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Bridges America Sher Lane, LP - 1998-08-31
J� City of Huntington Beach , , • P. O. Box 190 - 2000 Main Street Huntington Beach, Ca!ifo.-nia "2043 - HUNTINGTON BEACH Fr the desk of. Janelle Case Deputy City Clerk Telephone: (714) 536-526� tax: (714) 374-1557� LO" HUNTINGTON BEACH From the desk of - City of Huntington Beach P. O. Box ] 90 - 2000 Main Street Huntington Beach, Caiifomia 92648 3anelle Case Deputy City Clerk Telephone: (714) 536-5260 Fax: (714) 374-1557 XAT — � r. h 7 A T- -&Saaw . J� City of Huntington Beach P. O. Box 190 - 2000 Main Street ' Huntington Beach, California 9264 Q HUNTINGTON BEACH a Cl From the desk of_ Connie Brockway, CMC �. Citv Clerk Telephone: (714) 536-5404 Fax: (714)374-1557 - n I -� c�1/ c✓2/ /ZD 0� .7J� 4" 41-07 d a.ee cL UkA A�a-. Ile �z CounciVAgency Meeting Held: Deferred/Continued to: Approved ❑ Conditionally Approved ❑ Denied CA77 erx's Z:iigrU1ure Council Meeting Date: 07/18/05 Departmen Number: ED 05-16 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIR AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: PENELOI�CU E�GRAFTC,_E_FdCUTIVE DIRECTOR 2 PREPARED BY: ROBERT F_ B EY, AC ING ASSISTA T EXECUTIVE =-- DIRECTOR r� � SUBJECT: Request for A oof Assignment and Assumption A9Lrpement for Sale of the Sher Lane Apartments Statement of Issue, Funding Source, Recommended Action, Alternative Action(*), Analysis, Environmental Status, Attactnnent(s) Statement of Issue: Bridges America Sher Lane LP, owners of the 66-unit Sher Lane Apartment complex generally located at 16112 Sher Lane, is requesting that the Agency approve the sale of the Sher Lane complex to the proposed buyer, VPM Sher Lane, LP (Village Investments). Attached is an Assignment and Assumption Agreement authorizing the sale and transfer of the existing Owner's Participation Agreement and Redevelopment Agency Note from Bridges America Sher Lane to VPM Sher Lane, LP Fundinq Source: Not Applicable. Recommended Action: Motion to.- 1 . Approve the Assignment and Assumption Agreement and authorize its execution by the Executive Director, Agency Secretary and Agency Counsel. Alternative Actions : Do not approve the proposed Assignment and Assumption Agreement E , 0-b REQUEST FOR ACTION MEETING DATE: 07/18/05 DEPARTMENT ID NUMBER:ED 05-16 Analy s/ Is: Village Investments is currently in escrow with the Bridges Foundation to purchase the Sher Lane Apartments. Village Investments has, in recent years, successfully participated with both the Agency and the City in three low-income affordable housing projects, including Main Place Apartments (Garfield and Beach), Hermosa Village (McFadden and Goiden West) and Bridges Apartments (Nichols and Wamer). Staff has reviewed the qualifications of Village Investments and found them to be satisfactory. Village Investments has never been in default with the City or Agency on any of its current or past projects_ The Agency's affordable housing loan with the Bridges Foundation, ongnally in the amount of $1,200, 734, has a term of 30 years and is forgiven at the rate of 1130 of the loan amount per year. The current balance on the loan is approximately $960,587. The Assignment and Assumption Agreement will transfer the obligation of this loan to the new owner, Village Investments. The proposed Assignment and Assumption Agreement was reviewed and approved by the City Attorney's Office. This matter was presented to the Economic Development Committee on June 13, 2005 and was forwarded for full Agency consideration_ Environmental Status: Not applicable_ Attachment{s1: 1. 1 Assignment and Assumption Agreement 2. Owners Participation Agreement for Sher Lane Apartments 0 Location of Sher Lane Apartments G-1Tem\Sheriane\RCASherLane doc -2- 7111200510:25 AM Assignment and Assumption Agreement ATTACHMENT 1 This Document was electronically recorded by First American Title B RECORDING REQUESTED BY: FIRST AMERICAN TITLE INS. CO. WHEN RECORDED MAIL TO: VPM SHER LANE, LP 2400 MAIN STREET, STE. 201 IRVINE, CA 92614 OR-1575262-EL Recorded in Official Records, Orange County Tout Daly. Clerk -Recorder 11111191111111 Ulm 111111111111111 111.00 2005000580311 12:45pm 07/27/05 119 13 A31 36 0.00 0.00 0.00 0.00 105.00 0.00 0.00 0.00 THIS SPACE FOR RECORDER'S USE ONLY ASSIGNMENT AND ASSUMPTION AGREEMENT THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (Additional recording fee applies) ASSIGNMENT AND ASSUMPTION AGREEMENT THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment") is entered into as of �LLI_V / 8 , 2005, by and among (1) THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership "(Assignor"), (2) VPM SHER LANE, L.P., a California limited partnership ("Assignee"), and (3) the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"). RECITALS A. Assignor is the owner of that certain real property and improvements thereon located at 16112 Sher Lane, Huntington Beach, California, and legally described in Exhibit "A" attached hereto (the "Property."). Concurrent with the recordation of this Assignment, Assignee is acquiring title to the Property from Assignor. B. Assignor and Agency entered into that certain Owner Participation Agreement, dated as of August 31, 1998 (the "OPA"). In connection with the OPA, (i) Assignor and Agency entered into that certain Promissory Note, with Assignor as Maker and the Agency as Holder, dated August 31, 1998. in the original principal loan amount of One Million Two Hundred Thousand Seven Hundred Thirty -Four Dollars And No Cents ($1,200,734.00) (the "Note"), and (ii) as security for the Note, Assignor, as Trustor, and Agency as Trustee and Beneficiary, entered into that certain Subordinated Deed of Trust With Assignment of Rent With Rider Attached Hereto, dated August 31. 1998, and recorded on October 2, 1998, in the Official Records of Orange County, California as Instrument No. 19980669844 (the "Deed of Trust"). C. The OPA, Note, and Deed of Trust, are collectively referred to herein as the "Agency Loan Documents." D. Assignor desires to assign to Assignee, and Assignee desires to assume from Assignor, all of Assignor's rights, title, interest, duties, liabilities, and obligations in, to, and under the Agency Loan Documents. E. Agency, under the terms of the OPA, shall have the right to consent to this assignment and assumption. ASSIGNMENT AND ASSUMPTION: NOW, THEREFORE, in consideration of the foregoing Recitals and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Assignor and Assignee, with the consent of Agency, agree as follows: 1. Assignee has reviewed the Agency Loan Documents, and each of them, and understand-, their terms including but not limited to the rights and obligations of the "Owner" thereunder. 2. Assignor hereby sells, assigns, transfers, conveys, and delivers to Assignee all of Assignor's rights, title, interests, duties, liabilities, and obligations in, to, and under the Agency 6M79 oS dw i As Loan Documents to Assignee. Assignee hereby accepts the assignments set forth in this Paragraph 2 and agrees to and shall assume all of Assignor's rights, title, interests, duties liabilities, and obligations in, to, and under the Agency Loan Documents, and from hereafter Assignor is released from any and all duties, liabilities, and obligations in, to, and under the Agency Loan Documents. (a) With respect to the OPA, Agency consents to the assignment of the OPA to Assignee, and Agency hereby releases Assignor from its duties, liabilities, and obligations in, to, and under the OPA. The parties acknowledge that a copy of the OPA is not attached hereto. (b) With respect to the Note, a true and correct copy of the Note is attached hereto as Exhibit `B" which confirms the original outstanding principal balance of the Note of One Million Two Hundred Thousand Seven Hundred Thirty -Four Dollars And No Cents ($1,200,734.00). Agency, as Holder or payee under the Note, consents to the assignment of the Note by the Assignor to the Assignee, releases Assignor from any and all liability on the Note, and acknowledges that no default exists thereunder. Concurrent with the execution of this Assignment, the parties agree to execute the "Allonge to Note" attached hereto as Exhibit "C" and thereafter to attach said executed Allonge to the Note. (c) With respect to the Deed of Trust, concurrent with the execution of this Assignment, the parties agree to execute and, and Assignor and Assignee shall record, the "Assignment of Deed of Trust" in the form attached hereto as Exhibit "D". Agency, as Trustee and Beneficiary of the Deed of Trust, consents to the assignment of the Deed of Trust by the Assignor to the Assignee and releases Assignor from any and all obligations thereunder. I Each party hereto agrees to execute such other and further documents as may be necessary or appropriate to effectuate the purposes of this Assignment. 4. This Assignment shall be binding on and insure to the benefit of the parties hereto and their respective heirs and assigns. 5. This Assignment shall be governed by and construed under the laws of the State of California. 6. This Assignment may be signed in multiple counterparts which shall, when signed by all the parties hereto, constitute a binding agreement. [end — signature page follows] 344m2442ls- MI b(IM74.03 vOY3m5 -2- IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the date first above written. "ASSIGNOR" THE BRIDGES AMERICA SHER LANE, L.P. By: The Bridges America Foundation, a f Delaware nonprofit corporation its General Partqcr By:9�9�c j �L o Ann Ulvan Affordable Housing Coordinator "ASSIGNEE" VPM SHER LANE, L.P., a California limited partnership By: Affordable Housing Access. Inc., a non-profit California corporation its Managing General Partner By: Name- Title: By: Co -General Partner By: Scott ].MUMM"ART By: Philip H. McNamee [signatures continued on nut page 3"*2"4_Q10 i "W 79 os 905n "1 -3- IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the date first above written. "ASSIGNOR" THE. BRIDGES AMERICA SHER LANE, L.P. By: The Bridles America Foundation, a Delaware nonprofit corporation its General Partner By: C _O NTERP_ART Jo Ann Ulvan Affordable Housing Coordinator "ASSIGNFF ' VPM SHER LANE, L.P., a California limited partnership By: Affordable Housing Access, Inc., a non-profit California cnrporatio its Mana ' g ral Partn By: L Name: 4j/LC/4," AV. I[SC14 Title: PiCFSA"r#1 r By: Co -General Partner, By: By, d§11 if M 4 hill H. McNamee [signatures continued on next page] 394,"244 za.flflo i - 3 - W9779OS I aONnIA35 A cy Secretary U ROVED AS TO FORM: r A ency Coun el -7/ G "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGT By: Executive Director [end of signatures] 194XC-U2&tM1 �- W9779 n5 :ASn I M5 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On July 19, 2005 before me, Robin Roberts, Notary Public Dote Name and Title of Of xw (e y . 'Jane Doe. Notary PctC') personally appeared Joan L. Flynn ---- _ _ Names) of Sgna+(s) I personally known to me El proved to me on the basis of satisfactory evidence to be the person(e) whose name(6) is/afe subscribed to the within instrument and acknowledged to me that-0+e/she/0hey executed the same in higher/their authorized capacity(i"), and that by his/her/their ROBIN ROBERTS signature(s) on the instrument the person(0), or comm.11562700 - the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hano.And official seal. —at, 49C� Place Notmy Seel Above S1"ture of Notary Public OPTIONAL Though the information below is not required by law, rt may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: Assignment and Assumption Agreement - Bridges America Sher Lane Document Date: July l8, 2005 Number of Pages: 5 SignerY4 Other Than Named Above: Jo Ann Ulvan, Scott J. Barker, Philip H. McNamee, Capacity(i") Claimed by Signer Signer's Name: _ _ Joan L. Flynn Individual C!f Corporate Officer — Title(s): Agency Secretary U Partner —1-I Limited ❑ General ❑ Attorney in Fact ❑ ,'rustee Guardian or Conservator ❑ Other - Signer Is Representing: The Redevelopment Agency of the City of Huntington Beach O 11 Nfnonal NOWy AtePC�a00�+ •!<3.50 De SM Ave. PO Bo. 24W • CrW2*0lh. CA 91313-2402 • w nrawm wwy orq Pled NO Sgp7 P40r*w CAN TOFF." 140"76 =7 GOVERNMENT CODE 27361.7 1 CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT TO WHICH THIS STATI-MENT IS ATT'ACI-IED READS AS FOLLOWS - NAME OF NOTARY: Robin Roberts DATE COMMISSION EXPIRES- Feb 14, 2009 COUNTY WHERE BOND IS FILED- Orange COMMISSION NUMBER: 1552700 �IANUFACTURER/VENDOR NUMBER= VSI1 PLACE OF I:XI;CU ITON- Santa Ana, CA DATED- July 27, 2005 SIGNATURE: Wklx,/Q- STATE OF GALWORMA } COUNTY OF E On I�� 171. Zvi , before me, SGb 5� �rv� personally appeared !W6&- OLa. U— _ _ personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that helshelthey executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. at rers,t• • NOT.4R * g -ftb.141, SEAL' u [ ] + � �� 410 L1G •� F STATE OF CALIFORNIA } } .ss COUNTY OF ORANGE } k--- No&y Publit On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that helshe/they executed the same in his/her/their authorized capacity(es), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] ~3"U-Ml ra+ M w am i as -5- GOVERNMENT CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT TO WHICH THIS STATI-MENT IS ATTACHED READS AS FOLLOWS: NAME OF NOTARY- Scott Skolrud I)ATI; COMMISSION EXPIRES- COUNTY WHERE BOND IS FILED: COMMISSION NUMBER- MANUFACTURFRNFN'DOR NUMBER: PLACE OF EXECUTION: Santa Ana, CA DATED- July 27, 2005 SIGNATURE- CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of _ On f� ' s before me, ano Toe a, oec« to DM. Notary l personalty appeared _ . wnetft 01 tsi lkaersonally known to me 1M'MLL L- UNG Callw ft d' 14409M--evVgRe Noloty hm - CONOWAD OMW Cotttltlfr Comm &On Oct12. YERVIL L UONG 4% Commisibn • 1440M Notory hbic - 40=*1 ` OK"P C U* MV CarrR BVW Od 12. to be the person whose name Is c4 subscribed to the within instrument and acknowledged to me tha he executed the same in ii sfxwr authorized capacity(aps), and that by hi herftOr signature' on the instrument the person{, or the entity upon behalf of which the person(9 acted, executed the instrument- WITNES y hand and official seal. SW+re a Ndary OPTIONAL Though the Wormahon bebw is not r* med by law it may prpve vatuabfe to persons relying On [he document and coufd prevent fraudulent removal and rearfachawnt of this form to another document. Description of Attarhp4ggcument Title or Type of Document W/L) - Document Date- -�$=Q,� Number of Pages: .5f%it Signer(s) Other Than Named Above (:a . �lLppll �L nL �J r- 7C��V_ 9�- J (7 Capacity(ies) Claimed by Signer Signer's Name:CG ❑ Individual Top a'""'m Corporate Officer— Title(s): :J Partner — D Limited :1 General Qf ;] Attorney -in -Fact ❑ Trustee C} Guardian or Conservator Other 6XPK%ar-Y_ _2�t,reCl xr Signer Is Representing- GCV4jja46 &I/yU 9 19" N&bwal NWAry ASZOpa.pn - 9390 Do Sm A" PO Bo. 24M - Grrawnn. CA 91313-2402 -, r+.lar,&.L.Y o 9 P,00 No 5907 N.oroF- CsA Ty Tr 1 A00-876.6E37 GOVERNMEN"r CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT TO WHICH THIS STA'TF,MENT IS A"I"TACIIL•D READS AS FOLLOWS: NAME OF NOTARY: Tcryll L. King DATE COMMISSION EXPIRES: Oct 12, 2007 COUNTY WHERE BOND IS FILED: Orange COMMISSION NUMBER- 1440952 MANUFACTURERJVENDOR `UMBER- LANAI PLACE OF EXECUTION- Santa Ana. CA DATED: July 27, 2005 SIGNATURE: -k&," EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY [see following pagel 394FM44294M] 6W79115 0r3iars EXHIBIT "A" title Order Numtxr- He Number OSA-1575262 Exhibit W Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: PARCEL 1: THAT PORTION OF THE NORTHEAST QUARTER OF SECTION 23, TOWNSHIP 5 SOUTH, RANGE 11 WEST, PARTLY IN THE RANCHO LA BOLSA CHICA AND PARTLY IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, AS PER MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF SAID NORTHEAST QUARTER WITH THE EAST LINE OF SHER LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNTINGTON BEACH, RECORDED DECEMBER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCE NORTH 180.00 FEET ALONG SAID EAST LINE; THENCE EAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF T1IE NORTI IWEST QUARTER OF THE NORTHEAST QUARTER; TI IENCE SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; THENCE EAST 90.00 FEET PARALLEL WITH SAID NORTH LINE; THENCE SOUTH 80.00 FEET PARALLEL WITH SAID EAST LINE TO THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF SAID NORTHEAST QUARTER; THENCE WEST 436.00 FEET TO THE POINT OF BEGINNING. SAID LAND IS INCLUDED WITHIN THE AREA SHOWN ON A MAP FILED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS AND OTHER HYDROCARBONS, BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEEDS OF RECORD. PARCEL 2: THAT PORTION OF THE NORTHEAST QUARTER OF SECTION 23, TOWNSHIP 5 SOUTH, RANGE 11 WEST, IN THE RANCHO LA BOLAS, IN THE CITY OF HUNTINGTON BEACH, AS PER MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF SAID NORTHEAST QUARTER WITH THE EAST LINE OF SHER LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNTINGTON BEACH, RECORDED DECEMBER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCE NORTH 180.00 FEET ALONG SAID EAST LINE; THENCE EAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SOLM LEAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER THENCE SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; THENCE EAST 90.00 FEET PARALLEL WITH SAID NORTH LINE TO A POINT WHICH POINT IS THE TRUE POINT AND PLACE OF BEGINNING; THENCE SOUTH 80.00 FEET PARALLEL WITH SAID EAST LINE TO THE SOUTI I LINE Of THE NORTI1 50.00 rLET OF THE SOUTHWEST QUARTER OF THE NORTHEAST OF SAID SOUTHEAST QUARTER; THENCE 408.96 FEET EAST PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER TO THE WEST LINE OF PARKSIDE LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNGTINGTON BEACH, RECORDED SEPTEMBER 20, 1968 IN BOOK 8727 PAGE 541 OF OFFICIAL RECORDS; THENCE NORTH 80.00 FEET ALONG SAID WEST LINE THAT 1S PARALLEL WITIi T1IE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER, AND WHICH PASSES THROUGH AND TRUE POINT AND PLACE OF BEGINNING; THENCE WEST 408.96 FEET, ALONG SAID LAST MENTIONED PARALLEL, TO THE TRUE POINT AND PLACE OF BEGINNING. EXCEPT THEREFROM ALL OIL, GAS, MINERALS AND OTHER HYDROCARBONS, BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEEDS OF RECORD. SAID LAND IS INCLUDED WITHIN THE AREA SHOWN ON A MAP FILED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 142-111-38 and 142-111-37 EXHIBIT "B" COPY OF NOTE [SEE FOLLOWING PAGES] 394M"294XW)i eos»9.05mmv3m EXHIBIT "B" PROMISSORY NOTE SECURED BY SUBORDINATED CORPORATION DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED THERETO DO NOT DESTROY THIS NOTE.