HomeMy WebLinkAboutCity Council - 2014-73 RESOLUTION NO. 2014- 73
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH APPROVING AN AFFORDABLE HOUSING
AGREEMENT BETWEEN THE CITY AND ORANGE COUNTY
COMMUNITY HOUSING CORPORATION
WHEREAS, Orange County Community Housing Corporation("Owner") is the
owner of real property located at 313 11th Street in the City of Huntington Beach
("Property"), which is improved with nine housing units and is currently operated by
Owner as affordable rental housing for very low income households.
WHEREAS, Owner proposes to rehabilitate the units for continued operation as
affordable housing for very low income households for an extended period of fifty-five
years.
WHEREAS, the City of Huntington Beach ("City") administers HOME
Investments Partnership Program ("HOME Program") funds made available to it by the
United States Department of Housing and Urban Development, and seeks to provide a
loan of HOME Program funds to Owner in the amount of$305,000 ("HOME Loan"), for
payment of Owner's costs of rehabilitating the units.
WHEREAS, the City published a Notice of Intent to Request Release of Funds for
the HOME Loan, in accordance with HUD requirements, and has duly considered all
comments received.
WHEREAS, the project is categorically excluded from the environmental review
requirements of the National Environmental Policy Act as rehabilitation of multifamily
residential buildings (with five or more units) under 24 CFR 58.35(a)(3)(ii).
WHEREAS, the project is categorically exempt from the environmental review
requirements of the California Environmental Quality Act ("CEQA"), as rehabilitation of
an existing facility under State CEQA Guidelines Section 15301(c).
WHEREAS, Owner has submitted to the City a proposed Affordable Housing
Agreement between the City and the Owner dated as of September 15, 2014 (the
"Affordable Housing Agreement") in a form desired by the Owner.
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the
City of Huntington Beach as follows:
Section 1. The Affordable Housing Agreement hereto as Exhibit A is approved and
adopted.
Section 2. The City Manager, or designee, is authorized to execute the Affordable
Housing Agreement and to execute all instruments and take all actions
Resolution No. 2014-73
necessary and convenient to carry out and implement the Affordable
Housing Agreement and to administer the City's obligations,
responsibilities and duties to be performed thereunder.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach
at a regular meeting thereof held on the 15th day of September, 2015.
Mayor_
REVIEWED AND APPROVED: APPROVED AS TO FORM:
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City ffan!Wg/r City Attorney
INITIATED AND APPROVED:
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Economic De
�16pment Deputy Director
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AFFORDABLE HOUSING AGREEMENT
By and Between
THE CITY OF HUNTINGTON BEACH,
a municipal corporation of the State of California
and
ORANGE COUNTY COMMUNITY HOUSING CORPORATION,
a California nonprofit public benefit corporation
(313 11'h Street)
TABLE OF CONTENTS
PAGE
ARTICLE1. DEFINITIONS.............................................................................................I
ARTICLE 2. SUBJECT OF THIS AGREEMENT...........................................................8
Section 201 Purpose of the Agreement.....................................................
Section202 City...........................................................:....................................................8
Section203 Owner...........................................................................................................8
Section 204 Prohibition Against Transfers; Right of First Refusal.................................9
ARTICLE 3. RELOCATION OBLIGATIONS...............................................................10
Section 301 Relocation Plan..........................................................................................10
Section 302 Relocation Activities and Costs.................................................................10
ARTICLE4. FINANCING..............................................................................................10
Section 401 The Project Budget.....................................................................................10
Section 402 The City Assistance ...................................................................................I I
Section 403 Priority of City Lien...................................................................................I I
Section 404 Disbursement of HOME Loan...................................................................i l
Section 405 Conditions Precedent to Closing................................................................12
ARTICLE 5. REHABILITATION OF THE IMPROVEMENTS...................................13
Section 501 Scope of Work.......................................................:. ..13
................................
Section 502 Construction Drawings and Related Documents.......................................13
Section 503 City Approval of Plans, Drawings and Related Documents......................14
Section 504 Cost of the Work........................................................................................14
Section 505 Schedule of Performance..................... ..............15
........................................
Section 506 Accessibility Requirements........................................................................15
Section 507 Local, State, and Federal Laws..................................................................16
Section 508 Hazardous Substances................................................................................17
Section 509 Nondiscrimination During Construction....................................................18
Section510 Insurance....................................................................................................18
Section 511 Indemnification..........................................................................................19
Section 512 Disclaimer of Responsibility by the City...................................................19
Section 513 Rights of Access ........................................................................................20
Section 514 Taxes,Assessments, Encumbrances and Liens .........................................20
Section 515 Rights to Plans...........................................................................................20
Section 516 Hazardous Materials ..................................................................................21
ARTICLE 6. USE OF THE PROPERTY........................................................................21
Section601 Uses............................................................................................................21
Section 602 Management Plan;Annual Project Budget;Management Reports............21
Section 603 Maintenance of the Property......................................................................22
Section 604 Lead-Based Paint. ......................................................................................23
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Section 605 Barriers to the Disabled..............................................................................23
Section 606 Creation of Capital Reserve Account............................:............................23
Section 607 Capital Reserves...............................................................................:.........23
Section 608 Obligation to Refrain from Discrimination................................................24
Section 609 Effectiveness and Duration of Covenants..................................................24
Section 610 Effect of Violation of Covenants...............................................................24
Section 611 CHDO Provisions......................................................................................25
ARTICLE 7. DEFAULTS, REMEDIES AND TERMINATION...................................25
Section 701 Defaults;Notice of Cure; Cure Rights.......................................................25
Section 702 Institution of Legal Actions .......................................................................26
Section703 Applicable Law..........................................................................................26
Section 704 Acceptance of Service of Process..............................................................26
Section 705 Rights and Remedies Are Cumulative.......................................................26
Section 706 Specific Performance.................................................................................26
Section 707 Termination Due to Failure of Construction Financing Event ..................27
Section 708 Termination by Either Party.......................................................................27
Section 709 Limited Recourse Obligations ...................................................................27
Section 710 Owner's Remedies.....................................................................................28
Section 711 Attorney's Fees..........................................................................................28
ARTICLE 8. GENERAL PROVISIONS.........................................................................28
Section 801 Owner's Warranties...................................................................................28
Section 802 Notices, Demands, and Communications Between the Parties .................29
Section 803 Conflicts of Interest....................................................................................29
Section 804 Titles and Captions ....................................................................................29
Section805 Gender........................................................................................................29
Section806 Modifications.............................................................................................29
Section 807 Merger of Prior Agreements and Understandings .....................................29
Section 808 No Third Parties Benefited........................................................................29
Section 809 Assurances to Act in Good Faith...............................................................30
Section 810 Warranty Against Payment of Consideration for Agreement; No
Real Estate Commissions.......................................................................................30
Section 811 Nonliability of City Officials and Employees............................................30
Section 812 Interpretation..............................................................................................30
Section 813 Counterparts...............................................................................................30
Section814 Severability................................................................................................30
Section 815 Extension of Times of Performance ..........................................................30
Section 816 Inspection of Books and Records...............................................................31
Section817 Waivers......................................................................................................31
ARTICLE 9. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE.............31
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LIST OF EXHIBITS
EXHIBIT 1 - LEGAL DESCRIPTION
EXHIBIT 2 - SITE MAP
EXHIBIT 3 - SCOPE OF WORK
EXHIBIT 4 - PROJECT BUDGET
EXHIBIT 5 - SCHEDULE OF PERFORMANCE
EXHIBIT 6 - HOME NOTE
EXHIBIT 7 - HOME DEED OF TRUST
EXHIBIT 8 - HOME REGULATORY AGREEMENT
EXHIBIT 9 - ENVIRONMENTAL INDEMNITY
EXHIBIT 10 - ASSIGNMENT OF AGREEMENTS
EXHIBIT 11 - ASSIGNMENT OF RENTS &LEASES
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AFFORDABLE HOUSING AGREEMENT
BETWEEN THE CITY OF HUNTINGTON BEACH
AND
ORANGE COUNTY COMMUNITY HOUSING CORPORATION
(HOME PROGRAM—313 11TH STREET)
THIS AFFORDABLE HOUSING AGREEMENT ("Agreement"), dated as of September
15, 2014, is entered into by and between THE CITY OF HUNTINGTON BEACH, a municipal
corporation of the state of California ("City"), and ORANGE COUNTY COMMUNITY
HOUSING CORPORATION, a California nonprofit public benefit corporation("Owner").
RECITALS
A. Owner is the owner of the "Property" (as defined herein), which is improved with
nine units of rental housing.
B. Owner operates the Property as affordable housing for very low income persons,
with priority given to households participating in the City's "Project Self-Sufficiency," in
accordance with the terms of a Loan Agreement between the Owner and the Redevelopment
Agency of the City of Huntington Beach, dated as of December 23, 1993.
C. Owner proposes to rehabilitate the Property, as described in the Scope of Work
attached as Exhibit 3 (the "Project") for continued operation as affordable rental housing for very
low income persons.
D. The City desires to preserve and expand affordable housing in the community by
making a loan to Owner of HOME Investment Partnership Program funds ("HOME Funds") in
the original principal amount of THREE HUNDRED FIVE THOUSAND DOLLARS ($305,000)
(the "HOME Loan"), subject to and conditioned upon the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the promises and covenants contained herein,
the above recitals, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged,the parties hereto agree as follows:
AGREEMENT
ARTICLE 1. DEFINITIONS
The following terms, as used in this Agreement, will have the meanings given unless
expressly provided to the contrary:
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"Affiliate" means (i) any party directly or indirectly controlling, controlled by or under
common control with another.party, (ii) any party owning or controlling 10% or more of the
outstanding voting securities of such other party, (iii) any officer, director or partner of such
parry, or (iv) if such other parry is an officer, director or partner, any company- for which such
party acts in any such capacity.
"Affordable Rent" means rental rates not to exceed the applicable rent limits set forth by
the HOME Program in 24 C.F.R. 92.252(a) and 24 C.F.R. 92.252(b). Affordable Rent must
include a reasonable utility allowance for tenant-paid utilities based on the Orange County
Housing Authority's published utility schedules.
1) In the case of a Very Low Income Unit, the rent must meet either (a) or (b)
of the following rent requirements:
(a) The rent does not exceed the lesser of(1) 30 percent of the annual
income of a family whose income equals 50 percent of the median income for the area, as
determined by HUD, with adjustments for smaller and larger families, as provided by HUD; (2)
the fair market rent for existing housing for comparable units in the area as established by HUD
under 24 CFR 888.111; or (3) 30 percent of the adjusted income of a family whose annual
income equals 65 percent of the median income for the area, as determined by HUD, with
adjustments for the number of bedrooms in the unit; or
(b) The rent does not exceed 30 percent of the family's adjusted
income. If the unit receives Federal or State project-based rental subsidy and the Very Low
Income family pays as contribution toward-rent not more than 30 percent of the family's adjusted
income, then the maximum rent (i.e., tenant contribution plus project-based rental subsidy) is the
rent allowable under the Federal or State project-based rental subsidy program.
"Affordable Unit" means one of the nine (9) rental dwelling units on the Property
restricted to occupancy by Very Low Income Households at Affordable Rent.
"Agreement" or any reference to this "Agreement" means this Affordable Housing
Agreement executed by and between City and Owner, including all exhibits attached hereto,
which exhibits are incorporated herein by this reference and all other documents incorporated
herein by reference.
"Approved Title Conditions" means title that is subject to current property taxes and
assessments, easements and other encumbrances specifically approved by the City Manager.
"Area Median Income" means the area median income of the Orange County primary
metropolitan statistical area (PMSA), with adjustments for household size, as estimated annually
by the United States Department of Housing and Urban Development pursuant to Section 8 of
the United States Housing Act of 1937 as amended.
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"Assignment of Agreements" means the assignments by Owner to City of plans,
contracts and permits, substantially in the form attached hereto as Exhibit 10.
"Assignment of Rents and Leases" means a document substantially in the form attached
hereto as Exhibit 11.
"City" means the City of Huntington Beach, a municipal corporation of the State of
California, and any assignee of, or successor to, the rights,powers, and responsibilities of City.
"City Manager" means the individual duly appointed to the position of City Manager of
the City, or authorized designee. Whenever an administrative action is required by City to
implement the terms of this Agreement, the City Manager, or an authorized designee, will have
authority to act on behalf of City, except with respect to matters reserved under California law or
the City's Charter wholly for City Council determination.
"Completion" means, with regard to rehabilitation of the Improvements, the satisfaction
of each of the following events: (i) the City will have determined that rehabilitation of the
Improvements has been completed substantially in accordance with the plans approved by the
City (as may be modified in accordance herewith), (ii) certification by the Project architect, or if
there is no Project architect, by the Owner, that rehabilitation of the Improvements (with the
exception of minor "punchlist" items) has been completed in a good and workmanlike manner
and substantially in accordance with the approved plans and specifications; (iii) if required by the
City in its regulatory capacity,,temporary or permanent certificates of occupancy will have been
issued by the City with respect to all of the Units, (iv) the time for Owner's contractor, suppliers
and subcontractors to file a claim pursuant to Civil Code Sections 3115-3117 has expired or
Owner has delivered to the City unconditional lien releases for its contractor, suppliers and
subcontractors, and any mechanic's liens that have been recorded or stop notices that have been
delivered have been paid, settled or otherwise extinguished, discharged, released, waived,
bonded around or insured against, (v) a notice of completion pursuant to Civil Code Section
3117 has been duly recorded in the land records of Orange County, and (vi) the units are fit for
occupancy. Upon the Completion of the Project, the City and Owner will attach an addendum to
this Agreement setting forth the date of Completion for purposes of determining the maturity
date of the HOME Loan and the termination date of the Restricted Period.
"Construction )Financing Event"means the point in time when all conditions precedent
to the recording of the City's HOME Loan Documents have been satisfied.
"Days" means calendar days and the statement of any time period herein will be calendar
days and not working days, unless otherwise specified.
"Effective Date" means the date this Agreement is executed by the City; which date will
be set forth opposite the signature of the City Manager.
"Eligible Tenant" means any person entitled to rent an Affordable Unit as set forth in
the HOME Regulatory Agreement.
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"Environmental Indemnity" means an instrument substantially in the form attached to
this Agreement as Exhibit 9.
"Force Majeure" or "Force Majeure Event" means the following events, provided that
they actually delay and interfere with the timely performance of the matter to which it would
apply and despite the exercise of diligence and good business practices are or would be beyond
the reasonable control of the party claiming such interference: war; insurrection; strikes; lock-
outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority; litigation including litigation challenging the validity of this transaction or
any element thereof; unusually severe weather; inability to secure necessary labor, materials or
tools, provided that such inability is not caused by the party claiming a Force Majeure Delay;
delays of any contractor, subcontractor, or suppliers, provided that such delay is not caused by
the party claiming a Force Majeure Delay; acts of the other party; acts or failure to act of any
Governmental Agency (except acts or failure to act of the City will not excuse performance by
the City); the imposition of any applicable moratorium by a Governmental Agency; or any other
causes which despite the exercise of diligence and good business practices are or would be
beyond the reasonable control of the party claiming such delay and interference.
Notwithstanding the foregoing, none of the foregoing events will constitute a Force Majeure
Event unless and until the party claiming such delay and interference delivers to the other parry
written notice describing the event, its cause, when and how such parry obtained knowledge, the
date the event commenced, and the estimated delay resulting therefrom. Any party claiming a
Force Majeure Delay will deliver such written notice within ten (10) business days after it
obtains actual knowledge of the event.
"Force Majeure Delay" means any delay in taking any action required by this
Agreement, proximately caused by the occurrence of any Force Majeure Event.
"Governmental Approvals" means and include any and all general plan amendments,
zoning approvals or changes, required approvals and certifications under the California
Environmental Quality Act, tentative and final tract maps, variances, conditional use permits,
demolition permits, excavation/foundation permits, grading permits, building permits, inspection
reports and approvals, certificates of occupancy, and other approvals, permits, certificates,
authorizations, consents, orders, entitlements, filings or registrations, and actions of any nature
whatsoever required from any Governmental Agency in order to commence and complete the
Project.
"Governmental Agency" means the United States, the State of California, the County of
Orange, the City of Huntington Beach or any other political subdivision in which the Property is
located, and any court or political subdivision, agency or instrumentality having jurisdiction over
the Property.
"Hazardous Materials"has the meaning set forth in the Environmental Indemnity.
"HOME Deed of Trust" means the Deed of Trust securing the HOME Loan,
substantially in the form attached hereto as Exhibit 7.
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"HOME Funds" means the City's allocation of funds from the HOME Investment
Partnership Program created by the National Affordable Housing Act of 1990.
"HOME Loan" means the City's loan of HOME Funds to Owner in a principal amount
of THREE HUNDRED FIVE THOUSAND DOLLARS ($305,000.00), as evidenced by the
Home Note and secured by the HOME Deed of Trust pursuant to this Agreement.
"HOME Loan Documents" means this Housing Agreement, the HOME Note, the
HOME Deed of Trust, the HOME Regulatory Agreement, the Environmental Indemnity, the
Assignment of Rents and Leases, the Assignment of Agreements and the UCC1 Financing
Statement.
"HOME Note" means that certain Promissory Note evidencing the HOME Loan,
substantially in the form attached hereto as Exhibit 6.
"HOME Regulations"means 24 CFR Part 92, as amended from time to time.
"HOME Regulatory Agreement" means the Regulatory Agreement and Declaration of
Covenants and Restrictions substantially in the form attached hereto as Exhibit 8, to be recorded
at the Construction Financing Event. The HOME Regulatory Agreement will unconditionally be
and at all times remain prior and superior to any lien hereafter recorded against the Property.
"HUD"means the United States Department of Housing and Urban Development.
"Improvements" means the improvements located on the Property, to be rehabilitated in
accordance with this Agreement, including but not limited to the Scope of Work.
"Lease"means the lease entered into between Owner and an Eligible Tenant of a Unit.
"Net Proceeds" means the amount, if any, by which a refinancing exceeds the amount
needed to repay a Senior Loan in full, including principal and interest, any early redemption or
prepayment penalty, and customary and reasonable fees and costs of the transaction.
"Operating Costs" has the same meaning as the definition of Annual Operating
Expenses set forth in the HOME Note.
"Owner" means ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a
California nonprofit public benefit corporation, and any assignee of or successor to its rights,
powers and responsibilities approved by the City or permitted by this Agreement.
"Permitted Transfer" means any Transfer that is approved by the City or expressly
permitted by the terms of this Agreement.
"Plans" means any architectural and construction plans and drawings prepared on behalf
of Owner for the Project in accordance with this Agreement.
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"Person" means an individual, partnership, limited partnership, trust, estate, association,
corporation, limited liability company or other entity, domestic or foreign.
"Project" means the rehabilitation of the Improvements on the Property as described in
the Scope of Work and the subsequent rental of the Affordable Units to Eligible Tenants at
Affordable Rent for a period of not less than 55 years, as more particularly described in the
HOME Regulatory Agreement.
"Project Budget" means the anticipated sources and uses of funds for the Project as set
forth in Exhibit 4. The Project Budget and Owner's proposed method of financing will be subject
to change from time-to-time, subject to the prior written approval of Owner and the City
Manager or designee, which will not be unreasonably withheld, and subject to and conditioned
on such further review and approval by the City Council as is needed to satisfy applicable law,
policies and procedures, upon which approval the Project Budget will be replaced by the
approved revised Project Budget.
"Project Costs" means all costs which are actually incurred by Owner for the Project,
and will include, without limitation, all of the items of cost set forth in the Project Budget and
similar costs, fees and expenses as approved by the City Manager, but not including Operating
Costs.
"Property" means that certain real property located in the City of Huntington Beach,
County of Orange, State of California, commonly known as 313 11t' Street, Huntington Beach,
California, and legally described in Exhibit 1 and depicted on the Property Map attached hereto
as Exhibit 2.
"Restricted Period" means fifty-five (55) years from the date of Completion of the
Project.
"Schedule of Performance" means that certain schedule attached hereto as Exhibit 5
setting forth the times upon which performance by the parties under this Agreement is due.
"Scope of Work"means that certain exhibit attached hereto as Exhibit 3.
"Title Company" means Commonwealth Title Company or another title insurance
company mutually acceptable to City and Owner.
"Transfer"means:
(i) Owner's assignment or attempted assignment of this Agreement or any right
herein.
(ii) the sale, agreement to sell, transfer or conveyance of the Property, the Project, or
any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or
otherwise, the execution of any installment sale contract or similar instrument affecting all or a
portion of the Property or Project, the lease of all or substantially all of the Property or Project,
except as provided in subparagraph (iv) below, or the appointment of a receiver or trustee to
OCCHC—313 11TH STREET
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operate or exercise direct or indirect control over any portion of or interest in the Project or to
operate or exercise direct or indirect control over Owner or any interest in Owner.
(iii) "Transfer" also includes the transfer, assignment, hypothecation or conveyance of
legal or beneficial ownership of any interest in Owner, or any conversion of Owner to an entity
form other than that of Owner at the time of execution of this Agreement, except that, neither(a)
a cumulative change in ownership interest of Owner of forty-nine percent (49%) or less, or (b)
transfer to a limited liability company (LLC) of which Orange County Community Housing
Corporation is, and remains, the sole member, will be deemed a "Transfer'' for purposes of this
Agreement.
(iv) Notwithstanding paragraphs (i) and (ii), "Transfer" will not include the following
Permitted Transfers:
(a) the leasing for occupancy of all or any part of the Property or Project in
accordance with this Agreement and the HOME Regulatory Agreement; and
(b) Any refinancing that repays any portion of a Senior Loan (referred to
herein as a "Take-out Loan"), if the City Manager or designee reasonably determines (which
determination shall not be unreasonably withheld, conditioned or delayed) that the resulting loan-
to-value ratio (including the Take-out Loan, any of the remaining Senior Loan not repaid by the
refinancing, and the HOME Loan) will not exceed the loan-to-value ratio in effect at the time of
the Construction Financing Event for the Project, and the repayment terms of the Take-out Loan
do not materially impair the Trustor's ability to repay the HOME Loan.
"UCC1 Financing Statement" means the financing statement(s) to be filed with the
California Secretary-of State's Office at the Construction Financing Event in connection with the
HOME Loan. The Owner hereby consents to the filing of the UCC 1 Financing Statement.
"Units" means the five (5) one-bedroom dwelling units and the four (4) two-bedroom
dwelling units comprising the Project.
"USA Patriot Act" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-
56, 115 Stat. 272 (2001), as amended from time to time.
"Very Low Income Household" means low-income families whose annual incomes do
not exceed 50 percent of the median family income for the area, as determined by HUD with
adjustments for smaller and larger families, except that HUD may establish income ceilings
higher or lower than 50 percent of the median for the area on the basis of HUD findings that such
variations are necessary because of prevailing levels of construction costs or fair market rents, or
unusually high or low family incomes.
"Very Low Income Unit" means one of the nine (9) Affordable Units that are reserved
for occupancy by Very Low Income Households.
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ARTICLE 2. SUBJECT OF THIS AGREEMENT
Section 201 Purpose of the Agreement
A. Owner has applied to the City for certification as a Community Housing
Development Organization ("CHDO"), and has submitted a proposal for use of HOME Program
funds for a CHDO-eligible project under HOME Program regulations and that proposal has been
approved by the City, subject to and conditioned upon the terms of this Agreement. The purpose
of this Agreement is to promote affordable housing by providing the HOME Loan to assist.
Owner in the rehabilitation of the Improvements on the Property for its continued operation as
affordable rental housing for Very Low Income persons, with a priority for persons participating
in the City's "Project Self-Sufficiency."
B. The Project pursuant to this Agreement and the fulfillment generally of this
Agreement are in the best interests of the City and the welfare of its residents, and are in
accordance with the public purposes and provisions of applicable federal, state, and local laws
and requirements under which the Project is being undertaken and is being assisted.
C. The HOME Loan is conditioned upon the use and operation of the Property for
not less than fifty-five (55) years as rental housing, with all nine of the Units restricted to
occupancy by Very Low Income Households in accordance with the HOME Regulatory
Agreement.
Section 202 City.
The City is THE CITY OF HUNTINGTON BEACH, CALIFORNIA, a municipal
corporation, and includes any assignee or nominee. The address of the City for the purpose of
receiving notices pursuant to this Agreement is:
The City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Fascimile Number: 714-374-1590
Attention: Economic Development Deputy Director
With a copy to:
City Attorney's Office
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Section 203 Owner.
The Owner is ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a
California nonprofit public benefit corporation and includes any permitted assignee or nominee.
The address of Owner for the purpose of receiving notices pursuant to this Agreement is:
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Orange County Community Housing Corporation
2024 N. Broadway, 3rd Floor
Santa Ana, CA 92706-2623
Facsimile number: 714-558-0423
Attention: Executive Director
Section 204 Prohibition Against Transfers, Right of First Refusal.
A. The qualifications and identity of the Owner are of particular concern to the City.
It is because of those qualifications and identity that the City has entered into this Agreement
with the Owner. No voluntary or involuntary successor in interest of the Owner will acquire any
rights or powers under this Agreement except as expressly set forth herein.
B. Owner agrees that Owner will not sell the Property during the term of the HOME
Regulatory Agreement, unless and until Owner has given to City notice in writing of its intent to
sell, specifying the identity of the prospective buyer and the price and terms of the contemplated
sale. Within ninety (90) days after Owner gives City written notice of Owner's intent to sell,
City will have the right to purchase the Property at the same price and on the same terms and
conditions set forth in Owner's written notice of intent to sell. The City may assign the right
granted to it under this paragraph to an entity of its choosing. To exercise this right, City or its
assignee must, within the same ninety (90) day period, deposit in escrow with any escrow
company in Orange County, California, all moneys and instruments required by the terms of the
Owner's notice of intent to sell to be paid or delivered to Owner on close of escrow and will also
give Owner written notice of the deposit. If City or its assignee does not exercise the right in
accordance with the provisions of this Section, Owner may sell the Property to the prospective
buyer for the price and on the terms contained in the notice; provided, however, that City must
have reasonably approved such prospective buyer in advance in writing, including the City's
determination that the prospective buyer is a certified CHDO and has satisfactory experience in
the field of low-income housing (including the management of properties with income and
affordability restrictions). If for any reason the Property is not sold to the prospective buyer, on
receiving any subsequent offer from any third party that is acceptable to Owner, Owner will give
City a right to purchase the Property on the same terms as set forth above.
C. For the reasons cited above, the Owner represents and agrees for itself and any
successor in interest that, except for the Permitted Transfers set forth in the definition of
"Transfer" or as otherwise expressly permitted under this Agreement, without the prior written
approval of the City (not to be unreasonably withheld, conditioned or delayed), there will be no
significant change in the ownership of the Owner.
D. The Owner will promptly notify the City of any and all changes whatsoever in the
identity of the parties in ownership and/or in control of the Owner or the degree thereof, of which
it or any of its officers have been notified or otherwise have knowledge or information. The City
may exercise any and all available remedies, including termination of this Agreement, if there is
any significant change (voluntary or involuntary) in membership, ownership, management or
control, of the Owner, including but not limited to the appointment of a receiver; (other than
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changes occasioned by the death or incapacity of any individual or as otherwise expressly
permitted by this Agreement), without the prior written consent of the City.
E. Owner will not Transfer this Agreement, the Property or the Project, without prior
written approval of the City Manager, except as expressly permitted by this Agreement. Any
proposed transferee will have the qualifications and financial responsibility necessary and
adequate as may be reasonably determined by the City to fulfill the obligations undertaken in this
Agreement by the Owner. Any such proposed transferee, by instrument in writing satisfactory to
the City and in form recordable among the land records, for itself and its successors and assigns,
and for the benefit of the City will expressly assume all of the obligations of the Owner under
this Agreement and agree to be subject to all conditions and restrictions applicable to the Owner
in this Agreement. There will be submitted to the City for review all instruments and other legal
documents proposed to affect any such Transfer, and if approval is required and if such Transfer
is approved by the City Manager,the City's approval will be indicated to the Owner in writing.
F. In the absence of specific written agreement by the City, no Transfer, or approval
thereof by the City, will be deemed to relieve the Owner or any other party from any obligations
under this Agreement.
G. Consent to any Transfer will not be deemed to be a waiver of the right to require
consent to future or successive Transfers.
H. The provisions of this Section 204 will be of no force or effect as of the expiration
of the HOME Regulatory Agreement.
ARTICLE 3. RELOCATION OBLIGATIONS
Section 301 Relocation Plan
If temporary or permanent relocation of existing tenants and/or persons residing in or on
the Property is required to implement the Project, Owner will comply with the provisions of a
relocation plan prepared by Owner and reviewed and approved by the City ("Relocation Plan").
The Relocation Plan will comply with the requirements of the Uniform Relocation Act and the
California Relocation Assistance Act and any guidelines promulgated in connection therewith.
Section 302 Relocation Activities and Costs.
