Borrower shall pay to the City the City's Percentage of the total Sale Proceeds, not to exceed the outstanding amount of principal due on this Note. At least fifty percent (50 %) of the Sale Proceeds shall remain with Borrower, with all remaining Sales proceeds remaining with the Developer to the extent the outstanding balance of the Note has been fully paid. Such payment shall be due on the date of such Sale, and shall be applied to reduce the principal balance of the Loan The City shall not be required to reconvey the lien of . the Deed of Trust if Sale Proceeds are insufficient to repay the Loan in fall. 8. Accelerated Loan Payment. The full principal amount outstanding shall be due and payable on the earlier to occur of the following: 1076 \53 \1389384.1 25B -108 a. Sale or Refinancing of the Property as provided further in Section 13 hereof, unless: (i) in the case of a Sale in which the Sale 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 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. In event of default (subject to any applicable notice and cure provisions) pursuant to any of the Loan Documents or the Senior Loan Documents. c. Any default (subject to any applicable notice and cure provisions by Borrower as to any other loan or loans by City to Borrower with respect to the Property; or d. The date that is fifty five (55) years after the date of execution of this Note. On that date, the City agrees to review the performance of the Property and consider in good faith any reasonable request by Borrower to modify the terms or extend the Term of this City Note. 4. Prepayment Borrower may prepay the outstanding principal balance under this Note, in whole or in part, at any time without penalty, however the Affordability Restrictions on Transfer of Property still remain for the entire Affordability Period of fifty -five (55) years. 10. Lawful Monev. Principal is payable in lawful money of the United States of America. 11. Application of Payments; Late Charges. a. Any payments received by the City pursuant to the terms hereof shall be applied first to sums, other than principal, due the City pursuant to this Note, and the balance, if any, to the payment of principal. b. If any payment is not received by the City within fifteen (15) Business Days after Developer's receipt of written notice that such payment was not received when due, 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 amoumt 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 grid ini aid excludia the late charge, shall b- ear inter-c- nterest at -t-h- he highest amival �) p'� g g, rate which may lawfully be charged and collected under applicable law on the obligation evidenced by this Note, 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 1076A53 \1389384.1 17 25B -109 due any installment of 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 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 immediately corrected by Borrower notice to City. 12. Securi This Note is secured by the recorded Deed of Trust. 13. Acceleration by Reason of Transfer or Financing` a, In order to induce City to make the loan evidenced hereby, Borrower agrees that in the event of any transfer of the Property without the prior written consent of City (other than 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, without prior demand or notice, to declare all sums secured hereby immediately due and payable. 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 discretion and, if consent should be given, any such transfer shall be subject to this Section 13, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Borrower from any liability thereunder without the prior written consent of City. b. As used herein, "transfer" includes the Sale, agreement to sell, transfer or conveyance of 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 Affordability Covenants and Restrictions relating to such leasing activity, nor shall it include a conveyance of the Property to a limited partnership in which Borrower is a general partner, or to a corporation or limited liability company that is wholly owned by the Borrower or its affiliates 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 in excess of the balance of the Senior Loan, 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 shall be repaid to the City at the time of each Refinancing or partial Refinancing. ,. c. Notwithstanding anything to the contrary contained herein, a "transfer" shall not include (and it shall not be deemed a Sale) (i) a transfer of a general partner's interest in Borrower when made in connection with the exercise by the Borrower's limited partner (the "Limited Partner ") of its rights upon a default by a general partner under the Borrower's partnership agreement (the "Partnership Agreement ") or upon a general partner's withdrawal in 1076 \53 \1389384.1 25B -110 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 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 connection with a default by the Limited Partner under and in accordance with the Partnership Agreement; and (iv) any sale, transfer or other disposition of an interest in a limited partner of the Borrower. 14. Event of Default. Subject to the provisions of Sections 23 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 fifteen (15) Business Days after Developer's receipt of written notice that such payment was not received when due; (b) faihtre by Borrower to perform any covenant or agreement in the Deed of Trust, the Agreement, or the Affordability Restrictions on Transfer of Property within thirty (3 0) days after written demand therefor by City (or, in the event that more than thirty (3 0) days is reasonably required to cure such default, should Borrower fail to promptly commence such cure, and diligently and continuously prosecute same to completion); or (c) a default under the Senior Loan Deed of Trust that remains uncured after any applicable notice has been provided and the expiration of any applicable cure period therefore„ if any, provided therein. 