- When paid, this Note, with the Deed of Trust securing same, must be surrendered to Trustee for cancellation before reconveyance will be made. PROMISSORY NOTE SECURED BY SUBORDINATED DEED OF TRUST Principal Loan Amount: $1,200,734 Note Date: August 31 , 1998 FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Holder"), at a place designated by Holder, the principal sum of ONE MILLION TWO HUNDRED THOUSAND SEVEN HUNDRED THIRTY FOUR DOLLARS AND NO CENTS ($1,200,734.00), or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof, pursuant to an Owner Participation Agreement (the "O P.A.") dated as of August 31, 1998 between Maker and Holder. The obligation of the Maker to the Holder hereunder shall be secured by a deed of trust made by the Maker encumbering the Site to be developed (the "Site") pursuant to the OPA and the Deed of Trust and Assignment of Rents dated August 31, 1998 , executed by the Maker and recorded in the Recorder's Office of Orange County, California, on to In _ , as Document No. t 4"Lq+_JTqJ "the "Trust Deed")_ "The obligation of the Maker set forth in this Note is subject to acceleration as set forth in the OPA. The OPA and the Trust Deed are public records on file in the offices of the Holder. l . 6 ency Loan. This Note evidences the obligation of the Maker to the Holder for the repayment of funds loaned to the Maker by the Holder (the "Agency Loan") to finance the development of the Site pursuant to the OPA. The Maker shall not make any sale, assignment or conveyance, or transfer in any other form, of the Site, or any part thereof, or interest therein without the express written consent of the Holder as set forth in Section 2.4 of the OPA_ 2. Payment of Obligation_ Unless a uncured Material Default of Maker shall have occurred under the Deed of Trust (as hereinafter defined) or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement [as such term is defined in the OPA]), or Maker has breached any promise or obligation in this Note, (i) no interest shall accrue op.. ' the unpaid principal of this Note; and (ii) a prorated portion of the total principal advanced hereunder shall be forgiven, waived, and discharged on each anniversary date of Note Date.set-f'ba.�. above in an amount equal to the total principal advanced hereunder divided by thirty (10),-'Le., one- SF-98Agrre Sher-3.Eyh-F-1 0RnINR - W.i Exhibit "V' - Promissory Nolc - Page 1 of 3 1bX-dtem -d&comment Agency CnY OF HUNTINGTON BEACH C-ame firwkwey. OW Clark Y Cfty thirtieth of the Note Amount shall be deemed waived and discharged by Maker as of each anniversary date of the Note Date. Holder is only requiring Maker to execute this Note as a promise to repay the Note Amount in the event of an uncured Material Default of Maker under the Deed of Trust, OPA, or Regulatory Agreement. Unless such uncured Material Default of Matter has occurred, Holder does not intend for Maher to make any principal payments or interest of any kind on this Note. Upon the forgiveness, waiver, and discharge of this Note as set forth above, Holder shall mark this Note "PAID IN FULL" and shall the deliver this Note to the Trustee of the Subordinated Deed of Trust that secures this Note for the 'Trustee's delivery to Maker in conjunction with the reconveyance of the Deed of Trust 3 No Prepayment. This note may not be prepaid. 4. Acceleration of Obligation. Upon the occurrence of a uncured Material Default of Maker under this Note, the Deed of Trust or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement), or in any other instrument now or hereafter securing the obligations evidenced hereby, then, and in any of such events, Holder may, at its option, and upon thirty (30) days prior written notice to Maker, declare this Note and the entire obligations hereby evidenced that has not been forgiven, waived, and discharged pursuant to Section 1 above, to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity- 5- DefauIt Interest. If any event occurs giving Holder the right to accelerate this Note pursuant to Section 4 above, the entire unpaid and unforgiven principal owing hereunder shall, 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 pennitted by law, whichever is less 6. Collection_ Costs, Attorneys' Fees. If any attorney is engaged by Holder because of any event of an uncured Material Default under this Note or the Deed of Trust or to enforce any provision of either instrument, whether or not suit is filed hereon, Holder shall bear its own attorney's fees and costs. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally, nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. 9. Usury. Notwithstanding any provision in this Note, Deed of Trust or other document securing same, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. SF-9ltAgree:Sher• 3- Gxh-F-1 O$V3I)W - #3 Exhibit " F' - Promissory Note - Page 2 of 3 10. Govemint~ Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. 1N WITNESS WHEREOF, Maker has executed this Note as of the date and year first above written. SF-98Agree Shrr-3:1`0 F-1 09/01199 - N 3 "PARTICIPANT" THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership By Its General Partner: T}IE BRIDGES AMERICA FOUNDATION, a Delaware Nonprofit Corporation By: " Name: (Type or print) -b1v-4--fro« Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President By: Natne: (Type or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary (iii) Chief Financial Officer (iv) Any Assistant Treasurer Exhibit "F" — Promissory Note — Page 3 of 3 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of CqAkrY1XA_ County of _ 01aLiq e- On s4pf �W 1, 1 g before me. A lVeJS*m 11/O&,2-f ` SIG, Dale "a"" Tift a1 offim tog. -.Jane Doe. l40wyPl6w) personally appeared V • H)ew° t �-xj Y Naino(sl o1 S"r1s) --?4proved to me on the basis of satisfactory evidence to be the person(* whose name( ,)®/ere subscribed to the within instrument and acknowledged to me that &94eftt<►ey executed the same in& tcrtttteir authorized capacity(*s), and that by &A+erfthei signatureFs) on the instrument the person ft L,urbAA. tELSOn or the entity upon behalf of which the person`() acted, corrnni ow # 1056263 executed the instrument. Wotcry Pubic — C(00ff*0 Worm0e CZ111 0My Conn E.gres.AI 23. 1999 WITNESS my hand and official seal. OIN=ry Though the information below is not required by law, it may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document. _ irOrn / SS'd rz{ J��� Document Dale: g8_ _ Number of Pages: affaeA"A.t Signer(s) Other Than Named Above: f -wle_- Capacity(ies) Claimed by Signer(s) Signer's Name: .SiEll&N%J V 1444t-d4SOQ jT- El r] J9 Individual Corporate Officer Title(s): Pariner — ❑ Limited ['I General Attorney -in -Fact Trustee Guardian or Conservator Other: 171 �2EGTA� Signer Is Representing: FVvryDAP 6AJ RIGHT THUNIBMNT OF SIGNER Signer's Name: n Fj Fj II Individual Corporate Officer Title(s): Partner -- ❑ Limited 0 General Attorney -in- Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER 0 1895 Notions) Notary Association - 8236 Remmot Ave. P o 13ox 7184 • Canoga Park. CA 91309-718A Prod NO 5907 Fto"r Cail TohFn)e 1.800-876-6027 EXHIBIT "C" ALLONGE TO NOTE [SEE FOLLOWING PAGE) NA779ns�ims EXHIBIT "C" ALLONGE TO NOTE FOR VALUE RECEIVED, and pursuant to that certain Assignment and Assumption Agreement between the parties hereto, of even date herewith, THE BRIDGES AMERICA SHER LANE, L.P., as the original Maker of that certain Promissory Note, with the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, as Holder, dated August 31, 1998, in the original principal loan amount of One Million Two Hundred Thousand Seven Hundred Thirty -Four Dollars And No Cents ($1,200,734.00) (the "Note"), hereby assigns to VPM SHER LANE, LP. ("Assignee") its obligations under the Note, Assignee hereby assumes the obligations under said Note, and Assignor is hereby released from any and all obligations under the Note. This Allonge shall be attached to the Note. This Allonge may be executed in counterp s. Dated: % G "ASSIGNOR" THE BRIDGES AMERICA SHER LANE, L.P. By: The Bridges America Foundation, a Delaware nonprofit corporation, its General Part4�&- By.t_6111--� o Ann lva Affordable Housing Coordinator "ASSIGNEE" VPM SHER LANE, L.P., a California limited partnership By: Affordable Housing Access, Inc., a non-profit California corporation its Managing General Partner By: Name: C OUNTERPART- Title: By: Co -Genera] Partner By: COUNTERPART Scott I. Barker By: Philip H. McNamee [signatures continued on next page] 19Y VA28-0=l EtOrr?9 05 aW5P lqt ALLONGE TO NOTE FOR VALUE RECEIVED, and pursuant to that certain Assignment and Assumption Agreement between the parties hereto, of even date herewith, THE BRIDGES AMERICA SHER LANE, L.P., as the original Maker of that certain Promissory Note, with the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, as Holder, dated August 31, 1998, in the original principal loan amount of One Million Two Hundred Thousand Seven Hundred Thirty -Four Dollars And No Cents ($1,200,734.00) (the "Note"), hereby assigns to VPM SHER LANE, L.P. ("Assignee") its obligations under the Note, Assignee hereby assumes the obligations under said Note, and Assignor is hereby released from any and all obligations under the Note. This Allonge shall be attached to the Note. This Allonge may be executed in countervarts. Dated: 7�L1�'� _ "ASSIGNOR" THE BRIDGES AMERICA SHER LANE, L.P. By: The Bridges America Foundation. a Delaware nonprofit corporation, its General Partner Ry: covr��T Jo Ann Ulvan Affordable Housing Coordinator "ASSIGNEE" VPM SHER LANE, L.P., a California limited partnership By: Affordable Housing Access, Inc., a non-profit Califo is corporation its Man• in eral P• By: G. Name: �•-/L[1R�+ �+. fllR,S'cht Title: By: Co -General Partner By: �! 1 'r' IttJ}}. BarkBy:! Gl.---- Phj ip H. McNamee (signatures continued on next page) W002"211-W i 6M77905 a0931AS CONSENT TO ASSIGNMENT: "HOLDER" REDEV—E.LQPNTWl—AlMNCY OF THE CITY OF HUNTINGTON BEACH TExecutive Director ) 71SIc -V A cy Secretary PPROVED AS TO FORM: gency Counsel f /� [end of signatures] 394RP_442f1-11(7[Il e09779.ii5 A5131 n5 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On July 19, 2005 , before me, ---------Robin Roberts, Notary Public , Dau Name and Too of Of kw (e g . ',lane Dos. Notary Puac ) personally appeared _ _ Joan L. Flynn , Name(S) d signer(s) personally known to me :i proved to me on the basis of satisfactory evidence to be the person(e) whose name(e) is/ate subscribed to the within instrument and acknowledged to me that-he/she/H! ay executed the same in his/her/thwir authorized ROBIN ROBERTS capacity(+), and that by tft/herltkeir Com.11511100 signature(s) on the instrument the person(Q, or MotArMra<tt•ut)row U1 the entity upon behalf of which the person(s) � u,acted, executed the instrument. WITNESS ;Mofficial seal. Place Notary Seal Above nature of Notary Pudic OPTIONAL Though the information below is not required by law, it may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document A Title or Type of Document: Allonge to Note - Bridges America -- Sher Lane Document Date: July 18, 2005 Number of Pages: 1 Signer+ Other Than Named Above: Jo Ann Ulvan, Scott J. Barker, Philip H. McNamee, Capacity(kw) Claimed by Signer Signer's Name: Joan L. El nn _ il ❑ Individual ` TOR o1 (humq Here ;1 Corporate Officer — Ttle(s): Agency Secretary Partner — C1 Limited ❑ General J Attomey in Fact ❑ rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing- The Redevelopment Agency of the City of Huntington Beach O t MO Masanal Navy ANODO on - DWO a SCO Are . P O Bo. 2ao2 • Cnan.o,m. CA 4i J i 324M - .m- rwjws&*wy om Prod NO SON PA*ao Cae 7os-Free r 4OP4766e77 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss_ County of 4=64,c 40 On z6k-s-before me, Qn & L - r - I B- hA, Dew b� - _ a arw remo1 0ft -,W" Doe. mury '1 personally appeared /�'o6drf 1 r_ &,— NX-em +! VEM L 00 n 1 Ie4OQ16�.Colmlbft Nalay P1t� - CelmCMMP CaryIAr personally known to me �vidtnCe to be the person ,w whose name(pyaafee subscribed to the within instrument and acknowledged to me thalgshek"y executed the same in �i 4er4�ex authorized capacily(4esr. and that by Ohef>`wm f signatureWon the instrument the personw, or the entity upon behalf of which the person45' acted, executed the instrument. WITNESS my hand and official seal_ PL tic OPTIONAL Though the information below is nor required by law, of may prove valuable to persons relying on the documenf and could prevent fraudulent removal and rearrachment of this form ro another document Description of Attached Document Title or Type of Document: I_p � Q2i� TO NB te-, Document Date- / r "�S Number of Pages: O� Signer(s) Other Than Named Above: Ja 09Kh L[_ldUfi, CCi[ [Qlfc,�Li•l�Irr, i SCtt.T 9cy� N.I �e �a�st Capacity(ies) Claimed by Signer Q Signer's Name: _ 1&berf / , [ar&k,, 11 Individual Tco of lrxn r�:e Cl Corporate Officer — Title(s): _ 4 C Partner —I Limited C General .r " C Attomey-in-Fact Trustee 1 V" ❑ Guardian or.Conservator r�Q, X.other: )(,e We, am/ --- Signer Is Representing /1 _. _. � e!pd Q 019%Nehw4iNoteryeesnmbo -OW Ds Sob Ave. PO Bo. 2so2-CNts+oft Cx91313.2e02--r%mboheblO:eryOtg PrhQ No S907 RgWder_C.1TOM-Free 1-gQpg76.6V7 GOVERNMENT CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENI' TO WHICH THIS STATEMENTIS ATTACHED READS AS FOLLOWS. NAME OF NOTARY: Teryll L. King UATL'• COMMISSION EXPIRES- Oct 12, 2007 COUNTY WHERE BOND IS FILED: Orange COMMISSION NUMBER: 1440952 MANUFACTURERIVENDOR NUMBER: NNAI PLACE OF EXECUTION: Santa Ana, CA DATED: July 27, 2005 SIGNATURE- EXHIBIT "D" ASSIGNMENT OF DEED OF TRUST [SEE FOLLOWING PAGES] 394W4421N1ftt11 MM"9_05OY31RI5 EXHIBIT -D" This Document was electronically recorded by First American Title B RECORDIM REQUESTED BY FlRSUBM� �� Recording Requested By And When Recorded Mail To: J P �rn 51%cA L ?A Op W1kti ,n ST�ic�r t SrE. �[ 5 r .^A y C'O, nt2co ty Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 1111110 10111011 11 Q11142.00 2005000580310 12:45pm 07/27/05 119 13 A32 13 0.00 0.00 0.00 0.00 36.00 0.00 0.00 0.00 t-7-*7 Z(o Z Lr [SPACE ABOVE FOR RECORDER'S USE] ASSIGNMENT OF DEED OF TRUST FOR VALUE RECEIVED, the undersigned Trustor grants, assigns, and transfers to VPM SHER LANE, L.P., a California limited partnership ("New Trustor'), whose address is all of the rights, title, interest, duties, liabilities, and obligations of Trustor under that certain "Subordinated Deed of Trust With Assignment of Rents With Rider Attached Hereto," dated August 31, 1998. and recorded in the Official Records of Orange County, California as Instrument No. 19980669844, together with the note or notes therein described or referred to. This Assignment may be executed in counterparts. Dated: [ ` 2 z - Zot) "TRUSTOR" THE BRIDGES AMERICA SHER LANE, L.P. By: The Bridges America Foundation, a Delaware nonprofit corporation, its General Partner By: Ann Ulvan Affordable Housing Coordinator [signatures continued on following pagcj N.W"9 of 305n Trot -1- "NEW TRUSTOR" VPM SHER LANE, L.P., a California limited partnership By- Affordable Housing Access, Inc., a non-profit Californi corporation its Mana Ong al Partnelr By: u/` Name: 4 $.LLjAA% 4+ N+4fCi4 Title: Pit f Dr—r By: Co -General Partner M By: [signatures continued on following page] 394M2"284M i -2- NOUN 05 aPS!ti 1,115 CONSENT TO ASSIGNMENT BY TRUSTEE AND BENEFICIARY: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, the TrusuwtBeneficidlv--� F. ve Director -b Ag y Secretary pproved As To Form: Cgency'Co nsel [end of signatures] enxm Ws .Mn i ms -3- 71,5/vS'. %&J-o 0— STATE OF ] COUNTY OF ORr4Mer- On before me, ScdA SVokiA , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names) is/are subscribed to the within instrument and acknowledged to me that helshe/they executed the same in his/her/their authorized capacity(ies), and that by hisftr/their signaturcs(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official $eai-- �c f: •° Y O ; '` P1. c O :vVi• � �•�� gam;, [SEAL]TA TV, 11868133510 STATE OF CALIFORNIA } } .ss COUNTY OF ORANGE- [ Nougy Public On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons) whose name(s) Ware subscribed to the within instrument and acknowledged to me that helshelthey executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] )94MZ442*- ool 60SM 03 Y7SA i US -4- GOVERNMENT CODE 27361.7 1 CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON "I IIE DOCUMENT TO WHICH TI IIS STATEMENT IS Al-fACHED RFADS AS FOLLOWS: NAME. OF NOTARY: Scott Skolrud DATE COMMISSION EXPIRES: COUNTY WHERE BOND IS FILED: COMMISSION NUMI3ER: MANUFACTURERA -IENDOR NUMBER: PLACE OF FXFCUfION: Santa Ana, CA DATED- July 27, 2005 SIGNATURE: ht&,,A�- STATE OF CALIFORNIA ) }.SS COUNTY OF ORANGE } 2005 Carole J. Norris, Notar Public On June 24, , before me, }' personally appeared Scott J. Barker and Philip H. McNamee personally known to me -(,or Prcwed to me an she isis to be the person(s) whose name(s) -Ware subscribed to the within instrument and acknowledged to me that hak-Ae/they executed the same in hi&&Wtheir authorized capacity(es), and that by h+oAw/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. GROLE J. MOM Canmiuion # 1402370 ?;JAMZ� [SEAL] Notary Pubft • Cawww Orww county A- Carton. Eq*n Feb 26. 