Owner will comply with the requirements of all applicable relocation laws, including, but
not limited to, the Uniform Relocation-Act and the California Relocation Assistance Act, and
will comply with related tenant notice requirements and will provide the City with true and
correct copies of such notices to tenants. Owner will also retain all required records and the
originals and/or copies of tenant notices in its files as mandated by applicable law. The cost of
complying with all applicable relocation requirements for the Project will be the responsibility of
Owner.
ARTICLE 4. FINANCING
Section 401 The Proiect Budget
The cost of the Rehabilitation is set forth in the Project Budget attached to this
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Agreement as Exhibit 4. The Project Budget will be subject to change from time-to-time, subject
to the prior written approval by the City Manager or his designee (which approval will not be
unreasonably withheld); upon which approval the Project Budget will be replaced by the
approved revised Project Budget. Owner has proposed, and the City has approved, the Project
Budget appended to this Agreement. Owner acknowledges that the City is relying on Owner's
experience and expertise in establishing the costs for the Project and Owner represents that the
Project Budget is based on Owner's best, good faith estimate of the costs that are likely to be
incurred for the Project. Owner will be responsible during the Rehabilitation to provide funds if
and as needed to pay for cost overruns and contingencies not otherwise funded by the HOME
Loan. Owner acknowledges and agrees that the City will have no obligation to increase the
amount of the HOME Loan.
Section 402 The Citv Assistance
The City agrees to lend to Owner, and Owner agrees to borrow from the City, the HOME
Loan, with interest as provided in the HOME Note. The HOME Loan will be secured by the
HOME Deed of Trust. Owner agrees to repay the HOME Loan as set forth in the HOME Note.
Owner agrees to use the HOME Loan exclusively to pay eligible Project Costs approved by the
City.
Section 403 Priority of City Lien
A. The HOME Deed of Trust will be senior to any other lien or security interest in
the Property with the sole exception of the following senior encumbrances (referred to herein as a
"Senior Loan"): (i) any deed of trust or other encumbrance of record as of the date of the
Construction Financing Event which is shown in the title insurance policy described in the
following paragraph and approved by the City as a permitted encumbrance; or (ii) a deed of trust
or other encumbrance securing any additional loan of funds to be used in the rehabilitation work,
as shown in the Project Budget and approved in advance by the City. Without the express
written consent of the City Manager or his or her designee, Owner will not place any
encumbrances, or permit any encumbrances to be placed, on or against title to the Property,
including security interests that are subordinate to the HOME Deed of Trust.
B. On or prior to the Construction Financing Event, the Title Company will record
the HOME Deed of Trust, the HOME Regulatory Agreement and such other instruments and
documents as the City and Owner may reasonably request,and will issue to the City, if requested
by City, at the City's sole discretion and at the expense of Owner: an ALTA lender's policy of
title insurance, including such endorsements as the City requires, in the original principal amount
of the HOME Loan, insuring that Owner is the fee owner of the Property and that the HOME
Deed of Trust constitutes a valid lien covering the Property, and all right, title, interest and estate
of Owner therein, subordinate and subject only to the Senior Loan, if any, and other exceptions
which the City approves in writing in its sole discretion.
Section 404 Disbursement of HOME Loan.
A. No portion of the HOME Loan will be disbursed until all conditions precedent to
the disbursement of the HOME Loan (described in Section 405, below) have been satisfied.
Owner may not request disbursement of any portion of the HOME Loan until funds are needed
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for payment of eligible costs. The amount of each disbursement request must be limited to the
amount needed to pay eligible costs.
B. Upon satisfaction of all conditions precedent, the City will disburse the HOME
Loan, as needed, for the payment of Project Costs as set forth in the Project Budget, in
accordance with procedures approved by the City Manager or his designee.
C. Owner will carry out the rehabilitation work, and manage and operate the Property
in conformity with all applicable requirements of the HOME Program and as set forth in the
HOME Regulatory Agreement.
Section 405 Conditions Precedent to Closing.
The City will not be obligated to make any disbursements of any portion of the HOME
Loan unless and until all of the following conditions precedent are satisfied on or before the date
set forth in the Schedule of Performance:
i. Owner will have satisfied all of the HOME Regulation and
City requirements to be certified as a CHDO.
ii. Owner will submit, and the City Manager or designee will
have approved, the rehabilitation contract described in Paragraph D. of
Section 504.
iii. Owner will prepare and submit, and the City Manager or
designee will have approved, a final Project Budget, to be current as of the
Construction Financing Event, demonstrating to the satisfaction of the City
Manager or designee that the HOME Loan will be sufficient to pay all
Project Costs.
iv. Owner will obtain all licenses, franchises, permits,
governmental approvals and agreements required for the rehabilitation
work.
v. Owner will deliver to the City Manager or designee a loan
draw-down schedule showing a detailed breakdown of the estimated
periods of commencement and completion of the rehabilitation work.
vi. Owner will have executed and delivered to the City Manager
or designee the HOME Regulatory Agreement, the HOME Note, the
HOME Deed of Trust, the Assignment of Rents, the Environmental
Indemnity and the other HOME Loan Documents.
vii. Owner will have delivered evidence acceptable to the City
Manager or designee that Owner has obtained the insurance policies
required by Section 510 and will have delivered the required endorsements.
viii. If required for Owners compliance with applicable relocation
laws, Owner will have delivered evidence satisfactory to the City Manager
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or designee that the Owner has completed the relocation of existing tenants
on the Property in accordance with the Relocation Plan approved by the
City.
ix. The City Manager or designee will have determined that
Owner is in full compliance with the terms and conditions of this
Agreement and all documents and instruments referred to herein or
executed by Owner in furtherance of this Agreement.
x. The title insurance company will be prepared to issue to the
Authority the lender's title policy described in Section 403A.
xi. Owner will prepare and submit, and the City Manager or
designee will approve, the Maintenance Program required by Section 603
and the Management Plan required by Section 602 of this Agreement.
xii. Owner will prepare and submit, and the City Manager or
designee will approve,the Annual Project Budget required by Section 602.
xiii. Owner will prepare and submit, and the City Manager or
designee will approve, a form of tenant lease that conforms to the
requirements of the HOME Regulatory Agreement.
The City may waive any condition of closing set forth herein, however any such waiver
must be expressly made in writing. The decision to waive any condition of closing will be in the
sole discretion of the City and the decision to waive any requirement may be conditioned upon its
satisfaction at a later date and/or upon the substitution of another condition. The disbursement of
any portion of the HOME Loan prior to fulfillment of one or more of the foregoing conditions
will not be construed as a waiver of such conditions, and the City reserves the right to require
their fulfillment prior to making any subsequent disbursements.
ARTICLE 5. REHABILITATION OF THE Il"ROVENIENTS
Section 501 Scone of Work
The Improvements will be rehabilitated in accordance with and within the limitations
established in the Scope of Work and plans approved by the City pursuant to this Agreement and
permits issued by the City. It is anticipated that Owner will contract for performance of specific
activities, including but not limited to activities such as rehabilitation work and management of
the Units. Such contracts will not in any way diminish or waive Owner's obligations under this
Agreement.
Section 502 Construction Drawings and Related Documents
A. If construction drawings are required for City permitting purposes, Owner will
prepare and submit construction drawings and related documents for the rehabilitation of the
Improvements to the City for review (including, but not limited to, architectural review) and
written approval at the times established in the Schedule of Performance. The construction
drawings and related documents will be submitted in two stages, preliminary and final drawings,
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plans and specifications. Final drawings, plans, and specifications are hereby defined as those in
sufficient detail to obtain a building permit. Any items so submitted and approved in writing by
the City will not be subject to subsequent disapproval. City approval will not be unreasonably
withheld, conditioned or delayed.
B. Progressively detailed plans will be approved by the City if exterior spaces and
areas open to public view do not vary and the plans otherwise do not materially vary from
previously approved plans, and if they are a logical evolution of previously approved plans,and
conform to the Scope of Work. In the event of disapproval by the City of any plans submitted by
Owner, City will promptly communicate in writing to Owner all reasons for such disapproval and
all requirements for subsequent approval of revised plans.
C. During the preparation of all drawings and plans, City staff and Owner will hold
regular progress meetings to coordinate the preparation of, submission to, and review of
construction plans and related documents by the City. City staff and Owner will communicate
and consult informally as frequently as is necessary to insure that the formal submittal of any
documents to the City can receive prompt and speedy consideration.
D. If any revisions or corrections of plans approved by the City will be required by
another governmental official, agency, department or bureau having jurisdiction over the
Property, Owner and the City will reasonably cooperate in efforts to obtain waiver of such
requirements or to develop a mutually acceptable alternative. Neither the City nor Owner will
unreasonably withhold approval of a mutually acceptable alternative.
Section 503 City Approval of Plans,Drawings and Related Documents
As provided in Section 502, the City will have the right of reasonable review (including, but not
limited to, architectural review) of all plans, drawings and related documents for the construction
of the Property, including any proposed changes therein. The City Manager or designee will
approve or disapprove such plans, drawings, and related documents referred to in this Agreement
(and any proposed changes therein), in writing, within the times established in the Schedule of
Performance. Any disapproval will state, in writing, the reasons for disapproval. Owner, upon
receipt of disapproval will revise such portions of the plans, drawings or related documents in a
manner that satisfactorily addresses the reasons for disapproval and resubmit such revised
portions to the City as soon as possible after receipt of the notice of disapproval. The City will
approve or disapprove such revised portions in the same manner and within the same times as
provided in this Section for approval or disapproval of plans, drawings, and related documents
initially submitted to the City. No matter once approved will be subsequently disapproved.
Section 504 Cost of the Work.
A. Except as otherwise expressly set forth in this Agreement, the cost of
rehabilitating the Improvements will be the responsibility of Owner. The Project Costs are set
forth in the Project Budget and the Scope of Work, which will be subject to change from time-to-
time as mutually agreed by the City and Owner. Transfers of funds between the line items
described in the Scope of Work will require the prior approval of the City Manager or his or her
designee. If Owner determines that the funds designated for abatement of hazardous substances
will not be required for that purpose, Owner may propose another use for those funds, which
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could include work not described in the Scope of Work, but which must be approved in advance
by the City.
B. The Owner has proposed, and the City has approved, the Project Budget appended
to this Agreement. Owner acknowledges that the City is relying on Owner's experience and
expertise in establishing the costs for the Project and Owner represents that the Project Budget is
based on the best, good faith estimate of the Owner of the costs that are likely to be incurred for
the Project based upon the information now available to the Owner.
C. The Owner will use the City's loan of HOME Funds exclusively for the payment
of Project Costs that have been approved in writing by the City.
D. Owner will obtain at least three bids for the rehabilitation work from licensed
general contractors and will submit copies of the bids to the City. As a condition of the City's
disbursement of the HOME Loan, Owner will submit to the City for its approval a general
construction contract between Owner and a licensed general contractor approved by the City,
containing a fixed maximum price for all the rehabilitation work (including contingencies)
required by this Agreement, and providing for the withholding of such retention amounts as
required by the City's disbursement procedures, and (if required by the City), performance and
payment bonds provided by a surety acceptable to the City, in an amount that is acceptable to the
City, guaranteeing the timely completion of the rehabilitation in accordance with the Scope of
Work, the Project Budget, and the Schedule of Performance. All construction work and
professional services will be performed by persons or entities licensed or otherwise authorized to
perform the applicable construction work or service in the State of California.
Section 505 Schedule of Performance
A. Owner and City will perform all acts respectively required of such party in this
Agreement within the times provided in the Schedule of Performance.
B. After the Construction Financing Event, Owner will promptly begin and thereafter
diligently prosecute to completion the rehabilitation of the Improvements as provided in the
Scope of Work. Owner-will begin and complete all rehabilitation work within the times
specified in the Schedule of Performance, with such reasonable extensions of said times as may
be granted by the City. The.Schedule of Performance is subject to revision from time to time as
mutually agreed upon in writing by Owner and the City Manager.
C. During periods of construction, Owner will submit to the City a written report of
the progress of the construction when and as requested by the City. The report will be in such
form and detail as may be reasonably required by the City and will include a reasonable number
of construction photographs (if requested)taken since the last report by Owner.
Section 506 Accessibility Requirements
Owner must ensure that the Project will be rehabilitated and operated to comply with all
federal, state, and local requirements for access for disabled persons that apply to the
rehabilitation of existing multi-family rental units.
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Section 507 Local, State,and Federal Laws
A. Owner hereby agrees to carry out development, construction (as defined by
applicable law) and operation of the Project on the Property, including, without limitation, any
and all public works (as defined by applicable law), in conformity with all applicable local, state
and federal laws, rules and regulations and all applicable federal and state labor laws (including,
without limitation, any requirement to pay state prevailing wages). Owner hereby expressly
acknowledges and agrees that the City has never previously affirmatively represented to the
Owner or its contractor(s) for the Project in writing or otherwise, in a call for bids or otherwise,
that the work to be covered by the bid or contract is not a "public work," as defined in Section
1720 of the Labor Code. Owner hereby agrees that Owner will have the obligation to provide
any and all disclosures, representations, statements, rebidding, and/or identifications which may
be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or
amended from time to time, or any other provision of law. Owner hereby agrees that Owner will
have the obligation to provide and maintain any and all bonds to secure the payment of
contractors (including the payment of wages to workers performing any public work) which may
be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or
amended from time to time, or any other provision of law. The Owner hereby agrees that the
Owner will have the obligation, at the Owner's sole cost, risk and expense, to obligate any parry
as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted
or amended from time to time, or any other provision of law. Owner will indemnify, protect,
defend and hold harmless the City and its officers, employees, contractors and agents, with
counsel reasonably acceptable to City, from and against any and all loss, liability, damage, claim,
cost, expense, and/or "increased costs" (including labor costs, penalties, reasonable attorneys
fees, court and litigation costs, and fees of expert witnesses) which, in connection-with the
development, construction (as defined by applicable law) and/or operation of the Project,
including, without limitation, any and all public works (as defined by applicable law), results or
arises in any way from any of the following: (1) the noncompliance by Owner of any applicable
local, state and/or federal law, including, without limitation, any applicable federal and/or state
labor laws (including, without limitation, if applicable, the requirement to pay state prevailing
wages); (2) the implementation of Sections 1726 and 1781 of the Labor Code, as the same may
be enacted, adopted or amended from time to time, or any other similar law; (3) failure by Owner
to provide any required disclosure, representation, statement, rebidding and/or identification
which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted,
adopted or amended from time to time, or any other provision of law; (4) failure by Owner to
provide and maintain any and all bonds to secure the payment of contractors (including the
payment of wages to workers performing any public work) which may be required by the Civil
Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to
time, or any other provision of law; and/or (5) failure by the Owner to obligate any party as may
be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or
amended from time to time, or any other provision of law. It is agreed by the parties that, in
connection with the development, construction (as defined by applicable law) and operation of
the Project, including, without limitation, any public work(as defined by applicable law), Owner
will bear all risks of payment or non-payment of state prevailing wages and/or the
implementation of Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or
amended from time to time, and/or any other provision of law. "Increased costs" as used in this
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Section will have the meaning ascribed to it in Labor Code Section 1781, as the same may be
enacted, adopted or amended from time to time. The foregoing indemnity will survive
termination of this Agreement and will continue after Completion.
B. Owner will be responsible for obtaining all Permits and land use approvals
required by the City for the construction of the Project, ensuring that the use of the Property for
the purposes described in this Agreement complies with the zoning and other City land use
regulations (including any applicable exemptions and/or exceptions) applicable to the Property at
the time of Construction Financing Event.
C. Prior to or concurrently with the Construction Financing Event, Owner will satisfy
all conditions to the issuance of any Permit required for the construction of the Property. The
City will provide reasonable assistance to Owner in obtaining permits from other governmental
agencies with jurisdiction over the Project but will have no liability to Owner in the event such
permits are not obtained in a timely manner.
D. This Agreement is not a"Development Agreement" as provided in Section 65864
et sec. of the California Government Code. Owner will comply with all applicable conditions of
approval required by the City of Huntington Beach in its regulatory capacity.
Section 508 Hazardous Substances.
A. Lead-Based Paint and Asbestos Containing Materials. If the presence of lead-
based paint or asbestos hazards on the Property is discovered during the course of the
rehabilitation of the Improvements pursuant to this Agreement and Owner determines that, with
the taking of appropriate precautions and in compliance with all applicable Hazardous Materials
Laws (as such term is defined in the Environmental Indemnity), Owner can carry out the Project
Without disturbing such hazards, then Owner may proceed to do so. If Owner determines that it
will not be able to carry out the Project without disturbing such hazards or if the removal of such
hazards is required by applicable Hazardous Materials Laws, then Owner will prepare and submit
to the City a plan, in compliance with all applicable Hazardous Materials Laws, for the
abatement of any such hazards. Implementation of the plan must qualify the Property for a
closure letter or similar clearance from the appropriate governmental entity having jurisdiction
over the Property indicating that all lead-based paint and asbestos hazards have been fully abated
to the satisfaction of such governmental entity.
B. Indemnification. Owner will indemnify, defend, and hold harmless the City and
its officers, employees, agents and representatives (collectively, the"Indemnified Parties") from
and against any and all liabilities (including penalties, fines and monetary sanctions) arising from
a violation of state or federal law occurring after the Construction Financing Event, pertaining to
(i) the storage of Hazardous Substances on the Property or(ii) contamination of the Property by a
release of Hazardous Substances. As a condition precedent to the Construction Financing Event,
Owner will execute and deliver to the City an Environmental Indemnity, substantially in the form
of Exhibit 9 to this Agreement.
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Section 509 Nondiscrimination During Construction
Owner, for itself and its successors and assigns, agrees that during the rehabilitation of the
Improvements provided for in the Agreement, Owner will not discriminate against any employee
or applicant for employment because of race, color, religion, sex, or national origin.
Section 510 Insurance
A. Owner will procure and maintain, during the term of this Agreement, at its sole
cost and expense, until the date that City waives any such insurance requirement or requirements
in writing,the following_policies of insurance,on a Project specific basis:
1. Workers' Compensation Insurance. Pursuant to California Labor Code
Section 1861, Owner acknowledges awareness of Section 3700 et seq. of said code, which
requires every employer to be insured against liability for workers' compensation. Owner
covenants that it will comply with such laws and provisions prior to commencing any work of
construction or construction on the Property. To the extent Owner directly employs personnel at
the Project, Owner will maintain such Workers' Compensation Insurance in an amount not less
than the statutory requirements in California for bodily injury and disease and must maintain
employer's liability coverage in an amount not less than ONE MILLION DOLLARS
($1,000,000.00). Owner will require all contractors to provide such Workers' Compensation
Insurance for all of the contractors' and subcontractors' employees. Owner will furnish City with
a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance
and Owner will similarly require all contractors and subcontractors to waive subrogation.
2. General Liability and Auto Insurance. Owner will carry general
commercial liability insurance, including coverage for bodily injury, property damage,
products/completed operations and blanket contractual liability in an amount not less than TWO
MILLION DOLLARS ($2,000,000.00) per occurrence and FOUR MILLION DOLLARS
($4,000,000.00) annual aggregate, combined single limit for bodily injury and property damage.
All such insurance will be provided by insurance companies admitted in California, or if not
admitted in California, then reasonably acceptable to City. Such insurance will name the City
and its officers, agents, and employees acting in their official capacity, as additional insureds.
Owner will carry automobile insurance, including liability coverage for bodily injury and
property damage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00) per
occurrence. Owner will require its insurer to waive its subrogation rights against City and will
provide certificates of insurance evidencing same.
3. Property Insurance. Owner will obtain and maintain in force, all-perils
(to include fire and vandalism protection) property insurance with extended coverage
endorsements thereon, on the Property, in an amount equal to the full replacement costs and/or
value thereof; this policy will contain a replacement cost endorsement naming City as the insured
and will not contain a coinsurance penalty provision. The policy will contain a lender's loss
payable endorsement that such proceeds will be used to repair or rebuild any Units or other
improvements situated on the Property so damaged or destroyed; and, if not so used, such
proceeds will be paid to City. The proceeds of any such insurance payable to City will be used
for rebuilding or repair as necessary to restore the site at the sole discretion of City. The policy
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will name City and its, officers, agents and employees acting in their official capacity as
additional insureds.
4. Certificate of Insurance; Additional Insured Endorsements. Prior to the
Construction Financing Event, Owner will furnish to City certificates of insurance and additional
insured endorsements evidencing the foregoing insurance coverages as required by this
Agreement. Such certificates and endorsements will be subject to the reasonable approval of the
City Attorney and will provide the name and policy number of each carrier and policy and will
state that the policy is currently in force and will promise to provide that such policies will not be
cancelled without thirty (30) days prior written notice to City.
5. In accordance with the requirements of the Flood Disaster Protection Act
of 1973 (42 U.S.C. 4001),the Owner will assure that for activities located in an area identified by
the Federal Emergency Management City (FEMA) as having special flood hazards, flood
insurance under the National Flood Insurance Program is obtained and maintained as a condition
of financial assistance for acquisition or construction purposes (including construction).
6. If Owner fails or refuses to procure or maintain insurance as required by
this Agreement, City will have the right, at City's election, and upon ten (10) days prior notice to
Owner, to procure and maintain such insurance. The premiums paid by City will be treated as a
loan, due from Owner, to be paid on the first day of the month following the date on which the
premiums were paid. City will give prompt notice of the payment of such premiums, stating the
amounts paid and the name of the insured(s).
Section 511 Indemnification
During the term of this Agreement, Owner agrees to and will protect, defend, indemnify
and hold harmless the City and its members, officers, officials, employees, agents,
representatives, servants, contractors, successors and assigns from and against all liability, loss,
damage, cost or expenses (including reasonable attorneys' fees and court costs)arising from or as
a result of(i) Owner's failure to perform any obligations as and when required by this Agreement
or any document referred to herein, and (ii) the death of any person or any accident, injury loss,
or damage whatsoever caused to any person or to the property of any person which will occur on
the Property and which will be directly or indirectly caused by the acts of, or any errors or
omissions of, the Owner or its officers, shareholders, directors, members, agents, servants,
employees, contractors, or invitees. Owner will not be responsible for, and the City will protect,
defend, hold harmless and indemnify Owner against any liability, loss, damage, cost, or expense
(including reasonable attorney's fees and court costs) arising from or as a result of the gross
negligence or willful misconduct -of the City or its members, officers, officials, employees,
agents, representatives, servants, or contractors.
Section 512 Disclaimer of Responsibility by the City
Except as otherwise expressly provided in this Agreement, the City neither undertakes
nor assumes nor will have any responsibility, right or duty to Owner or to any third party to
review, inspect, supervise, pass judgment upon or inform Owner or any third party of any matter
in connection with the Property,whether with respect to the quality, adequacy or suitability of the
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plans, any labor, service, equipment or material furnished to the Project, any person furnishing
the same or otherwise. Owner and all third parties will rely upon its or their own judgment
regarding such matters, and any review, inspection, supervision, exercise of judgment or
information supplied to Owner or to any third parry by the City in connection with such matter is
for the public purpose of providing affordable housing, and neither Owner (except for the
purposes set forth in this Agreement)nor any third party is entitled to rely thereon.
Section 513 Rights of Access
The City will have the right, at its sole risk and expense, to enter the Property or any part
thereof at reasonable times and with as little interference as possible, for the purpose of
inspecting the Property to determine Owner's compliance with this Agreement. To the fullest
extent allowed by law, all residential leases will provide for such right of the City. The
representatives of the City entering the Property will be identified in writing in advance by the
City Manager (or his or her designee). Any such entry will be made only after reasonable notice
to Owner, and the City will indemnify and hold Owner harmless from any claims or liabilities
pertaining to such entry. Any damage or injury to the Property proximately caused by such entry
will be promptly repaired at the sole expense of the City.
Section 514 Taxes,Assessments,Encumbrances and Liens
Subject to Owner's right to claim any exemption to which it may be entitled under State
or local law, Owner will be responsible for paying when due all real estate taxes and assessments,
if any, assessed and levied on or against the Property or any portion thereof or interest therein.
Owner will not place, or allow to be placed, on the Property or any portion thereof or interest
therein, any mortgage, trust deed, encumbrance (excluding easements not unreasonably
interfering with the use of the Property) or lien (excluding mechanic's liens paid prior to
foreclosure or liens for current year property taxes not paid) except the Permitted Transfers.
Owner will remove, or will have removed, any levy or attachment made on the Property (or any
portion thereof or interest therein), or will assure the satisfaction thereof within a reasonable time
but in any event prior to foreclosure. Nothing herein contained will be deemed to prohibit Owner
from contesting the validity or amount of any tax, assessment, encumbrance or lien, nor to limit
the remedies available to Owner in respect thereto. The covenants of Owner set forth in this
Section 514 relating to the placement of any unauthorized mortgage, trust deed, encumbrance or
lien, will remain in effect until Completion.
Section 515 Rights to Plans
A. All work product prepared pursuant to this Agreement, including (but not limited
to), all Plans, construction documents, soils tests .and similar reports, Permits and other
entitlements are hereby assigned to the City as security for Owner's obligations hereunder. In the
event that this Agreement is terminated by the City following an uncured event of default, Owner
will, within ten (10) days of such termination, transmit all such work product to the City to the
fullest extent possible without representation and warranty.
B. To effectuate the assignment described in the preceding paragraph, prior to the
Construction Financing Event, Owner will execute and deliver to the City an Assignment of
Agreements substantially in the form attached to this Agreement as Exhibit 10 in a form that is
acceptable to the City Manager, granting to the City all of Owner's rights to: (1) the Plans
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prepared pursuant to this Agreement; (2) the contracts between Owner and its architect and
between Owner and its general contractor; (3) all Permits relating to the Project; and all similar
rights and property interests.
Section 516 Hazardous Materials
Owner, from and after the Construction Financing Event will indemnify, defend, and hold
harmless City and its officers, employees, agents and representatives (collectively, the
"Indemnified Parties") from and against any and all liabilities (including penalties, fines and
monetary sanctions) arising from a violation of state or federal law pertaining to (i) the storage of
Hazardous Materials on the Property or (ii) contamination of the Property by a release of
Hazardous Materials, except to the extent of the Indemnified Parties' gross negligence or willful
misconduct. Owner, prior to the Construction Financing Event, will provide to City a copy of
any notices, orders, or reports concerning the presence of any Hazardous Materials on or
affecting the Property that is in Owner's possession.As a condition precedent to the Construction
Financing Event, Owner will execute and deliver to the City an Environmental Indemnity,
substantially in the form of Exhibit 9 to this Agreement.
ARTICLE 6. USE OF THE PROPERTY
Section 601 Uses
Owner covenants and agrees (for itself, its successors, its assigns, and every successor in
interest to the Property or any part thereof or any interest therein) that Owner, its successors and
assigns will use the Property exclusively to provide affordable housing for Very Low Income
Eligible Tenants and associated provision of social and/or community services. Owner further
covenants and agrees, for itself, its successors, its assigns, and every successor in interest to the
Property, or any part thereof, that for the period beginning on the Construction Financing Event
and ending on the expiration date of the HOME Regulatory Agreement, Owner and such
successors will not allow any portion of the Property to be used inconsistent with the applicable
zoning restrictions,this Agreement, and the HOME Regulatory Agreement.
Section 602 Management Plan; Annual Project Budget; Management Reports
A. Prior to the Construction Financing Event, Owner will submit for City Manager
approval a Management Plan describing the Owner's proposal for managing and operating the
Property. The Management Plan will include, without limitation, a description of the proposed
social and supportive services to be made available to Project tenants. Any modifications to the
approved Management Plan will be subject to the prior written approval (not to be unreasonably
withheld or delayed) of the City Manager or designee, for the entire Restricted Period.
B. Approval of the Management Plan by the City Manager or designee will be a
condition precedent to the Construction Financing Event. Owner will manage and operate the
Property in accordance with the approved Management Plan, including such amendments as may
be approved in writing from time to time by the Owner and the City Manager or designee, for the
entire Restricted Period.
C. In addition,the Owner must submit on or before the first day of each fiscal year of
the Restricted Period an estimated annual budget for management of the Property (the "Annual
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Project Budget") in accordance with the Management Plan. The Annual Project Budget will
include all necessary operating expenses, current maintenance charges, expenses of reasonable
upkeep and repairs, taxes and special assessment levies, prorated amount required for insurance
and all other expenses incident to the operation of the Project; and will show the expected
revenues to pay such expenses, including annual debt service requirements and reserve fund
deposits and balances. The Annual Project Budget, including any amendments proposed by
Owner, will be subject to the approval of the City Manager not to be unreasonably withheld or
delayed.
D. For each fiscal year of the Restricted Period, Owner must also submit on an
annual basis, and upon the written request of the City on a quarterly basis, a report for the
management of the Property (the "Management Report"). The Management Report will include
a profit and loss statement, budget to date figures, and occupancy report and will clearly show
project revenues, operating expenses, deposits to and withdrawals from the Project's reserve
accounts, and cash flow available for residual receipts payments, all of which will be certified by
Owner. The Management Report will be in a form that is reasonably acceptable to the City
Manager. The City Manager, in his/her sole discretion may waive the requirement of the
Management Report for one or more quarterly reporting periods. However, such waiver will not
operate to waive any subsequent requirement of the Management Report during the Restricted
Period. After receipt of such certified financial statements for the Project, City may request
additional financial analyses or obtain a third party review at City's own expense, of financial
statements for the Project to verify the accuracy of the payments by Owner on the HOME Note;
provided, however, that if such review reveals underpayment on the HOME Note greater than ten
percent (10%) of the correct payment amount, in addition to the other remedies available to the
City, Owner will promptly reimburse the City for the reasonable cost of conducting the review,
and the City will have the right to exercise all remedies for such underpayment available under
law or in equity.