15. Remedies. Upon the occurrence 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 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 Deed of Trust. City shall also deposit with Trustee the Deed of Trust, this Note and all documents evidencing expenditures secured thereby and evidenced hereby. Upon the occurrence of an Event of Default (and so long as such Event of Default shall continue), the entire balance of principal shall bear interest at the Bank of America reference rate on the due date of the delinquent payment plus four percent (4 %). No delay or ornission on the part of the City in exercising any right mlder this Note or under any of the other Loan Documents shall operate as a waiver of such right. 16. Attorney Pees. If this City Promissory 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, 1076 \53 \1389384.1 25B -111 reasonable attorneys' fees, whether or not any action or proceeding is brought to enforce the provisions hereof. 17. 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. 18. 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. 19. Non - recourse. The City Loan is a nonrecourse obligation of the Borrower. Neither Borrower, nor its partners nor any other parity 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 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 theremider. 20. Subordination. It is hereby expressly agreed and aclmowledged by Borrower and City that the Deed of Trust is a subordinate deed of trust, and that this Note is subject and subordinate to any Senior Deed of Trust. 21. Notice of Default. a. Subject to the applicable cure periods set forth in Section 14 and subject to the further provisions of this Section 21, failure or delay by the Borrower to perform any term or provision of this Note constitutes a default under this Note. The Borrower must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. b. The City shall give written notice of default to the Borrower specifying the default complained of by the City. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. c. Except in the case of a monetary event of default, the Borrower shall not be in default so long as it endeavors to complete such cure, correction or remedy with reasonable diligence, provided such cure, correction or remedy is completed within the applicable time 1076 \53 \1359384.1 10 25B -112 period set forth herein after receipt of written notice (or such additional time as may be deemed by the City to be reasonably necessary to correct the default). d. Any failures or delays by the City in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by the City in asserting any of its rights and remedies shall not deprive the City of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. e. If a monetary event of default occurs under the terms of this Note or the Deed of Trust, prior to exercising any remedies thereunder City shall give Borrower written notice of such default. Borrower shall have a period of fifteen (15 Business Days after such notice is received within which to cure the default prior to exercise of remedies by City under this Note and the Deed of Trust. f, If a non - monetary event of default occurs under the terms of this Note or the Deed of Trust, prior to exercising any remedies thereunder, City shall give Borrower notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Borrower shall have such period to effect a cure prior to exercise of remedies by the City under this Note and the Deed of Trust. If the default is such (hat it is not reasonably capable of being cured within thirty (30) days, and Borrower (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then borrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by City, In no event shall City be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) days after the first notice of default is given. 22. Insurance and Condemnation. In the event of any fire or other casualty to the Property or eminent domain proceedings resulting in condermnation of the Property or any part thereof, Borrower shall have the right to rebuild the Property, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to keep flie City Loan in balance and rebuild the Property in a manner that provides adequate security to City for repayment of the City Loan or if such proceeds are insufficient then Borrower shall have funded any deficiency, (b) City shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no material default then exists Corder this Note or the Deed of Trust. If the casualty or condemnation affects only part of the Property and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the City Loan in a manner that provides adequate security for repayment of the remaining balance of the City Loan, 23, Force Maieure. 1076A53A1389384.1 11 25B -113 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 govenunental 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. 24. Assl2nment. The City, and the assignee of the City, shall have the right to assign this Note and the 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. 1076 \53\1389384.1 12 25B -114 This City NSP Promissory Note is hereby agreed to and executed on the date first set forth above. "BORROWER" 815 HARBOR, LP, a California limited partnership MANAGING GENERAL PARTNER OHDC 815 N Harbor, LLC a California limited liability company ORANGE HOUSING DEVELOPMENT CORPORATION a California nonprofit corporation, its sole member By: Eunice Bobert, Chief Executive Officer DEVELOPER GENERAL PARTNER C&C 815 N Harbor, LLC a California limited liability company LIM Todd R. Cottle, its member By: Cottle Family Trust Dated 3/8/87, By: Barry A. Cottle, its Trustee 1076 \53 \1389384.1 13 25B -115 25B -116