2007 STATE OF CALIFORNIA } } .ss COUNTY OF ORANGE } On before me, personally appeared I personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behall'of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL) 39.M"2R-0001 W8 ny as AW 1 cos -5- GOVERNMENT CODE 27361.7 I CERTIFY UNDFR PENALTY OF PERJURY TI IAT THE NOTARY SEAL ON THE DOCUMENT TO WHICH THIS STATEMENT IS ATTACHED READS AS FOLLOWS: NAME OF NOTARY: Carole J- Dorris DATE: COMMISSION EXPIRES- Feb 26, 2007 COUNTY WI-117RE BOND IS FILED- Orange COMMISSION NUMBER: 1402370 MANUFACI'URIiWV1iNDOR NUMBER: NNAI PLACE OI: EXECUTION- Santa Ana, CA DATED: July 27, 2005 SIGNATURE: STATE OF CALIFORNIA } } .ss COUNTY OF ORANGE } On UYIQ, 211 UK before me, rn l � � �'_'- personally appeared WAIjAm W. Hiirst,[n, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names) Ware subscribed to the within instrument and acknowledged to me that he/shelthey executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. HILDA L. JUSUF Comm.113622231 NOTARY PUBLIC - CALIFORM oruge Canny YT Comm_ Elpuas bpa2S-m l [SEAL] 3%A124429 tm I 609779 as aM M.A —6— Notary Public GOVERNMENT CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON TI-i1- DOCUMENT TO WHICH TIIIS STATEMENT IS ATI'ACIII:D READS AS FOLLOWS - NAME OF NOTARY- Carole J_ Norris DATE COMMISSION EXPIRES- Feb- 26, 2007 COUNTY Will -RE BOND IS FILED: Orange COMMISSION N ;MBI:R: 1402370 MANUFACTUREILNENI)OR Ni1Ml3ER- NNA1 PLACE OF EXECUTION: Santa .Ana, CA DA'I'1:D- July 27, 2005 SIGNATURE: CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of Califomia ss. County of Orange On July 19, 2005 , before me, --Robin Roberts, Notary Public Date Name and Tile of OKlcsr (e g . "Jane Doe. Nomy R tMrc') personally appeared Joan L. Flynn ----- _ Nams(s) of Srpnelts) personally known to me ::1 proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/Oiey executed the same in 4+s/her/!hair authorized capacity(iae), and that by -his/herftheic_ ROBIN ROBERTS signature(s) on the instrument the persorr(s), or Gomm.11552T00 the entity upon behalf of which the person(s) N "D' acted, executed the instrument. {,oeat Feb. 11,1009i ESS my han and official seal. Place Notary Seal A)ove S"ture Of NOtary Public OPTIONAL Though (he information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Assignment of Deed of Trust — Sher Lane Document Date: July 18, 2005 Number of Pages: 1 Signer04 Other Than Named Above= Jo Ann Ulvan, Scott J. Barker, Philip H. McNamee, Capacity(") Claimed by Signer Signer's Name: Joan L. Flynn ❑ Individual 2�' Corporate Officer — Title(s): Agency Secretary Partner — U Limited ❑ General Attorney in Fact ❑ .*r-ustee ❑ Guardian or Conservator ❑ Other Signer Is Representing- The Redevelopment Agency of the City of Huntington Beach O 1 pep NaftnW Wry AewxnnM • MO N Son Ave . P O Bm 2402 • CroM wT. CA 0131}24a2 • www re111orveratary org Prod No Se02 PAordr Caa Tc&Fry 1 400�-97e-WV GOVERNMENT CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THATTHE. NOTARY SEAL ON THE: I}OCUMENT TO WHICH 'PHIS STATEMENTIS A"I`TACIII:D READS AS FOLLOWS: NAME, OF NOTARY: Robin Roberts DATA: COMMISSION EXPIRE•.S- Feb 14, 2009 COUNTY WIIERE 13OND IS FILED- Orange COMMISSION NUMBER - 1552700 MANUFACTURER/VENDOR NUMBER: VS11 PLACE OF EXECUTION- Santa Ana, CA DATED- July 27, 2005 SIGNATURE- V CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California 55 County of �( L(—/�7QJ,[iJ On / a� _ before me, l C�'4 ! l Z. I . Du• Norm aro rdb & orico q . •.W a one ic.o ["1 personally appeared Nar1Ws1 d ywlq personally known to me OV +ee TEMll L XM C01t1111rbn / 140M NokxV AID - CerNNft 01p! Carlgf IlyOcwwt` �� OC112. to be the perso5Awhose namei��a subscribed to the within instrument and acknowledged to me tha Isba4hay executed the same in is authorized capacity(wST, and that by 91 /herfll►e+f signature on the instrument the personjK, or the entity upon behalf of which the person�a"f acted, executed the instrument- WITNESA my hand and official seal_ — -- sgrwwo a 09A Pup•C OPTIONAL Though the information below is not required by law, if may prove valuable to persons relying on the document and Could prevent trauduteni removal and reattachment of Mrs form to another document Description of Attached Document Title or Type of Document: 6`GCUI i' i (1YL Document Date: _rill 310 Number of Pages: Signer(s) Other Than Named Above- -r7 AA 11 M L/&YU 10 - 9 Capacity(ies) ClaimedbySigner --``__ Signer's Name- fro kr f f A=.r s(-tw Wel ❑ Individual TO ql ft ;o ritwe F! Corporate Officer — Title(s): �� r - Partner — J Limited _; General ] J Attomey-in-Fact N I Trustee LI Guardian or Conservator Other. 1 ete L hV_ Qt to r Signer Is Representing: O19"NN-,A]NaurAa•0mum•WMDeSolo A.•_DO 80.24M•ChWSsK n_CA91]1}2AD2•. nawVYgte7pp Prep No 5307 P• dv C43Toa.Fro•1aDDar&682r GOVERNMENT CODE 27361.7 I CE'R`I'IIY UNDER PENALTYOF PERJURY THAT THE: NO'I ARY SEAL ON THE" DOCUMENT'I O WHICH THIS STATEMENT T IS A'I'I'ACHED READS AS FOLLOWS- NAM1: OF NOTARY: Teryll L. King DATE COMMISSION EXPIRES: Oct 12, 2007 COUNTY WHERE BOND IS FILED: Orange COMMISSION NUMBER: 1440952 MANUFACTURFRtiTNDOR NUMBER LANAI PLACE OF EXECUTION = Santa Ana, CA DATED- July 27, 2005 SIGNATURE.: Lm—MA�—Q RmFOM FMOUESM Oy FIRST*� TITLE CDMPANY QEPAUMNT This Document was electronically recorded by First American Title-13 RECORDING REQUESTED BY First American Title Company AND WHEN RECORDED MAIL TO: VPM Sher Lane, LP 2400 Main Street, Suite 201 Irvine, CA 92614 Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 55.00 2005000580308 12:45pm 07/27/05 119 13 G02 4 4647.50 4647.50 20.00 20.00 9.00 0.00 0.00 0.00 Pne r ite[order"s Use Only A.P.N.: 142-111-38 and 142-111-37 w 1 ` " File No.: OSA-1575262 (RCB) GRANT DEED The Undersigned Grantor(s) Declare(s) DOCUMENTARY TRANSFER TAX S1111ea CITY TRANSFER TAX $0.00; X computed on the consideration or full value of property conveyed, OR computed on the consideration or full value less value of Dens and/or encumbrances remaining at time of safe, unincorporated area; I X ) City of Huntington Beach, and FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, The Bridges America Sher Lane, L.P., a California Limited Partnership hereby GRANTS to VPM Sher Lane, LP, a California Limited Partnership the following described property in the City of Huntington Beach, County of Orange, State of California: PARCEL 1: THAT PORTION OF THE NORTHEAST QUARTER OF SECTION 23, TOWNSHIP 5 SOUTH, RANGE 11 WEST, PARTLY IN THE RANCHO LA BOLSA CHICA AND PARTLY IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, AS PER MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF SAID NORTHEAST QUARTER WITH THE EAST LINE OF SHER LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNTINGTON BEACH, RECORDED DECEMBER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCE NORTH 180.00 FEET ALONG SAID EAST LINE; THENCE EAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER; THENCE SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; THENCE EAST 90.00 FEET PARALLEL WITH SAID NORTH LINE; THENCE SOUTH 80.00 FEET PARALLEL WITH SAID EAST LINE TO THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF SAID NORTHEAST QUARTER; THENCE WEST 436.00 FEET TO THE POINT OF BEGINNING. SAID LAND IS INCLUDED WITHIN THE AREA SHOWN ON A MAP FILED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. Mail Tax Statements To SAME AS ABOVE A.P.N.: 142-111-38 Grant Deed - continued File No.:OSA-1575262 (RCB) Date: 04/ 12/2005 EXCEPT THEREFROM ALL OIL, GAS, MINERALS AND OTHER HYDROCARBONS, BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEEDS OF RECORD. PARCEL 2: THAT PORTION OF THE NORTHEAST QUARTER OF SECTION 23, TOWNSHIP 5 SOUTH, RANGE 11 WEST, IN THE RANCHO LA BOLAS, IN THE CITY OF HUNTINGTON BEACH, AS PER MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF SAID NORTHEAST QUARTER WITH THE EAST LINE OF SHER LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNTINGTON BEACH, RECORDED DECEMBER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCE NORTH 180.00 FEET ALONG SAID EAST LINE; THENCE EAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER THENCE SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; THENCE EAST 90.00 FEET PARALLEL WITH SAID NORTH LINE TO A POINT WHICH POINT IS THE TRUE POINT AND PLACE OF BEGINNING; THENCE SOUTH 80.00 FEET PARALLEL WITH SAID EAST LINE TO THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHWEST QUARTER OF THE NORTHEAST OF SAID SOUTHEAST QUARTER; THENCE 408.96 FEET EAST PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER TO THE WEST LINE OF PARKSIDE LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNGTNNGTON BEACH, RECORDED SEPTEMBER 20, 1968 IN BOOK 8727 PAGE 541 OF OFFICIAL RECORDS; THENCE NORTH 80.00 FEET ALONG SAID WEST LINE THAT IS PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER, AND WHICH PASSES THROUGH AND TRUE POINT AND PLACE OF BEGINNING; THENCE WEST 408.96 FEET, ALONG SAID LAST MENTIONED PARALLEL, TO THE TRUE POINT AND PLACE OF BEGINNING. EXCEPT THEREFROM ALL OIL, GAS, MINERALS AND OTHER HYDROCARBONS, BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEEDS OF RECORD. SAID LAND IS INCLUDED WITHIN THE AREA SHOWN ON A MAP FILED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. Dated: 4 12 2005 Page 2 ,j[ 3 A.P.N.: 142-111-38 The Bridges America Sher Lane. L.P., a California Limited Partnership Wits, Authorized Signer STATE OF �TZ/�►�t )SS Grant Deed - continued File No.:OSA-1575262 (RCB) Date: 04/ 12/ 2005 COUNTY OF On 6/ 7- O— , before me, personally appeared _To a " C au r A L( i >Ia^ (or proved to me on the basis of satisfactory evidence) to be the personKwhose nameN is/ace subscribed to the within instrument and acknowledged to me that-he/she/they executed the same in4tiy/her/tAetr authorized capaaty(ies), and that by +1is/her/thew signatureO on the instrument the personO, or the entity upon behalf of which the person(-4 acted, executed the instrument. WITNESS my hand and official seal. Signature My Commission Expires: This area for official notarial seal DU1HE SWTH _ Commission i 1325C74 Notary Pudic - Ca Mon" Orange County MY Conrn EMies Oct 13, 2W6 Notary Name: 1�vk-e SN -( _ Notary Phone:?/ Notary Registration Number: 13Z5V-?c_ County of Principal Place of Business: Page 3 of 3 GOVERYNIEYC CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON I HE DOCUMENT TO WHIC11 "PHIS SI'ATFMENT IS A17ACHLD READS AS FOLLOWS - NAME OF NOTARY Diane Smith DATE COMMISSION EXPIRES. Oct 13, 2005 COUNTY WHERE BOND IS FILI D. Orange COMMISSION NUMBER- 1325074 MA\NUFACTUR.EWVENDOR ``Ul%-IBER- LANAI PLACE OF EXECUTIOti Santa Ana, CA DATED- July 27. 2005 SIGNATURk- Owners Participation Agreement for Sher Lane Apartments ATTACHMENT 2 OWNER PARTICIPATION AGREEMENT By and Between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic and THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership TABLE OF CONTENTS Page SECTION 1. DEFINITIONS..................................................................................... 1 SECTION 2. SUBJECT OF THIS AGREEMENT ................................................... 4 2.1 Purpose of the Agreement.............................................................4 2.2 The Redevelopment Plan.............................................................. 5 2.3 Participant.................................................................................... 5 2.4 Prohibition Against Transfers....................................................... 5 SECTION 3. FINANCING AND ACQUISITION OF THE SITE ........................... 6 3.1 Ownership of the Site................................................................. 6 3.2 Agency Financial Assistance....................................................... 7 3.3 Form of Agency Financial Assistance; Purpose of Note and Security...................................................................................... 7 3.4 Escrow......................................................................... 3.5 Agency's Conditions to Closing .................................................. 8 3.6 Participant's Conditions to Closing .............................................. 9 3.7 Broker's Fees ........................................... .._. 10 3.8 Subordination Agreements........................................................ 10 3.9 Agency Rehabilitation Assistance ............................................... 11 SECTION 4. DEVELOPMENT OF THE SITE ..................................................... 12 4.1 General..................................................................................... 12 4.2 Construction of the Project........................................................ 12 4.3 Insurance................................................................................... 14 4.4 Indemnification .............. .................................................. . ......... 14 4.5 Hazardous Substances................................................................ 15 4.6 Security Financing; Right of Holders ......................................... 15 4.7 Release of Construction Covenants ............................................ 16 4.8 Mechanics Liens, Stop Notices, and Notices of Completion ........ 16 SECTION S. USE OF THE SITE ............................... .....17 5.1 No Inconsistent Uses................................................................. 17 5.2 Regulatory Agreement............................................................... 17 5.3 Relocation................................................................. ............ 17 5.4 Maintenance of the Site............................................................. 18 5.5 Nondiscrimination..................................................................... 18 5.6 Form of Nondiscrimination and Nonsegregation Clauses ............18 5.7 Effect and Duration of Covenants ............................................... 19 5.8 Capital Reserves............................................................... ....... ..19 5.9 Payment of Portion of Residual Receipts....................................19 5.10 Financial Statements.................................................................. 20 SF-98Agree: Sher-3 gn"S-a2 SECTION 6. DEFAULTS AND REMEDIES.......................................................... 20 6.1 Participant Defaults.................................................................... 20 6.2 Agency Defaults...................................................... 6.3 Notice of Default ........................................ ...... 21 6.4 Agency's Remedies..................................................................... 21 6.5 Participant's Remedies ............................................ .................. ..21 6.6 Rights and Remedies are Cumulative ......................................... 21 SECTION 7. GENERAL PROVISIONS.................................................................. 21 7.1 Governing Law.......................................................................... 21 7.2 Attorneys' Fees.......................................................................... 21 7.3 Notices, Demands, and Communications Between the Parties........................................................................................ 21 7.4 Acceptance of Service of Process ............................................... 22 7.5 Conflicts of Interest................................................................... 22 7.6 Titles and Captions................................................................._...22 7.7 Gender.......................................................................................22 T8 Modifications .............................