Section 603 Maintenance of the Property
A. Prior to the Construction Financing Event, Owner must prepare and submit to the
City Manager or his designee for review and approval a program, including a proposed budget,
(the "Maintenance Program") for the exterior and interior maintenance of the Property and the
Improvements. The City will have the right at all reasonable times and upon 72 hours advance
written notice (except in the case of an emergency) to enter and inspect the Property in order to
ensure compliance with the foregoing requirements.
B. The Maintenance Program must describe in reasonable detail the standards to be
followed in maintaining the interior and exterior of the Improvements, including a schedule
indicating the proposed frequency of each element of maintenance, and will include, at a
minimum, the following: periodic cleaning of the interior and exterior of the Improvements,
including windows; removing graffiti; removing debris and waste materials and otherwise
maintaining indoor and outdoor areas of the Property; maintaining any lawns, plants, shrubs and
trees or other landscaping planted on the Property; performing inspections of all exterior features
to determine whether repairs are required; conducting periodic protective treatments such as rust
removal and caulking; conducting repairs to facades, roof, doors, windows and other exterior
features; maintaining fencing and other security devices and systems; periodic repainting of the
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exterior; periodic repainting of the interior units and common areas; periodic replacing of the
interior unit carpets; checking building systems, including, but not limited to the heating and
cooling systems, smoke alarms and water heaters; checking interior unit appliances; and
monitoring interior unit bathrooms for mold/mildew. The Maintenance Program, including any
amendments proposed by Owner, will be subject to the approval of the City Manager.
C. At all times during the Restricted Period,Owner will maintain the Property and
the Improvements in accordance with the approved Maintenance Program and in compliance
with Federal Housing Quality Standards (24 CFR § 982.401) and other applicable state and local
laws and codes. To implement this requirement, Owner agrees to budget sufficient funds to pay
for all reasonably anticipated costs (as indicated in the Annual Maintenance Budget). In the
event Owner fails to maintain the Property as required by this Section, Owner will, within thirty
(30) days after City's notification or Owner's own discovery of any deficiency, take all necessary
steps to correct such deficiency, provided that, if such deficiency is not reasonably capable of
being cured within thirty (30) days, Owner will commence to cure said deficiency within thirty
(30) days and diligently and in good faith continue to take all necessary steps to correct such
deficiency. In the event the Owner fails to cure said deficiency within the time allowed, the City
will have the right, but not the obligation, to enter the Property, correct any violation, and hold
Owner responsible for the cost thereof, and such cost, until paid, will constitute a lien on the
Property.
Section 604 Lead-Based Paint.
Owner will ensure that it and its contractors and subcontractors will not use lead-based
paint in the construction or maintenance of the Project. Owner will insert this provision in all
contracts and subcontracts for work performed on the Project which involves the application of
paint.
Section 605 Barriers to the Disabled
Owner will ensure that the Project will be operated to comply with all federal, state, and
local requirements for access for disabled persons that apply to existing multi-family rental units.
Section 606 Creation of Capital Reserve Account
Concurrently with or prior to the Permanent Financing Event, Owner will create a
"Capital Reserve Account" in the initial amount shown on the Project Budget. No later than
thirty(30) days after the Capital Reserve Account has been created, Owner will provide to City a
pro forma statement concerning the account, for review and approval. At any time thereafter
during the term of this Agreement, City, on ten (10) days prior written notice to Owner, may
request that Owner submit to it an updated, revised Capital Reserve Account statement. City, at
its own expense, may audit any updated, revised Capital Reserve Account statement submitted to
it by Owner; provided that, if such audit reveals a substantial underfunding of the Capital
Reserve Account, Owner will promptly reimburse the City for the cost of conducting the audit.
Section 607 Capital Reserves.
Beginning at Completion and every succeeding year during the Restricted Period, Owner
will deposit the amount set forth in the definition of Operating Expenses in the HOME Note, into
the Capital Reserve Account for repairs to the Property. The Capital Reserve Account will only_
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be used to fund the cost of repairs and improvements to the Property and to maintain the Property
in compliance with the requirements of Section 603. Owner will exhaust funds in the Capital
Reserve Account prior to utilizing operating revenues to pay for capital repairs ,and
improvements to the Property. Interest earned on the Capital Reserve Account will remain in
said account and be used as Capital Reserves. Upon repayment in full of the HOME Loan and to
the extent that maintenance of the Capital Reserve Account is not required by another lender, the
Owner may request the City's approval for the release of those funds, with such approval not to
be unreasonably withheld. At the expiration of the Restricted Period, the City's approval of the
release of the Capital Reserves will no longer be required.
Section 608 Obligation to Refrain from Discrimination
There will be no discrimination against or segregation of any person, or group of persons,
on account of race, color, creed, age, class, source of income, religion, sex, sexual orientation,
gender identity, marital status, national origin or ancestry in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the Property, or any part thereof, or in the awarding of
contracts for the Project, nor will Owner, or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the Property, or any part thereof, or in the awarding of contracts for the Project.
Owner will comply with all applicable federal, state and local nondiscrimination, fair housing,
and equal opportunity requirements. In addition, Owner will conduct affirmative marketing and
minority outreach activities if and as required by Federal regulations.
Section 609 Effectiveness and Duration of Covenants
The covenants established in this Agreement will, without regard to technical
classification and designation, be binding on Owner and any successor in interest to the Property
or any part thereof or interest therein for the benefit and in favor of the City of Huntington Beach.
Every covenant and condition and restriction contained in the HOME Regulatory Agreement
will remain in effect for fifty-five (55) years from the Effective Date of the HOME Regulatory
Agreement (regardless of whether the HOME Loan has been repaid prior to the end of such 55-
year period), except that the covenants against discrimination set forth in the HOME Regulatory
Agreement and in Section 608 hereof will remain in effect in perpetuity.
Section 610 Effect of Violation of Covenants
The City is deemed beneficiary of the terms and provisions of this Agreement and the
covenants herein, both for and in its own right and for the purposes of protecting the interests of
the community and other parties, public or private, for whose benefit this Agreement and the
covenants running with the land have been provided. The City will have the right if the
covenants contained in this Agreement 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 it or any other beneficiaries of this Agreement and covenants are
entitled.
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Section 611 CHDO Provisions
A. Owner shall maintain CHDO (Community Housing Development Organization)
status for the term of this Agreement and the HOME Regulatory Agreement in accordance with
24 CFR 92. Owner agrees to provide information as may be requested by the City to document
its continued compliance, including but not limited to an annual board roster and certification of
continued compliance.
B. Any funds advanced as CHDO pre-development funds must be in compliance
with 24 CFR 92.301, and are forgivable only under the terms in 24 CFR 92.301.
C. Any funds advanced to Owner as C14DO Operating Expenses must be expended
in compliance with 24 CFR 92.208.
D. Any funds that Owner is permitted to retain as CHDO proceeds from this Project
shall be used in compliance with 24 CFR 92.300(a)(2) or as specified in this Agreement.
E. Owner will create and follow a tenant participation plan, as required in 24 CFR
92.303.
ARTICLE 7. DEFAULTS,REMEDIES AND TERMINATION
Section 701 Defaults; Notice of Cure; Cure Rights
A. Subject to Force Majeure Delay, as such term is defined in this Agreement, failure
or delay by either party to perform any term or provision of this Agreement constitutes a default
under this Agreement. The party who fails or delays must immediately commence to cure,
correct or remedy such failure or delay and will complete such cure, correction or remedy with
reasonable diligence.
B. The injured party will give written notice of default to the party in default,
specifying the default. Failure or delay in giving such notice will not constitute a waiver of any
default, nor will it change the time of default. Except as otherwise expressly provided in this
Agreement, any failures or delays by either party in asserting any of its rights and remedies as to
any default will not operate as a waiver of any default or of any such rights or remedies. Delays
by either party in asserting any of its rights and remedies will not deprive either party 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.
C. If a monetary event of default occurs, prior to exercising any remedies hereunder,
the injured party will give the party in default written notice of such default. The party in default
will have a period of fifteen (15) days after such notice is given within which to cure the default
prior to exercise of remedies by the injured party.
D. If a non-monetary event of default occurs, prior to exercising any remedies
hereunder, the injured parry will give the party in default notice of such default. If the default is
reasonably capable of being cured within thirty (30) days, the party in default will have such
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period to effect a cure prior to exercise of remedies by the injured parry. If the default is such
that it is not reasonably capable of being cured within thirty(30) days, and the party in default(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 the party in default will have such additional time
as is reasonably necessary to cure the default prior to exercise of any remedies by the injured
parry. In no event will the injured party 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 ninety(90)days after the first notice of default is given.
Section 702 Institution of Legal Actions
Subject to the notice and cure provisions of Section 701 and the limited recourse
provisions of Section 709, in addition to any other rights or remedies (and except as otherwise
provided in this Agreement), either party may institute legal action to cure, correct or remedy any
default, to recover damages for any default, or to obtain any other remedy consistent with the
purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the
County of Orange, State of California, in any other appropriate court of that county, or in the
United States District Court for the Central District of California.
Section 703 Applicable Law
The internal laws of the State of California, without reference to the principles relating to
conflicts of laws,will govern the interpretation and enforcement of this Agreement.
Section 704 Acceptance of Service of Process
A. In the event that any legal action is commenced by the City against Owner, service
of process on Owner will be made by personal service upon Owner(or upon an officer of Owner)
and will be valid whether made within or without the State of California, or in such manner as
may be provided by law,
B. In the event that any legal action is commenced by Owner against the City, service
of process on the City will be made by personal service upon the City Manager or the City Clerk
or in such other manner as may be provided by law.
Section 705 Rip-hts and Remedies Are Cumulative
Except with respect to rights and remedies expressly declared to be exclusive in this
Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party
of one or more of such rights or remedies will not preclude the exercise by it, at the same or
different times, of any other rights or remedies for the same default or any other default by the
other party.
Section 706 Specific Performance
If either party defaults with regard to any of the provisions of this Agreement, subject to
the notice and cure provisions of Section 701, the non-defaulting party, at its option, may, after
such notice and opportunity to cure (but not before) commence an action for specific
performance of the terms of this Agreement pertaining to such default.
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Section 707 Termination Due to failure of Construction >Financin2 Event
Notwithstanding anything in this Agreement to the contrary, the City will have the right
to terminate this Agreement, in its sole discretion and without further notice to Owner and
without requirement of the expiration of any cure period, in the event that, subject to Force
Majeure Delay, the Construction Financing Event fails to occur within the time specified in the
Schedule of Performance (as such Schedule of Performance may be amended pursuant to the
terms hereof).
Section 708 Termination by Either Party
Prior to the Construction Financing Event, any parry will have the right to terminate this
Agreement in the event any other party is in default of any material term or provision of this
Agreement, and, following notice, fails to cure such default within the time provided in Section
701.
Section 709 Limited Recourse Oblivations
Each obligation of the Owner under this Agreement is a nonrecourse obligation of the
Owner. Except as provided otherwise in this Agreement, Owner will have no personal liability
for payment of Owner's obligations to the City. The sole recourse of the City will be the exercise
of its rights against the Property and the improvements thereon and any related security for the
HOME Loan. Provided, however, that the foregoing will not (a) constitute a waiver of any
obligation evidenced by this Agreement; (b) prevent or in any way hinder the City from
exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief
in respect of the exercise of, any remedy prescribed by law or in equity in case of default, other
than repayment of the HOME Loan; or (c) relieve Owner of any of its obligations under any
indemnity delivered by Owner to the City. The foregoing provisions of this paragraph are limited
by the provision that in the event of the occurrence of a default, Owner and its successors and
assigns will have personal liability hereunder for any deficiency judgment, but only if and to the
extent Owner, its principals, shareholders, or its successors and assigns, received rentals, other
revenues, or other payments or proceeds in respect of the mortgaged Property after the
occurrence of such default, which rentals, other revenues, or other payments or proceeds have not
been used for the payment of ordinary and reasonable operating expenses of the mortgaged
Property, ordinary and reasonable capital improvements to the mortgaged Property, debt service,
real estate taxes in respect of the mortgaged Property and basic management fees, but not
incentive fees, payable to an entity or person unaffiliated with Owner in connection with the
operation of the mortgaged Property, which are then due and payable.
Notwithstanding the foregoing, the City may obtain a judgment or order (including,
without limitation, an injunction) requiring any Person to perform (or refrain from) specified acts
other than repayment of the HOME Loan; may proceed against any Person whatsoever with
respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement
agreements or similar rights to payment or performance; and may recover directly from any
Person:
1. any damages, costs and expenses incurred by City as a result of fraud or any
criminal act or acts of Owner or any member, shareholder, officer, director, agent or employee of
Owner;
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2. any damages, costs and expenses incurred by City as a result of any
misappropriation of funds provided for the Project, rents and revenues from the operation of the
Project, or proceeds of insurance policies or condemnation proceeds by Owner or any member,
partner, shareholder, officer, director or employee of Owner;
3. any and all amounts owing by Owner pursuant to Owner's indemnification
regarding Hazardous Substances; and
4. all court costs and attorneys' fees reasonably incurred in enforcing or collecting
upon any of the foregoing exceptions.
Section 710 Owner's Remedies.
Subject to any applicable cure periods and the right to notice provided for .in this
Agreement, upon a default or breach of this Agreement by City, Owner may bring an action for
specific performance of this Agreement or any term or provision hereof, or, if prior to the
Construction Financing Event, may terminate this Agreement. Owner may not sue for monetary
damages and hereby fully and finally releases the City from any claims for monetary damages
arising directly or indirectly from City's breach of its obligations under this Agreement.
Section 711 Attorney's Fees
Except as otherwise expressly provided in this Agreement, in the event that any action,
suit or other proceeding is brought to enforce the obligations of any parry under this Agreement,
each parry will bear its own costs and expenses of suit, including attorneys' fees, expert witness
fees and all costs incurred in each and every such action, suit or other proceeding, including any
and all appeals or petitions therefrom.
ARTICLE 8. GENERAL.PROVISIONS
Section 801 Owner's Warranties
Owner represents and warrants (1)that it has access to professional advice and support to
the extent necessary to enable Owner to fully comply with the terms of this Agreement; (2)that it
is duly organized, validly existing and in good standing under the laws of the State of California;
(3) that it has the full power and authority to undertake the Project and to execute this
Agreement; (4) that the persons executing and delivering this Agreement are authorized to
execute and deliver such documents on behalf of Owner; (5) except as disclosed to the City in
writing, there are no actions or proceedings pending or, to the best of the Owner's knowledge,
threatened against the Owner before any court or administrative agency in any way connected
with the Property or the Project which could adversely affect the Owner's ability to perform the
activities contemplated hereunder; (6) neither this Agreement nor anything provided to be done
hereunder violates or will violate any contract, agreement or instrument to which the Owner is a
parry or which affects the Project or any part thereof; (7) the Owner is not in default in respect of
any of its obligations or liabilities pertaining to this Agreement, nor is there any state of facts or
circumstances or conditions or events which, after notice, lapse of time, or both,would constitute
or result in any such default under this Agreement; and (8) the Owner has not entered into any
agreements which will adversely affect the title to the Project or the Owner's right to develop and
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use the Project as provided in this Agreement, and the Owner will not enter into any such
agreements after the date hereof.
Section 802 Notices,Demands,and Communications Between the Parties
Formal notices, demands, and communications between City and Owner will be
sufficiently given if: (i) personally delivered; (ii) delivered by same day or overnight courier
(acknowledged by receipt showing date and time of delivery); or (iii) dispatched by registered or
certified mail, postage prepaid, return receipt requested, to the address for the City and Owner set
forth in Section 202 and Section 203, respectively. Notices personally delivered or delivered by
courier will be effective upon receipt or refusal to accept delivery. Mailed notices will be
effective on the earlier of (i) receipt of refusal to accept delivery, or (ii) noon on the second
business day following deposit in the United States mail.
Section 803 Conflicts of Interest
No member, official, or employee of City will have any personal interest in this
Agreement, nor participate in any decision relating to this Agreement, that is in violation of any
applicable law, regulation or ordinance.
Section 804 Titles and Captions
Titles and captions are for convenience only and will not be construed to limit or extend
the meaning of this Agreement.
Section 805 Gender
As used in this Agreement, masculine, feminine or neuter gender and the singular or
plural number will each be deemed to include the others wherever and whenever the context so
dictates.
Section 806 Modifications
Any amendment, alteration, change, or modification of or to this Agreement, in order to
become effective, will be made by written instrument or endorsement thereon and in each such
instance executed on behalf of each party hereto. The City Manager or designee is authorized to
approve revisions to this Agreement and the attachments hereto, subject to the approval of City's
legal counsel, to the extent that such revisions: (a) are required to conform this Agreement and
the attachments hereto to HOME Regulations; (b) do not materially adversely affect the
economic feasibility of the Project; (c) do not impose a material additional burden on the City;
and (d) do not substantially reduce any benefit to the City or the community.
Section 807 Merger of Prior Agreements and Understandings
This Agreement and all documents incorporated herein contain the entire understanding
among the parties hereto relating to the transactions contemplated herein and all prior or
contemporaneous agreements, understandings, representations, and statements, oral or written.
Section 808 No Third Parties Benefited
This Agreement will create no third-party beneficiary rights or any other rights in favor of
any persons, firms or corporations, except as may be expressly stated in this Agreement. This
Agreement is for the sole use and benefit of the parties hereto and is not for the use or benefit of
any other person or entity.
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Section 809 Assurances to Act in Good Faith
Owner and City agree to execute all documents and instruments and to take all action,
including timely depositing funds as required hereby, and will use their respective good faith
efforts to accomplish the acquisition and construction of the Property in accordance with the
provisions hereof.
Section 810 Warranty Against Payment of Consideration for Agreement; No Real
Estate Commissions
Owner warrants that it has not paid or given, and will not pay or give, any person any
money or other consideration for obtaining this Agreement that is in violation of any law.Neither
the City nor the Owner will be liable for any real estate commissions, brokerage fees or finder's
fees which may arise from this transaction. The Owner and the City each represent to the other
that it has employed no broker, agent, or finder in connection with this transaction. Owner and
City will each indemnify, defend, and hold harmless the other from any claims or damages for
payment of any real estate commissions or broker's fees or finder's fees arising out of the acts or
representations of the other with respect to any of the transactions contemplated by this
Agreement.
Section 811 Nonliability of City Officials and Employees
No member, official, or employee of the City will be personally liable to the Owner or
any successor in interest, in the event of any default or breach by the City or for any amount
which may become due to the Owner or to its successor, or on any obligations under the terms of
this Agreement.
Section 812 Interpretation
The terms of this Agreement will be construed in accordance with the meaning of the
language used and will not be construed for or against any party by reason of the authorship of
this Agreement or any other rule of construction which might otherwise apply.
Section 813 Counterparts
This Agreement may be executed in two or more counterparts, each of which will be
deemed an original and all of which together will constitute one and the same instrument.
Section 814 Severability
Wherever possible, each provision of this Agreement will be interpreted in such a manner
as to be effective and valid under applicable law. If, however, any provision of this Agreement
will be prohibited by or invalid under applicable law, such provision will be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Agreement.
Section 815 Extension of Times of Performance
A. Notwithstanding the foregoing, in addition to the specific provisions of this
Agreement, performance by any party hereunder will not be deemed to be in default during an
event of Force Majeure. An extension of time for an event of Force Majeure will be limited to
the period of such event, and will commence to run from the time of the commencement of the
cause, provided notice by the parry claiming such extension is sent to the other party within sixty
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(60) days of the commencement of the cause. In the event of such delay, the party delayed will
continue to exercise reasonable diligence to minimize the period of delay.
B. Times of performance under this Agreement may also be extended by mutual
written agreement by City and Owner. In addition, the City Manager will have the authority on
behalf of City to approve extensions of time not to exceed a cumulative total of one (1) year.
Section 816 Inspection of Books and Records
The City or its designee will have the right at all reasonable times to inspect the books,
records and/or other documents of the Owner pertaining to the Property and/or the Project as
pertinent to the purposes of this Agreement.
Section 817 Waivers
The waiver by City or Owner of any term, covenant, or condition herein contained will
not be a waiver of such term, covenant, or condition on any subsequent breach.
ARTICLE 9. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE
A. This Agreement and the attachments hereto, which are incorporated by this
reference, constitute the entire understanding and agreement of the parties.
B. This Agreement does not take effect until executed by the Owner and City. This
Agreement, when executed by the Owner and delivered to the City, must be authorized, executed
and delivered by the City within thirty (30) days after the date of signature by the Owner, or this
Agreement may be terminated by the Owner on written notice to the City.
C. The City Manager is hereby authorized and directed to take such other and further
actions, and sign such other and further agreements and documents on behalf of the City as may
be necessary or proper to effect the terms of this Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
"OWNER" "CITY"
ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH, a
HOUSING CORPORATION, municipal corporation of the state of California
a California nonprofit public benefit
corporation
By:
Mayor
By:
ra Mendez ATTEST:
Its: Executive Director
By:
City Clerk
APPROVED AS TO FORM:
COUN° ' By:
City Attorney
By:
KANE, BALLMER&BERKMAN
Special Counsel
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AFFORDABLE HOUSING AGREEMENT
Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
"OWNER" "CITY"
ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH, a
HOUSING CORPORATION, municipal corporation of the state of California
a California nonprofit public benefit
corporation
By:
Mayor
By:
Nora Mendez ATTEST:
Its: Executive Director
By:
City Clerk
APPROVED AS TO FORM:
COUNTERPARTBy:
City Attorney
KANE, BALLMER& BERKMAN
Special Counsel
OCCHC—313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
Signature Page
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
"OWNER" "CITY"
ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH, a
HOUSING CORPORATION, municipal corporation of the state of California
a California nonprofit public benefit
corporation
By:
yor
By:
Nora Mendez ATTEST:
Its: Executive Director
By: s
Pity Clerk
APPROVED AS TO FORM:
COUNTERPART
By:
City Atto ey
By:
KANE, BALLMER&BERKMAN
Special Counsel
OCCHC—313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
Signature Page
EXHIBIT 1
LEGAL DESCRIPTION
LOTS 13 AND 15 IN BLOCK 311 OF HUNTINGTON BEACH, IN THE CITY OF
HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 3 PAGE 36 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY.
APN: 024-027-20
EXHIBIT 2
SITE MAP
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EXHIBIT 3
SCOPE OF WORK
EXHIBIT 3
SCOPE OF WORK
Description Work Specification
1. Landscaping Removal Trees and Shrubs that are too close to structure
2. Fire Extinguisher Relocate Fire Extinguisher at front of building, that is
blocked by postal box
3. Exterior Walls, Soffits, Wood Remove all exterior, wood trim, wood fascia, soffit material
Fascia, Wood Trim and Siding that has wood rot or insect damage from the building.
Replace materials. While exterior is exposed, treat building
by a qualified termite control contactor.
4. Exterior Walls: Stucco Remove all stucco from two story building, including
windows
5. Exterior Scaffolding Provide scaffolding for removal of stucco &replacement
with siding
6. Exterior Siding Provide and install new exterior composite wood siding,
install OSB sheathing and provide water proof
underlayment, make minor structural repairs as needed,
remove and replace all water damaged structural framing,
including minimum R-13 installation in exterior sections of
the walls.
7. Roof Repairs Provide repairs after removal of stucco and installation of
new siding. Provide and install new roof metal &water
proofing as required.
8. Downspouts Repair or replace downspouts as necessary, extend
downspout at rear of building to divert water to lower level
of roof.
9. Windows Remove all existing windows and replace with low-E
windows. Make minor structural repairs as needed.
Provide all required flashing/weather proofing.
10. Stairs/Posts Stairs, remove rotted posts and stair treads and
replace/repair stairs, properly secure posts at rear stairs with
recast piers or footings.
11. Exterior Paint Paint all new composite wood exterior siding and trim.
12. Exterior Doors Remove &replace all exterior doors/security screens,
including lockset hardware, provide thresholds and weather
proofing. Paint with rust resistant paint.
13. Foundation Vent Screens & Provide required corrections to prevent water intrusion to
Crawlspace Access Covers subfloor area. Install properly sized vents, replace all
damaged vents and secure all vents and access opening to
keep out mice or rodents.
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT 3-SCOPE OF WORK
PAGE 1
14. Rear Driveway and Walk way Saw cut and remove existing asphalt garage approach, pour
new concrete approach. Pour new sidewalk to access
driveway.
15. Electrical Repairs Correct wiring installation in unit#2 kitchen and#3
bathroom exhaust fan, include a light switch tooperate fan.
16. Electrical Repairs Replace all faulty toggle switches and duplex outlets.
Replace face plates as needed. Replace lights as needed and
install new bathroom lights with exhaust fans.
17. Electrical Repairs Replace all hallway and exterior lighting with energy
efficient lighting.
18. Electrical Repairs Replace GFI in garage.
19. Electrical Repairs Remove and place a stand-off for electrical panel during
construction installation of siding and demo.
20. Bathrooms Cast Iron Waste Remove all cast iron plumbing waste piping system and
Plumbing and Finish Trim replace with ABS plastic piping. Provide and install new
tub shower unit, connect with pressure balance valve&
trim, include low flow shower heads and tip-toe waste and
overflow Install new 1.28 GPF hot water closets. Install
new low flow lavatory faucets. Replace water connectors.
21. Kitchens cast Iron Waste Remove all cast iron plumbing waste piping system and
Plumbing replace with ABS plastic piping. Connect to existing
kitchen sink with new ABS P-Trap.
22. Waste Plumbing/Vent System Extend plumbing vents at rear deck to minimum 18" above
roof.
23. Bathroom Floors Units#1 Remove existing bathroom floors, repair damaged
through 9 subfloors, install backer board and install ceramic tile.
24. Gas Furnace Verify and repair all units where thermostat is improperly
located to close to unit, impairing functionality. Conceal all
wiring.
25. Patch Interior Walls All drywall or patching for interior work necessary for ABS
re-pipe and all cosmetic defects caused rot or insect
damage. Match existing wall finishes and repaint.
26. Interior Walls all 9-units Interior painting of walls and trim, as needed. Replace and
repair peeling paint as needed.
27. Dum ster Provide dum ster for construction debris removal
28. Permit Allowance Provide permits for all required trades.
29. Abatement Contingency Funds to cover abatement issues regarding lead, asbestos or
mold.
OCCHC—313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT 3—SCOPE OF WORK
PAGE 2
EXHIBIT 4
PROJECT BUDGET
EXHIBIT 4
PROJECT BUDGET
Rehabilitation Costs Eligible for Payment with HOME Loan Proceeds:
Landscaping -Allowance $ 1,500
Replace Rear Driveway- Allowance 12,000
Exterior Rehabilitation - 9 Units @ $14,814/Unit 133,325
Interior Rehabilitation - 9 Units @ $8,621 /Unit 77,590
Permit Allowance - 9 Units @ $556/Unit 5,000
Dumpster-Allowance 5,000
Abatement Contingency- Allowance - 9 Units @ $2,778 /Unit 25,000
Contractor Overhead &Profit- 18% of Other Rehabilitation Costs 45,585
Total Rehabilitation Costs for 9 Units @$33,889[Unit $305,000
OCCHC-313 11'STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT 4-PROJECT BUDGET
EXHIBIT 5
SCHEDULE OF PERFORMANCE
[Immediately Behind This Page]
EXHIBIT 5
SCHEDULE OF PERFORMANCE
ACTION ITEM TIME OF REFERENCE
PERFORMANCE
1. Submittal — Evidence of Insurance. Owner At least 30 days prior to Section 510 of
shall submit to the City for approval the closing. the Agreement
evidence of insurance.
2. Submittal - Final Construction Drawings At least 5 days prior to Section 502 of
and Specifications. If necessary for City closing. the Agreement
permitting of the Project, Owner shall
prepare and submit to the City for approval
the Final Construction Drawings and
Specifications.
3. Submittal - Management Plan. Owner shall At least 5 days prior to Section 602 of
submit to the City for approval the proposed closing. the Agreement
Management Plan. and Section 4.7
of HOME
Regulatory
Agreement
4. Submittal - Annual Project Budget. Owner At least 5 days prior to Section 602 of
shall submit to the City for approval the closing. the Agreement
proposed Annual Project Budget for the first and Section
year of operation. 4.7(a)(5) of
HOME
Regulatory
Agreement
5. Submittal — Maintenance Program. Owner At least 5 days prior to Section 603 of
shall submit to the City for approval the closing. the Agreement
proposed Maintenance Program for the and Section 4.2
Project. of HOME
Regulatory
Agreement
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 5-SCHEDULE OF PERFORMANCE
PAGE 1
6. Closing. All conditions precedent to the Not later than December Section 405 of
Construction Financing Event shall have 15, 2014. the Agreement
been satisfied.