•--------------------------- ............... 22 7.9 Merger of Prior Agreements and Understandings ........................ 23 7.10 No Third Parties Benefited......................................................... 23 7.11 Assurances to Act in Good Faith ................................................ 23 7.12 Warranty Against Payment of Consideration for Agreement ....... 23 7.13 Nonliability of Agency Officials and Employees .........................23 7.14 Interpretation............................................................................. 23 7.15 _Counterparts......................................................... ........ 23 7.16 Severability.................................................................................23 7.17 Extension of Times of Performance ........................................... 23 7.18 Inspection of Books and Records................................................24 7.19 Waivers......................................................................................24 SECTION 8. EXECUTION OF AGREEMENT; TMIE FOR ACCEPTANCE.................................................................................... 24 ATTACHMENTS EXHIBIT "A" LEGAL DESCRIPTION OF SITE EXHIBIT "B" SITE MAP EXHIBIT "C" SCOPE OF DEVELOPMENT EXIBIT "D" SCHEDULE OF PERFORMANCE EXHIBIT "E" RELEASE OF CONSTRUCTION COVENANTS SF-98Agree:Sher-3 8/25M - a2 EXHIBIT "F" PROMISSORY NOTE EXHIBIT "G" SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED EXHIBIT "H" FORM OF SUBORDINATION AGREEMENT EXHIBIT "I" REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS EXHIBIT "J" PROJECT BUDGET/PRO FORMA SF-96AQee Sher-3 V25199 - u2 OWNER PARTICIPATION AGREEMENT THIS OWNER PARTICIPATION AGREEMENT ("Agreement") is entered into as of the 31' day of August, 1998 ("Effective Date'), by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership ("Participant"). RECITALS A Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (California Health and Safety Code Section 33000 et sec . B. Participant has opened an escrow to acquire the "Site" (as such term is defined herein) from the Pham Trust ("Pham Trust") and intends to develop the "Project" (as such term is defined herein) on the Site in accordance with the terms of this Agreement. C. Agency desires to meet its affordable housing goals pursuant to the California Community Redevelopment Law by assisting Participant in the acquisition of the Site to facilitate Participant's rehabilitation -in -place of an existing apartment complex on the Site with the units, after rehabilitation, subject to the terms of this Agreement, rented to tenants whose household incomes do not exceed very low income, low income, and median income as defined by California law. Agency's assistance shall be in the form of a self-liquidating loan in the amount of ONE MILLION SIX HUNDRED TWELVE DOLLARS ($1,000,612) to assist Participant in meeting the cost of acquisition of the Site and rehabilitation of the apartment complex, and additional assistance in the form of a self-liquidating loan of Two Hundred Thousand One Hundred Twenty-two Dollars ($200,122.00) through the HOME Investment Partnership Program, or if such HOME Funds are not timely provided as set forth herein, with additional Agency assistance in that same amount as provided herein. The total assistance shall be One Million Two Hundred Thousand Seven Hundred Thirty-four Dollars ($1,200,734.00). 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: AGREE NIENT SECTION 1. DEFINITIONS The following terms, as used in this Agreement, shall have the meanings given unless expressly provided to the contrary: SF-98Agee:Sher-1 08n V98 - #3 The term "Agency" shall mean the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to, the rights, powers, and responsibilities of Agency. The term "Agency Deed of Trust" shall mean the Subordinated Deed of Trust with attached hereto as Exhibit "G". The term "Agency Loan" shall mean collectively, (t) the Agency's self-liquidating loan to Participant in the amount of One Mullion Six Hundred Twelve Dollars ($1,000,612.00), and (ii) the additional assistance from either HOME Funds or additional Agency Low and Moderate Income Housing Funds in the amount of Two Hundred Thousand One Hundred Twenty Two Dollars ($200,122.00), as evidenced by the Note in the total amount of One Million Two Hundred Thousand Seven Hundred Thirty -Four Dollars ($1,200,734.00), and secured by the Agency Deed of Trust. The term "Agreement" or any reference to this "Agreement" shall mean this Owner Participation Agreement executed by and between Agency and Participant, including all exhibits attached hereto, which exhibits are incorporated herein by this reference and all other documents incorporated herein by reference. The term "Approved Project Plans and Permits" shall mean all of the plans, permits, and approvals required for the Project, as approved by the Agency and/or the City including, but not limited to, preliminary and final drawings (final drawings shall be in sufficient detail to obtain a building permit), site plans, building plans and elevations, grading plans, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications that City and Agency customarily require for such a Project, and including all required approvals and findings pursuant the California Environmental Quality Act of 1970, as amended, and regulations promulgated thereunder ("CEQA"), and, if applicable, the National Environmental Policy Act of 1969, as amended, and regulations promulgated thereunder. The term "City" shall mean the City of Huntington Beach, a municipal corporation, having its offices at 2000 Main Street, Huntington Beach, CA 92648. The term "Construction/Permanent Lender" shall mean one or more lenders of Participant's choice providing funds for the Participant's rehabilitation of the Units, including any replacement or permanent lender that replaces the construction lender in an amount not to exceed Thirty-five Thousand Dollars ($35,000.00). The term "Days" shall mean calendar days and the statement of any time period herein shall be calendar days and not working days, unless otherwise specified. The term "Effective Date" shall mean the date the Agency approves this Agreement, which date shall be inserted into the preamble of this Agreement. SF-98Aglee-Sher-34 2 09n1/" •3 The term "Eligible Tenant" shall mean any person entitled to rent a Unit as set forth in the Regulatory Agreement. The term "Escrow" shall mean that certain escrow with Orange Coast Title Company, Escrow Division, which has been established to convey the Site from the Pham Trust to Participant, and into which Agency shall deposit the portion of the Agency Loan funds described in Section 3.2 in accordance with the terms of this Agreement. The term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of the Agency, or authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or an authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved under California law wholly for Agency Board determination. The term "First Deed of Trust" shall mean the deed of trust recorded in first position at close of escrow as security for the loan obtained by Participant from a lender of Participant's choice in an amount not to exceed Three Million Four Hundred Thousand Dollars ($3,400,000). The term "Force Majeure" shall mean any war; insurrection, strike, lock -out; labor dispute; riot; flood; earthquake; fire; casualty; Act of God; act of the public enemy-, epidemic; quarantine; restriction, freight embargo; unavoidable lack of transportation; governmental restriction; unusually severe weather;'inabiiity to secure necessary labor, materials. or tools; delay of any contractor, subcontractor or supplier; economic or market conditions; lack of tenant commitments or tenant changes; inability to secure satisfactory financing-, act of the other party including act or failure to act of City or any other public or governmental agency or entity (except that any act or failure to act of City or Agency shall not excuse performance by Agency); or any other cause beyond the control or without the fault of the party claiming an extension of time to perform_ The term "Grant Deed" shall mean that certain Grant Deed that conveys the Site from the current owner, the Pham Trust, to Participant. The term "Note" shall mean that certain Promissory Dote Secured by Subordinated Deed of Trust attached hereto as Exhibit "F". The term "Participant" shall mean THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership, whose address is 19837 Brookhurst Street, Suite 303, Fountain Valley, CA 92708. The Term "Project" shall mean generally the rehabilitation of the existing apartment complex on the Site and the subsequent rental of the Units therein to Eligible Tenants, pursuant to the procedures set forth herein and more particularly described in the Scope of Development. The term "Project Budget/Pro Forma" shall mean the sources and uses of funds for acquisition of the Site and the development of the Project as set forth in Exhibit " 3" SF-98Agree:Slier -3-1 3 086 r98 •3 The term "Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions attached hereto as Exhibit "I". The term "Rehabilitation Account" shall have the meaning ascribed in Section 3.9. The term "Release of Construction Covenants" shall mean that release attached hereto as Exhibit "E" issued by Agency to Participant pursuant to the provisions of Section 4.7 below. The term "Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit "D" setting forth the times upon which performance by the parties under this Agreement is due. The term "Scope of Development" shall mean that certain exhibit attached hereto as Exhibit "C". The term "Second Deed of Trust" shall mean the deed of trust recorded in second position at close of escrow as security for the loan obtained by Participant from the Pham Trust as seller financing in an amount not to exceed Eight Hundred Thousand Dollars ($800,000)_ The term "Site" shall mean that certain real property located in the City of Huntington Beach, County of Orange, State of California commonly known as 16112 Sher Lane, Huntington Beach, California, and legally described in Exhibit "A" and depicted on the Site Map. The term "Site Map" shall mean the map attached hereto as Exhibit "B" depicting the location of the Site. The term "Subordination Agreement" shall mean the form of Subordination Agreement attached hereto as Exhibit "H". The term "Units" shall mean the sixty-six (66) dwelling units comprising the Project and subject to rent restrictions as set forth in the Regulatory Agreement. SECTION 2. SUBJECT OF THIS AGREEMENT. 2.1 Purpose of the Agreement (a) The purpose of this Agreement is to implement the Community Redevelopment Law by providing a loan (the "Agency Loan") to assist Participant to pay a portion of the Project costs, in an amount not to exceed One Million Two Hundred Thousand Seven Hundred Thirty -Four Dollars ($1,200,734.00), as evidenced by the Note secured by the Agency Dedd of Trust, which Agency Loan is composed of (ii) One Million Six Hundred Twelve Dollars ($1,000,612) in funds from the Agency's Low and Moderate Income Housing Fund, which funds are not federal funds or the proceeds of a tax-exempt bond issue, and Two Hundred Thousand One Hundred Twenty-two Dollars ($200,122.00) [pursuant to a separate contract with City] in HOME SF-98Aace Sher-3-1 on1;9S •3 Program rehabilitation funds or that same amount in additional Agency Low and Moderate Income Housing Funds as provided in Section 3.9. (b) This Agreement is intended to facilitate Participant's acquisition of the Site and rehabilitation of the existing apartment complex located thereon for rental to very low and low income tenants. 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 has been undertaken and is being assisted. (c) The Project will be used and operated for not less than thirty (30) years as mixed income rental housing, with not less than fifty percent (50%) of the apartments restricted to occupancy to Eligible Very Low income Tenants at an Affordable Rent, and the remainder restricted to occupancy to Eligible Special Median Income Tenants (as those terms are defined in the Regulatory Agreement). 2.2 The Redevelopment Plan. This Agreement is made in accordance with the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project") which was approved by adoption of Ordinance No. 3343 on December 16, 1996, and which merged together four different, previously approved project areas_ The Site is located outside of the Merged Redevelopment Project. Agency intends this Agreement to meet its obligations pursuant to Health and Safety Code Sections 33413, 33334 2 and 33413(b)(2)(A)(ii). 2.3 Participant The Participant is The Bridges America Sher Lane, L.P., a California limited partnership, whose address is 18837 Brookhurst Street, Suite 303, Fountain Valley, CA 92709. 2.4 Prohibition Aizainst Transfers. (a) The qualifications and identity of the Participant are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Participant. No voluntary or involuntary successor in interest of the Participant shall acquire any rights or powers under this Agreement except as expressly set forth herein (b) The Participant shall not assign all or any part of this Agreement without the prior written approval of the Agency. The Agency agrees to reasonably give such approval if: (1) the change is to a limited partnership formed for financing the Project, in which the original Participant or its general partner is the managing general partner, or possesses not less than a 50% interest in the managing general partner, and has control over the management of the partnership; and (2) if in the reasonable determination of the Agency, the proposed reconstituted Participant is comparable in all material respects (including experience, character and financial capability) to the Participant. Any such change (or assignment of this Agreement in connection therewith) shall be by instruments satisfactory to the Executive Director (or his designee), and be subject to the approval by the Executive Director (or his designee) of evidence of the proposed assignee's qualifications to meet the obligations of the Participant under this Agreement. Sr-98Agree Sher-3-1 5 08/311-98 -3 (c) For the reasons cited above, the Participant represents and agrees for itself and any successor in interest that without the prior written approval of the Agency, there shall be no significant change in the ownership of the Participant or in the relative proportions thereof; or with respect to the identity of the parties in control of the Participant or the degree thereof, by any method or means. (d) The Participant shall promptly notify the Agency of any and all changes whatsoever in the identity of the parties in control of the Participant or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by the Agency and the Agency may exercise its remedies pursuant to the Agency Note and Agency Deed of Trust, if there is any significant change (voluntary or involuntary) in membership, management or control, of the Participant (other than such changes occasioned by the death or incapacity of any individual). (e) Participant shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Site (referred to hereinafter as a "Transfer"), without prior written approval of the Agency, except as expressly permitted by this Agreement. Consent to a Transfer shall not result in acceleration of the Agency Note. Consent to one such Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers_ Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Agency, to fulfill the obligations undertaken in this Agreement by the Participant. Any such proposed transferee, by instrument in writing satisfactory to the Agency and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Participant under this Agreement and agree to be subject to all conditions and restrictions applicable to the Participant in this Agreement. There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such Transfer, and if approved by the Agency its approval shall be indicated to the Participant in writing. (0 In the absence of specific written agreement by the Agency, no unauthorized Transfer, or approval thereof by the Agency, shall be deemed: to relieve the Participant or any other party from any obligations under this Agreement- (g) The provisions of this Section 2.4 shall be of no force or effect as of the expiration of the Regulatory Agreement. SECTION 3. FINANCING AND ACQUISITION OF THE SITE. 3.1 Own- ership of the Site. As of the Effective Date of this Agreement, Participant is in escrow to acquire the Site from the Pham Trust and as such Participant qualifies as an "owner - participant" within the meaning of the Community Redevelopment Law (Health & Safety Code §33000_et seq.) Participant's financing of the acquisition of the Site includes Participant's equity, financing secured by the First Deed of Trust, seller financing secured by the Second Deed of Trust, and use of a portion of the Agency Loan. SF-98Agrcc Sher-3.1 6 0801 r98 -3 3.2 Agency Financial Assistance. The Agency, in accordance with the terms of this Agreement, shall provide to Participant the Agency Loan. Upon satisfaction of all conditions precedent (or waiver by Agency) to Agency's obligation to disburse the Agency Loan under this Agreement, Agency shall deposit approximately Seven Hundred Thirty-five Thousand Dollars ($735,000.00) bf the Agency Loan funds into Escrow for disbursement to Participant at Close of Escrow (Participant shall provide Agency's Executive Director with notice of the exact amount Agency is to deposit), with the remainder to be disbursed to pay for the costs of rehabilitation of the Site. 3.3 Form of Agency Financial Assistance; Pu3r ose of Note and Securit . The parties hereto expressly acknowledge that the Agency Loan funds to be provided to Participant under this Agreement is intended to be a self-liquidating loan, assuming Participant's performance of its obligations hereunder. In the event Participant is in material default of any of its obligations hereunder, including its obligations under the Regulatory Agreement, Agency's sole and exclusive remedy shall be to foreclose under the Agency Deed of Trust. 3.4 Escrow. This Agreement, once deposited in Escrow, shall constitute joint escrow instructions of Agency and Participant. The Escrow agent is hereby empowered to act under the Agreement and upon indicating its acceptance in writing to Agency and Participant within five (5) days after receipt of this Agreement; provided, however, that any undertaking by the Escrow agent of any of the acts or services set forth in this Agreement shall constitute acceptance of the obligation to perform as Escrow agent under this Agreement. Any amendment to the Escrow instructions contained herein shall be in writing and signed by both Agency and Participant. (a) Closing Date_ On or before the date established in the Schedule of Performance, the parties shall satisfy the conditions described in Sections 3.5 and 3.6 and complete the Close of Escrow. If, for any reason, the Close of Escrow has not occurred by the date provided therefor in the Schedule of Performance, either party may terminate this Agreement, by providing notice of termination to the other party. (b) Delivejy of D ments and Funds by Participant. On or before twelve noon on the last business day prior to the scheduled Closing Date, Participant shall deposit or cause to be deposited with the Escrow agent the following: {i) the Grant Deed executed and acknowledged by the Pham Trust; (ii) the Note, executed by Participant; (iii) the Agency Deed of Trust, including the Rider thereto, executed and acknowledged by Participant; (iv) the Regulatory Agreement, executed and acknowledged by Participant, and S-98AgerSher-3.1 7 08131 /99 -3 (v) All funds, documents, and deposits Participant is required to deposit with Escrow agent in order to close the Escrow conveying the Site to Participant. (c) Delivery of Documents and Funds by Agency. On or before twelve noon on the last business day prior to the scheduled Closing Date, Agency shall deposit or cause to be deposited with the Escrow agent the following: {i} the Agency Deed of Trust including the Rider thereto, executed and acknowledged by Agency; (ii) the Regulatory Agreement, executed and acknowledged by Participant; and (iii) the portion of the Agency Loan funds described in Section 3.2. (d) Recordation. Escrow agent is directed, on the Closing Date, to record against the Site the following documents in the following order of priority: (i) the Grant Deed; (ii) the First Deed of Trust; (iii) the Second Deed of Trust; (iii) any deed of trust from the Construction/Permanent Lender; and (iv) the Agency Deed of Trust; (v) the Regulatory Agreement. One or more Subordination Agreements, if required to effect the proper priority of the Agency Deed of Trust and Regulatory Agreement, shall be recorded at the direction of Participant in accordance with the terms of this Agreement. (e) Escrow Agent Duties. The Escrow agent shall (1) record the documents as provided in subparagraph (d), and (ii) at Closing, deliver the original promissory note to Agency and a conformed copy of same to Participant, and upon recordation deliver to Agency the original of the Agency Deed of Trust and the Regulatory Agreement and a conformed copy of same to Participant. (f) Interest Bearing Accounts. Escrow agent shall hold all funds received in an interest bearing account with the interest accrued paid at Closing to the party depositing such funds. (g) Title Insurance. Escrow agent shall deliver to Agency at Closing a CLTA standard form owner's policy of title insurance in an amount not to exceed $1,200,734.00, issued by a title insurer acceptable to Agency, insuring in favor of Agency the priority of the Agency Deed of Trust and Regulatory Agreement in accordance with the priority established by this Agreement. The cost of said policy shall be shared equally between the parties. 3.5 " A enc s Conditions to Closin . Agency's obligations to deposit the portion of Agency Loan funds described in Section 3.2 in Escrow for disbursement to Participant at Closing shall be conditioned and contingent upon satisfaction, or Agency's waiver of each of the following conditions precedent (collectively, the "Agency's Conditions to Closing"): SF-98Agree:Sher.3.1 8 Our! 1/98 -3 {a) Participant has deposited in escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow; (b) Escrow agent, at Closing, holds and will deliver to Agency the Note, Deed of Trust, Regulatory Agreement, and Title Insurance Policy. (c) Participant shall deliver evidence acceptable to the Agency Executive Director that Participant has obtained the insurance policies as required by Section 4.3 of this Agreement. (d) Participant shall deliver to the Agency a good standing certificate issued by the California Secretary of State's office indicating that Participant exists in good standing at the time of the proposed Close of Escrow. (e) The Agency shall determine that Participant is in full compliance with the terms and conditions of this Agreement and all documents and instruments referred to herein or executed by Participant in furtherance of this Agreement. In the event any of the Agency's Conditions to Closing are not satisfied (or waived by Agency), Agency may cancel the Escrow and terminate this Agreement by delivering thirty (30) days prior written notice to Participant and the Escrow agent. Participant may nullify Agency's notice to terminate if, within such thirty (30),day period Participant (at no cost to Agency) cures any unsatisfied Agency's Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds deposited by Agency shall be retumed to it with any accrued interest earned on such funds; (ii) Participant shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. 3.6 Participant's Conditions to Closing. Participant's obligations to close Escrow shall be conditioned and contingent upon satisfaction, or Participant's waiver of each of the following conditions precedent (collectively, the "Participant's Conditions to Closing"): (a) The Pham Trust have signed and acknowledged the Grant Deed and have deposited same in Escrow; (b) Participant has obtained the financing secured by the First Deed of Trust, the Second Deed of Trust, any such deed(s) of trust securing any financing from the Construction/Permanent Lender, and all documents and instruments related to same have been deposited in Escrow as required by the agreements and documents pertaining thereto; (c) Agency has deposited in escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow, including but not limited to the portion of the Agency Loan funds described in Section 32, the Agency Deed of Trust, Regulatory Agreement, and such Subordination Agreements as may be required to effect the priority required by this Agreement; SF-98ASrce Sher-3.1 9 0&11/98 -3 (d) All conditions to Closing set forth in (i) the agreements and any amendments thereto between Participant and the Pham Trust for conveyance of the Site, including as pertaining to the Second Deed of Trust; and (ii) agreements and financing documents pertaining to Participant's- financing of the acquisition of the Site, including as pertaining to the First Deed of Trust, financing by the Construction/Permanent Lender, have been satisfied (or waived by the appropriate party). In the event any of the Participant's Conditions to Closing are not satisfied (or waived by Participant), and provided Participant has fully performed its obligations hereunder, Participant may cancel the Escrow and terminate this Agreement by delivering thirty (30) days prior written notice to Agency and the Escrow agent. Agency may nullify Participant's notice to terminate if, within such thirty (30) day period Agency (at no cast to Participant) cures any unsatisfied Participant's Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds deposited by Participant shall be returned to it with any accrued interest earned on such funds; (ii) Participant shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. 3.7 Broker's Fees. Participant and Agency shall 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. 3.8 Subordination Agreements. Pursuant to Section 33334.14 of the Health and Safety Code, Agency is permitted to subordinate the Agency Deed of Trust and the Regulatory Agreement to superior deed of trust and regulatory agreements, including but not limited to the First Deed of Trust, the Second Deed of Trust, and Construct Lender's deed of trust, and such other and related documents as such lender(s) may require, if certain findings are made and certain written commitments are obtained. In accordance with said Section, the Agency hereby finds that no economically feasible alternative method of financing the Project on substantially comparable terms and conditions without subordination is reasonably available and the Agency has obtained written commitments to protect the Agency's investment in the event of a default. Therefore, the Agency hereby agrees to subordinate the Agency Deed of Trust and the Regulatory Agreement to the First Deed of Trust, Second Deed of Trust, the Deed(s) of Trust of the Construction/Permanent Lender, and such other and related documents as such lender(s) may require, not to exceed a total indebtedness of Four Million Two Hundred Thirty -Five Thousand Dollars ($4,235,000.00). Participant may apply to Agency to increase said indebtedness, which approval the Agency shall not unreasonably withhold. The priority of such deeds of trust shall be effected through the order of recordation of documents as set forth in Section 3.4(d). Such subordination agreement shall provide for: (i) A right of the Agency to cure a default on the First Deed of Trust, Second Deed of Trust,. and Deed(s) of Trust of the Construction/Permanent Lender; (ii) A right of the Agency to negotiate with any lenders after notice of default from the lender; (iii) An agreement that if prior to foreclosure of any s F-48 A&rct Sher-3.1 10 0813108 -3 of said loans, the Agency takes title to the Site and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan by reason of the transfer of title to the Agency; and (tv) A right of the Agency to purchase the Site from the Participant at any time after a default on the loan. If a Subordination Agreement is required to effect the foregoing order of priority, such subordination agreement shall be generally in the form set forth as Exhibit "H". If, from time to time and at one or more times, Participant chooses to refinance any loan secured by a deed of trust which is superior to the Agency Deed of Trust and Regulatory Agreement, Agency agrees to subordinate the lien of the Agency Deed of Trust to the refinancing lender's deed of trust under the same terms and conditions as set forth in the Subordination Agreement, on the condition that Participant's total indebtedness pursuant to the liens of the First Deed of Trust, Second Deed of Trust, and Construction/Permanent Deed of Trust shall not exceed, in the aggregate, the sum of Four "Ilion Two Hundred Thirty -Five Thousand Dollars ($4,235,000.00). 3.9 Agency Rehabilitation Assistance. (a) Immediately upon the Close of Escrow, Agency shall set aside into a separately identifiable Agency account to be used exclusively for the rehabilitation of the Site pursuant to this Agreement (the "Rehabilitation Account") a portion of the Agency Loan equal to (i) One N illion Six Hundred Twelve Dollars ($1,000,612.00), less (ii) the portion of such One Million Six Hundred Twelve Dollars ($1,000612.00) that Agency deposited into Escrow pursuant to Section 3.2 [Agency and Participant anticipate the foregoing deposit into the Rehabilitation Account will be Two Hundred Sixty -Five Thousand Six Hundred Twelve Dollars ($265,612.00)1. Pursuant to subparagraph (c) below, Agency later shall deposit the HOME Program funds of Two Hundred Thousand One Hundred Twenty -Two Dollars ($200,122.00) into the Rehabilitation Account when City and Participant execute a HOME Program agreement- (b) Participant shall invoice Agency Executive Director the costs of rehabilitation as they are incurred, which invoices the Executive Director shall pay within ten (10) days of receipt. In no event shall Agency pay rehabilitation costs in excess of Four Hundred Sixty- five Thousand Seven Hundred Thirty-four Dollars ($465,734.00)_ (c) City and Participant shall enter into an agreement for the provision of City assistance to the Project in the amount of Two Hundred Thousand One Hundred Twenty -Two Dollars ($200,122.00) from the United States Department of Housing and Urban Development ("HUD") HOME Investment Partnerships Program ("HOME Program") (42 U.S.C. §12741 et seq.) ("HOME Funds") by no later than October 31, 1998. City shall transfer such funds to Agency and Agency shall then deposit the HOME Funds into the Rehabilitation Account. Such HOME Funds shall be part of; and repaid through, the self-liquidating Agengy Loan. If such HOME Funds agreement is not timely executed, Agency shall deposit the same amount into the rehabilitation account from the Agency's Low and Moderate Income Housing Fund, and in such an instance the parties shall cause the eleven (11) HOME Units described in the Regulatory Agreement to be redesignated as Units for Eligible Very Low Income Tenants. (d) Within 90 days after the Agency issues the Release of Construction Covenants, Participant shall cause to be prepared and shall submit to the Agency for reasonable approval a cost certification (the "Cost Certification"), setting forth all Project Costs, certified by the SF-98Ayree:Sher- 3-1 ] 1 08/31 /99 •3 Chief Financial Officer of Participant. In the event the actual total Project Costs, as certified by Participant and approved by Agency, are less than Five Million Three Hundred Thirty-five Thousand Seven Hundred Thirty-four Dollars ($5,335,734.00), the balance of the Agency Loan shall be reduced by the same amount, and the Agency and Participant will cause a reduced Agency Note, Deed of Trust and related instruments to be executed and recorded. SECTION 4. DEVELOPMENT OF THE SITE. 4.1 General The Project shall consist of rehabilitation of an existing 66-unit apartment complex on the Site and the use of the Site as an affordable rental apartment complex in accordance with this Agreement and the Regulatory Agreement. 