7. Commencement of Construction. The Not later than fifteen (15) Section 505 of
Owner shall commence rehabilitation of the days after the the Agreement
improvements on the Site. Construction Financing
Event.
8. Completion of Construction. The Owner Not later than 8 months Section 505 of
shall achieve Completion of rehabilitation of following commencement the Agreement
the improvements on the Site in accordance of construction.
with the Scope of Work and approved plans.
9. Submission - Tenant Lease. The Owner At least 30 days prior to Section 2.11 of
shall prepare and submit to the City for closing. HOME
approval the proposed tenant lease in Regulatory
conformance with the HOME Regulatory Agreement
Agreement.
10. Submission — Annual Reports. The Owner Within one hundred Sections 4.5 &
submits annual financial statements and rent twenty (120) days after 4.6 of HOME
records/tenant eligibility certifications to the the end of each calendar Regulatory
City. year. Agreement
NOTES:
It is understood that this Schedule of Performance is subject to all of the terms and conditions of the
text of the Agreement. The summary of the items in this Schedule of Performance is not intended to
supersede or modify the more complete description in the text; in the event of any conflict or
inconsistency between this Schedule of Performance and the text of the Agreement, the text shall
govern.
The time periods set forth in this Schedule of Performance may be altered or amended only by
written agreement signed by the Owner and the City. The City Manager shall have the authority, in
his/her sole discretion to approve extensions of time.
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 5-SCHEDULE OF PERFORMANCE
PAGE 2
EXHIBIT 6
HOME PROMISSORY NOTE
[Immediately Behind This Page]
RESIDUAL RECEIPTS PROMISSORY NOTE
SECURED BY DEED OF TRUST
TO THE CITY OF HUNTINGTON BEACH, CALIFORNIA
(HOME PROGRAM)
DO NOT DESTROY THIS NOTE: When paid,this Note,with the Deed of Trust securing same(if
the Restricted Period has expired), must be surrendered to Trustee for cancellation before
reconveyance or partial reconveyance will be made.
3%Interest Huntington Beach, California
$305,000 %�T- /.� , 2014
FOR VALUE RECEIVED, ORANGE COUNTY COMMUNITY HOUSING
CORPORATION,a California nonprofit public benefit corporation(`Borrower"),hereby promises
to pay to THE CITY OF HUNTINGTON BEACH("City"),a municipal corporation of the State of
California, or order, a principal amount of Three Hundred Five Thousand and No/100 Dollars
($305,000.00), or so much thereof as may be advanced by the City to the Borrower as the HOME
Loan pursuant to the Affordable Housing Agreement dated as of September 15,2014(the"Housing
Agreement") between Borrower ("Owner" therein) and the City, incorporated herein by this
reference.The Housing Agreement is a public record on file in the offices of the City.The Borrower
will pay interest at the rate, in the amount and at the time hereinafter provided.
1. Definitions. Any capitalized term not otherwise defined herein will have the meaning
ascribed to such term in the Housing Agreement.
"HOME Loan Documents"means the Housing Agreement,this HOME Note,the HOME
Deed of Trust,the HOME Regulatory Agreement,the Environmental Indemnity,the Assignment of
Rents and Leases, and the Assignment of Agreements.
"Net Proceeds" means the amount, if any, by which a refinancing exceeds the amount
needed to repay a Senior Loan, in full, including.principal and interest, any early redemption or
prepayment penalty, and customary and reasonable fees and costs of the transaction.
"Residual Receipts"means,in each calendar year,the amount by which Gross Revenue(as
defined below)exceeds Annual Operating Expenses(as defined below),as determined by an audit to
be completed not later than ninety(90) days after the end of each calendar year by an independent
certified public accountant first approved in writing by the City,using generally accepted accounting
principles and based on the accrual method (the "Audit").
OCCHC-313 11 TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.6-HOME PROMISSORY NOTE
PAGE 1
(i) "Gross Revenue," with respect to each calendar year, means all revenue,
income,receipts,and other consideration actually received from operation or leasing of the Project.
"Gross Revenue" will include, but not be limited to: all rents, fees and charges paid by tenants,
Section 8 payments or other rental subsidy payments received for the dwelling units, deposits
forfeited by tenants,all cancellation fees,price index adjustments and any other rental adjustments to
leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of
business interruption or similar insurance; the proceeds of casualty insurance to the extent not
utilized to repair or rebuild the Project; and condemnation awards for a taking of part or all of the
Project for a temporary period."Gross Revenue"will also include the fair market value of any goods
or services provided in consideration for the leasing or other use of any portion of the Project,except
that the value of services provided by on-site manager(s)will not be treated as"Gross Revenue"if no
more than one dwelling unit is leased to or otherwise used by on-site manager(s). "Gross Revenue"
will not include tenants' security deposits,proceeds from the HOME Loan or other borrowed funds,
Owner Equity, including capital contributions or similar advances, or interest that is earned on and
allocated to reserve accounts.
(ii) "Annual Operating Expenses,"with respect to each calendar year means the
costs reasonably and actually incurred for operation and maintenance of the Project, which may
include, without limitation, the following, to the extent that they are consistent with an annual
independent audit performed by a certified public accountant using generally accepted accounting
principles:property and other taxes and assessments imposed on the Project;premiums for property
damage and liability insurance; utility services not paid for directly or reimbursed by tenants,
including but not limited to water,sewer,trash collection,gas and electricity;maintenance and repair
including but not limited to pest control, landscaping and grounds maintenance, painting and
decorating, cleaning, common systems repairs, general repairs, janitorial, supplies, and similar
customary utility services; any license or certificate of occupancy fees required for operation of the
Project; general administrative expenses including but not limited to advertising and marketing,
security services and systems, professional fees for legal, audit, accounting and tax returns, and
similar customary administrative expenses; property management fees, expenses and costs,not to
exceed $55 per unit per month in the first year with annual increases not to exceed three percent
(3%)thereafter, and pursuant to a management contract approved by the City;cash deposited into a
replacement reserve in the amount of$804 per unit per year, subject to annual increases not to
exceed three percent (3%); cash deposited into an operating reserve in such reasonable amounts as
are required by the City from time to time;and,fixed debt service payments(excluding debt service
contingent upon the availability of residual receipts or surplus cash of the Project) on loans
associated with the Project and approved by the City."Annual Operating Expenses"will not include
the following: depreciation, amortization, depletion or other non-cash expenses or any amount
expended from a reserve account. Annual Operating Expenses will be subject to the reasonable
approval of the City.
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.6-HOME PROMISSORY NOTE
PAGE 2
2. This Note evidences the obligation of the Borrower to the City for the repayment of
the HOME Loan.Borrower may prepay the principal balance of this Note at any time without penalty.
However,even if Borrower prepays the entire balance of this Note including all accrued interest,costs
and penalties,the covenants,conditions and restrictions imposed on the Site by the HOME Regulatory
Agreement will remain in full force and effect for the full 55=year term as specified therein.
3. This Note is payable at the principal office of City, 2000 Main Street, Huntington
Beach, California 92648, or at such other place as the holder hereof may inform the Borrower in
writing, in lawful money of the United States.
4. This Note is secured by the HOME Deed of Trust.
5. This Note will accrue simple interest at the rate of three percent(3%)per annum on
the principal amount outstanding, from the date of disbursement. Interest under this Note will be
computed on the basis of a year of 365 days and the actual number of days elapsed. However,if any
event occurs giving the City the right to accelerate repayment of this Note,the entire unpaid principal
balance owing hereunder will,as of the date of such default,commence to accrue interest at a rate equal
to two percentage points above the reference rate published by Bank of America N.A.,or the maximum
non-usurious interest rate permitted by law,whichever is less(the"Default Rate").Further,in the event
Borrower fails to reimburse the City for any amount advanced by or for the account of the City which
is due hereunder or under the HOME Deed of Trust within ten(10)days after written notice of such
advance is made by the City to Borrower, then such unreimbursed amount will thereafter bear
interest at the Default Rate until paid
6. If the Borrower is in compliance with the terms of the Home Loan Documents on the
earlier to occur of. (a) August 1, 2070; or (b) the fifty-fifth (55t') anniversary of the date of
Completion of the Project, (which will be referred to herein as the"Maturity Date"),the principal
and accrued interest shall be deemed paid by the Owner's compliance and no further funds shall be
due from the Borrower under this Note. Notwithstanding the foregoing, all principal and accrued
interest on the Loan shall be due and payable on the occurrence of either of the following events:
(a) the date the Property or the improvements thereon or any portion thereof or
interest therein is sold,transferred,assigned or refinanced,without the prior written approval of the
City, except as permitted by the provisions of the Housing Agreement; or
(b) the date on which there is a Default by the Borrower under the terms of this
Note, the Housing Agreement, the HOME Deed of Trust, the HOME Regulatory Agreement, the
Environmental Indemnity,or any deed of trust or other instrument securing a Senior Loan,which is
not cured or waived within the respective time period provided herein and therein.
OCCHC-313 11"'STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.6-HOME PROMISSORY NOTE
PAGE 3
0
7. Prior to the Maturity Date, Borrower will be obligated to repay the HOME Loan as
follows:
(a) Borrower must utilize twenty-five percent(25%) of Residual Receipts with
respect to each calendar year to repay the HOME Loan. Payments due hereunder must be made no
later than one hundred twenty(120)days following the end of the applicable calendar year.
(b) In the event Borrower refinances a Senior Loan at any time prior to the
Maturity Date,twenty-five percent(25%)of the Net Proceeds must be allocated and paid to the City
to reduce the HOME Loan.
(c) All payments to the City will be applied first to the payment of all expenses,
charges, costs and fees incurred by or payable to City by Borrower pursuant to the terms of the
HOME Loan Documents(in such order and manner as City,in its sole discretion,may elect),then to
the payment of all interest accrued to the date of such payment, and then to reduce the principal
amount owed.All prepayment of principal on this Note will be applied to the most remote principal
installment or installments until paid. Notwithstanding anything to the contrary contained herein,
after the occurrence and during the continuation of an uncured default under the HOME Deed of
Trust,all amounts received by the City from any party will be applied in such order as the City,in its
sole discretion, may elect.
8. Any breach by Borrower of the provisions of Section 204 (entitled "Prohibition
Against Transfers;Right of First Refusal")of the Housing Agreement,unless otherwise permitted by
the terms thereof, will constitute a default under this Note. The cure periods under the Housing
Agreement and this Note in connection with such a default will run concurrently.
9. Borrower waives presentment for payment,demand,protest,and notices of dishonor
and of protest;the benefits of all waivable exemptions; and all defenses and pleas on the ground of
any extension or extensions of the time of payment or of any due date under this Note,in whole or in
part,whether before or after maturity and with or without notice. Borrower hereby agrees to pay all
costs and expenses, including reasonable attorney's fees, which may be incurred by the holder
hereof,in the enforcement of this Note,the HOME Deed of Trust or any term or provision of either.
10. Upon the failure of Borrower to perform or observe any term or provision of this
Note,or upon the occurrence of any event of default after the expiration of any applicable notice and
cure periods under the terms of any of the other HOME Loan Documents,the holder may exercise its
rights or remedies hereunder or thereunder.All such rights and remedies will be cumulative. Upon
the event of a default that is not cured or waived within the time provided therefore,the whole of the
unpaid principal and interest owing on this Note will, at the option of City and without notice,
become immediately due and payable. This option may be exercised at any time after any such event
OCCHC-313 11'H STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.6-HOME PROMISSORY NOTE
PAGE 4
and the acceptance of one or more payments from any person thereafter will not constitute a waiver
of City's option. City's failure to exercise said option in connection with any particular event or
series of events will not be construed as a waiver of the provisions hereof as regards that event or any
subsequent event.
11. (a) Subject to the extensions of time set forth in Section 12, and subject to the
further provisions of this Section 11, failure or delay by Borrower to perform any material term or
provision of the HOME Loan Documents constitutes a default under this Note.
(b) City will give written notice of default to Borrower, specifying the default
complained of by the City. Delay in giving such notice will not constitute a waiver of any default
nor will it change the time of default.
(c) Any failures or delays by City in asserting any of its rights and remedies as to
any default will not operate as a waiver of any default or of any such rights or remedies. Delays by
City in asserting any of its rights and remedies will not deprive 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.
(d) If a monetary event of default occurs, prior to exercising any remedies
hereunder,the City will give the Borrower written notice of such default. The Borrower will have a
period of fifteen(15)days after such notice is given within which to cure the default prior to exercise
of remedies by the City.
(e) If a non-monetary event of default occurs, prior to exercising any remedies
hereunder, the injured party will give the parry in default notice of such default. If the default is
reasonably capable of being cured within thirty(30)days,the party in default will have such period
to effect a cure prior to exercise of remedies by the injured parry. If the default is such that it is not
reasonably capable of being cured within thirty (30) days, and the party in default (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 the party in default will have such additional time as is reasonably
necessary to cure the default prior to exercise of any remedies by the injured party. In no event will
the injured party 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 ninety(90)
days after the first notice of default is given.
(f) Any notice of default will be deemed given only if either (i) dispatched by
first class mail, registered or certified, postage prepaid, return receipt requested, to the address
specified for the Borrower in Section 16 of this Note,or(ii)by electronic facsimile transmission to
the facsimile number specified for the Borrower in Section 16 of this Note,followed by delivery by
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.6-HOME PROMISSORY NOTE
PAGE 5
the method described in clause(i), or(iii)by personal delivery(including by means of professional
messenger or courier service such as United Parcel Service or Federal Express) to the address
specified for the Borrower in Section 16 of this Note. Receipt will be deemed to have occurred on
the earlier of(i)the date of successfully completed electronic facsimile transmission or(ii)the date
marked on a written postal service or messenger or courier service receipt as the date of delivery or
refusal of delivery(or attempted delivery if undeliverable).If either party gives notice of a change of
address in the manner specified in this paragraph, all notices, demands and communications
originated after receipt of the change of address (or the effective date specified in the notice of
change of address, if later)will be transmitted, delivered or sent to the new address.
12. Notwithstanding specific provisions of this Note, non-monetary performance
hereunder will not be deemed to be in default where delays are due to causes beyond the control and
without the fault of the party claiming an extension of time to perform(a"Force Majeure Delay"),
provided that they actually delay and interfere with the timely performance of the matter to which
they would apply and despite the exercise of diligence and good business practices are or would be
beyond the reasonable control of the party claiming such interference, including:war; insurrection;
strikes;lock-outs;riots;floods;earthquakes;fires;casualties;acts of God;acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority; litigation including litigation challenging the validity of this transaction or
any element thereof,unusually severe weather;inability to secure necessary labor,materials or tools;
delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of
any Governmental agency(except acts or failure to act of the City will not excuse performance by
the City); the imposition of any applicable moratorium by a Governmental Agency; or any other
causes which despite the exercise of diligence and good business practices are or would be beyond
the reasonable control of the party claiming such delay and interference. Notwithstanding the
foregoing, none of the foregoing events will constitute a Force Majeure Delay unless and until the
party claiming such delay and interference delivers to the other party written notice describing the
event, its cause,when and how such party obtained knowledge,the date the event commenced, and
the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay will deliver such
written notice within ten(10)_business days after it obtains actual knowledge of the event.
13. If the rights created by this Note will be held by a court of competent jurisdiction to
be invalid or unenforceable as to any part of the obligations described herein, the remaining
obligations must be completely performed and paid.
14. [Intentionally Omitted.]
15. (a) The obligation to repay the HOME Loan is a nonrecourse obligation of the
Borrower. Except as provided otherwise in this Note, Borrower will have no personal liability for
payment of the HOME Loan. The sole recourse of the City will be the exercise of its rights against
OCCHC-313 11'H STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.6-HOME PROMISSORY NOTE
PAGE 6
the Property and the improvements thereon and any related security for the HOME Loan.Provided,
however,that the foregoing will not(a)constitute a waiver of any obligation evidenced by this Note;
(b) prevent or in any way hinder the City from exercising, or constitute a defense, an affirmative
defense,a counterclaim,or other basis for relief in respect of the exercise of,any remedy prescribed
by law or in equity in case of default, other than repayment of the HOME Loan; or (c) relieve
Borrower of any of its obligations under any indemnity delivered by Borrower to the City. The
foregoing provisions of this paragraph are limited by the provision that in the event of the occurrence
of a default, Borrower and its successors and assigns will have personal liability hereunder for any
deficiency judgment, but only if and to the extent Borrower, its principals, shareholders, or its
successors and assigns,received rentals,other revenues,or other payments or proceeds in respect of
the mortgaged Property after the occurrence of such default,which rentals,other revenues, or other
payments or proceeds have not been used for the payment of ordinary and reasonable operating
expenses of the mortgaged Property,ordinary and reasonable capital improvements to the mortgaged
Property,debt service,real estate taxes in respect of the mortgaged Property and basic management
fees,but not incentive fees, payable to an entity or person unaffiliated with Borrower in connection
with the operation of the mortgaged Property,which are then due and payable.
(b) Notwithstanding the foregoing, the City may obtain a judgment or order
(including, without limitation, an injunction) requiring any Person to perform (or refrain from)
specified acts other than repayment ofthe HOME Loan;may proceed against any Person whatsoever
with respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement
agreements or similar rights to payment or performance; and may recover directly from any Person:
(i) any damages,costs and expenses incurred by City as a result of fraud
or any criminal act or acts of Borrower or any member, shareholder, officer, director, agent or
employee of Borrower;
(ii) any damages, costs and expenses incurred by City as a result of any
misappropriation of funds provided for the Project, rents and revenues from the operation of the
Project, or proceeds of insurance policies or condemnation proceeds by Borrower or any member,
partner, shareholder, officer, director or employee of Borrower;
(iii) any and all amounts owing by Borrower pursuant to Borrower's
indemnification regarding Hazardous Substances; and
(iv) all court costs and attorneys' fees reasonably incurred in enforcing or
collecting upon any of the foregoing exceptions.
16. The address of Borrower for purposes of receiving notices pursuant to this Note is as
follows:
OCCHC-313 1 IT"STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 6-HOME PROMISSORY NOTE
PAGE 7
Orange County Community Housing Corporation
2024 N.Broadway, 3`d Floor
Santa Ana, CA 92706-2623
Facsimile number: 714-558-0423
Attention: Executive Director
17. In addition to the other terms of this Note, the Borrower hereby agrees and
acknowledges that,notwithstanding any internal accounting procedures or provision pertaining to the
use of receipts,payments,reserves and distributions contained in its governing documents,the terms
of this Note and the Housing Agreement will control as to the use of the City funds provided under
the Housing Agreement and all operating income from the Project.
18. Neither this Note nor any term hereof may be waived,amended,discharged,modified,
changed or terminated orally; nor will any waiver of any provision hereof be effective except by an
instrument in writing signed by City and Borrower.
19. Notwithstanding any provision in this Note, the HOME Deed of Trust or other
document securing same,the total liability for payment in the nature of interest will not exceed the limit
now imposed by applicable laws of the State of California.
20. This Note has been executed and delivered by Borrower in the State of California and is
to be governed and construed in accordance with the internal laws thereof.
21. 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, invalid or
unenforceable for any reason whatsoever,such illegality,invalidity or unenforceability will not affect
the balance of the terms and provisions hereof,which terms and provisions will remain binding and
enforceable, and this Note will be construed as if such illegal, invalid or unenforceable term or
provision had not been contained herein.
22. Time is of the essence in the performance of each provision hereof.
[Signatures on Following Page.]
OCCHC-313 11 TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 6-HOME PROMISSORY NOTE
PAGE 8
IN WITNESS WHEREOF Borrower has executed this Note as of the day and year set forth
above.
"BORROWER"
ORANGE COUNTY COMMUNITY HOUSING
CORPORATION,
a California nonprofit public benefit corporation
By:
a Mendez
Its: Executive Director
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 6-HOME PROMISSORY NOTE
PAGE 9
EXHIBIT 7
HOME DEED OF TRUST
[Immediately Behind This Page]
This Document was electronically recorded by
City of Huntington Beach
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk-Recorder
111111111111111111111111111111111111111111111111111111111111111111111111111NO FEE
FREE RECORDING REQUESTED BY 2014000497044 03:06pm 11/18/14
AND WHEN RECORDED MAIL TO: 105 409 D11 S02 U08 A36 19
0.00 0.00 0.00 0.00 54.00 0.00 0.00 0.00
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code §27383)
APN: 024-027-20
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
BY ORANGE COUNTY COMMUNITY HOUSING CORPORATION
FOR THE BENEFIT OF
THE CITY OF HUNTINGTON BEACH
[HOME PROGRAM]
This Deed of Trust,Security Agreement and Fixture Filing(With Assignment of Rents)is made this
[Lb��ay of 2014] by ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit public benefit corporation (hereinafter referred to as
"Trustor")(whose address is 2024 N.Broadway,3rd Floor, Santa Ana, CA 92706-2623,Attention:
Executive Director),to Commonwealth Title Company,(hereinafter called"Trustee"),for the benefit
of THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California
(hereinafter called`Beneficiary"),whose address is 2000 Main Street,Huntington Beach,California
92648.
Witnesseth: That Trustor IRREVOCABLY GRANTS,TRANSFERS AND ASSIGNS to Trustee,
its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF
ENTRY AND POSSESSION all present and future right, title and interest of Trustor in and to the
following property.(the"Trust Estate"):
(1) All of Trustor's rights,title and interest in and to that certain real property in the City
of Huntington Beach, County of Orange, State of California more particularly described in Exhibit
OCCHC—313 1 1TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.7—HOME DEED OF TRUST
PAGE 1
"A" attached hereto and by this reference made a part hereof(hereafter referred to as the"Subject
Property");
(2) All buildings,structures and other improvements now or.in the future located or to be
constructed on the Subject Property(the"Improvements");
(3) all tenements, hereditaments, appurtenances, privileges, franchises and other rights
and interests now or in the future benefiting or otherwise relating to the Subject Property or the
Improvements,including easements,rights-of-way and development rights(the"Appurtenances").
(The Appurtenances,together with the Subject Property and the Improvements,are hereafter referred
to as the"Real Property");
(4) subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents,
issues, income, revenues, royalties and profits now or in the future payable with respect to or
otherwise derived from the Trust Estate or the ownership, use, management, operation, leasing or
occupancy of the Trust Estate, including those past due and unpaid(the"Rents");
(5) all inventory, equipment, fixtures and other goods (as those terms are defined in
Division 9 of the California Uniform Commercial Code(the"UCC"),and whether existing now or in
the future)now or in the future located at,upon or about,or affixed or attached to or installed in,the
Real Property,or used or to be used in connection with or otherwise relating to the Real Property or
the ownership, use, development, construction, maintenance, management, operation, marketing,
leasing or occupancy of the Real Property, including furniture, furnishings,machinery,appliances,
building materials and supplies,generators,boilers,furnaces,water tanks,heating ventilating and air
conditioning equipment and all other types of tangible personal property of any kind or nature,and
all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and
substitutions of or to any of such property, but not including personal property that is donated to
Trustor(the"Goods,"and together with the Real Property,the"Property"); and
(6) all accounts,general intangibles,chattel paper,deposit accounts,money,instruments
and documents(as those terms are defined in the UCC)and all other agreements,obligations,rights
and written material(in each case whether existing now or in the future)now or in the future relating
to or otherwise arising in connection with or derived from the Property or any other part of the Trust
Estate or the ownership, use, development, construction, maintenance, management, operation,
marketing,leasing,occupancy,sale or financing of the property or any other part of the Trust Estate,
including (to the extent applicable to the Property or any other portion of the Trust Estate) (i)
permits,approvals and other governmental authorizations,(ii)improvement plans and specifications
and architectural drawings, (iii) agreements with contractors, subcontractors, suppliers, project
managers,supervisors,designers,architects,engineers,sales agents,leasing agents,consultants and
OCCHC-313 11"H STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 7-HOME DEED OF TRUST
PAGE 2
property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties,
guaranties, indemnities and insurance policies, together with insurance payments and unearned
insurance premiums, (vi) claims, demands, awards, settlements, and other payments arising or
resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage
to,trespass on or taking,condemnation(or conveyance in lieu of condemnation)or public use of any
of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale
agreements and purchase options, together with advance payments, security deposits and other
amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits,
bonds,deferred payments,refunds,rebates,discounts,cost savings,escrow proceeds,sale proceeds
and other rights to the payment of money,trade names,trademarks,goodwill and all other types on
intangible personal property of any kind or nature, and (ix) all supplements, modifications,
amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such
property(the"Intangibles").
Trustor further grants to Trustee and Beneficiary,pursuant to the UCC, a security interest in
all present and future right,title and interest of Trustor in and to all Goods and Intangibles and all of
the Trust Estate described above in which a security interest may be created under the UCC
(collectively, the "Personal Property"). This Deed of Trust constitutes a security agreement under
the UCC,conveying a security interest in the Personal Property to Trustee and Beneficiary. Trustee
and Beneficiary will have, in addition to all rights and remedies provided herein, all the rights and
remedies of a"secured party"under the UCC and other applicable California law. Trustor covenants
and agrees that this Deed of Trust constitutes a fixture filing under Sections 9502(c)and 9604 of the
UCC.
FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect,
all of the following:
(1) Due,prompt and complete observance,performance and discharge of each and every
condition, obligation, covenant and agreement contained herein or contained in the following:
(a) a promissory note in the original principal amount of$305,000.00,executed
by Trustor(`Borrower"therein) of even date herewith (the"HOME Note");
(b) the Affordable Housing Agreement dated as of September 15,2014, by and
between Trustor ("Owner"therein) and Beneficiary("City"therein) (the"Housing
Agreement"); and
(c) the Regulatory Agreement and Declaration of Covenants and Restrictions
dated on or about the date hereof, by and between Trustor ("Owner" therein) and
OCCHC-313 11'"STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 7-HOME DEED OF TRUST
PAGE 3
Beneficiary ("City" therein) and recorded concurrently herewith in the Official
Records of the County Recorder of Orange County, California("HOME Regulatory
Agreement").
(2) Payment of indebtedness of the Trustor to the Beneficiary in the principal sum of
Three Hundred Five Thousand and No/100's Dollars($305,000.00),or so much thereof as may be
advanced by Beneficiary for the benefit of Trustor, evidenced by the HOME Note, with interest,
according to the terms of the HOME Note.
(3) Payment and performance of all future advances and other obligations that the then
record owner of all or part of the Property may agree to pay and/or perform (whether as principal,
surety or guarantor) for the benefit of Beneficiary, when such future advance or obligation is
evidenced by a writing which recites that it is secured by this Deed of Trust.
The Housing Agreement, including all Attachments thereto, and the documents and instruments
executed by Trustor in connection with the Project,including the HOME Regulatory Agreement,the
HOME Note,the Assignment of Rents, and the Assignment of Agreements, all as described in the
Housing Agreement(collectively referred to as the"Secured Obligations")and all of their terms are
incorporated herein by reference and this conveyance will secure any and all extensions,
amendments,modifications or renewals thereof however evidenced.Any capitalized term that is not
otherwise defined in this Deed of Trust will have the meaning ascribed to such term in the Housing
Agreement.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
1. That Trustor will pay the HOME Note at the time and in the manner provided therein,
and perform the obligations of the Trustor as set forth in the Secured Obligations at the time and in
the manner provided therein;
2. That Trustor will not permit or suffer the use of any of the Property for any purpose
other,than the uses permitted by the Secured Obligations;
3. That the Secured Obligations are incorporated in and made a part of this Deed of
Trust. Upon default of a Secured Obligation,and after the giving of notice and the expiration of any
applicable cure period, the Beneficiary, at its option, may declare the whole of the indebtedness
secured hereby to be due and payable;
OCCHC-313 11 TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 7-HOME DEED OF TRUST
PAGE 4
4. That,subject to the prior rights,if any,of a lender whose lien is senior to this Deed of
Trust ("Senior Lender"), all rents, profits and income from the Trust Estate are assigned to the
Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to
Trustor so long as no default exists hereunder after the giving of notice and the expiration of any
applicable cure period, to collect such rents, profits and income for use in accordance with the
provisions of the Secured Obligations;
5. That upon default hereunder or under the aforementioned agreements, and after the
giving of notice and the expiration of any applicable cure period,Beneficiary will be entitled to the
appointment of a receiver by any court having jurisdiction, without notice, to take possession and
protect the Trust Estate and operate same and collect the rents, profits and income therefrom;
6. That Trustor will keep the Improvements insured against loss by fire and such other
hazards,casualties,and contingencies as may reasonably be required in writing from time to time by
the Beneficiary, and all such insurance will be evidenced by standard fire and extended coverage
insurance policy or policies. In no event will the amounts of coverage be less than 100 percent of the
replacement value of the Property. Such policies will be endorsed with standard mortgage clause
with loss payable to the Beneficiary and certificates thereof together with copies of original policies
will be deposited with the Beneficiary;
7. To pay,at least 10 days before delinquency,any taxes and assessments affecting the
Property;to pay,when due,all encumbrances,charges and liens,with interest,on the Property or any
part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of
this Trust. Notwithstanding anything to the contrary contained in this Deed of Trust,Trustor will not
be required to pay and discharge any such tax, assessment, charge or levy so long as Trustor is
contesting the legality thereof in good faith and by appropriate proceedings,and Trustor has adequate
funds to pay any liabilities contested pursuant to this Section 7;
8. To keep the Property in good condition and repair, subject to ordinary wear and tear,
casualty and condemnation, not to remove or demolish any buildings thereon without the prior
written consent of Beneficiary,not to be unreasonably withheld,conditioned or delayed;to complete
or restore promptly and in good and workmanlike manner any building which may be constructed,
damaged, or destroyed thereon and to pay when due all claims for labor performed and materials
furnished therefor; to comply with all laws affecting the Property or requiring any alterations or
improvements to be made thereon(subject to Trustor's right to contest the validity or applicability of
laws or regulations);not to commit or permit waste thereof;not to commit, suffer or permit any act
upon the Property in violation of law and/or covenants, conditions and/or restrictions affecting the
Property;not to permit or suffer any material alteration of or addition to the Improvements without
the consent of the Beneficiary;
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 7-HOME DEED OF TRUST
PAGE 5
9. To appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee,and to pay all costs and expenses, including
cost of evidence of title and reasonable attorney's fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear;
10. Should Trustor fail to make any payment or do any act as herein provided, then
Beneficiary or Trustee,but without obligation so to do and without notice to or demand upon Trustor
and without releasing Trustor from any obligation hereof,may make or do the same in such manner
and to such extent as either may deem necessary to protect the security hereof. Following default,
after the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee
being authorized to enter upon said property for such purposes, may commence, appear in and/or
defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee;may pay,purchase,contest,or compromise any encumbrance,charge,or lien
which in the judgment of either appears to be prior or superior hereto; and, in exercising any such
powers, may pay necessary expenses, employ counsel, and pay reasonable attorney fees.