4.2 Construction of the Project. (a) Development in Accordance with AppLcLved Pro-ject Plans and Permits. Participant shall undertake the Project and rehabilitate the Site in accordance with this Agreement, the Scope of Development, and the Approved Project Plans and Permits and any changes thereto as may be subsequently approved in writing by both Participant and Agency and, if necessary, City. As completed, the Project (a) shall comply with all applicable laws and ordinances of all governmental authorities, including, without limitation, all Federal Housing Quality Standards as set forth at Section 982.401 of Title 24 of the Code of Federal Regulations. All Units must be rehabilitated no later than eighteen (18) months from the close of escrow. (b) Agency Approyals. Participant will furnish to the Agency a list of proposed repairs and improvements to the Site prior to submittal of plans to the City. The Agency will have the right to review and approve the list prior to the start of any rehabilitation work. Participant shall provide to Agency an executed construction contract with a contract price that is consistent with the Project Budget. Upon request, the construction contract, together with all other contracts for services necessary to construct the Project shall be submitted to the Agency for approval. The Agency shall approve the contracts if they are consistent with the Project Budget. Participant will furnish copies of all building permits for all items required to be permitted under the Huntington Beach Municipal Code, with proof of inspection by the Huntington Beach Building Department, where applicable. (c) Evolution of Prrr jest Plans. On or before the date set forth in the Schedule of Performance, Participant shall submit to City, and shall use reasonable efforts to obtain approval of the Approved Project Plans as may be required for the rehabilitation work, and Permits. including City approval of, preliminary, and thereafter final drawings and specifications for development of the Site in accordance with the Scope of Development, and all in accordance with the City's requirements_ The term preliminary and final drawings shall be deemed to include site plans, building plans and elevations, grading plans, if applicable, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications as City and Agency customarily require for such a Project. Final SF-98Aj7ee-Sher-3-1 12 0851198 •3 drawings will be in sufficient detail to obtain a building permit. Said plans, drawings and specifications shall be consistent with the Scope of Development and the various development approvals referenced hereinabove, except as such items may be amended by City (if applicable) and by mutual consent of Agency and Participant. Participant shall not be in default of this Agreement due to any delay of Agency or City processing any plans or permit applications submitted by Participant. (d) Other Governmental Permits. Participant shall, at its own expense and before commencement of construction or rehabilitation of any buildings, structures, or other work of improvement upon the Site, secure or cause to be secured any and all permits and approvals which may be required by any governmental agency affected by such construction, development, or work to be performed by Participant pursuant to the Scope of Development, including but not limited to, necessary building permits and all approvals required under the California Environmental Quality Act ("CEQA"). In constructing and developing the Project, Participant shall comply with all applicable development standards in City's Municipal Code and shall comply with all building code, landscaping, signage, and parking requirements (except as may be permitted through approved variances and modifications). (e) Approval by Agency. The Agency shall approve or disapprove any submittal made by the Participant pursuant to this Agreement within ten (M) days after such submittal. Any disapproval shall state in writing the reason for the disapproval and the changes which the Agency requests to be made. After Participant resubmits the corrected submittal, Agency shall have an additional seven (7) days for the review of the resubmittal but if the Agency disapproves the resubmittal, then the cycle shall repeat, until the Agency's approval has been obtained. (0 Agency Assistance. So long as Participant is not in material default of any term or provision of this Agreement, Agency agrees to provide reasonable assistance to Participant, at no cost to Agency, in the processing of Participant's submittals required under this Agreement in order that Participant may obtain a final City action on such matters on or before the date set forth in the Schedule of Performance; provided that Agency does not warrant or represent that such approval shall be obtained. (g) Cost of Rehabilitation. Participant (with the assistance of the Agency Loan) shall bear all costs for the Project, including, but not limited to any and all costs for preparing or obtaining the Approved Plans and Permits, environmental remediation, interim and permanent financing, broker's and leasing commissions, and fees or charges for development and building, except as specifically provided herein. (h) Project Budget. Participant shall develop the Project in accordance with the Project Budget/Pro Forma attached hereto as Exhibit " " (i) Project Schedule. Participant shall commence and complete the construction of the Project within the times set forth in the Schedule of Performance. SF-98AVrcc:Sh r-3-1 13 08/31198 .3 4.3 Insurance. Participant shall procure and maintain, at its sole cost and expense, until the date that Agency issues or is required to issue the Release of Construction Covenants, the following policies of insurance: (a) Workers Compensation Insurance. Pursuant to California Labor Code Section 1861, Participant acknowledges awareness of Section 3700 et seq. of said code which requires every employer to be insured against liability for workers' compensation. Participant covenants that it will comply with such laws and provisions prior to commencing any work of construction or rehabilitation on the Site. Participant shall maintain such Workers' Compensation Insurance in an amount not less than One Hundred Thousand Dollars ($100,000) bodily injury, each occurrence, One Hundred Thousand Dollars ($100,000) bodily injury by disease, each employee, and Two Hundred Fifty Thousand Dollars ($250,000) bodily injury by disease, policy limit, at all times incident thereto, in forms and underwritten by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Participant shall require all subcontractors to provide such Workers' Compensation Insurance for all of the subcontractor's employees. Participant shall furnish Agency with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Participant shall similarly require all subcontractors to waive subrogation. (b) General Liability Insurance. Participant shall 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 One Mullion Dollars ($1,000,000), combined single limit. Such insurance shall also include automotive bodily injury and property damage liability insurance. All such insurance shall be provided by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Such insurance shall name the City and Agency and their officers, agents, and employees acting in their official capacity, as additional insureds pursuant to a pre-1990 CG 20 10 11 85 endorsement form. In the event of aggregate coverage, -such limit shall be no less than One Million Dollars ($1,000,000.00). Participant shall require its insurer to waive its subrogation rights against Agency and shall provide certificates of insurance evidencing same. (c) Certificates of Insurance; Additional Insured Endorsements. Prior to performance of any work upon the Site, Participant shall furnish to Agency certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement. Such certificates and endorsements shall be subject to the reasonable approval of the City Attorney and shall provide the name and policy number of each carrier and policy and shall state that the policy is currently in force and shall promise to provide that such policies will not be cancelled without thirty (30) days prior written notice to Agency. 4.4 Indemnification. During any period of construction of any of the Project pursuant to this Agreement and until such time Agency issues or is required to issue the Release of Construction Covenants, Participant agrees to and shall protect, defend, indemnify and hold the Agency and City harmless 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) Participant'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 sr-99,Agrce Sher-3-1 14 08131 M .3 to any person or to the property of any person which shall occur on the Site and which shall be directly or indirectly caused by the acts of, or any errors or omissions of, the Participant- or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Participant shall not be responsible for, and the Agency shall protect, defend, hold harmless and indemnify Participant against any liability, loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result of the active concurrent negligence, sole negligence or s sole willful misconduct of the Agency or the City or their respective members, officers, officials, employees, agents, representatives, servants, or contractors. 4.5 Hazardous Substances. Participant, from and after the Close of Escrow, and until a transfer, sale, or assignment of the Site upon which the following covenant shall then be the obligation of the transferee, purchaser, or assignee, shall indemnify, defend, and hold harmless Agency 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 Site or (ii) contamination of the Site by a release of hazardous materials. Participant, prior to the Closing Date, shall provide to Agency a copy of any notices, orders, or reports concerning the presence of any hazardous materials on or affecting the Site that is in Participant's possession. For the purposes of the foregoing, the term "hazardous materials" shall mean any hazardous or toxic substance, material or waste which, as of the date of Close of Escrow, is regulated by the State of California, or the United States Government, and including asbestos and any material containing asbestos. 4.6 Security Financing; Right of Holders_ (a) Permitted Encumbrances_ Participant, prior to the date Agency issues or is required to issue the Release of Construction Covenants, shall be permitted to enter into mortgages, deeds of trust, conveyances, and leases -back or any other form of conveyance in which the Site is used as security for the purpose of securing loans of funds to be used for the acquisition of the Site and construction of the Project thereon without the consent of the Agency provided such conveyance (i) is for the purposes permitted herein and (ii) is given to a financial or lending institution or other acceptable person or entity capable of performing or causing to be performed Participant's obligations under this Agreement, including without limitation a pension fund, insurance company, or real estate investment trust. Conveyances for financing purposes not meeting the foregoing requirements shall be subject to the prior approval of the Agency's Executive Director, which approval shall not be unreasonably withheld. (b) Holder Not Obligated to Construct I MProvements. The holder of any mortgage or deed of trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to construct or complete the improvements or to guarantee such construction or completion; nor shall any covenant or any provision in the Regulatory Agreement be construed to so obligate such holder. (c) Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders, Right -to Cure_ Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or default by Participant in completion of construction of the improvements, SF-98Agree -Sher-3-1 15 08/31M -3 Agency shall at the same time deliver a copy of such notice or demand to each approved holder of record of any mortgage, deed of trust, or other security interest which has previously requested such notice in writing. Each such holder shall (insofar as the rights of Agency are concerned) have the right, at its option within ninety (90) days after the receipt of the notice, to commence and thereafter to diligently proceed to cure or remedy such default and add the cost thereof to the security interest debt and the lien on its security interest. Any holder completing the improvements in accordance with this Agreement shall be entitled to a Release of Construction Covenants upon written request made to Agency. 4.7 Release of Construction Covenants. Upon satisfactory completion of the Project, Agency shall issue to Participant a Release of Construction Covenants. The Release of Construction Covenants shall be, and shall so state, a conclusive determination of satisfactory completion of the Project required by this Agreement, and of full compliance with the terms of this Agreement relating to commencement and completion of the Project. The Release of Construction Covenants is not a notice of completion as referred to in California Civil Code Section 3093. If Agency refuses or fails to furnish a Release of Construction Covenants upon completion of the Project, Agency, after written request from Participant, shall, within fifteen (15) days of Participant's written request, provide Participant a written statement of the reasons Agency refused or failed to furnish a Release of Construction Covenants. The statement shall also contain a detailed description of the specific actions Participant must take to obtain a Release of Construction Covenants. If the Agency shall have failed to provide such written statement within fifteen (15) days. Participant shall be deemed entitled to the Release of Construction Covenants. If Agency refuses or fails to furnish the Release of Construction Covenants for the reason that specific items or materials are not available or landscaping is not complete, Agency shall issue the Release of Construction Covenants upon the posting by Participant with Agency of a cash deposit, bond or irrevocable letter of credit (in a form acceptable to Agency) in an amount representing the fair value of the work not yet completed. 4.8 Mechanics Liens, Stop Notices, and Notices of Completion (a) If any claim of lien is filed against the Site or the Project, or a stop notice is served on any lender or other third party in connection with the Project, then the Participant shall, within twenty (20) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the party entitled thereto a surety bond in sufficient form and amount, or provide other assurances satisfactory to the Agency that the claim of lien or stop notice will be paid or discharged. (b) If the Participant fails to discharge any lien, encumbrance, charge, or claim in the manner required in subsection (a) of this Section 4.8, then in addition to any other right or remedy, the Agency may (but shall be under no obligation to) require the Participant to immediately deposit with the Agency the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The Agency may use such deposit to satisfy any claim or lien that is adversely determined against the Participant. SF-98Agree:Sher•3-1 16 08/31/98 -3 (c) The Participant shall file a valid notice of cessation or notice of completion upon cessation of construction on the Project for a continuous period of thirty (30) days or more, and take all other reasonable steps to forestall the assertion of claims or liens against the Project. The Agency may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that the Agency deems necessary or desirable to protect its interest in the Project. SECTION 5. USE OF THE SITE. 5.1 No Inconsistent Uses. Participant covenants and agrees, for itself, its successors, its assigns, and every successor in interest to the Site, or any part thereof, that for the period beginning on the Close of Escrow and ending on the expiration date of the Regulatory Agreement, Participant and such successors shall not devote the Site to uses inconsistent with the applicable zoning restrictions, this Agreement, and the Regulatory Agreement; provided that, in the event of any inconsistency, the provisions of the provisions of the Regulatory Agreement shall prevail over this Agreement. 5.2 Regglatory Agreement- At the Close of Escrow the Regulatory Agreement shall be recorded against the Site in the priority set forth in the Section 3.4(d). 5.3 Relocation. (a) Relocation Plan. As the Project is a "rehabilitation -in -place," no relocation of tenants living on the Site as of the Effective Date of this Agreement is contemplated by the parties hereto or is required to occur as a result of this Agreement. In the event, however, that off -Site relocation of existing tenants becomes necessary as a result of the Project, Participant, prior to such off -Site relocation, shall submit a relocation plan to Agency for review and approval ("Relocation Plan"). The Relocation Plan shall include the name, gender, age, ethnicity, household income, and amount of relocation payment to be paid; provided, however, that Participant shall not be obligated to provide any of the foregoing referenced personal information about relocatees if such relocatees refuse to provide such information or the gathering or provision of such information is contrary to applicable law. Participant shall be obligated to meet the notice requirements of applicable relocation law and shall provide the Agency with true and correct copies of such notices. Participant shall also retain all required records and copies of notices in its files as mandated by applicable law. (b) Relocation Cost. Participant shall be obligated for the payment of all relocation benefits and costs identified in the Relocation Plan, as well as relocation benefits and costs that arise from the acquisition or rehabilitation of the Site beyond those obligations identified in the Relocation Plan. Participant shall indemnify, defend, and hold harmless the Agency from and against any claims for relocation and the payment of relocation benefits that are the obligations of Participant under this Agreement. Notwithstanding the above, Agency shall provide relocated tenants Section 8 HUD housing certificates, which Participant may use to offset its relocation obligations_ SF-98A&rce Sher-3-1 17 OR13119R .; 5.4 Maintenance of thp Site. All Units must meet Federal Housing Quality Standards (24 CFRS 982.401) while occupied. Further, Participant shall maintain the Site in accordance with the terms of the Regulatory Agreement. 5.5 • Nondiscrimination- There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Participant, 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 Site, or any part thereo(. 