Notwithstanding the foregoing,in the event of default under this Deed of Trust,the Beneficiary may
also require Trustor to maintain and submit additional records. Beneficiary will specify in writing
the particular records that must be maintained and the information or reports that must be submitted;
11. Beneficiary will have the right to pay fire and other property insurance premiums
when due should Trustor fail to make any required premium payments. All such payments made by
the Beneficiary will be added to the principal sum secured hereby;
12. To pay immediately and without demand all sums so expended by Beneficiary or
Trustee, under permission given under this Deed of Trust,with interest from date of expenditure at
the rate specified in the HOME Note;
13. That the funds to be advanced hereunder are to be used in accordance with the
Secured Obligations and upon the failure of Trustor to keep and perform all the covenants,
conditions,and agreements of said agreements,the principal sum and all arrears of interest,and other
charges provided for in the HOME Note will at the option of the Beneficiary of this Deed of Trust
become due and payable, anything contained herein to the contrary notwithstanding;
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be
created against the property subject to this Deed of Trust any lien or liens except as permitted by the
Secured Obligations or otherwise approved by Beneficiary,and further that it will keep and maintain
the Property free from the claims of all persons supplying labor or materials which will enter into the
construction of any and all buildings now being erected or to be erected on said premises.
OCCHC-313 11 TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.7-HOME DEED OF TRUST
PAGE 6
Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor will not be
obligated to pay any claims for labor,materials or services which Trustor in good faith disputes and
is diligently contesting,provided that Trustor will,at Beneficiary's written request,within thirty(30)
days after the filing of any claim or lien (but in any event, and without any requirement that
Beneficiary must first provide a written request, prior to foreclosure) record in the Office of the
Recorder of Orange County,a surety bond in an amount one-and-one-half(1 1/2)times the amount of
such claim item to protect against a claim of lien, or provide such other security reasonably
satisfactory to Beneficiary;
15. That any and all improvements made or about to be made upon the premises covered
by the Deed of Trust, and all plans and specifications, comply in all material respects with all
applicable municipal ordinances and regulations and all other applicable regulations made or
promulgated,now or hereafter,by lawful authority,and that the same will upon completion comply
with all such municipal ordinances and regulations and with the rules of the applicable fire rating or
inspection organization, bureau, association or office; and
16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing
representative of the Beneficiary a reasonable charge for providing a statement regarding the
obligation secured by this Deed of Trust as provided by Section 2954,Article 2,Chapter 2 Title 14,
Division 3, of the California Civil Code.
IT IS MUTUALLY AGREED THAT:
17. Should the Property or any part thereof be taken or damaged by reason of any public
improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other
manner, subject to the rights of any senior lender that has been approved by Beneficiary,Beneficiary
will be entitled to all compensation,awards,and other payments or relief therefor which are not used
to reconstruct,restore or otherwise improve the Property or part thereof that was taken or damaged,
and will be entitled at its option to commence,appear in and prosecute in its own name,any action or
proceedings, or to make any compromise or settlement, in connection with such taking or damage.
Subject to the rights of any senior lender that has been approved by Beneficiary, all such
compensation, awards, damages, rights of action and proceeds which are not used to reconstruct,
restore or otherwise improve the Property or part thereof that was taken or damaged, including the
proceeds of any policies of fire and other insurance affecting the Property, are hereby assigned to
Beneficiary. After deducting therefrom all its expenses, including reasonable attorney's fees, the
balance of the proceeds which are not used to reconstruct,restore or otherwise improve the Property
or part thereof that was taken or damaged,will be applied to the amount due under the HOME Note
secured hereby. No amount applied to the reduction of the principal will relieve the Trustor from
OCCHC-313 11T1 STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.7-HOME DEED OF TRUST
PAGE 7
making payments as required by the HOME Note. If the HOME Note has been repaid in full, the
remainder of the balance will revert to the Trustor;
18. Upon default by Trustor in making any payments provided for in the HOME Note
secured hereby or in this Deed of Trust, or in performing any obligation set forth in any of the
Secured Obligations,and if such default is not cured within the respective time provided therefor in
Section 34 of this Deed of Trust, below, Beneficiary may declare all sums secured hereby
immediately due and payable by delivery to Trustee of written declaration of default and demand for
sale, and of written notice of default and of election to cause the property to be sold, which notice
Trustee will cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust.
Beneficiary will also deposit with Trustee this Deed of Trust, the HOME Note and all documents
evidencing expenditures secured hereby;
19. a. Prior to the repayment in full of the HOME Loan,the Trustor must not assign
or attempt to assign the Housing Agreement or any right therein,nor make any total or partial sale,
transfer, conveyance or assignment of the whole or any part of the Property,the Improvements, or
any portion thereof or interest therein(referred to hereinafter as a"Transfer"),without prior written
approval of the Beneficiary, except as otherwise permitted in the Secured Obligations. Consent to
one such transaction will not be deemed to be a waiver of the right to require consent to future or
successive transactions. Beneficiary will not unreasonably withhold or delay its consent. If consent
should be given, any such transfer will be subject to this Section 19, and any such transferee must
assume all obligations hereunder and agree to be bound by all provisions contained herein.
b. Any such proposed transferee must have the qualifications and financial
responsibility necessary and adequate as may be reasonably determined by the Beneficiary,to fulfill
the obligations undertaken by Trustor in the Secured Obligations. Any such proposed transferee,by
instrument in writing satisfactory to the Beneficiary and in form recordable among the land records
of Orange County, for itself and its successors and assigns, and for the benefit of the Beneficiary
must expressly assume all of the obligations of the Trustor under the Secured Obligations,and agree
to be subject to all conditions and restrictions applicable to the Trustor in this Deed of Trust. There
will be submitted to the Beneficiary for review all instruments and other legal documents proposed
to effect any such transfer; and if approved by the Beneficiary its approval will be indicated to the
Trustor in writing.
C. In the absence of specific written agreement by the Beneficiary,no Transfer,
or approval thereof by the Beneficiary,will be deemed to relieve the Trustor or any other party from
any obligations under the Secured Obligations.
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.7-HOME DEED OF TRUST
PAGE 8
d. In the event of a Transfer prior to the time the HOME Loan is paid in full and
without the prior written consent of the Beneficiary,the net proceeds of such Transfer,will be paid to
the Beneficiary to the extent necessary to pay in full the accrued interest and remaining principal
balance of the HOME Loan.
e. (1) As used herein,"Transfer"includes the sale,agreement to sell,transfer
or conveyance of the Property, the Project, or any portion thereof or interest therein, whether
voluntary, involuntary, by operation of law or otherwise, the execution of any installment sale
contract or similar instrument affecting all or a portion of the Property or Project,the lease of all or
substantially all of the Property or Project, except as provided in subparagraph (3) below, or the
appointment of a receiver or trustee to operate or exercise direct or indirect control over any portion
of or interest in the Project or to operate or exercise direct or indirect control over Trustor or any
interest in Trustor.
(2) "Transfer" also includes the transfer, assignment, hypothecation or
conveyance of legal or beneficial ownership of any interest in Trustor,or any conversion of Trustor
to an entity form other than that of Trustor at the time of execution of this Deed of trust,except that,
a cumulative change in ownership interest of trustor of forty-nine percent(49%)or less will not be
deemed a"Transfer" for purposes of this Deed of Trust.
(3) Notwithstanding paragraphs (1) and(2), "Transfer"will not include
any of the following Permitted Transfers:
(i) The leasing for occupancy of all or any part of the Property or
Project in accordance with the Housing Agreement and the HOME Regulatory Agreement; and
(ii) A refinancing that repays any portion ofa Senior Loan(referred
to herein as a "Take-out Loan"), if the City Manager or designee reasonably determines (which
determination will not be unreasonably withheld,conditioned or delayed)that the resulting loan-to-
value ratio (including the Take-out Loan, any of the remaining Senior Loan not repaid by the
refinancing, and the HOME Loan)will not exceed the loan-to-value ratio in effect at the time of the
Construction Financing Event for the Project,and the repayment terms of the Take-out Loan do not
materially impair the Trustor's ability to repay the HOME Loan.
f. Beneficiary will not unreasonably withhold,condition or delay its approval of
any matter for which its approval is required hereunder. Any disapproval will be in writing and
contain Beneficiary's reasons for disapproval.
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AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 7-HOME DEED OF TRUST
PAGE 9
20. After the lapse of such time as may then be required by law following the recordation
of a notice of default, and notice of sale having been given as then required by law,Trustee,without
demand on Trustor,will sell the Property at the time and place fixed by it in the notice of sale,either
as a whole or in separate parcels, and in such order as it may determine at public auction to the
highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of the Property by public announcement at the time and place of
sale,and from time to time thereafter may postpone the sale by public announcement at the time and
place of sale,and from time to time thereafter may postpone the sale by public announcement at the
time fixed by the preceding postponement. Trustee will deliver to the purchaser its deed conveying
the property so sold, but without any covenant or warranty, express or implied. The recitals in the
deed of any matters or facts will be conclusive proof of the truthfulness thereof. Any person,
including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee will apply the
proceeds of sale to payment of(1)the expenses of such sale,together with the reasonable expenses
of this trust including therein reasonable Trustee's fees or attorney's fees for conducting the sale,and
the actual cost of publishing, recording, mailing and posting notice of the sale; (2)the cost of any
search and/or other evidence of title procured in connection with such sale and revenue stamps on
Trustee's deed; (3)all sums expended under the terms hereof,not then repaid,with accrued interest
at the rate specified in the HOME Note; (4) all other sums then secured hereby; and (5) the
remainder, if any,to the person or persons legally entitled thereto;
21. Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter will be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution will be made by written instrument executed by Beneficiary,containing reference to this
Deed of Trust and its place of record,which,when duly recorded in the proper office ofthe county or
counties in which the property is situated, will be conclusive proof of proper appointment of the
successor trustee;
22. The pleading of any statute of limitations as a defense to any and all obligations
secured by this Deed of Trust is hereby waived to the full extent permissible by law;
23. Upon written request of Beneficiary stating that all sums secured hereby have been
paid and all obligations secured hereby have been satisfied, including but not limited to the
obligations set forth in the HOME Regulatory Agreement,and upon surrender of this Deed of Trust
and any note, instrument or instruments setting forth all obligations secured hereby to Trustee for
cancellation and retention and upon payment of its fees,Trustee will reconvey,without warranty,the
Property then held hereunder. The recitals in such reconveyance of any matters or fact will be
conclusive proof of the truthfulness thereof. To the extent permitted by law, the grantee in such
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PAGE 10
reconveyance may be described as "the person or persons legally entitled thereto." Neither
Beneficiary nor Trustee will have any duty to determine the rights of persons claiming to be rightful
grantees of any reconveyance. When the Property has been fully reconveyed, the last such
reconveyance will operate as a reassignment of all future rents, issues and profits of the Property to
the person or persons legally entitled thereto;
24. The trust created hereby is irrevocable by Trustor;
25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto,
their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term
"Beneficiary"will include not only the original Beneficiary hereunder but also any future owner and
holder including pledgees, of the HOME Note secured hereby. In this Deed of Trust,whenever the
context so requires, the masculine gender includes the feminine and/or neuter, and the singular
number includes the plural. All obligations of Trustor hereunder are joint and several;
26. Trustee accepts this Trust when this Deed ofTrust,duly executed and acknowledged,
is made public record as provided by law. Except as otherwise provided by law the Trustee is not
obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or
proceeding in which Trustor, Beneficiary, or Trustee will be a parry unless brought by Trustee.
Beneficiary, at its option,may from time to time remove Trustee and appoint a successor trustee to
any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee will
succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law;
27. The undersigned Trustor requests that a copy of any notice of default and of any
notice of sale hereunder be mailed to Trustor at the address set forth on the first page of this Deed of
Trust;
28. Trustor agrees at any time and from time to time upon receipt of a written request
from Beneficiary,to furnish to Beneficiary detailed statements in writing of income, rents,profits,
and operating expenses of the premises, and the names of the occupants and tenants in possession,
together with the expiration dates of their leases and full information regarding all rental and
occupancy agreements, and the rents provided for by such leases and rental and occupancy
agreements,and such other information regarding the premises and their use as may be requested by
Beneficiary;
29. Trustor agrees that the loan secured by this Deed of Trust is made expressly for the
purpose of financing the rehabilitation of the Property for the purpose of providing nine dwelling
units of affordable housing for Very Low Income Households, and such dwelling units will be
occupied exclusively by such persons;
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30. Trustor agrees that,'except as otherwise provided in the HOME Note, upon sale or
refinancing of the Property, the entire principal balance of the debt secured by this Deed of Trust,
plus any accrued but unpaid interest thereon,will at the option of Beneficiary be immediately due
and payable;
31. (a) The obligation to repay the HOME Loan is a nonrecourse obligation of
Trustor.Except as provided otherwise in the HOME Note,Trustor will have no personal liability for
payment of the HOME Loan. The sole recourse of Beneficiary will be the exercise of its rights
against the Property and the improvements thereon and any related security for the HOME Loan.
Provided,however,that the foregoing will not(a)constitute a waiver of any obligation evidenced by
the HOME Note; (b) prevent or in any way hinder Beneficiary from exercising, or constitute a
defense,an affirmative defense,a counterclaim,or other basis for relief in respect of the exercise of,
any remedy prescribed by law or in equity in case of default, other than repayment of the HOME
Loan; or (c) relieve Trustor of any of its obligations under any indemnity delivered by Trustor to
Beneficiary. The foregoing provisions ofthis paragraph are limited by the provision that in the event
of the occurrence of a default, Trustor and its successors and assigns will have personal liability
hereunder for any deficiency judgment, but only if and to the extent Trustor, its principals,
shareholders, or its successors and assigns, received rentals, other revenues, or other payments or
proceeds in respect of the mortgaged Property after the occurrence of such default, which rentals,
other revenues, or other payments or proceeds have not been used for the payment of ordinary and
reasonable operating expenses of the mortgaged Property, ordinary and reasonable capital
improvements to the mortgaged Property,debt service,real estate taxes in respect of the mortgaged
Property and basic management fees, but not incentive fees, payable to an entity or person
unaffiliated with Trustor in connection with the operation of the mortgaged Property,which are then
due and payable.
(b) Notwithstanding the foregoing,Beneficiary may obtain a judgment or order
(including, without limitation, an injunction) requiring any Person to perform (or refrain from)
specified acts other than repayment of the HOME Loan;may proceed against any Person whatsoever
with respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement
agreements or similar rights to payment or performance;and may recover directly from any Person:
(i) any damages,costs and expenses incurred by Beneficiary as a result of
fraud or any criminal act or acts of Trustor or any member, shareholder, officer, director, agent or
employee of Trustor;
(ii) any damages,costs and expenses incurred by Beneficiary as a result of
any misappropriation of funds provided for the Project,rents and revenues from the operation ofthe
OCCHC-313 11'H STREET
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EXHIBIT NO. 7-HOME DEED OF TRUST
PAGE 12
Project, or proceeds of insurance policies or condemnation proceeds by Trustor or any member,
partner, shareholder, officer, director or employee of Trustor;
(iii) any and all amounts owing by Trustor pursuant to Trustor's
indemnification regarding Hazardous Substances; and
(iv) all court costs and attorneys' fees reasonably incurred in enforcing or
collecting upon any of the foregoing exceptions.
32. Notwithstanding specific provisions of this Deed of Trust,non-monetary performance
hereunder will not be deemed to be in default where delays or defaults are proximately caused by any
of the following Force Majeure events,provided such event actually delays and interferes with the
timely performance of the matter,and,despite the exercise of diligence and good business practices,
such event is beyond the reasonable control of Trustor: War; insurrection; strikes; lock-outs;riots;
floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions;freight embargoes;lack of transportation;governmental restrictions or priority;litigation
including litigation challenging the validity of this transaction or any element thereof; unusually
severe weather; inability to secure necessary labor, materials or tools; delays of any contractor,
subcontractor, or suppliers; acts of the other party; acts or failure to act of any Governmental
Authority (except acts or failure to act of the Beneficiary will not excuse performance by the
Beneficiary); the imposition of any applicable moratorium by a Governmental Authority; or any
other causes which despite the exercise of diligence and good business practices are or would be
beyond the reasonable control of the party claiming such delay and interference. Notwithstanding
the foregoing, none of the foregoing events will constitute a Force Majeure Event unless and until
Trustor delivers to Beneficiary written notice describing the event,its cause,when and how Trustor
obtained knowledge, the date the event commenced, and the estimated delay resulting-therefrom.
Trustor must deliver such written notice within ten (10) business days after it obtains actual
knowledge of the event;
33. If the rights and liens created by this Deed of Trust are held by a court of competent
jurisdiction to be invalid or unenforceable as to any part of the Secured Obligations,the unsecured
portion of such obligations must be completely performed and paid prior to the performance and
payment of the remaining and secured portion of the obligations,and all performance and payments
made by Trustor will be considered to have been performed and paid on and applied first to the
complete payment of the unsecured portion of the obligations;
34. (a) Subject to the extensions of time set forth in Section 32, and subject to the
further provisions of this Section 34, failure or delay by Trustor to perform any term or provision
OCCHC-313 11 TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 7-HOME DEED OF TRUST
PAGE 13
respectively required to be performed under the Secured Obligations or this Deed of Trust constitutes
a default under this Deed of Trust.
(b) Beneficiary will give written notice of default to Trustor and Investor Limited
Partner, specifying the default complained of by the Beneficiary. Failure or delay in giving such
notice will not constitute a waiver of any default nor will it change the time of default.
(c) Any failures or delays by Beneficiary in asserting any of its rights and
remedies as to any default will not operate as a waiver of any default or of any such rights or
remedies. Delays by Beneficiary in asserting any of its rights and remedies will not deprive
Beneficiary 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.
(d) If a monetary event of default occurs, prior to exercising any remedies
hereunder,Beneficiary will give Trustor written notice of such default. Trustor will have a period of
fifteen (15) days after such notice is given within which to cure the default prior to exercise of
remedies by Beneficiary.
(e) If a non-monetary event of default occurs, prior to exercising any remedies
hereunder,Beneficiary will give Trustor notice of such default. If the default is reasonably capable
of being cured within thirty(30)days,Trustor will have such period to effect a cure prior to exercise
of remedies by Beneficiary. If the default is such that it is not reasonably capable of being cured
within thirty (30) days, and Trustor (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 Trustor will
have such additional time as is reasonably necessary to cure the default prior to exercise of any
remedies by Beneficiary. In no event will Beneficiary 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 ninety(90)days after the first notice of default is given.
(0 Except as otherwise required to comply with the provisions of California Civil
Code Section 2924 et seq. that are applicable thereto, any notice of default that is transmitted by
electronic facsimile transmission followed by delivery of a"hard" copy,will be deemed delivered
upon its transmission; any notice of default that is personally delivered (including by means of
professional messenger service,courier service such as United Parcel Service or Federal Express,or
by U.S.Postal Service),will be deemed received on the documented date of receipt by Trustor;and
any notice of default that is sent by registered or certified mail, postage prepaid, return receipt
required will be deemed received on the date of receipt thereof.
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PAGE 14
35. hi the event of a default or breach by Trustor of any security instrument securing a
senior loan,Beneficiary will have the right to cure the default prior to completion of any foreclosure.
In such event, Beneficiary will be entitled to reimbursement by Trustor of all costs and expenses
incurred by Beneficiary in curing the default. The amount of any such disbursements will be a lien
against the Property and added to the obligation secured by this Deed of Trust until repaid, with
interest at the highest rate permitted by law;
IN WITNESS WHEREOF Trustor has executed this Deed of Trust as of the day and year set
forth above.
"TRUSTOR"
ORANGE COUNTY COMMUNITY HOUSING
CORPORATION,
a California nonprofit public benefit corporation
By:
Nor endez
Its: Executive Director
[Signatures Continue on Following Page]
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.7-HOME DEED OF TRUST
PAGE 15
APPROVED BY:
THE CITY OF HUNTINGTON BEACH, a
municipal corporation of the State of California
By:
Mayor
ATTEST:
B
r
erl
12
APPROVED AS TO FORM:
ity Attorney o (41 t
By:
K NE BALLMER& BERKMAN
Special Counsel
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
HOME DEED OF TRUST
PAGE 16
ACKNOWLEDGMENT
State of California )
ss
County of Orange )
On October 13, 2014, before me, P. L. Esparza,Notary Public,personally appeared
Nora Mendez who proved to me on the basis of satisfactory evidence to be the person whose
name is subscribed to the within instrument and acknowledged to me that she executed the same
in her authorized capacity, and that by her signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal. P L ESPARZA
Commission #2032750
Lei Notary Public -California z
Orange County
My,Comm.Ex Tres Au 4,2017,
sa
(Notary Signature)
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On October 20, 2014, before me, P. L. Espcarzca, Notary Public, personally
appeared Joan L. Flynn and Matthew M. Harper who proved to me on the basis
of satisfactory evidence to be the persons whose names are subscribed to the within
instrument and acknowledged to me that they executed the same in their authorized
capacities, and that by their signatures on the instrument the persons, or the entity
upon behalf of which the persons acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
Pal �E3PAR�
WITNESS my hand and official seal. Commission#t 203275
are,
Notary Public-California zZ
Orange County
M Comm.Ex ires Aug4,2017
(Seal)
(Notary Signatur
EXHIBIT A
LEGAL DESCRIPTION
LOTS 13 AND 15 IN BLOCK 311 OF HUNTINGTON BEACH, IN THE CITY OF
HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 3 PAGE 36 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY.
APN: 024-027-20
EXHIBIT 8
HOME REGULATORY AGREEMENT
[Immediately Behind This Page]
This Document was electronically recorded by
City of Huntington Beach
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk-Recorder
FREE RECORDING REQUESTED BY II I I II 1111111111 IN 1111111111111111111111111111111111 IIIINO FEE
AND WHEN RECORDED MAIL TO: 2014000497045 03:06pm 11/18/14
105 409 Al2 28
0.00 0.00 0.00 0.00 81.00 0.00 0.00 0.00
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code §27383)
APN: 024-027-20
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
(HOME PROGRAM)
Community Housing Development Organization (CHDO)
(24 CFR § 92.504)
THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS (HOME PROGRAM) ("Agreement"), dated as of LTT� - /.r, 2014], is
made and entered into by and between THE CITY OF HUNTINGTON BEACH, a municipal
corporation of the State of California ("City") and ORANGE COUNTY COMMUNITY
HOUSING CORPORATION, a California nonprofit public benefit corporation ("Owner"), in
furtherance of the regulations issued by the United States Department of Housing and Urban
Development set forth in 24 CFR Part 92 (the"HOME Regulations").
RECITALS:
A. City is responsible for the use of certain funds ("HOME Funds") made available
to the City of Huntington Beach by the United States Department of Housing and Urban
Development ("HUD") under the HOME Investment Partnerships Program (the "HOME
Program").
B. Owner is certified with the City as a Community Housing Development
Organization ("CHDO") and holds title to the property more particularly described in Exhibit
No. 1 attached hereto and incorporated by reference herein (the "Property").
C. City and Owner have entered into that certain Affordable Housing Agreement,
dated as of September 15, 2014 (the "Housing Agreement"), concerning Owner's rehabilitation
of the improvements located on the Property, including nine units of rental housing (consisting
of four 2-bedroom units and five 1-bedroom units), and Owner's use of the Property as
affordable rental housing to be restricted to Very Low Income Households, with priority to be
OCCHC—313 11TH STREET
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EXHIBIT NO. 8—HOME REGULATORY AGREEMENT
PAGE 1
given to households participating in the City's "Project Self-Sufficiency." The Housing
Agreement is incorporated herein by this reference as though fully set forth herein. Any
capitalized terms not defined herein shall have the meanings ascribed to such terms in the
Housing Agreement.
D. Owner has executed a promissory note (the "HOME Note") dated on or about the
date hereof, evidencing a loan of HOME Funds from the City to Owner, in the principal amount
of THREE HUNDRED FIVE THOUSAND AND NO/100 DOLLARS ($305,000.00) ("HOME
Loan"). The HOME Note is secured by a Deed of Trust With Assignment of Rents dated on or
about the date hereof, naming City as beneficiary ("HOME Deed of Trust"). In consideration of
the HOME Loan and in satisfaction of HOME Program requirements, all nine of the Units are
designated as HOME Units.
E. City and Owner now desire to place restrictions upon the use and operation of the
Property, in order to ensure that the Property shall be operated continuously as an affordable
housing project available for rental to Very Low Income persons in accordance with HOME
Regulations and the terms set forth below.
AGREEMENT:
NOW, THEREFORE, the Owner and City declare, covenant and agree, by and for
themselves, their heirs, executors, administrators and assigns, and all persons claiming under or
through them, that the Property, for the term of this agreement, shall be held transferred,
encumbered, used, sold, conveyed, leased and occupied, subject to the covenants and restrictions
hereinafter set forth:
1. DEFINITIONS.
1.1. Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall
mean rental rates not to exceed the applicable rent limits set forth by the HOME Program in 24
C.F.R. 92.252(a) and 24 C.F.R. 92.252(b). Affordable Rent shall include a reasonable utility
allowance for tenant-paid utilities based on the Orange County Housing Authority's published
utility schedules.
(a) In the case of any Very Low Income tenant, the rent must meet either (i)
or(ii) of the following rent requirements:
(i) The rent does not exceed the lesser of(1) 30 percent of the annual
income of a family whose income equals 50 percent of the median income for ,the area, as
determined by HUD, with adjustments for smaller and larger families, as provided by HUD; (2)
the fair market rent for existing housing for comparable units in the area as established by HUD
under 24 CFR 888.111; or (3) 30 percent of the adjusted income of a family whose annual
income equals 65 percent of the median income for the area, as determined by HUD, with
adjustments for the number of bedrooms in the unit; or
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(ii) The rent does not exceed 30 percent of the family's adjusted
income. If the unit receives Federal or State project-based rental subsidy and the Very Low
Income family pays as contribution toward rent not more than 30 percent of the family's adjusted
income, then the maximum rent (i.e., tenant contribution plus project-based rental subsidy) is the
rent allowable under the Federal or State project-based rental subsidy program.
1.2. Table of Rents. The parties agree that if the Project were placed in service on the
date of this Agreement, the maximum gross rent that would be paid by Very Low Income
households would be as set forth in the table of rents appended as Exhibit No. 2. The HOME
rents in Exhibit No. 2 will be adjusted to not exceed the maximum rent limits provided by HUD
at the Completion of the Project and will be adjusted periodically thereafter in accordance with
24 CFR part 92.252(o and (g).
1.3. Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall
mean any person entitled to rent an Affordable Unit as set forth in this Agreement.
1.4. Median Income or Oran e�ty Median Income. For purposes of this
Agreement, the terms "Area Median Income", "Median Income" and "Orange County Median
Income" shall mean the median income for the Orange County Primary Metropolitan Statistical
Area, with adjustment for household size, as estimated annually by the United States Department
of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of
1937 as amended.
1.5. Very Low Income Household. As used in this Agreement, the term "Very Low
Income Household"means low-income families whose annual incomes do not exceed 50 percent
of the median family income for the area, as determined by HUD with adjustments for smaller
and larger families, except that HUD may establish income ceilings higher or lower than 50
percent of the median for the area on the basis of HUD findings that such variations are
necessary because of prevailing levels of construction costs or fair market rents, or unusually
high or low family incomes.
2. TERM OF AGREEMENT; PRIORITY OF AGREEMENT; USE OF PROPERTY.
In accordance with the formula set forth in 24 CFR 92.252(e) and as required by 24 CFR 92.504
(c)(3)(ix), this Agreement shall remain in effect for the HOME Program required term of fifteen
(15) years following the date of Completion of the Project (the "HOME Term"). Upon the
expiration of the HOME Term, this Agreement shall continue in full force and effect for an
additional forty (40) years and shall terminate on the date that is fifty-five (55) years following
the date of Completion of the Project. This Agreement shall remain in effect throughout its 55-
year term, notwithstanding the payment in full of the HOME Loan. This Agreement is secured
by the HOME Deed of Trust and Owner shall not be entitled to a reconveyance of the HOME
Deed of Trust prior to the expiration of the 55-year term of this Agreement. This Agreement
shall unconditionally be and remain at all times prior and superior to the lien created by any deed
of trust securing construction and/or permanent financing for the Project and all of the terms and
conditions contained in the loan documents relating to such financing and to the lien of any new
OCCHC—313 1 I Ta STREET
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mortgage debt which is for the purpose of refinancing all or any part of such financing. Owner
hereby agrees that the Property is to be owned, managed, and operated as nine units of affordable
rental housing for Eligible Tenants, with priority given to households participating in the City's
"Project Self-Sufficiency", for the 55-year term of this Agreement. To that end, the Owner
hereby represents, covenants, warrants and agrees as follows:
2.1. Compliance With HOME Regulations. Owner, its successor and assigns,
covenant and agree that the Project shall at all times during the term of this Agreement comply
with applicable requirements set forth in Subpart F of Part 92 of Title 24 of the Code of Federal
Regulations.
2.2. Maximum Per-Unit Subsidy. The amount of the HOME loan will not exceed the
per unit dollar limits established by HUD pursuant to section 221(d)(3)(ii) of the National
Housing Act, as implemented in regulations issued by HUD, 24 CFR 221.514(b)(1) and (c).
2.3. The rehabilitation of the Property shall be accomplished within the time provided
in the Schedule of Performance, which is attached to the Housing Agreement as Exhibit 5.
2.4. Tasks, Budget, and Disbursement. The HOME Funds shall be used exclusively
for the payment of costs approved by the City and incurred in connection with the Project
(sometimes referred to herein as the "Project Activities") in accordance with the Housing
Agreement. The tasks to be performed with the use of the HOME Funds, and the Project Budget,
which specifies the line items for which HOME Funds will be used, are set forth in the Project
Budget attached to the Housing Agreement as Exhibit 4. Owner shall not request disbursement
of HOME Funds until the funds are needed to pay eligible costs. The amount of each
disbursement request shall be limited to the amount needed. 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 Housing Agreement and this Agreement.
2.5. CHDO Proceeds. CHDO Proceeds are funds generated by the Project receiving
CHDO set-aside funds. CHDO Proceeds include funds generated from activities such as the
permanent financing of the CHDO project that are used to pay off a CHDO financed
construction loan, or proceeds generated from the sale of the Property to a second non-profit.
CHDO Proceeds do not include rental income generated by the Project. The receipt of CHDO
Proceeds by Owner must be reported to the City within thirty(30) days after receipt. Pursuant to
24 CFR 92.300(a)(2), the City agrees that Owner may retain CHDO Proceeds that are not
required to be paid to the City under the terms of the HOME Note, on the condition that Owner
use such proceeds for affordable housing activities that benefit Very Low Income households in
the City of Huntington Beach. The following will be considered allowable activities for which
CHDO Proceeds may be expended: emergency repairs to the Project, Project operating costs and
reserves, construction or rehabilitation of additional affordable rental housing for Very Low
Income households, and Owner's operating costs directly related to the foregoing activities.
CHDO Proceeds must be expended for allowable activities within two (2) years of their receipt
by Owner. Owner must maintain, and submit to the City upon request, accurate and reasonably
detailed accounts of the receipt and expenditure of CHDO Proceeds, including at a minimum the
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purpose of the expenditure, the identity of the party receiving the expenditure and the amount.
The requirements of this paragraph shall survive the termination of this Agreement and shall
apply to all CHDO Proceeds received by Owner, even if such proceeds are received after the
expiration of the term of this Agreement. Owner shall retain all books and records relevant to
CHDO Proceeds for a minimum of five years after the expenditure of such proceeds. The City,
HUD and the Comptroller General of the United States, and any of their representatives, shall
have the right of access to any pertinent books, documents, papers or other records of the Owner,
in order to make audits, examinations, excerpts and transcripts.
2.6. Property Standards.
(i) All of the Units in the Project shall contain facilities adequate for living,
sleeping, eating, cooking and sanitation in accordance with all applicable federal, state and local
laws and codes.
(ii) The rehabilitation of the Property shall comply with the City's building
code and all other applicable local codes, rehabilitation standards, ordinances and zoning
ordinances in effect at the time of Project Completion, and the Property shall be decent, safe and
sanitary and shall conform to the building, electrical, plumbing, mechanical and energy codes
that have been adopted by the City of Huntington Beach.
(iii) The Property shall comply with the accessibility requirements at 24 CFR
Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and, if
applicable, the design and construction requirements at 24 CFR 100.205 for covered multifamily
dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act (42 U.S.C.
3601-3619).
(iv) Owner shall maintain the housing in compliance with applicable property
standards as required by Section 92.251.
(v) The Project shall comply with the lead-based paint standards in Section
92.355. Housing assisted with HOME Program funds constitutes HUD-associated housing for
the purpose of Lead-Based Paint Poisoning Prevention Act (42 U.S.C. Section 4821, et seq.) and
is, therefore, subject to 24 Code of Federal Regulations Part 35. Accordingly, and pursuant to
Section 92.355 of the Regulations, the Owner hereby agrees to and shall be responsible for
testing and abatement activities specified in the Lead-Based Paint Poisoning Prevention Act and
the regulations set forth at 24 Code of Federal Regulations Part 25 with respect to the
rehabilitation of the Property.
2.7. Residential Use. None of the Units will at any time be utilized on a transient
basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming
house, nursing home, hospital, sanitarium, or trailer court or park, or any other use that is
inconsistent or incompatible with this Agreement.
OCCHC-313 11"H STREET
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2.8. Faith Based Activities. Developer will comply with in the restrictions on the use
of HOME Funds for faith based activities as set forth in Section 92.257. Owner hereby certifies
that HOME Funds will not be used for the acquisition, construction or rehabilitation of structures
to the extent that those structures are used for inherently religious activities. Owner shall use the
HOME Funds for the construction of structures only to the extent the structures are used for
conducting eligible activities under 24 Code of Federal Regulations Part 92.
2.9. Conversion of Units. No part of the Project will at any time be owned by a
cooperative housing corporation nor shall the Owner take any steps in connection with the
conversion to such ownership or uses to condominiums, or to any other form of ownership
without prior written approval by the City. Any such conversion shall comply with the
requirements of 24 C.F.R. Section 92.255.
2.10. Tenant Preference. All of the Affordable Units will be made available to
Eligible Tenants for rental in accordance with the terms of this Agreement, and the Owner shall
not give preference to any particular class or group in renting the Affordable Units, except to the
extent that the Affordable Units are required to be leased or rented to Eligible Tenants and except
as provided in Section 3.6 below.
2.11. Tenant Protections. Owner shall comply with the tenant protections provisions
of 24 C.F.R. Section 92.253, including but not limited to:
a. The lease of an Affordable Unit must be for not less than one year, unless
by mutual agreement between tenant and Owner.
b. The lease may not contain any of the following provisions:
(1) Agreement by the tenant to be sued, to admit guilt or to a judgment in
favor of Owner in a lawsuit brought in connection with the lease;
(2) Agreement by the tenant that the Owner may take, hold, or sell
personal property of household members without notice to the tenant and a court decision on the
rights of the parties. This prohibition, however, does not apply to an agreement by the tenant
concerning disposition of personal property remaining in the Unit after the tenant has moved out
of the Unit. The Owner may dispose of this personal property in accordance with state law.
(3) Agreement by the tenant not to hold the Owner or the Owner's
agents legally responsible for any action or failure to act, whether intentional or negligent;
(4) Agreement by the tenant that the Owner may institute a lawsuit
without notice to the tenant;
(5) Agreement by the tenant that the Owner may evict the tenant or
household members without instituting a civil court proceeding in which the tenant has the
opportunity to present a defense, or before a court decision on the rights of the parties;
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(6) Agreement by the tenant to waive any right to a trial by jury;
(7) Agreement by the tenant to waive the tenant's right to appeal, or to
otherwise challenge in court, a court decision in connection with the lease; and
(8) Agreement by the tenant to pay attorney's fees or other legal costs 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.
As required by 24 C.F.R. 92.303, Owner shall adhere to a fair lease and grievance procedure
approved by the City and provide a plan for and follow a program of tenant participation in
management decisions.
2.12. Termination of Tenancv. Owner, its successors or assigns, may not terminate the
tenancy or refuse to renew the lease of a tenant, except (i) for serious or repeated violation of the
terms and conditions of the lease; (ii) for violation of applicable federal, state, or local law; or
(iii) for other good cause. Pursuant to 24 C.F.R. 92.253(c), any termination or refusal to renew
must be preceded by not less than 30 days by the Owner's service upon the tenant of a written
notice specifying the grounds for the action.
3. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS. Owner hereby represents,
warrants, and covenants as follows:
3.1. Income Restrictions. Except as expressly provided herein,throughout the term of
this Agreement, the Affordable Units shall be rented only to, and occupied only by, Eligible
Tenants.
3.2. Rent Schedules &Rent Increases.
1) Owner shall rent the Affordable Units to Eligible Tenants at no more than
the allowable Affordable Rents. The Owner is responsible for ensuring that the current operative
income limits, program rents, and utility allowances which are effective at the time of tenant
application are used to determine initial tenant eligibility and conformance with affordability
requirements; and that each tenant recertification is performed using current income limits,
program rents, and utility allowances that assure compliance with affordability requirements.
The rental rates for the Affordable Units shall be adjusted annually based upon annual updates of
the applicable income and rent standards, including but not limited to updates published by the
United States Department of Housing and Urban Development.
2) Owner shall submit to the City for review and approval its initial rent
schedule and utility allowances, thirty (30) days prior to initial rental of the Units, and on an
annual basis as determined by the date of the initial rent schedule and utility allowance schedule
submission. Rental rates are adjusted, and income determinations are performed annually at the
time of lease renewal. Any increase in rents for the HOME Units is subject to the provisions of
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outstanding leases, including the provision that rents are not adjusted until their leases are
renewed. The Owner must provide tenants of those units not less than thirty (30) days prior
written notice before implementing any increase in rents.
3) In no event shall any of the Affordable Units be rented at a rate greater
than the applicable Affordable Rent. Failure to comply with the affordability requirements of this
Agreement is an event of default under the terms of the HOME Loan. Subject to the right to
cure, the HOME Loan will be due and payable immediately if the Affordable Units do not meet
the requirements of this Agreement.
3.3. Occupancy By Eligible Tenant. An Affordable Unit initially occupied by an
Eligible Tenant shall be deemed occupied by an Eligible Tenant until such Affordable Unit is
vacated, even if the tenant's household income subsequently increases to an amount that exceeds
the maximum allowable income for a Low Income Household, so long as satisfactory actions are
taken to ensure that all vacancies are filled in accordance with this Agreement until the
noncompliance is corrected. To the extent provided by HOME Regulations, Owner shall not
terminate or refuse to renew the lease of a tenant who initially qualified as an Eligible Tenant but
whose income subsequently increases to an amount that exceeds the maximum allowable income
for a Low Income Household. However, if the tenant's income increases to one hundred forty
percent (140%) or more of the income limit for a Low Income Household, Owner shall raise the
tenant's rent (including a reasonable utility allowance) to an amount equal to thirty percent
(30%) of the tenant's gross household income.
3.4. Maximum Occupancy. The maximum number of persons residing in a Unit may
not exceed a number equal to two times the number of bedrooms in the Unit plus one. For
example, no more than five persons may reside in a two-bedroom Unit. Owner shall be
responsible for enforcing this maximum occupancy limit. Upon discovery of a violation of this
Section 3.4, Owner shall immediately notify the Eligible Tenant of record in writing
("Occupancy Violation Notice"). In the Occupancy Violation Notice, Owner shall inform the
Eligible Tenant of the occupancy violation and provide the Eligible Tenant with an opportunity
to cure the violation within thirty(30) days from the date of the Notice.
3.5. Income Determination. Immediately prior to a prospective tenant's
occupancy of an Affordable Unit, Owner shall obtain and maintain on file an income
computation and certification form from such prospective tenant dated immediately prior to the
date of initial occupancy of an Affordable Unit by such prospective tenant. Owner shall verify
that the income information provided by an applicant is accurate by following all applicable City
policies and procedures and by taking one or more of the following steps as a part of the
verification process: (i) obtain two (2) pay stubs from the most recent pay periods; (ii) obtain a
written verification of income and employment from applicant's current employer; (iii) obtain an
income verification form from the Social Security Administration and/or California Department
of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is
unemployed or did not file a tax return for the previous calendar year, obtain other verification of
such applicant's income as is reasonably satisfactory; or (v) obtain such other information as
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may be reasonably required. Owner shall update the foregoing records annually and shall
provide copies of updated tenant eligibility records and monthly rental records to City for
review, subject to redaction only to the extent deemed necessary by Owner, after consultation
with the City, to comply with applicable federal and state privacy laws. Upon review of such
records, City may at its option perform an independent audit of the tenant eligibility records in
order to verify compliance with the income and affordability requirements set forth herein.
Costs for such an audit performed by the City shall be deemed a Project Operating Expense,
deductible from the Project's Revenue(as such term is defined in the HOME Note). Owner shall
retain the records described in this Section, including the documentation submitted pursuant to
24 C.F.R. 92.203(a)(1), for a period of five (5) years after the date the respective records were
created.
3.6. Rental Priority. Subject to Owner's policies and procedures for screening
potential tenants, which must be approved by the City, the Affordable Units shall be rented
according to the following priorities:
a. When an Affordable Unit becomes available as a result of a tenant
vacation, Owner shall give first priority in renting the Affordable Unit to an Eligible Tenant who
has been displaced by activities of the City.
b. Owner shall give second priority to persons who are participating
in the City's "Project Self-Sufficiency."
Except as otherwise set forth above, Affordable Units shall be rented to Eligible Tenants on a
first-come, first-served basis; provided, however, that Owner shall maintain an "interest list" or
"eligibility list" of potential tenants. The rental priority provision set forth in this Section 3.6
shall apply only to the extent such provisions are not in conflict with any applicable federal or
state law or any regulatory agreement affecting the Project that is approved by the City and
recorded in superior priority to this Agreement.
3.7. Maintenance of Records. Owner shall maintain complete and accurate records
pertaining to the Affordable Units, and shall permit any duly authorized representative of the
City to inspect the books and records of Owner pertaining to the Project including, but not
limited to, those records pertaining to tenant eligibility and occupancy of the Affordable Units.
Records pertaining to the Project and Affordable Units shall be retained for a period of five (5)
years after the termination of this Agreement; records pertaining to tenant eligibility shall be
retained for the period set forth in Section 3.5.
To assist the City in meeting its HOME Program recordkeeping and reporting
requirements and to document compliance with the requirements of Section 230.26 of the City of
Huntington Beach Zoning Code, Owner shall prepare, maintain and submit to the City, as
appropriate,the following records and reports:
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a. Records which demonstrate that the Property meets the property standard
specified in 24 CFR 92.251 and the lead-based paint requirements of 24 CFR 92.355;
b. Records which demonstrate that each family occupying a HOME Unit is
income eligible in accordance with 24 CFR 92.203;
C. Records which demonstrate that the Property meets the affordability and
income targeting requirements of 24 CFR 92.252 for the duration of this Agreement. Records
shall be kept for each family occupying an Affordable Unit;
d. Records which demonstrate that each lease complies with the tenant and
participant protections, as specified in 24 CFR 92.253. Records shall be kept for each family
occupying an Affordable Unit;
e. Equal opportunity and fair housing records, including, as applicable:
(1) data on the extent to which each racial and ethnic group and single-
headed household (by gender of household head) have applied for, participated in, or benefited
from, any program or activity funded in whole or in part with HOME funds;
(2) documentation of actions undertaken to meet the requirements of 24
CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended
(12 U.S.C. 1701u);
(3) documentation of the actions taken to affirmatively further fair
housing;
£ Affirmative Marketing and MBE/WBE records, including, as applicable:
(1) if applicable, records documenting compliance with the affirmative
marketing procedures and requirements of 24 CFR 92.351;
(2) if applicable, documentation and data on the steps taken by Owner
to implement the City's outreach programs as set forth in applicable City policies and procedures
including data indicating the racial/ethnic or gender character of each business entity receiving a
contract or subcontract of$25,000 or more paid, or to be paid, with HOME funds; the amount of
the contract or subcontract, and documentation of the Owner's affirmative steps to assure that
minority business and women's business enterprises have an equal opportunity to obtain or
compete for contracts and subcontracts as sources of supplies, equipment, construction and
services;
g. if applicable, records which demonstrate compliance with the
requirements of 24 CFR 92.353 relating to displacement, relocation and real property
acquisition, including project occupancy lists identifying the name and address of all persons
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occupying or moving into the Property on and after the date on which Owner obtained site
control;
h. if applicable, records demonstrating compliance with the labor
requirements of 24 CFR 92.354, including contract provisions and payroll records;
i. records demonstrating compliance with the lead-based paint requirements
of 24 CFR 92.355;
j. if applicable, records which support any exceptions to the conflict of
interest prohibition pursuant to 24 CFR 92.356;
k. debarment and suspension certifications required by 24 CFR Parts 24 and
91; and
1. Equal opportunity and fair housing records, including, as applicable:
(1) data on the extent to which each racial and ethnic group and single-
headed household (by gender of household head) have applied for, participated in, or benefited
from, any program or activity funded in whole or in part with HOME funds;
(2) documentation of actions undertaken to meet the requirements of
24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as
amended(12 U.S.C. 1701u);
(3) documentation of the actions the Owner has taken to affirmatively
further fair housing.
Owner shall retain all books and records relevant to the Housing Agreement for a minimum of
five years after the project completion date, except that records of individual tenant income
verifications, project rents and project inspections shall be retained for the most recent five year
period until five years after the affordability period terminates, or until the conclusion or
resolution of any and all audits or litigation relevant to the Housing Agreement, whichever is
later. The City, HUD and the Comptroller General of the United States, and any of their
representatives, shall have the right of access to any pertinent books, documents, papers or other
records of the Owner, in order to make audits, examinations, excerpts and transcripts.
in. Records, data and documentation as required for the City's performance of
its reporting obligations under the Federal Funding Accountability and Transparency Act of 2006
(FFATA), to the full extent applicable to the Project, which may include but is not necessarily
limited to reporting of executive compensation received by executives of Owner and/or
executives of Owner's partners or members and/or executives of partners or members of any of
Owner's partners or members.
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3.8. Reliance on Tenant Representations: Each tenant lease shall contain a provision
to the effect that Owner has relied on the income certification and supporting information
supplied by the tenant in determining qualification for occupancy of an Affordable Unit, and that
any material misstatement in such certification (whether or not intentional) will be cause for
immediate termination of such lease.
4. MAINTENANCE
4.1. Maintenance Covenant.
(a) Owner agrees to maintain all interior and exterior improvements; including
landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy
condition), reasonable wear and tear excepted, and in accordance with all applicable laws, rules,
ordinances, orders, and regulations of all federal, state, county, municipal, and other
governmental agencies and bodies having or claiming jurisdiction (including, but not limited to,
Federal Housing Quality Standards as set forth in 24 C.F.R. 982.401). In addition, Owner shall
keep the Property free from all graffiti and any accumulation of debris or waste material. Owner
shall make all repairs and replacements necessary to keep the improvements in good condition
and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and
landscaping with comparable materials. The maintenance covenant contained in this Section
shall remain in effect for the term of this Agreement.
(b) The Project shall comply with the lead-based paint standards in 24 C.F.R.
§92.355. Housing assisted with HOME Program funds constitutes HUD-associated housing for
the purpose of Lead-Based Paint Poisoning Prevention Act (42 U.S.C. Section 4821, et sea•) and
is,therefore, subject to 24 Code of Federal Regulations Part 35.
4.2. Maintenance Program. Owner must maintain the Property in conformance with an
approved Maintenance Program, including a maintenance budget. The Maintenance Program
must describe in reasonable detail the standards to be followed in maintaining the interior and
exterior of the Improvements, including a schedule indicating the proposed frequency of each
element of maintenance, and will include, at a minimum, the following: periodic cleaning of the
interior and exterior of the Improvements, including windows; removing graffiti; removing
debris and waste materials and otherwise maintaining indoor and outdoor areas of the Property;
maintaining any lawns, plants, shrubs and trees or other landscaping planted on the Property;
performing inspections of all exterior features to determine whether repairs are required;
conducting periodic protective treatments such as rust removal and caulking; conducting repairs
to facades, roof, doors, windows and other exterior features; maintaining fencing and other
security devices and systems; periodic repainting of the exterior; periodic repainting of the
interior units and common areas; periodic replacing of the interior unit carpets; checking
building systems, including, but not limited to the heating and cooling systems, smoke alarms
and water heaters; checking interior unit appliances; and monitoring interior unit bathrooms for
mold/mildew. The Maintenance Program, including any amendments proposed by Owner, will
be subject to the approval of the City Manager.
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4.3. At all times during the Restricted Period, Owner must maintain the Property and
the Improvements in accordance with the approved Maintenance Program and in compliance
with Federal Housing Quality Standards (24 CFR § 982.401) and other applicable state and local
laws and codes. To implement this requirement, Owner agrees to budget sufficient funds to pay
for all reasonably anticipated costs (as indicated in the Annual Operating Budget).
4.4. City Rights. The City shall have the right to enter upon the Property to inspect
the Property and both the interiors and exteriors of the Units, upon seventy-two (72) hours prior
written notice to Owner. City may, but is not obligated to, perform or cause to be performed the
maintenance necessary to cure any default of these maintenance covenants and Owner shall be
liable for payment of reasonable costs to perform such required maintenance;provided, however,
that Owner first be given written notice of the actions required to cure any default, and Owner,
after receipt of such notice, shall have thirty (30) days to cure such defaults, but Owner shall not
be deemed in default of the foregoing maintenance covenant if such default cannot reasonably be
cured within the thirty (30) day period referenced above so long as Owner has commenced to
cure such default within the same thirty (30) day period and is diligently proceeding with the
work to cure such default. Notwithstanding the foregoing, if any property conditions are
reasonably identified by City after a property inspection attended by a representative of Owner
that pose an immediate danger to life or limb, Owner shall have three (3) days_ to effect
corrections of such condition(s)to City's reasonable satisfaction.
4.5. Annual Report. Owner covenants and agrees to submit to the City an annual
report (the "Annual Report"), which shall include the information required by Section 3.5 of this
Agreement. The Annual Report shall include for each Affordable Unit the rental rate and the
income and family size of the occupants, and shall also include the records described in Section
3.5 herein and any financial statements required by the Housing Agreement. The income
information shall be supplied by the tenant in a certified statement on a form provided by the
City. The Owner shall submit the Annual Report on or before April 30 of the year following the
year covered by the Annual Report. The Owner shall provide for the submission of household
information and certification in its leases with tenants.
4.6. Management Report. Beginning on the date of first occupancy, and for each
fiscal year thereafter during the term of this Agreement, Owner shall also submit on an annual
basis, and upon the written request of the City on a quarterly basis, a report for the management
of the Property (the "Management Report"). The Management Report shall include a profit and
loss statement, budget to date figures, and occupancy report and shall clearly show project
revenues, operating expenses, deposits to and withdrawals from the Project's Capital Reserve
Account, and cash flow available for residual receipts payments, all of which shall be certified
by Developer. The Quarterly Report shall be in a form that is reasonably acceptable to the City
Manager. The City Manager, in his/her sole discretion may waive the requirement of the
Management Report for one or more quarterly reporting periods. However, such waiver shall
not operate to waive any subsequent requirement of the Management Report for the Restricted
Period. After receipt of such certified financial statements for the Project, City may request
additional financial analyses or obtain a third party review at City's own expense, of financial
statements for the Project to verify the accuracy of the payments by Developer on the HOME
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Note or the required deposits into the Capital Reserve Account; provided, however that if such
review reveals a substantial underpayment on the HOME Note in the City's reasonable
discretion, in addition to the other remedies available to the City, the Developer shall promptly
reimburse the City for the reasonable cost of conducting the review.
4.7. Management Plan. Within the time set forth in the Schedule of Performance
attached to the Housing Agreement, Owner shall prepare and submit to the City for approval a
management plan in accordance with the following("Management Plan"):
(a) The Management Plan, including such amendments as may be approved in
writing by the City(if applicable), shall remain in effect for the term of this Agreement. Owner
shall not amend the Management Plan or any of its components without the prior written consent
of the City. The components of the Management Plan shall include:
(1) Management Agent. The name and qualifications of any proposed
management agent. The City shall approve or disapprove the proposed management agent in
writing based on the experience and qualifications of the management agent. The management
agent shall have demonstrated experience in operating affordable housing comparable to the
Project.
(2) Management Program. A description of the proposed management,
maintenance, tenant selection and occupancy policies and procedures for the Affordable Units.
(3) Management Agreement. A copy of the proposed management
agreement specifying the amount of the management fee and the relationship and division of
responsibilities between Owner and management agent.
(4) Tenant Lease or Rental Agreement. A copy of the proposed tenant
lease or rental agreement to be used in renting the Affordable Units.
(5) Annual Operating Budget. Within the time set forth in the
Schedule of Performance attached to the Housing Agreement and annually thereafter not later
than fifteen (15) days prior to the beginning of the next fiscal or calendar year of the Project,
Owner shall submit a projected operating budget to the City for review and approval. After
Owner's initial projected operating budget submittal, Owner shall annually reconcile each
previous year's projected budget with actual operating results for the Project ("Budget
Reconciliation"). In each Budget Reconciliation, Owner shall set forth an explanation for any
major discrepancies between projected and actual budgets. For purposes of this Agreement, a
"major discrepancy" shall mean a line item difference between projected and actual budgets of
20% or more.
The City shall not unreasonably withhold, condition or delay its approval of any matter for which
its approval is required hereunder, but such matter shall be deemed disapproved unless the City
provides to Owner its written approval within thirty (30) days after receipt of a request for
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approval. Any express disapproval shall be in writing and contain the City's reasons for
disapproval. Notwithstanding the foregoing, if the City has not expressly approved or
disapproved Owner's projected operating budget within thirty (30) days after its submittal to the
City, then Owner shall provide a written notice to the City, sent by registered mail, that it intends
to operate pursuant to the projected operating budget and the City shall have an additional thirty
(30) days within which to approve or disapprove such budget. If the City has not expressly
approved or disapproved the projected operating budget by the end of the second 30-day period,
then Owner may operate the Project under its projected operating budget so long as discretionary
line items do not exceed one hundred ten percent (110%) of the amount of that line item in the
previous year's approved operating budget.
(b) Owner hereby covenants and agrees the City shall have the right, at any
time and from time to time, to give notice to Owner if the City determines that the Project is not
being managed or maintained in accordance with the Management Plan. The City may require
the Owner to change management practices or to terminate the management agent and retain a
different management agent, approved by the City. The City agrees that prior to requiring the
Owner to change its management agent or the management practices the City shall identify in
writing the deficiencies complained of and shall informally consult with Owner for a period not
to exceed thirty (30) days, in an attempt to resolve the dispute and achieve a cure of such
deficiencies. If the City determines that such an attempt at informal resolution and/or cure has
been unsuccessful, it shall give the Owner thirty (30) days written notice to change the
management agent. If Owner fails to do as requested by the City in the written notice, the City
may then require the immediate change of the management agent. The management agreement
shall provide that it is subject to termination by the Owner without penalty, upon thirty (30) days
prior written notice. Within ten (10) business days following a direction of the City to replace
the management agent, the Owner shall select another management agent or make other
arrangements satisfactory to the City for continuing management of the Project. The Owner
shall notify the City upon learning that there is a voluntary change in the management or control
of the management agent, and, if the change is unsatisfactory to the City, the City shall be
entitled to require the Owner to change the management agent in accordance with the terms of
this paragraph.
5. OTHER PROGRAM REQUIREMENTS.
Owner shall comply with all applicable federal requirements set forth in Subpart H of the
HOME regulations, including the following:
5.1. Other Federal Requirements and Nondiscrimination. 24 CFR 92.350. Owner
acknowledges that 24 CFR 92.350 provides that the Federal requirements set forth in 24 CFR
Part 5, subpart A, are applicable to participants in the HOME program, and that these Federal
requirements include the following:
(a) Nondiscrimination and Equal Opportunity.