5.6 Form of Nondiscrimination andNonsMeQation Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, religion, ancestry, national origin, sex or marital status of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In Deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. (b) In Leases- "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of rare, color, religion, ancestry, national origin, sex, or marital status in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." (c) In Contract : "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, religion, ancestry, national origin, sex, or marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of the land." SF•98 kWee:Sher•3.1 18 08'31:9S -3 5.7 Effect and Duration of Covenants. The Participant has, concurrently with the execution of this Agreement, executed in recordable form the Regulatory Agreement. Every covenant and condition and restriction contained in the Regulatory Agreement shall remain in effect thirty (30) years, except that the covenants against discrimination set forth in Sections 5.5 and 5-6 shall remain in effect in perpetuity. 5.8 Capital Reserves. Participant, commencing with the fiscal year starting on the July 1 that follows the third (3`d) anniversary date of the Effective Date of this Agreement, shall deposit from Project revenues at least Two Hundred Fifty Dollars ($250.00) per unit per year into a reserve for capital repairs. Should Project revenues be insufficient to permit Participant to make such a full deposit in any year, the shortfall shall be repaid into the Capital Reserve as soon as economically feasible. 5.9 Payment of Portion of Residual Receikts. (a) Percentage Payment to Agency. Commencing with the fiscal year starting on the July 1 that folloows the third anniversary date of the Effective Date of this Agreement, and continuing annually through expiration of the Regulatory Agreement, Participant shall pay to Agency an amount equal to fifty percent (5011/o) of the Net Operating Income of the Project, with the other fifty percent (501/6) of the Net Operating Income or Two Hundred Fifty Dollars per unit, whichever is more (subject to the terms of Section 5.8) to be deposited into the Capital Reserve Account as described in Section 5.9; provided, however, that once the Capital Reserve Account reaches the cumulative total shown on the Project Budget/Pro Forma (Exhibit "P'), Participant shall pay to Agency one hundred percent (1001/o) of the Net Operating Income. If a payment is required by Participant pursuant to the terms hereof; Participant shall make such payment no later than ninety (90) days following the end of the reporting year (calendar year or fiscal year). If the first or final payment is based on a portion of a year, the payment shall be pro rata based on a 360 day year. (b) Definition of Net Operating` Income. As used herein, the term "Net Operating Income of the Project" shall mean, for any reporting period (calendar year or fiscal year), (a) all income derived by Participant from the Site, including without limitation all tenant rent, but excluding such income to Participant or the Project as may be derived from the acquisition of further income restriction of Units as authorized by Section 3.2 of the Regulatory Agreement, (b) less (i) payments of principal and interest, if any, required to be paid in such year by Lessee with respect to any note, mortgage, or deed of trust with respect to the Site or Project, (ii) all expenses actually incurred (or to be incurred if accounted for on an accrual basis) by Participant in leasing, managing, operating, maintaining, and repairing the Site, (iii) all capital expenses incurred pertaining to the Site; (iv) the deposits into the Capital Reserve Account; (v) property management fees, administrative costs, salaries, benefits, overhead costs, and such other and further operating and management expenses incurred in operating the Site. Depreciation expenses shall not be a reduction against income. (c) Adjustment of Payment to Agency. In the event Participant determines that it cannot make the Agency payment as described in subparagraph (a) of this Section and at the same time retain the economic viability of the Project, Participant shall notify the Agency and SF-98/1yrce shei-3-1 19 0913 t /99 -3 request postponement, cancellation, forgiveness, or adjustment of the Agency payment. Participant shall provide financial and other evidence supporting its request. Agency may, in the exercise of its reasonable discretion and in light of its desire to see the Site used as an affordable rental apartment complex and maintained at the level required by the Regulatory Agreement, reduce, suspend, postpone, forgive, cancel, or renegotiate the terms of the Agency payment. 5.10 Financial Statements. Participant shall submit to Agency, on an annual basis, a true and correct copy of Participant's audited financial statement for the Project. After receipt of Participant's audited financial statements for the Project, Agency may, at its cost, request additional financial analyses or obtain a third party review of Participant's financial statement for the Project to verify the accuracy of Participant's payments made to the Agency pursuant to Section 5.9 or the deposits by Participant into the Capital Reserve Account pursuant to Section 5.8. SECTION 6. DEFAULTS AND REMEDIES. 6.1 Par6cipant_Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Participant hereunder if, after receiving written notice from Agency as provided in Section 6.3 below identifying such event, Participant fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within) thirty (30) days, Participant commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default: (a) Participant has failed to Close Escrow to acquire fee title to the Site within sixty (60) days after the time set forth in the Schedule of Performance; (b) Participant fails to observe or perform any material term of this Agreement or any agreement incorporated hereunder by reference including, but not limited to, the Regulatory Agreement, the Note, the Deed of Trust, or the Subordination Agreement (if applicable), within the time set forth in this Agreement or any of the documents referred to herein; or (c) Participant knowingly and intentionally makes or delivers to Agency any statement, report, or certificate that is not true or correct in any material respect. 6.2 Agency Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Agency hereunder if, after receiving written notice from Participant as provided in Section 6.3 below identifying such event, Agency fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within thirty (30) days, Agency commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default: (a) Agency fails to observe or perform any material term of this Agreement within the time set forth in this Agreement, including but not limited to timely deposit into Escrow of the required portion of Agency Loan funds; or SF-98AgreeSher-3-1 20 0&11 /98 -3 (b) Agency knowingly and intentionally makes or delivers to Participant any statement, report, or certificate that is not true or correct in any material respect. 6.3 Notice of Default. The non -defaulting party shall give written notice of any default under this Section to the defaulting party, clearly specifying the default. Copies of any notice of default given to the defaulting party shall also be given to any permitted lender requesting such notice. Any failure or delay in giving such notice or in asserting any of either party's rights and remedies as to any default shall not constitute a waiver of any default, nor shall it change the time of default, nor shall it deprive either party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 6.4 Agency's Remedies. (a) The Agency, at its option, may terminate this Agreement prior to the Close of Escrow in the event of any material default that the Participant fails to cure within the time set forth in Section 6.1 (subject to the right of notice and expiration of applicable cure periods). (b) Following the Close of Escrow, in the event of any material default that the Participant fails to cure within the time set forth in Section 6.1 (subject to the right of notice and expiration of applicable cure periods), the Agency's sole remedy shall be to foreclose on the Agency Deed of Trust pursuant to Agency's right and remedies thereunder. 6.5 Participant's Remedies. Subject to any applicable cure periods and the general right to notice provided for in this Agreement, upon a default or breach of this Agreement by Agency, Participant may bring an action for specific performance of this Agreement or any term or provision hereof or may terminate this Agreement. Participant may not sue for monetary damages. 6.6 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties hereto 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. SECTION 7. GENERAL PROVISIONS. 7.1 Governing Law_. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. -7.2 Attorneys' Fees. In the event of litigation between the parties arising out of this Agreement each party shall bear its own attorneys' fees, and other costs. 7.3 Notices. Demands, and Communications Between the Parties. Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if: (i) personally delivered, (1i) delivered by same day or overnight courier (acknowledged by receipt SF-93Agrce Sher-3-1 21 019/31,99 -3 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 Participant: The Bridges America Sher Lane, L.P. 18837 Brookhurst Street Suite 303 Fountain, Valley, CA 92708 Attn: JoAnn Ulvan With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626 Attn: Jeffrey M. Oderman If to Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street - Huntington Beach, CA 92648, Attn: Executive Director Notices personally delivered or delivered by courier shall be effective 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. 7.4 Acceptance of Service of Process. In the event that any legal action is commenced by Participant against Agency, service of process on Agency shall be made by personal service upon Executive Director or the Secretary of Agency, or in such other manner as may be provided by law. In the event that any legal action is commenced by Agency against Participant, service of process on Participant shall be made by in any manner provided by law, and shall be valid whether made within or without the State of California. 7.5 Conflicts of Interest. No member, official, or employee of Agency shall 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. 7.6 Titles and Captions. Titles and captions are for convenience only and shall not be construed to limit or extend the meaning of this Agreement. 7.7 Gender. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. 7.9 Modifications. Any amendment, alteration, change, or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. S17-99Agee:Sher-3.1 22 0&r31:98 -3 7.9 Merggr of Prior Agreements and Understanding. 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, including but not limited to that certain "Deal Point MemorandumO approved by Participant and the Agency and/or City Council of the City of Huntington Beach, are merged herein and shall be of no further force or effect. 7.10 No Third Parties Benefited. Other than the general and limited partners of Participant, this Agreement shall 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. 7.11 Assurances to Act in Good Faith. Participant and Agency each agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to accomplish the redevelopment of the Site in accordance with the provisions hereof. 7.12 Warranty Against Payment of Consideration for A eement. Except as provided in this Agreement, Participant 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 Iaw. 7.13 Nonliability of Agency Officials and Employees. No member, official, or employee of the Agency shall be personally liable to the Participant or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Participant or to its successor, or on any obligations under the terms of this Agreement. 7.14 Interpretation_ The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply 7.15 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 7.16 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 7.17 Extension of Times of Performance. Notwithstanding the foregoing, in addition to the specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default during an event of Force Majeure. An extension of time for an event of sr.9EA&rcc Shet-3.1 23 OW 1 /99 .3 Force Majeure shall be limited to the period of such event, and shall commence to nun from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause. In the event of such delay, the party delayed shall continue to exercise reasonable diligence to minimize the period of delay. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Participant. In addition, the Executive Director shall have the authority on behalf of Agency to approve extensions of time not to exceed a cumulative total of one (1) year. 7.18 Inspection of Books and Records. The Agency or its designee has the right at all reasonable times to inspect the books, records, and/or other documents of the Participant pertaining to the Site and/or the Project as pertinent to the purposes of this Agreement 7.19 Waivers. The waiver by Agency or Participant of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. SECTION 8. EXECUTION OF AGREEMENT; TE14E FOR ACCEPTANCE This Agreement shall be executed in five duplicate originals, each of which is deemed to be an original. This Agreement consists of hve-tL ,tee (Z5) pages and ten (10) attachments which constitute the entire understanding and agreement of the parties. This Agreement does not take effect until executed by the Participant and Agency. This Agreement, when executed by the Participant and delivered to the Agency, must be authorized, executed and delivered by the Agency within thirty (30) days after the date of signature by the Participant, or this Agreement may be terminated by the Participant on written notice to the Agency. The Agency Executive Director 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 Agency as may be necessary or proper to effect the terms of the Owner Participation Agreement on behalf of the Agency. [end - signature page follows] SF-9S.Agcc:Shcr-3-1 24 0&31198 -3 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. ATTEST: Agency Clerk APPROVED AS TO FORM: By:� Agency Counsel SG gfil` 1( "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: V&:� - hat art "PARTICIPANT" THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership By Its General Partner: THE BRIDGES AMERICA FOUNDATION, a Delaware N nproV9_ fitCorporation By: �t�L�---r Name: 'V�1 4,ArrIfu s' , y (r'Pe or print) bs(LC5i o Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President �: Name-. (Type or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary (iii) Chief Financial Officer (iv) Any Assistant Treasurer SF-98Agree-Sher-3-1 25 08/31/99 -3 FROM : 11111 111111111111 11111 1111 PHONE NO. : Sep. 01 1996 04:44PM PI RESOLUTION OF THE BOARD OF DIRECTORS OF THE BRIDGES AMERICA FOUNpATION, INC. The following resolutions were adopted by the Award of Directors of the Bridges America foundation (the ' Corporation') effective as of September 1.1998. RESOLVED, that Garrett Robinson, President of the Corporation, and or Steve Harrison. a member of the board of directors, be and hereby each are severally authorized to execute and deliver such agreements, documents and inspumetlts, and to undertake such acts as they shell deem necessary or advisable to consummate the purel se by the Bridges Sher Lane LP.. (a California limited partnership of which the Corporation -is the General Partner), of the low-income housing project and real property located at 16112 Sher lane Huntington Beach, Ca Dated as of September 1, 1998. note Robinson; ecretary CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County ofor �f On 10 4 g j g before me, L*kW&-A- WSrOAf N :t &bt-tG r OMa Nam* and TOa d OC,oer (a.q_' lane Doa, mcAry Pwe) personally appeared ST VW V• ifT422.tSaN _r Narrws) or s:prwr(s) 40 proved to me on the basis of satisfactory evidence to be the person(* whose name(s) ®are subscribed to the within instrument and acknowledged to me that) /6hekhey executed the same in "4 r authorized capacityfiee), and that by "i lbefMeir signature fs) on the instrument the person* A0 =LAUR,, A. NtxsoN or the entity upon behalf of which the person(* acted, �,. convnisoon. 