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(i) Civil Rights, Fair Housing, and Age and Disability Discrimination
Acts Assurances:
During the performance of the Loan Agreement, Owner shall assure that no otherwise
qualified person shall be excluded from participation or employment, denied program benefits,
or be subjected to discrimination based on race, color, national origin, sex, actual or perceived
sexual orientation, gender identity, marital status, age, handicap, religion, religious preference or
source of income (including but not limited to Section 8 Rental Assistance, Temporary
Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Social Security
Disability Insurance (SSDI) or earnings from seasonal employment), under any program or
activity funded by this Agreement, as required by state law, the Fair Housing Act (42 U.S.C.
3601-19) and implementing regulations at 24 CFR part 100 et seq., Executive Order 11063, as
amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980 Comp.,
p. 307) (Equal Opportunity in Housing Programs) and implementing regulations at 24 CFR part
107, title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d- 2000d-4) (Nondiscrimination in
Federally Assisted Programs) and implementing regulations at 24 CFR part 1, the Age
Discrimination Act of 1975 (42 U.S.C. 6101-6107) and implementing regulations at 24 CFR part
146, section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations
at 24 CFR part 8,Title VI of the Civil Rights Act of 1964,the Fair Housing Act (42 U.S.C. 3601-
20) and all implementing regulations, and the Age Discrimination Act of 1975, and all
implementing regulations.
(ii) Training, Employment, and Contracting Opportunities Assurance
of Compliance:
The Project Activities to be performed under the Agreement are on a project assisted
under a program providing direct federal financial assistance from HUD which is subject to the
requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12
U.S.C. 170lu ("Section 3"), and the regulations issued by HUD to implement Section 3 (24 CFR
Part 135) (the "Section 3 Regulations"). Pursuant to 24 CFR 135.3, the requirements of the
Section 3 Regulations apply to the recipient of such financial assistance only where the amount
of federal assistance exceeds $200,000, and apply to a contractor or subcontractor of such
recipient only where the amount of assistance exceeds $200,000 and the amount of the contract
or subcontract exceeds $100,000. Owner shall provide, to the greatest extent feasible, training,
employment and contracting opportunities generated by the financial assistance to low- and very-
low income persons and business concerns owned by low-or very-low income persons, or which
employ low-or very-low income persons.
(iii) MBE/WBE Affirmative Action Outreach Program:
Owner hereby agrees to comply with the City's minority and women business outreach
program in accordance with Executive Order 11625, as amended by Executive Order 12007 (3
CFR, 1971-1975 Comp., p. 616 and 3 CFR, 1977 Comp., p. 139) (Minority Business
Enterprises);Executive Order 12432 (3 CFR, 1983 Comp., p. 198) (Minority Business Enterprise
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Development); and Executive Order 12138, as amended by Executive Order 12608 (3 CFR,
1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women's Business Enterprise).
(iv) Disclosure Requirements. The disclosure requirements and
prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 CFR Part 87; and the
requirements for funding competitions established by the Housing and Urban Development
Reform Act of 1989 (42 U.S.C. 3531 et seq.).
(v) Debarred, Suspended or Ineligible Contractors. The prohibitions at
24 CFR Part 24 on the use of debarred, suspended or ineligible contractors.
(vi) Drug-free Workplace. The Drug-Free Workplace Act of 1988 (41
U.S.C. 701 et seq.) and HUD's implementing regulations at 24 CFR Part 24.
(b) Affirmative Marketing. Owner shall comply with the City's Affirmative
Marketing requirements.
(c) Displacement, Relocation and Acquisition. 24 CFR 92.353. Owner shall
cooperate with the City in connection with any project-specific relocation plan to be prepared by
the City, and shall certify that, to the extent applicable, it will comply or has complied with the
federal relocation, displacement and acquisition rules governing the HOME Program, which are
contained in the Uniform Relocation Act, 49 CFR Part 24, and applicable program regulations.
24 CFR Section 92.353 requires that tenants who are displaced from housing units demolished or
converted as a result of HOME-funded activities be provided with relocation assistance.
(d) Labor. 24 CFR 92.354. Does not apply to this Project.
(e) Lead-based Paint. 24 CFR 92.355. The Property shall comply with the
lead-based paint standards in 92.355.
(f) Conflict of Interest. 24 CFR 92.356.
(i) Interest of Employees. Officers and Officials. No employee,
agent, consultant, officer or elected official or appointed official of the City, or employee, agent,
consultant or officer of Owner, and no other public official of the City who exercises any
functions or responsibilities with respect to the activities assisted with HOME funds or who are
in a position to participate in a decision making process or gain inside information with regard to
these activities, during their tenure and for one year thereafter, may obtain a financial interest or
benefit from a HOME assisted activity or have an interest in any contract or subcontract, or
agreement with respect thereto, or the proceeds thereunder, either for themselves or those with
whom they have family or business ties. Owner shall incorporate, or cause to be incorporated, in
all such contractors or subcontracts a provision prohibiting such interest pursuant to the purposes
of this Section. Fulfillment of "sweat equity" obligations as defined in Section 8201 of the
HOME regulations shall not be considered a violation of this prohibition.
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(ii) Prohibition Against Occupying HOME-Assisted Units. No officer,
employee, agent, official or consultant of Owner may occupy a HOME assisted Unit.
(iii) Consultant Activities. 24 CFR 92.358. No person providing
consultant services in an employer-employee type relationship shall receive more than a
reasonable rate of compensation for personal services paid for with HOME funds. hi no event,
however, shall such compensation exceed the limits in effect under the provisions of any
applicable statute (e.g., annual HUD appropriations acts which have set the limit at the
equivalent of the daily rate paid for Level IV of the Executive Schedule). Such services shall be
evidenced by written agreements between the parties which detail the responsibilities, standards
and compensation. Consultant services provided under an independent contractor relationship
are not subject to the compensation limitation of Level IV of the Executive Schedule.
5.2. Lobbying Prohibition. Owner hereby certifies to City, under penalty of perjury,
under the terms of applicable federal law, that at all applicable times before, during and after the
term of this Agreement, that:
(a) No Federal appropriated funds have been paid-or will be paid, by or on
behalf of it, to any person for influencing or attempting to influence an officer or employee of
any agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal contract, the making of any
Federal grant, the making of any Federal loan, the entering into of any cooperative agreement,
and the extension, continuation, renewal, amendment, or modification of any Federal contract,
grant, loan, or cooperative agreement; and
(b) If any funds other than Federal appropriated funds have been paid or will
be paid to any person for influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with this Federal contract, grant, loan, or cooperative
agreement, it will complete and submit Standard Form-LLL, "Disclosure Form to Report
Lobbying," in accordance with its instructions; and
(c) Owner will require that the above stated language in paragraphs a. and b.
be included in the award documents for all subawards at all tiers, including subcontracts,
subgrants, loans, contracts, and cooperative agreements concerning the subject matter of this
Agreement; and
(d) Further, Owner and all subawards at all tiers, including subcontracts,
subgrants, loans, contracts, and cooperative agreements concerning the subject matter of this
Agreement, at all times, shall certify compliance with the provisions of 31 U.S.C. §1352 and any
and all terms and conditions of the Byrd Anti-Lobbying Amendment, as amended from time to,
time.
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AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 8-HOME REGULATORY AGREEMENT
PAGE 18
6. ENFORCEMENT.
(a) Failure to comply with the affordability requirements of this Agreement is an
event of default under the terms of the HOME Loan. Pursuant to the HOME Promissory Note
evidencing the HOME Loan, subject to the right to cure, the HOME Loan will be due and
payable immediately if the housing does not meet the affordability requirements of this
Agreement.
(b) If Owner defaults in the performance or observance of any covenant, agreement
or obligation of Owner pursuant to this Agreement, and if such default remains uncured for a
period of thirty (30) days after written notice thereof(or such longer period as may apply to the
specific alleged default) shall have been given by City, or, in the event said default cannot be
cured within said time period, Owner has failed to commence to cure such default within said
thirty (30) days and diligently prosecute said cure to completion, then City shall declare an
"Event of Default" to have occurred hereunder, and, at its option, may take one or more of the
following steps:
(i) By mandamus or other suit, action or proceeding at law or in equity,
require Owner to perform its obligations and covenants hereunder or enjoin any acts or things
which may be unlawful or in violation of this Agreement; or
(ii) Take such other action at law or in equity as may appear necessary or
desirable to enforce the obligations, covenants and agreements of participant hereunder,
including foreclosure of the Deed of Trust (provided, however, that foreclosure under the Deed
of Trust shall be in the priority position of the Deed of Trust and not this Regulatory Agreement).
(c) Except as otherwise expressly stated in this Agreement, the rights and remedies of
the parties are cumulative, and the exercise by any party of one or more of its rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same default or any other default by another party.
(d) Notwithstanding anything to the contrary stated herein, a breach of this
Agreement by Owner or its successors and assigns shall in no way defeat, invalidate or impair
the obligation or priority of any mortgage or deed of trust encumbering the Property.
7. COVENANTS TO RUN WITH THE LAND. Owner hereby subjects the Property
to the covenants, reservations, and restrictions set forth in this Agreement. City and Owner
hereby declare their express intent that all such covenants, reservations, and restrictions shall be
deemed covenants running with the land and shall pass to and be binding upon the Owner's
successors in title to the Property; provided, however, that on the termination of this Agreement
said covenants, reservations and restrictions shall expire, except the nondiscrimination covenants
contained in Section 5.1 shall remain in perpetuity. All covenants without regard to technical
classification or designation shall be binding for the benefit of the City, and such covenants shall
run in favor of the City for the entire term of this Agreement, without regard to whether the City
is or remains an owner of any land or interest therein to which such covenants relate.
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EXHIBIT NO. 8-HOME REGULATORY AGREEMENT
PAGE 19
8. ATTORNEYS' FEES. In the event that any action, suit or other proceeding is
brought to enforce the obligations of under this Agreement, each party shall bear its own costs
and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in Bach-
and every such action, suit or other proceeding, including any and all appeals or petitions
therefrom.
9. AMENDMENTS. This Agreement shall be amended only by a-written instrument
executed by the parties hereto or their successors in title, and duly recorded in the Official
Records of the County of Orange.
10. NOTICE. Any notice required to be given hereunder shall be made in writing and
shall be given by (i) personal delivery, (1i) courier service that provides a receipt showing date
and time of delivery, or (iii) certified or registered mail, postage prepaid, return receipt
requested, at the addresses specified below, or at such other addresses as may be specified in
writing by the parties hereto:
City: City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: Deputy Director of Economic Development
With a copy to: City Attorney's Office
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Owner: Orange County Community Housing Corporation
2024 N. Broadway, P Floor
Santa Ana, CA 92706-2623
Attention: Executive Director
Notices personally delivered or delivered by courier shall be effective upon receipt. Mailed
notices shall be effective on the earlier of receipt or Noon on the second business day following
deposit in the United States mail.
11. SEVERABILITY/WAIVER/INTEGRATION.
11.1. Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not
in any way be affected or impaired thereby.
11.2. Waiver. Waiver by either party of the performance of any covenant or
condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any
other covenants or conditions, nor shall the delay or forbearance by either party in exercising any
OCCHC-313 11'STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 8-HOME REGULATORY AGREEMENT
PAGE 20
remedy or right be considered a waiver of, or an estoppel against, the later exercise of such
remedy or right.
11.3. Inte rah tion. This Agreement contains the entire Agreement between the parties
and neither party relies on any warranty or representation not contained in this Agreement.
12. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
State of California, without reference to the principles regarding the conflict of laws.
13. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall constitute one original and all of which shall be one and the same instrument.
This Agreement may be executed by each party on a separate signature page, and when the
executed signature pages are combined, shall constitute one single instrument.
IN WITNESS WHEREOF, the City and Owner have executed this Regulatory Agreement and
Declaration of Covenants and Restrictions by duly authorized representatives on the date first
written hereinabove.
[SIGNATURES APPEAR ON NEXT PAGE]
OCCHC-313 11 TH STREET
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EXHIBIT NO. 8-HOME REGULATORY AGREEMENT
PAGE 21
"OWNER" "CITY"
ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON
HOUSING CORPORATION, BEACH, a municipal corporation of
a California nonprofit public benefit the State of California
corporation
By:
Nora Mendez Mayor
Its: Executive Director
ATTEST:
City Clerk
APPROVED AS TO FORM:
COUNTERPART
City Attorney
KANE, BALLMER& BERKMAN
Special Counsel
OCCHC-313 1 1TH STREET
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HOME REGULATORY AGREEMENT
PAGE 22
"OWNER" "CITY"
ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON
HOUSING CORPORATION, BEACH, a municipal corporation of
a California nonprofit public benefit the State of California
corporation
By:
a Mendez ayor
Its: Executive Director
ATTEST:
City k
ROVED AS TO FORM:
COUNTERPART
City Attorney
14
KANE, BALLMER&BERKMAN
Special Counsel
OCCHC-313 1 ITx STREET
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EXHIBIT NO. 8-HOME REGULATORY AGREEMENT
PAGE 22
ACKNOWLEDGMENT
State of California )
ss
County of Orange )
On October 13, 2014, before me, P. L. Esparza,Notary Public, personally appeared,
Nora Mendez who proved to me on the basis of satisfactory evidence to be the person whose
name is subscribed to the within instrument and acknowledged to me that she executed the same
in her authorized capacity, and that by her signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and.correct.
WITNESS my hand and official seal. P L.sPARZA
Commission #2032750
Notary Public-California i
Orange County
L
Expires Au 4,2017
(Notary Signature
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
ss
COUNTY OF ORANGE )
On October 20, 2014, before me, P. L. Esparza, Notary Public, personally
appeared Joan L. Flynn and Matthew M. Harper who proved to me on the basis
of satisfactory evidence to be the persons whose names are subscribed to the within
instrument and acknowledged to me that they executed the same in their authorized
capacities, and that by their signatures on the instrument the persons, or the entity
upon behalf of which the persons acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
P. L. ESPARZAA
WITNESS WITNESS m hand and official seal. Commission 2032750
y a �s Notary Public-California
Orange County
M Comm.Expires Au 4,2017
(Seal)
( otary Signatu ) 0
EXHIBIT NO. 1
LEGAL DESCRIPTION OF SITE
LOTS 13 AND 15 IN BLOCK 311 OF HUNTINGTON BEACH, IN THE CITY OF
HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 3 PAGE 36 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY.
APN: 024-027-20
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EXHIBIT NO. 8-HOME REGULATORY AGREEMENT
LEGAL DESCRIPTION
EXHIBIT NO. 2
TO HOME REGULATORY AGREEMENT
Affordability Requirements
(24 CFR 92.252; 92.504(c)(3)(iii))
Owner shall submit its rent schedule and utility allowances thirty (30) days prior to initial rental
of the units and on an annual basis thereafter. City shall review and approve or disapprove the
proposed rent schedule and utility allowances for compliance with the maximum rent limitations
contained in 24 CFR 92.252.
City will provide updated HUD income and rent limits to Owner as they become available. As of
the date of this Agreement,the applicable income and rent limits are as follows:
Orange County
2014 HOME Program Income Limits
Household Size Very Low Income
1 $31,650
2 $36,150
3 $40,650
4 $45,150
5 $48,800
6 $52,400
Orange County
2014 HOME Program Rent Limits
1-Bedroom 2-Bedroom
Low HOME Rent $903 $1,083
(Very Low Income)
For comparison purposes:
Fair Market Rent $1,312 $1,644
65%Rent Limit $1,154 $1,387
Owner shall be responsible for ensuring that the current operative HOME income and rent limits
in effect at the time of the tenant's rental application will be used to determine initial tenant
eligibility and conformance with HOME affordability requirements and that each tenant
recertification is conducted using current HOME income and rent limits to assure compliance
with HOME Regulations.
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AFFORDABILITY REQUIREMENTS
Income determination and rental rate adjustments shall occur upon annual lease renewal. An
increase in rents for HOME-assisted units is subject to the provisions of existing leases,
including the provision that rents may not be adjusted until leases are renewed. Owner must
provide tenants with not less than thirty (30) days prior written notice before implementing an
increase in rents.
OCCHC-313 11TH STREET
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EXHIBIT NO. 8-HOME REGULATORY AGREEMENT
AFFORDABILITY REQUIREMENTS
EXHIBIT 9
ENVIRONMENTAL INDEMNITY
[Immediately Behind This Page]
ENVIRONMENTAL INDEMNITY
BY ORANGE COUNTY COMMUNITY HOUSING CORPORATION
IN FAVOR OF THE CITY OF HUNTINGTON BEACH
THIS ENVIRONMENTAL INDEMNITY (this "Indemnity"), dated as of
FOEPT• 20141, and made by ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit public benefit corporation (referred to as "Borrower"),
whose address for purposes of giving notices is 2024 N. Broadway, 3rd Floor, Santa Ana, CA
92706-2623, Attention: Executive Director, in favor of THE CITY OF HUNTINGTON BEACH
(the "City"), whose address for purposes of giving notice is 2000 Main Street, Huntington
Beach, California 92648.
WITNESSETH
WHEREAS, Borrower is the owner of the real property in the City of Huntington Beach
described on Exhibit "A" attached hereto and made a part hereof, and the improvements thereon
(collectively referred to as the"Property");
WHEREAS, Borrower and the City entered into that certain Affordable Housing
Agreement, dated as of September 15, 2014 (the "Housing Agreement"), pursuant to which the
City agreed to make a loan to Borrower for the purpose of rehabilitating the Property as
affordable rental housing (the "Loan") (the Housing Agreement and the documents and
instruments referred to therein which are being executed by Borrower concurrently herewith are
referred to collectively as the"Loan Documents");
WHEREAS, Borrower has agreed to execute and deliver to the City this Indemnity to
induce the City to make the Loan.
NOW, THEREFORE, in consideration of the foregoing and in consideration of the
mutual agreements hereinafter set forth, Borrower hereby agrees with the City as follows:
1. DEFINITIONS
For the purpose of this Indemnity, "Hazardous Materials" or "Hazardous Substances"
will include, but not be limited to, oil, flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar
materials, including, without limitation, any substances defined as "extremely hazardous
substances," "hazardous substances," "hazardous materials," "hazardous waste" or "toxic
substances" in the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, including the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. Sections 9601 et seq. ("CERCLA"); the Hazardous Materials Transportation Act, 49
U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act of 1976, as
OCCHC-313 11""STREET
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EXHIBIT NO. 9-ENVIRONMENTAL INDEMNITY
PAGE 1
amended, 42 U.S.C. Sections 6901, et seq.; the Toxic Substances Control Act, as amended, 15
U.S.C. Section 2601 et seg.; the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the
Federal Water Pollution Control Act, as emended, 33 U.S.C. Section 1251 et seq.; the
Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651; the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the
Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe
Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq.; and those substances defined as
"hazardous waste" in Section 25117 of the California Health and Safety Code, as "infectious
waste" in Section 25117.5 of the California Health and Safety Code,,_ or as "hazardous
substances" in Section 25316 of the California Health and Safety Code or"hazardous materials"
as defined in Section 353 of the California Vehicle Code; and in the regulations adopted and
orders and publications promulgated pursuant to said laws. Other capitalized terms used in this
Indemnity will have the meanings ascribed to them in the Housing Agreement with the same
force and effect as if set forth in full below.
2. COVENANTS AND INDEMNITY
The following covenants, and indemnities are hereby given and made by Borrower:
2.1 Covenants.
(a) Borrower covenants that it will strictly comply with any and all laws,
regulations, and/or orders which may be promulgated from time to time relating to Hazardous
Materials ("Hazardous Materials )Laws"), to immediately take, at Borrower's sole expense, all
remedial action required by any Hazardous Materials Law or any judgment, consent decree,
settlement or compromise in respect to any Hazardous Materials Claim (as defined herein
below), and to keep the Property free of any lien imposed pursuant to any Hazardous Materials
Law or in relation to any Hazardous Materials Claim.
(b) Borrower covenants that the Property will not, while Borrower is the
owner of any portion thereof, be used for any activities involving, directly or indirectly, the use,
generation, treatment, storage, release, transportation, presence, discharge or disposal of any
Hazardous Materials, except for de minimis quantities used at the Property in strict compliance
with all Hazardous Materials Laws and required in connection with the routine rehabilitation,
operation and maintenance of the Property.
(c) The City will have the right, at any time, to conduct an environmental
audit of the Property at the City's expense, unless Hazardous Materials are found, then at
Borrower's sole cost and expense, and Borrower will cooperate in the conduct of any such
environmental audit. Other than in an emergency, such audit will be conducted only after prior
notice has been given to Borrower and only in the presence of a representative of Borrower.
Borrower will give the City and its agents and employees access to the Property to remove, or
OCCHC-313 11 TH STREET
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EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY
PAGE 2
otherwise to mitigate the effects of, Hazardous Materials and Borrower will not unreasonably
delay or condition such access.
(e) Borrower will not install, or permit to be installed, on the Property friable
asbestos or any substance -containing asbestos and deemed hazardous by any Hazardous
Materials Laws, and, with respect to any such material currently present in the Property,
Borrower will promptly either (i) remove or cause to be removed any material that such
Hazardous Materials Laws deem hazardous and require to be removed, or (ii) otherwise comply
with such Hazardous Materials Laws, all at Borrower's sole cost and expense. If Borrower fails
to so do within the cure period permitted under applicable law, regulation, or order, the City may
do whatever is necessary to eliminate said substances from the premises or to otherwise comply
with all Hazardous Materials Laws, and the costs thereof will be added to the Obligations (as
hereinafter defined) of Borrower under this Section 2.
(f) Borrower must immediately advise the City in writing of any of the
following: (i) any pending or threatened claim against Borrower or the Property by any
governmental entity or agency or by any other person or entity relating to Hazardous Materials
or pursuant to the Hazardous Materials Laws ("Hazardous Materials Claims"), (ii) any
condition or occurrence on the Property that (A) results in noncompliance by Borrower with any
Hazardous Materials Laws, (B) could reasonably be anticipated to cause the Property to be
subject to any restrictions on the ownership, occupancy, use or transferability of the Property
under any Hazardous Materials Law, or (C) could reasonably be anticipated to form the basis of
a Hazardous Materials Claim against the Property or Borrower.
2.2 Indemnity. Borrower hereby agrees to defend, indemnify, protect, and hold
harmless the City and its members, officers, officials, employees, agents, representatives,
servants, contractors, successors and assigns (collectively, the "Indemnitees"), except to the
extent of the Indemnitees' gross negligence or willful misconduct, from and against any and all
damages, losses, liabilities, obligations, penalties, claims (including, without limitation, any third
party tort claims), litigation, demands, defenses, judgments, suits, proceedings, costs,
disbursements, or expenses (including, without limitation, attorneys' and experts' fees and
disbursements) of any kind or of any nature whatsoever, whether foreseeable or unforeseeable,
(collectively, the "Obligations") which may at any time be imposed upon, incurred by or
asserted or awarded against the City as a direct or indirect consequence of.
(a) The presence of any Hazardous Materials on, in, under, or affecting all or
any portion of the Property;
(b) The breach of any covenant made by Borrower in Section 2.1 hereof; or
(c) The enforcement by the City of any of the provisions of this Section 2.2 or
the assertion by Borrower of any defense to its obligations hereunder.
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3. BORROWER'S UNCONDITIONAL OBLIGATIONS
3.1 Unconditional Obli ations. Borrower hereby agrees that the Obligations will be
paid and performed strictly in accordance with the terms of this Indemnity, regardless of any
law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of the Loan
Documents or affecting any of the rights of the City with respect thereto. The obligations of
Borrower hereunder will be absolute and unconditional irrespective of, and Borrower waives any
defense based upon,
(a) The validity, regularity, or enforceability of the Loan Documents or any
other instrument or document executed or delivered in connection therewith;
(b) Any alteration, amendment, modification, release, termination, or
cancellation of any of the Loan Documents, or any change in the time, manner, or place of
payment of, or in any other term in respect of, all or any of the obligations of Borrower contained
in any of the Loan Documents;
(c) Any extension of the maturity of the Loan or any waiver of, or consent to
any departure from, any provision contained in any of the Loan Documents;
(d) Any exculpatory provision in any of the Loan Documents limiting the
City's recourse to property encumbered by the Deed of Trust securing the Loan, or to any other
security, or limiting the City's rights to a deficiency judgment against Borrower;
(e) Any exchange, addition, subordination, or release of, or nonperfection of
any lien on or security interest in, any collateral for the Loan, or any release, amendment, waiver
of, or consent to any departure from any provision of, any other surety or guarantee given in
respect of the Loan;
(f) The insolvency or bankruptcy of Borrower or of any indemnitor or
guarantor under any other indemnity or guarantee given in respect of the Loan; or
(g) Any other circumstance that might otherwise constitute a defense
available to, or a discharge of, Borrower, or Borrower's approved assignee, or any other
indemnitor or guarantor with respect to the Loan or any or all of the Obligations.
3.2 Continuation. The term of this Indemnity will continue until such time as no legal
action can be successfully brought against the City due to applicable statutes of limitation. This
Indemnity (a) is a continuing indemnity and will remain in full force and effect until the
satisfaction in full of all of the Obligations (notwithstanding the payment in full of the Loan or
the release or other extinguishment of the Deed of Trust, or any other security for the Loan); and
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PAGE 4
(b) will continue to be effective or will be reinstated, as the case may be, if at any time any
payment of any of the Obligations is rescinded or must otherwise be returned by the City upon
the insolvency, bankruptcy, or reorganization of Borrower or otherwise, all as though such
payment had not been made.
3.3 Survival. Borrower's duty to indemnify will survive any judicial or non judicial
foreclosure under the HOME Deed of Trust or transfer of the Property in lieu thereof, the release
and reconveyance or cancellation of the HOME Deed of Trust, and the satisfaction of all of
Borrower's obligations under the Loan Documents.
4. WAIVER
Borrower acknowledges that possible defenses to the enforceability of the Obligations
may presently exist and/or may arise hereafter and as part of the City's consideration for entering
into the Housing Agreement, they have specifically bargained for the waiver and relinquishment
by Borrower of all such defenses. Borrower agrees that it has had the opportunity to seek and
receive legal advice from skilled legal counsel of its choosing and represents and confirms that
Borrower is fully informed regarding, and thoroughly understands, the nature of such possible
defenses,the circumstances under which they may arise, the benefits that they might confer upon
Borrower and the legal consequences to Borrower of waiving such defenses. Borrower makes
this Indemnity with the intent that this Indemnity and all of the waivers herein will each and all
be fully enforceable by the City and that the City are induced to enter into the Housing
Agreement in material reliance upon such presumed full enforceability. Without limitation to the
foregoing, Borrower hereby waives the following:
(a) Promptness and diligence;
(b) Notice of acceptance and notice of the incurrence of any Obligation by Borrower;
(c) Notice of any action taken by the City, Borrower, or any other interested party
under any Loan Document or under any other agreement or instrument relating thereto;
(d) All other notices, demands, and protests, and all other formalities of every kind, in
connection with the enforcement of the Obligations, the omission of or delay in which, but for
the provisions of this Section 4, might constitute grounds for relieving Borrower of its
Obligations hereunder;
(e) The right to a trial by jury with respect to any dispute arising under, or relating to,
this Indemnity;
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(f) Any requirement that the City protect, secure, perfect, or insure any security
interest or lien in or on any property subject thereto;
(g) Any requirement that the City exhaust any right or take any action against
Borrower or any other person or collateral; and
(h) Any defense-that may arise by reason of:
(1) The incapacity, lack of authority, death or disability of, or revocation
hereof by, any person or persons;
(2) The failure of the City to file or enforce any claim against the estate (in
probate, bankruptcy, or any other proceedings) of any person or persons; or
(3) Any defense based upon an election of remedies by the City, including,
without limitation, an election to proceed by nonjudicial foreclosure or which
destroys or otherwise impairs the subrogation rights of Borrower or any other
right of Borrower to proceed against a guarantor by the operation of Section 580d
of the California Code of Civil Procedure or otherwise.
5. NOTICES
Any notice, demand, statement, request, or consent made hereunder will be in writing and
will be personally served, mailed by first-class registered mail, return receipt requested, to the
address set forth in the first paragraph of this Indemnity, above, or given by electronic facsimile
("fax") transmission to the fax numbers stated below, with confirmations mailed by first class
registered mail, return receipt requested to the address set forth above, of the party to whom such
notice is to be given (or to such other address as the parties hereto, will designate in writing):
In the case of the City: 714-374-1590
In the case of Borrower: 714-558-0423
Any notice that is transmitted by fax transmission followed by delivery of a"hard"copy, will be
deemed delivered upon its transmission; any notice that is personally delivered.(including by
means of professional messenger service, courier service such as United Parcel Service or
Federal Express, or by U.S. Postal Service), will be deemed received on the documented date of
receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt
required will be deemed received on the date of receipt thereof.
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6. MISCELLANEOUS
6.1 Borrower must make any payment required to be made hereunder in lawful
money of the United States of America, and in same day funds, to the City at its address
specified in the first paragraph hereof.
6.2 No amendment of any provision of this Indemnity will be effective unless it is in
writing and signed by Borrower and the City and no waiver of any,provision of this Indemnity,
and no consent to any departure by Borrower from any provision of this Indemnity, will be
effective unless it is in writing and signed by the City, and then such waiver or consent will be
effective only in the specific instance and for the specific purpose for which given.
6.3 No failure on the part of the City to exercise, and no delay in exercising, any right
hereunder or under any Loan Document will operate as a waiver hereof or thereof, nor will any
single or partial exercise of any right preclude any other or further exercise thereof or the
exercise of any other right. The rights and remedies of the City provided herein and in the Loan
Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies
provided by law. The rights of the City hereunder or under any Loan Document against any party
thereto are not conditional or contingent on any attempt by the City to exercise any of its rights
hereunder or under any other Loan Document against such party or against any other person or
collateral.
6.4 If any provision of this Indemnity is determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable, then that provision will, as to such
jurisdiction, be deemed ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof and without affecting the validity or enforceability of
such provision in any other jurisdiction.
6.5 This Indemnity will (a) be binding upon Borrower, and Borrower's successors
and assigns; and (b) inure, together with all rights and remedies of the City hereunder, to the "
benefit of the City, its directors, officers, employees, and agents, any successors to the City's
interest in the Property, any other person who acquires any portion of the Property at a
foreclosure sale or otherwise through the exercise of the City's rights and remedies under the
Loan Documents, any successors to any such person, and all directors, officers, employees, and
agents of all of the aforementioned parties. Without limiting the generality of clause (b) of the
immediately preceding sentence, the City may, subject to, and in accordance with, the provisions
of the Loan Documents, assign or otherwise transfer all or any portion of its rights and
obligations under any Loan Document, to any other person, and such other person will thereupon
become vested with all of the rights and obligations in respect thereof that were granted to the
City herein or otherwise. None of the rights or obligations of Borrower hereunder may be
assigned or otherwise transferred without the prior written consent of the City.
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY
PAGE 7
6.6 Borrower hereby (a) irrevocably submits to the jurisdiction of any California or
federal court sitting, in each instance, in Orange County in any action or proceeding arising out
of or relating to this Indemnity, (b) waives any defense based on doctrines of venue or forum non
conveniens or similar rules or doctrines, and (c) irrevocably agrees that all claims in respect of
any such action or proceeding may be heard and determined in such California or federal court.
Borrower irrevocably consents to the service of any and all process which may be required or
permitted in any such action or proceeding to the address specified in the first paragraph of this
Indemnity or in any other manner provided by law. Borrower agrees that a final judgment in any
such action or proceeding will be conclusive and may be enforced in any other jurisdiction by
suit on the judgment or in any other manner provided by law.
6.7 The title of this document and the captions used herein are inserted only as a
matter of convenience and for reference and will in no way define, limit, or describe the scope or
the intent of this Indemnity or any of the provisions hereof.
6.8 This Indemnity will be governed by, and construed and interpreted in accordance
with, the internal laws of the State of California applicable to contracts made and to be
performed therein, except to the extent that the laws of the United States preempt the laws of the
State of California.
6.9 This Indemnity may be executed in any number of counterparts, each of which
will constitute an original and all of which together will constitute one agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY
PAGE 8
IN WITNESS WHEREOF, Borrower has duly executed this Indemnity as of the date set
forth below.
"BORROWER"
ORANGE COUNTY COMMUNITY HOUSING
CORPORATION,
a California nonprofit public benefit corporation
Dated: l3 By:
endez
Executive Director
OCCHC-313 1 I TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY
PAGE 9
EXHIBIT A
LEGAL DESCRIPTION
LOTS 13 AND 15 IN BLOCK 311 OF HUNTINGTON BEACH, IN THE CITY OF
HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 3 PAGE 36 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY.
APN: 024-027-20
OCCHC-313 11TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY
LEGAL DESCRIPTION
EXHIBIT 10
ASSIGNMENT OF AGREEMENTS
[Immediately Behind This Page]
ASSIGNMENT OF AGREEMENTS
FROM ORANGE COUNTY COMMUNITY HOUSING CORPORATION TO
THE CITY OF HUNTINGTON BEACH
1. FOR VALUE RECEIVED, the undersigned, ORANGE COUNTY
COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit
corporation ("Owner"), assigns to THE CITY OF HUNTINGTON BEACH, a municipal
corporation of the state of California ("Assignee"), all of its right, title and interest in and
to:
a. All architectural, design, engineering and development agreements, and
any and all amendments, modifications, supplements, addenda and general
conditions thereto (collectively, "Architectural Agreements"); and
b. All plans and specifications, shop drawings, working drawings,
amendments, modifications, changes, supplements, general conditions and
addenda thereto (collectively"Plans and Specifications")
heretofore or hereafter entered into or prepared by any architect, engineer or other person
or entity (collectively "Architect"), for or on behalf of Owner in connection with the
rehabilitation of the Improvements on the Property described in Exhibit A attached. This
assignment is subject to the prior rights, if any, of a lender approved by Assignee whose
lien is senior to the Deed of Trust held by Assignee. The Plans and Specifications, as of
the date hereof, are those which Owner has heretofore, or will hereafter deliver to
Assignee.
2. This ASSIGNMENT OF AGREEMENTS ("Assignment") constitutes a present
and absolute assignment to Assignee as of the Effective Date, subordinate to a lender
approved by Assignee whose lien is senior to the Deed of Trust held by Assignee
("Senior Lender"); provided, however, Assignee confers upon Owner the right to enforce
the terms of the Architectural Agreements and Owner's rights to the Plans and
Specifications so long as no event which would constitute a Default after notice or the
passage of time has occurred under the Affordable Housing Agreement dated as of
September 15, 2014, between Assignee and Owner (the "Housing Agreement"). Upon
the occurrence of an event which would constitute a Default after notice or the passage of
time under the Housing Agreement, Assignee may, in its sole discretion, give notice to
Architect of its intent to enforce the rights of Owner under the Architect Agreements and
of its rights to the Plans and Specifications and may initiate or participate in any legal
proceedings respecting the enforcement of said rights. Owner acknowledges that by
accepting this Assignment, Assignee does not assume any of Owner's obligations under
the Architectural Agreements or with respect to the Plans and Specifications.
OCCHC-313 11 T"STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 10-ASSIGNMENT OF AGREEMENTS
PAGE 1
3. Owner represents and warrants to Assignee, as of the Effective Date, that: (a) all
Architectural Agreements entered into by Owner are in full force and effect and are
enforceable in accordance with their terms and, to the best of Owner's knowledge, no
default, or event which would constitute a default after notice or the passage of time,
exists with respect to said Architectural Agreements; (b) all copies of the Architectural
Agreements and Plans and Specifications delivered to Assignee are complete and correct
in all material respects; and (c) Owner has not assigned any of its rights under the
Architectural Agreements or with respect to the Plans and Specifications except as
expressly permitted by the Housing Agreement.
4. Owner agrees: (a) to pay and perform all obligations of Owner under the
Architectural Agreements; (b) to enforce the payment and performance of all obligations
of any other person or entity under the Architectural Agreements; (c) not to materially
modify the existing Architectural Agreements nor to enter into any future Architectural
Agreements without Assignee's prior written approval except as otherwise expressly
permitted in the Housing Agreement; and(d) not to further assign (other than assignment
in connection with a loan which is senior in priority to Assignee's assignment), for
security or any other purposes, its rights under the Architectural Agreements or with
respect to the Plans and Specifications without Assignee's prior written consent.
5. This Assignment secures performance by Owner of all obligations of Owner
under the Housing Agreement. This Assignment is supplemented by the provisions of
the Housing Agreement and said provisions are incorporated herein by reference.
6. The term "Housing Agreement" as used herein shall mean the Affordable
Housing Agreement dated as September 15, 2014, between Owner and Assignee, as well
as any future amendments and implementation agreements between Owner and Assignee
which refer to this Assignment. Capitalized terms not otherwise defined herein shall
have the meaning set forth in the Housing Agreement.
7. This Assignment shall be governed by the internal laws of the State of California,
except to the extent that Federal laws preempt the laws of the State of California, and
Owner consents to the jurisdiction of any Federal or State Court within the State of
California having proper venue for the filing and maintenance of any action arising
hereunder. If Assignee should bring any action to enforce its rights hereunder at law or at
equity, Owner shall reimburse Assignee for all reasonable attorneys' fees and costs
expended in connection therewith.
8. This Assignment shall be binding upon and inure to the benefit of the heirs, legal
representatives, assigns, and successors-in-interest of Owner and Assignee; provided,
however, this shall not be construed and is not intended to waive any restrictions on
OCCHC-313 11T"STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 10-ASSIGNMENT OF AGREEMENTS
PAGE 2
assignment, sale, transfer, mortgage, pledge, hypothecation or encumbrance by Owner
contained in the Housing Agreement.
9. The Effective Date of this Assignment shall be the date it is executed by Owner.
IN WITNESS WHEREOF, the undersigned has executed this Assignment as of the date
set forth below.
OWNER:
ORANGE COUNTY COMMUNITY
HOUSING CORPORATION,
a California nonprofit public benefit
corporation
Date: /O /,j��5/ By:
N ra Mendez
Its: Executive Director
OCCHC-313 1 I TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 10-ASSIGNMENT OF AGREEMENTS
PAGE 3
PROPERTY DESCRIPTION
Exhibit A to Assignment of Agreements dated as of 6Sq!97• ,1r, 20141, between
ORANGE COUNTY COMMUNITY HOUSING CORPORATION as Owner and THE
CITY OF HUNTINGTON BEACH as Assignee.
LOTS 13 AND 15 IN BLOCK 311 OF HUNTINGTON BEACH, IN THE CITY OF
HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS
PER MAP RECORDED IN BOOK 3 PAGE 36 OF MISCELLANEOUS MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN: 024-027-20
OCCHC-313 11'H STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 10-ASSIGNMENT OF AGREEMENTS
LEGAL DESCRIPTION
EXHIBIT I I
ASSIGNMENT OF RENTS &LEASES
[Immediately Behind This Page]
This Document was electronically recorded by
City of Huntington Beach
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk-Recorder
FREE RECORDING REQUESTED BY I 1111111111111111111111111111111111 IIIII II II NO FEE
AND WHEN RECORDED MAIL TO: 2014000497046 03:06pm 11/18/14
105 409 A34 A36 10
0.00 0.00 0.00 0.00 27.00 0.00 0.00 0.00
THE CITY OF HUNTINGTON BEACH
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code§27383)
APN: 024-027-20
- ASSIGNMENT OF RENTS AND LEASES
FROM ORANGE COUNTY COMMUNITY HOUSING CORPORATION
TO THE CITY OF HUNTINGTON BEACH
THIS ASSIGNMENT OF RENTS AND LEASES (the "Assignment") dated
�'30T• /,�r , 2014] is made by ORANGE COUNTY COMMUNITY HOUSING
CORPORATION, a California nonprofit public benefit corporation ("Assignor"), in favor of
THE CITY OF HUNTINGTON BEACH, a municipal corporation(the"Assignee").
RECITALS
A. Assignor is the owner of the real property described in Exhibit "A" attached
hereto and the owner of all of the personalty, fixtures, and improvements now or hereafter
located thereon or attached thereto now existing or to be constructed thereon. Said real property,
personalty, fixtures, and the improvements are herein referred to collectively as the"Premises".
B. The City has agreed to make a loan of HOME Funds to Assignor in the original
principal amount of Three Hundred Five Thousand Dollars ($305,000) (the "HOME Loan"),
pursuant to the terms of that certain Affordable Housing Agreement by and between Assignor
and Assignee dated as of September 15, 2014 (the "Housing Agreement"). The HOME Loan is
evidenced by a Residual Receipts Promissory Note Secured by Deed.of Trust, of even date
herewith, executed by Assignor in favor of the City(the"Note"). The HOME Loan is secured by
a Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents), of even
date herewith, executed by Assignor, as Trustor, for the benefit of the City as Beneficiary (the
"Deed of Trust").
In order to induce the City to make the HOME Loan to Assignor, Assignor has agreed to
execute this Assignment.
OCCHC—313 11 TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 11 —ASSIGNMENT OF RENTS
PAGE 1
NOW THEREFORE, with reference to the foregoing and in reliance thereon and for
good and valuable consideration, the receipt of which is hereby acknowledged, Assignor agrees
as follows:
AGREEMENT
1. All initially capitalized terms used herein, unless otherwise defined or required by
context, shall have the meaning ascribed to them in the Housing Agreement.
2. Subject to the prior rights, if any, of a lender whose lien is approved by Assignee
as senior to the Deed of Trust held by Assignee ("Senior Lender"), Assignor hereby absolutely
grants, sells, assigns, transfers, and sets over to Assignee, by this Assignment, all of Assignor's
interests, whether now existing or hereafter acquired, in all leases and other occupancy
agreements of any nature, now or hereafter covering all or any part of the Premises,together with
all extensions, renewals, modifications, or replacements of said leases and occupancy
agreements, and together with any and all guarantees of the obligations of the lessees and
occupants (the "Lessees") thereunder, whether now existing or hereafter executed, and all
extensions and renewals of said guarantees. (Said leases and occupancy agreements, together
with any and all guarantees, modifications, extensions and renewals thereof, are hereinafter
referred to collectively as the "Leases" and individually as a"Lease".)
3. Assignor's purpose in making this Assignment is to relinquish to Assignee its
right to collect and enjoy the rents, royalties, issues, profits, income, and other benefits at any
time accruing by virtue of the Leases (hereinafter called"Rents and Profits").
4. The parties intend that this Assignment shall be a present, absolute and
unconditional assignment and shall, immediately upon execution, give the Assignee the right to
collect the Rents and Profits and to apply them in payment of the principal and interest and all
other sums payable on the indebtedness and other obligations under the Note and other loan
documents, as well as all other sums payable under the Deed of Trust or any other instrument
given as security for the indebtedness. However, the Assignee hereby grants to Assignor a
license to collect and use, subject to the provisions set forth below, the Rents and Profits as they
respectively become due and to enforce the Leases, so long as there is no Default by Assignor in
performance of the terms, covenants, or provisions of the Deed of Trust, the Note, or the
Housing Agreement, this Assignment or any other loan document. Nothing contained herein, nor
any collection of Rents and Profits by Assignee or by a receiver, shall be construed to make
Assignee a "mortgagee in possession" of the Premises so long as Assignee has not entered into
actual possession of the Premises.
5. Upon the occurrence of any Event of Default under the terms and conditions of
this Assignment, the Note, the Deed of Trust, the Housing Agreement or any other loan
document, this Assignment shall constitute a direction and full authority to each Lessee under
OCCHC-313 11 TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. I I -ASSIGNMENT OF RENTS
PAGE 2
any Lease and each guarantor of any Lease to pay all Rents and Profits to Assignee without
proof of the Default relied upon. Assignor hereby irrevocably authorizes each Lessee and
guarantor to rely upon and comply with any notice or demand by Assignee for the payment to
Assignee of any Rents and Profits due or to become due.
6. Assignor represents and warrants as to each Lease now or hereafter covering all
or any portion of the Premises, unless Assignee has been otherwise advised in writing by
Assignor:
a. That each Lease is in full force and effect;
b. That no material default] exists on the part of the Lessee thereunder or
Assignor;
C. That no rent in excess of one month's rent has been collected in advance,
except for a one-month security deposit;
d. That no Lease or any interest therein, except to the extent required by the
Senior Lender, has been previously assigned or pledged; and
e. That all rent due to date under each Lease has been collected and no
concession has been granted to any Lessee in the form of a waiver, release, reduction, discount,
or other alteration of rent due or to become due except as previously disclosed to Assignor in
writing.
7. Assignor agrees with respect to each Lease:
a. If any Lease provides for a security deposit paid by the Lessee to Assignor
and subject to the prior rights, if any, of a Senior Lender, this Assignment transfers to Assignee
all of Assignor's right, title, and interest in and to each such security deposit; provided, however,
that Assignor shall have the right to retain said security deposit so long as Assignor is not in
Default under this Assignment, the Deed of Trust, the Note, the Housing Agreement or any other
Loan Document, subject to any applicable notice and cure period; and provided further that
Assignee shall have no obligation to the Lessee with respect to such security deposit unless and
until Assignee comes into actual possession and control of said security deposit.
b. If any Lease provides for the abatement of rent during repair of the leased
premises by reason of fire or other casualty, Assignor shall furnish rental insurance to Assignee,
the policies to be with companies and in form, content, policy limits, and terms as are customary
in the case of entities owning similar property or assets similarly situated.
C. Each Lease shall remain in full force and effect despite any merger of the
interest of Assignor and any Lessee thereunder. Except as otherwise provided in the Housing,
OCCHC-313 11'"STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. I I -ASSIGNMENT OF RENTS
PAGE 3
Agreement, Assignor shall not terminate any Lease (except pursuant to the terms of the Lease
upon a default by any Lessee thereunder), or materially modify or amend any Lease or any of the
terms thereof, or grant any concessions in connection therewith or accept a surrender thereof,
without the prior written consent of Assignee, which consent shall not be unreasonably withheld.
d. Assignor shall not collect any Rents and Profits more than thirty (30) days
in advance of the date on which they become due under the terms of any Lease.
e. Assignor shall not discount any future accruing Rents and Profits.
f Assignor shall not consent to any assignment of any Lease, or any
subletting thereunder, whether or not in accordance with its terms, on any terms less favorable
than those that would reflect an arm's length transaction in light of prevailing market conditions
(subject to the rent restrictions applicable to the Premises), without the prior written consent of
Assignee, except as otherwise provided in the Housing Agreement.
g. Except as otherwise provided in the Housing Agreement, Assignor shall
not execute any further assignment of any of the Rents and Profits or any interest therein or
suffer or permit any such assignment to occur by operation of law.
h. Assignor shall faithfully perform and discharge all obligations of the
lessor under each Lease, and shall give prompt written notice to Assignee of any notice of
Assignor's default received from any Lessee or any other person and furnish Assignee with a
complete copy of said notice. Assignor shall appear in and defend, at no cost to Assignee, any
action or proceeding arising under or in any manner connected with any Lease. If requested by
Assignee, Assignor shall enforce each Lease and all remedies available to Assignor against the
Lessee in the case of default under the Lease by the Lessee.
i. Except as otherwise provided in the Housing Agreement, and except for
residential leases entered into in the ordinary course of business, Assignor shall give Assignee
written notice immediately upon entering into a Lease of any part of the Premises and shall
promptly upon request of Assignee provide to Assignee a true and correct copy of each executed
Lease. Upon written notice from Assignee to Assignor, such Lease shall be deemed included in
this Assignment as though originally listed herein. At Assignee's option, such notice may be
recorded, without cost to Assignor, in the Official Records of Orange County, California, which
notice shall refer to this Assignment.
j. Except as otherwise provided in the Housing Agreement, Assignor shall
not hire, retain, or contract with any third party for property management services with respect to
the Premises without the prior written approval of Assignee, at Assignee's option, of such party
and the terms of its contract for management services.
OCCHC-313 11 TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 11 -ASSIGNMENT OF RENTS
PAGE 4
k. Nothing herein shall be construed to impose any liability or obligation on
Assignee under or with respect to any Lease. Assignor shall indemnify, defend, and hold
Assignee, its officers, directors, agents, employees, and representatives (the "Indemnitee(s)")
harmless from and against any and all liabilities, losses, and damages that any Indemnitee may
incur under any Lease or by reason of this Assignment, and of and from any and all claims and
demands whatsoever that may be asserted against any Indemnitee by reason of any alleged
obligations to be performed or discharged by Assignee under any Lease or this Assignment,
unless any of the foregoing arises from or results from the active concurrent negligence, sole
negligence or sole willful misconduct of any Indemnitee. Should any Indemnitee incur any
liability, loss, or damage under any Lease or by reason of this Assignment and such liability,
loss, or damage falls within the foregoing indemnification, Assignor shall immediately upon
demand reimburse such Indemnitee for the amount thereof together with all costs and expenses
and reasonable attorneys' fees and court costs incurred by such Indemnitee. All of the foregoing
sums shall bear interest at the maximum rate permitted by law from demand by Indemnitee until
paid. Any Rents and Profits collected by Assignee may be applied by Assignee, in its discretion,
in satisfaction of any such liability, loss, damage, claim, demand, cost, expense, or fees.
8. Assignor hereby grants to Assignee the following rights:
a. Upon an Event of Default as defined in the Housing Agreement, Assignee
shall be deemed to be the creditor of each Lessee in respect of any assignments for the benefit of
creditors and any bankruptcy, arrangement, reorganization, insolvency, dissolution, receivership,
or other debtor relief proceedings affecting such Lessee, without obligation on the part of
Assignee, however, to file timely claims in such proceedings or otherwise pursue creditor's
rights therein.
b. Assignee shall have the right to assign Assignor's right, title, and interest
in the Leases to any subsequent holder of the Deed of Trust or any participating interest therein
or to any person acquiring title to all or any part of the Premises through foreclosure or
otherwise. Any subsequent assignee shall have all the rights and powers herein provided to
Assignee.
C. Assignee shall have the right (but not the obligation), upon any Event of
Default under the Deed of Trust or the Housing Agreement, to take any action as Assignee may
deem necessary or appropriate to protect its security, including but not limited to appearing in
any action or proceeding and performing any obligations of the lessor under any Lease; and
Assignor agrees to pay, on demand, all costs and expenses, including without limitation
reasonable attorneys' fees and court costs incurred by Assignee in connection therewith, together
with interest thereon at the rate of ten percent(10%)per annum.
d. Upon any Event of Default under this Assignment, the Deed of Trust, the
Note, the Housing Agreement, or any other loan document (subject to all applicable notice and
OCCHC-313 11 TH STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 11 -ASSIGNMENT OF RENTS
PAGE 5
cure periods), and without notice to or consent of Assignor, Assignee shall have the following
rights (none of which shall be construed to be obligations of Assignee):
i. Assignee shall have the right under this Assignment to use and
possess, without rental or charge, the Fixtures, Equipment, and Personal Property of the Assignor
located in or on the Premises and used in the operation or occupancy thereof Assignee shall
have the right to apply any of the Rents and Profits to pay installments due for Personal Property
rented or purchased on credit, insurance premiums on Personal Property, or other charges
relating to Personal Property in or on the Premises. However, this Assignment shall not make
Assignee responsible for the control, care, management, or repair of the Premises or any
Personal Property or for the carrying out of any of the terms or provisions of any Lease.
ii. Assignee shall have the right to apply the Rents and Profits and
any sums recovered by Assignee hereunder to the outstanding Indebtedness, as well as to charges
for taxes, insurance, improvements, maintenance, and other items relating to the operation of the
Premises.
iii. Assignee shall have the right to take possession of the Premises,
manage and operate the Premises and Assignor's-business thereon, and to take possession of and
use all books of account and financial records of Assignor and its property managers or
representatives relating to the Premises.
iv. Assignee shall have the right to execute new Leases of any part of
the Premises, including Leases that extend beyond the term of the Deed of Trust.
V. Assignee shall have the right to cancel or alter any existing Leases.
vi. Assignee shall have the irrevocable authority, as Assignor's
attorney-in-fact, such authority being coupled with an interest, to sign the name of Assignor and
to bind Assignor on all papers and documents relating to the operation, leasing and maintenance
of the Premises.
e. All of the foregoing rights and remedies of Assignee are cumulative, and
Assignee shall also have upon the occurrence of any such Default or Event of Default all other
rights and remedies provided under the Note, the Housing Agreement, the Deed of Trust, or any
other loan document or other agreement between Assignor and Assignee, or otherwise available
at law or in equity or by statute.
9. Failure of Assignee to avail itself of any terms, covenants, or conditions of this
Assignment for any period of time or for any reason shall not constitute a waiver thereof.
10. Notwithstanding any future modification of the terms of the Note, the Deed of
Trust, the Housing Agreement, or any other loan document, this Assignment and the rights and
OCCHC-313 11'STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. I I -ASSIGNMENT OF RENTS
PAGE 6
benefits hereby assigned and granted shall continue in favor of Assignee in accordance with the
terms of this Assignment.
11. This Assignment shall be binding upon and inure to the benefit of the respective
heirs, legal representatives, successors, and assigns of the parties hereto (including without
limitation in the case of Assignee, any third parties now or hereafter acquiring any interest in the
Indebtedness or other obligations of Assignor under the Note or Deed of Trust or a part thereof,
whether by virtue of assignment, participation, or otherwise). The words.Assignor,Assignee, and
Lessee, wherever used herein, shall include the persons and entities named herein or in any
Lease and designated as such and their respective heirs, legal representatives, successors and
assigns, provided that any action taken by the named Assignee (or any successor designated as
such by an instrument recorded in the Official Records of Orange County, California referring to
this Assignment) shall be sufficient for all purposes notwithstanding that Assignee may have
theretofore assigned or participated any interest in the obligation to a third party. All words and
phrases shall be taken to include the singular or plural number, and the masculine, feminine, or
neuter gender, as may fit the case.
12. Any change, amendment, modification, abridgment, cancellation, or discharge of
this Assignment or any term or provision hereof shall be invalid without the written consent of
Assignee.
13. Upon payment to Assignee of the full amount of the Indebtedness and other
obligations secured hereby and by the Note and Deed of Trust, as evidenced by a recorded
satisfaction or release of the Deed of Trust, this Assignment shall be void and of no further
effect. In such event, Assignee shall cooperate with Assignor to execute such instruments as may
be reasonably necessary to remove the lien of this instrument from the Official Records of
Orange County.
14. All notices, demands, approvals, and other communications provided for in this
Assignment shall be sufficiently given i£ (i) personally delivered; (ii) delivered by same day or
overnight courier (acknowledged by receipt showing date and time of delivery); or (iii)
dispatched by registered or certified mail, postage prepaid, return receipt requested, to the
addresses set forth below:
If to Assignor: Orange County Community Housing Corporation
2024 N.Broadway, 3rd Floor
Santa Ana, CA 92706-2623
Attention: Executive Director
OCCHC-313 11 rx STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. 11-ASSIGNMENT OF RENTS
PAGE 7
If to City: The City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager,
With a copy to: City Attorney's Office
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Notices personally delivered or delivered by courier shall be effective upon receipt or refusal to
accept delivery. Mailed notices shall be effective on the earlier of(i) receipt of refusal to accept
delivery, or(ii)noon on the second business day following deposit in the United States mail.
15. This Assignment may be recorded in the Official Records of Orange County,
California, and Assignor shall pay all fees, charges, costs, and expenses of such recording.
16. If any provision hereof is determined to be illegal or unenforceable for any
reason, the remaining provisions hereof shall not be affected thereby.
17. This Assignment shall be governed by and construed in accordance with the
internal laws of the State of California.
18. If Assignee should bring any action to enforce its rights hereunder at law or at
equity, Assignor shall reimburse Assignee for all reasonable attorneys' fees and costs expended
in connection therewith.
IN WITNESS WHEREOF, the undersigned Assignor has executed this Assignment as of
the date first above written.
"ASSIGNOR"
ORANGE COUNTY COMMUNITY HOUSING
CORPORATION,
a California nonprofit public benefit corporation
By:
ora Mendez
Its: Executive Director
OCCHC-313 11'STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. I 1 -ASSIGNMENT OF RENTS
PAGE 8
ACKNOWLEDGMENT
State of California )
ss
County of Orange )
On October 13, 2014, before me, P. L. Esparza,Notary Public, personally appeared
Nora Mendez who proved to me on the basis of satisfactory evidence to be the person whose
name is subscribed to the within instrument and acknowledged to me that she executed the same
in her authorized capacity, and that by her signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal. a
P.L. E$PARIA
Commission#2032750
La
llotary Public-California a
Orange County
AA Comm.Ex Tres ja 4,2017
(Notary Signature
EXHIBIT A
LEGAL DESCRIPTION
LOTS 13 AND 15 IN BLOCK 311 OF HUNTINGTON BEACH, IN THE CITY OF
HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS
PER MAP RECORDED IN BOOK 3 PAGE 36 OF MISCELLANEOUS MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN: 024-027-20
OCCHC-313 11 rx STREET
AFFORDABLE HOUSING AGREEMENT
EXHIBIT NO. I I-ASSIGNMENT OF RENTS
LEGAL DESCRIPTION
Res. No. 2014-73
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of
Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby
certify that the whole number of members of the City Council of the City of
Huntington Beach is seven; that the foregoing resolution was passed and adopted
by the affirmative vote of at least a majority of all the members of said City Council
at a Regular meeting thereof held on September''15, 2014 by the following vote:
AYES: Katapodis, Hardy, Shaw, Harper, Boardman, Sullivan, Carchio
NOES: None
ABSENT: None
ABSTAIN: None
i
a
City Ark and ex-officio Clerk of the
City Council of the City of
Huntington Beach, California