1066W executed the instrument. Nolay Pubic — Comornw (>anpe CotA* My ca„r„ EU 23. tvw WITNESS and and official seal. b-rature Though the Information below is not required by taw, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document - Description of Attached Document Title or Type of Document: �tt�i?er �C�Y"IcAw- � Document Date: F131 I q Number of Pages: -2A5 Pt _( 0 1� r �4 .A"l -Af- �i� Signers} Other Than Named Above: �gccl D Ne5Sct�dry Capacity(ies) Claimed by Signer(s) Signer's Name: Sr-aV6r4 V. 6414 1SOAJ -IF. et# Individual Corporate Officer Title(s): Partner --- G Limited ❑ General Attomey-in-Fact Trustee Guardian or Conservator Other: Dt>Z�Q Signer Is Representing JW A4 DIG eS �2VAJPf LA) RIGHT THUMBPRINT OF SIGNER t6 'r OE ' Signer's Name: F. Individual Corporate Officer Title(s): Partner -- C Limited -° General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER 0 1995 NaDonal rotary Assowf*n • 8236 RortYner A" . PO- boa 7184 • Cwwpa Park CA 91309.7184 Prom. No 5907 Reorder Call Tea -Free 7-800-876-W7 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of L��✓� County of Orl1,r� On w� c.-1 //l9�' before me, (aU+r¢,, AlelSix. oat* me r r, Naantl Tere of omw (e am Doe. bbc') personally appearedyAl i Loy I)e �,�f A AJ �pU e_ Haree(91 a S"r(s) personally known tome - to be the persorl(p whose namefo is/subscribed to the within instrument and acknowledged to me that �e executed the same in hiof authorized capaci re ), and that by LAURAA Nasc" signature's on the instrument the persorQ CoaWnbSi4"0 1 or the entity upon behalf of which the persorCs] acted, ,r Notary PuWc — calrornia QrorVe coKxuv executed the instrument. WITNESS my hand and official seal. Sqnalure of Wary Pubbe OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to anorher document. Description of Attached Document Title or Type of Document: ;r A.,hec 07't >�Ye2lrhe�f 63, Document Date: 1 q� _ Number at Pages: a5 Signer(s) Other Than Named Above: A j bwesm_o dletJeit U• Capacity(ies) Claimed by Signer(s) Signer's Name: 5711r1e�e �e"o i Individual Corporate Officer Title(s): Partner — 0 Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Cin6LlfrWrct.4t Signer Is Representing Top of thwnb here • tO Signer's Name: Z/ CG _Wad ■ ■ ■ ■ Individual Corporate Officer Title(s): Partner -- ❑ Limited Attorney -in -Fact Trustee Guardian pr Consery Other: A4244CA4 C Signer Is Representing: l rR�4�i�.;,• i s ❑ General 0 1" VftU W Notary A&SOCOCr n. 8236 Rmronw A,*. . P.O. Boa 71 e4 • Canoya Prk CA 91369-7184 Prod NO $907 Reorder Caa TOb-f,ee 1.8pa876-M7 EXHIBIT A EXHIBIT "A" PARCEL 1: THAT PORTION OF THE NORTHEAST QUARTER OF SECTICN 23, TOWN,SH I P S SOUTH, RANGE 3.1 WEST. PARTLY IN THE RANCHO LA BOLSA CHICA AND PARTLY IN THE RANCM LAS BALSAS, IN THE CITY OF HUNTINu" TON BEACH, AS PER MAP RECORDED IN BOOK 51, PAGE 13 OF MISS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID CJOLRITY, DESCRIBED AS FOLLOWS: BEGINNINGS AT THE 'INTERSECTION OF THE- SOUTH LINE OF THE NORT14 50.00 FEET OF THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF SAID NORTHEAST QUARTER WITH THE FAST LINE OF SHER. LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNT111331 N BEACH, RECORDED DE01T'BER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENM NORTH 160.00 FEET ALONG SAID FAST LINE; TT-m4M EAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SO[JM TEST QUARTER OF THE NOf�ST QUARTER OF nlE NORTHEAST QUARTER; THENM SOUTH 100-00 FEET PARALLEL WITH SAID EAST LINE; THENCE EAST 90.00 FEET PARALLEL WITH- SAID NORTH LINE; THENCE SCXM 80.00 FEET PARALLEL WITH SAID FAST LINE TO THE SOM LINE OF THE NORTH 50.00 FEET OF THE SCUMWEST QUARTER OF THE NORTlT-k3T QUARTER OF SAID NORTHEAST QUARTER; TIENCE WEST 436.00 FEET TO THE POINT OF BEGINNING. SAID LAND IS INCCLUDED WITHIN THE AREA SEiCW ON A MAP FILED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN T]-E OFFICE OF THE COCAJTY RECORDER OF SAID COUNTY. EXCEPT 71MREFRO'! ALL OIL, GAS, MINERALS AND OIER }MMGARBONS, BEL04 A DEPTH OF SOO FEET, 'VaIliiOUT THE RIG; M OF SURFACE ENTRY. AS RESERVED IN DEEDS OF RECORD. PARCEL. 2 : THAT PORTIAN Or THE NORTH-kl3T QUARTER OF SECTIC(I1 23, T D NSRIP 5 SCQM4, RANGE 11 WEST, IN THE RANCIiO LA BALSAS, IN TI-E CITY OF MiTi =.4 BEACH, AS PER KAP RECORDED IN BOOK_ 51, PAGE 13 OF MISCELLANMU,S MPS, IN 71-E OFFICE OF THE C)MTiY RECORDER OF SAID COUNTY, DESCRIBED AS FOLIEWS : BEGINNING AT T -E INTERSECTION OF THE SUJIH LINTE OF THE NORTH SO.00 FEET OF THE SCAJTHEAST QLIAR -ER OF THE NOWT QCiAM R OF SAID NORTHEAST ALTER WTIH THE FAST LINE OF SHER LANE AS DESCRIBED IN ME DEED TO THE CITY OF HUNTIIr, O BEACH, RE)MRDED DDCS'MER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENM NORTH 180.00 FEET ALCtV, SAID FAST LINE; THENCE EAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QC ; THENCE SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; THENCE FAST 90.00 FEET' PARALLEL, WITH SAID NORTH LINE TO A POINT WHICH POW IS THE TRUE POEW AND PLACE OF BEGINNING; THENCE SOUTH 80.00 FEET PARALLEL WITH SAID EAST LINE 70 THE SOUTH LINE OF THE NORTH 50.00 FEELOF THE SOMWEST QUARTER OF THE NORTHEAST' QUARTER OF SAID NORTHEAST QUAFtTETt; THENM 408.96 FEET FAST PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE NORT MEST QUARTER OF THE NORTHEAST QUARTER TO THE WEST LINE OF PARKSIDE LANE AS DESCIUBFD IN THE DEED TO THE CITY OF HUNrlNGIC>N BEACH, R ORDE:D SEPTE14BER 20, 1968 IN BOOK 8727 PAGE 541 OF OFFICIAL RDCDRDS; TIMNCE NORTH 80.00 FEET ALONG SAID WEST LINE 70 A LINE miAT IS PARALLEL_ WITH THE NORM LINE OF SAID 90UIII£AST BIER OF THE NORT�'.Si' QUARTER OF 'THE" NORTHEAST WARTER, AND WHICH PASSES M-ROU 314 AND TRUE POINT AND PLACE OF BEJGIMING; THENCE WEST 408.96 FEET, AMR,- SAID LAST MENTIONED PARALLEL LINE, TO THE TRUE POINT AND PLACE OF BE7GIMING. (".Mm, DrSCRIPI7Qd CLNTINUM) EXCEPT IVEREFRC'M ALL OIL, GAS, MINERALS AND OTHER HYDROCARBCx]S, 13EGC7W A DEPTH OF 500 FEET, WITHOUT THE RIG4T OF SURFACE ENTRY, AS RESERVED IN DEEDS OF RDOORD. SAID LAND IS IhK IMED WITHIN THE AREA SFiC)W ON A MAP FILED IN BC)OK 23 PAGE 17 OF RECORD OF SURVEYS, IN 'THE OFFICE OF THE C0UtgIY RECORDER OF SAID COUNTY. jlfI NI ro 0 LDK � �w e � �uNYl�w Cf EN 41�' Obi 5 Ssi,i?1N DN ® RES SERFQRO 8 E, I LLI 3 i NYM{ZA 1I LAURELsM3T 16 UWA TT�, AU&�RN LOY- ` 1 C ^PETER$ I r^ FL �cr+r sr .CENTE,R , Ll XI hft ,I WGRM} pGNEG!E,.F . i Iy71 _..,will �i•u��ARS _ � ISTONEw000 1 CIWT,)T,E ItaY,T� 90Ls0 ,STMLIG IT Ir rµ DIRC;! I kORGE SUBJECT' w lWnDY t; A"ZON T r I HOL T f AN4TA {({ + I +.iACDRNA! �IRUPD JULLCTIELQw I t r JGLENCUE ix qoA � it I HEIL \/ ILSATUR I S � ! N aq!y u! �' a. LLL SOnS PRINCEI r • {may Y��K I }y NpFiTi•fLA�cE ��1j`� rot! oUSE WASHINGON !jr 57f ' IJ riI.QpOLAKE 7S i ,. _ I Q2VFRDES , a 0 O.Qa� �d ^; � 5 ■ T, IEM 1 7 E SITE ANALYSIS Plat vlap FCR. V M2, SEC 23. r5S, R./I W. 'ECIAL PAGE M2-119 fOR FEE 7YiLE 4SSESS"ENT BELOW SURFACE 07 H ,Y h � i EADrG£R / ArCS73U. vLl AVt7W�E , g to ©� J d.: t'�v AM j m 0 .cx4 PZ J �3 A As i �1 e1w ® E) r� r+ rer o.a w�4 )ter.-.. V .,.4mr.c ze 1 N£ PARC rL AMP PAC 5-5Q 189-,V. u NOTE - ASMSSOxS ROCK d ~CCL AtndC£RS smz wr W CaKus 4 2 bOOK$d2 Aur { OOKrACf f f , CCKk4TY O' ORANGE 37 EXHMIT "C" SCOPE OF DEVELOPMENT Participant's rehabilitation of the existing 66-unit apartment complex located at 16112 Sher Lane in the City of Huntington Beach shall be undertaken as follows: 1. The rehabilitation shall be in substantial conformance with the Approved Plans and Permits In the event of any conflict between the description of the Project and rehabilitation work described in this Agreement and in the Approved Plans and Permits, the Approved Plans and Permits shall control. Notwithstanding the above, the rehabilitation of the Units shall result in Units meeting, at a minimum, federal housing quality standards as existing on the Effective Date of this Agreement; said standards are set forth at Title 24 of the Code of Federal Regulations, Section 982.401. Participant shall provide Agency with copies of all required permits under the City Municipal Code and proofs of City inspections. 2. Participant, prior to undertaking any wort: of rehabilitation on the Site (other than repairs immediately needed for habitability or removal of waste, debris, and general clean-up) shall submit to Agency for review a rehabilitation work list that describes the nature and order of the rehabilitation work The parties hereto acknowledge that the Site, as of the Effective Date, has received City code violation notices. Participant shall have a reasonable period to effect corrections of those conditions to which the code violation notices relate. Participant shall provide Agency with confirmation that the conditions to which the code violation notices relate have been corrected. 4. Participant shall be responsible for remediating any asbestos and any lead -based paint where the levels of those substances are found to be in violation of applicable law. Copies of all test results, tenant notifications, and remediation plans shall be provided to the Agency or its authorized representatives or consultants. S. Agency shall have the right to inspect the progress of the rehabilitation work, including both interiors and exteriors of the Units, upon forty-eight (48) hours prior notice to Participant; provided that such inspections shall not interfere with Participant's rehabilitation work. 6. Subject to Section 4.2(a) and Exhibit D of the OPA, Participant shall complete the rehabilitation work within eighteen (18) months after the Closing Date. SF-Agee-Sher -3:Exh-C OW M8---3 [Exhibit "C" — Scope of Development — Page i of l SCHEDULE OF PERFORMANCE ITEM OF PERFORMANCE TIME FOR PERFORMANCE REFERENCE 1- Participant and Agency each execute all documents Not later than twelve noon on die §3.4(b). §3-4(c). and deposit all documents and 6mds into Escrow as business day immediately prior to the required by this Agreement scheduled Closing Date. 2. Closing Date. Not later than September 15, 1998 §3.4(a). 3. Participant obtains the Approved Plans and Pennits Within sixty (60) days after the §4.2(a)-(e). for the Project and commences the rehabilitation Closing Date. wort{ on the Site. 4. Participant submits a Management Plan to the Within sixty (60) days after the §4.4 of Exhibit 1 Agency. Closing Date. 5. Participants completes the rehabilitation of the Site_ Within eighteen (I8) months after §4.2(1). commencement of the work. 6. Agency issues Release of Construction Covenants. Upon completion by Participant of die §4.7 rehabilitation work on the Site_ 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 performance 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 both the Participant and the Agency. The Executive Director of Agency shall have the authority to approve extensions of time without action of the Board of Directors of Agency not to exceed a cumulative total of one (1) year. The foregoing instrument is a correct copy of the original on file in this office. Attest_AQ & 1� 1 9� CONNIE Oz—ROCKWAY City Clerk and cLx•cl�icic Cicr'V VA tiic City Council of the City, ,of Hur,iingt n Beach, -California. SF-98ftmc:Sher-3:EJh-D-1 By OW31I98 [EXI11Brr -D- - SCHEDULE. OF PERFORMANCE - PAGE 1 Yl WHEN RECORDED RETURN TO: Bridges -Sher Lane, L.P. 18837 Brookhurst Street Suite 303 Fountain Valley, CA 92708 Attn: JoAnn Ulvan (Space Above This Line For Recorders Office Use Only) (Exempt from Recording Fee Per Gov. Code Sec. 6103 - See Below) This Release of Construction Covenants is recorded at the request and for the benefit of the Redevelopment Agency of the City of Huntington Beach and is exeml2t from the payment of the recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By:_ Its: Dated: RELEASE OF CONSTRUCTION COVENANTS T 4 G A M E7rZ1:L 14 WHER.EASvBRIDGESJ�I�R LANE, L.P., a California limited partnership ("Owner"), is the owner of the fee interest in that certain real property more particularly described in the legal description attached hereto as Exhibit No. 1 and incorporated herein (the "Site"); and WHEREAS, by an Owner Participation Agreement (hereinafter referred to as the "Agreement") dated , 1998, by and between Owner and the REDEVELOPMENT AGENCY OF THE CITY OF HUNFINGTON BEACH, a public body, corporate and politic (hereinafter referred to as "Agency"), Owner has constructed the improvements on the Site according to the terms and conditions of said Agreement; and WHEREAS, pursuant to the Agreement, promptly after completion of all construction work by Owner upon the Site, Agency shall furnish Owner with a Release of Construction Covenants in such form as to permit it to be recorded in the Official Records of the County of Orange; and sr--98Agicc sty«-3 Exh-1_4 08f18198 - 93 [Exhibit " E" — Release of Construction Covenants — Page 1 of 51 WHEREAS, the issuance by Agency of the Release- of Construction Covenants shall be conclusive evidence that Owner has complied with the terms of the Agreement pertaining to the construction of improvements on the Site; and WHEREAS, Agency has conclusively determined that the construction of improvements on the Site has been satisfactorily completed as required by the Agreement; and NOW, THEREFORE: 1. As provided in the Agreement, Agency does hereby certify that construction of the improvements on the Site have been fully and satisfactorily performed and completed, and that such development is in full compliance with said Agreement. 2. This Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of Owner to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction work on the Site, or any part thereof. Nothing contained herein shall modify in any way any other provision of said Agreement. 3. This Release is not a Notice of Completion as referred to in Califomia Civil Code Section 3093. IN WITNESS WI-M-REOF, Agency has executed this Release as of this day of , 199 . REDEVELOPMENT AGENCY OF THIS CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Its: ATTEST: Agency Clerk h M Ca SON SENT TO RECORDATION V BRIDGESaR LANE, L.P., a California limited partnership, owner of the fee interest in the Site legally described in Exhibit No. 1 attached hereto does hereby consent to the recordation of the foregoing Release of Construction Covenants against the Site. RMi .2�C rI �C- ABRIDGES�S'HER LANE, I.R. a California limited partnership By: Its: STATE OF CALIFORNIA } ) ss. COUNTY OF ORANGE ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) Ware subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public (SEAL) STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE } On before me, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that heJshe/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public (SEAL) EXHIBIT NO. I LEGAL, DESCRIPTION OF SITE [TO BE INSERTED] INTENTIONALLY LEFT BLANK PROMISSORY NOTE SECURED BY SUBORDINATED CORPORATION DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED THERETO DO NOT DESTROY THIS NOTE- When paid, this Note, with the Deed of Trust securing same, must be surrendered to Trustee for cancellation before reconveyance will be made_ PROMISSORY NOTE SECURED BY SUBORDINATED DEED OF TRUST Principal Loan Amount.- $1,200,734 Note Date: August 31 , 1998 FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Holder"), at a place designated by Holder, the principal sum of ONE MILLION TWO HUNDRED THOUSAND SEVEN HUNDRED THIRTY FOUR DOLLARS AND NO CENTS ($1,200,734.00), or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof, pursuant to an Owner Participation Agreement (the "O.P-A.") dated as of August 31, 1998 between Maker and Holder. The obligation of the Maker to the Holder hereunder shall be secured by a deed of trust made by the Maker encumbering the Site to be developed (the "Site") pursuant to the OPA and the Deed of Trust and Assignment of Rents dated August 31, 1993 , executed by the Maker and recorded in the Recorder's Office of Orange County, California, on jo jd2-jjI , as Document No. 1JI9041141 "the "Trust Deed"). The obligation of the Maker set forth in this Note is subject to acceleration as set forth in the OPA. The OPA and the Trust Deed are public records on file in the offices of the Holder. 1 Agency Loan. This Note evidences the obligation of the Maker to the Holder for the repayment of funds loaned to the Maker by the Holder (the "Agency Loan") to finance the development of the Site pursuant to the OPA. The Maker shall not make any sale, assignment or conveyance, or transfer in any other form, of the Site, or any part thereof, or interest therein without the express written consent of the I ]older as set forth in Section 2.4 of the OPA. 2_ Payment of Obligation. Unless a uncured Material Default of Maker shall have occurred under the Deed of Trust (as hereinafter defined) or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement [as such term is defined in the OPA)), or Maker has breached any promise or obligation in this Note, (1) no interest shall accrue on.. the unpaid principal of this Note; and (ii) a prorated portion of the total principal advanced hereunder shall be forgiven, waived, and discharged on each anniversary date of Note Date se-vfotih, above in an amount equal to the total principal advanced hereunder divided by thirty (30); i.e., one-' SF-9RAgrcc:Sher-3-F.xh-F- I 001M - #3 Fxhiba " t" - Promissory Note - Page I of 3 Tax-Ekempt-6avem'ment AgwW CITY OF HUNnNGTON BEACH e Brockway, City Clerk BY:Irim Puty thirtieth of the Note Amount shall be deemed waived and discharged by Maker as of each anniversary date of the Note Date. Holder is only requiring Maker to execute this Note as a promise to repay the Note Amount in the event of an uncured Material Default of Maker under the Deed of Trust, OPA, or Regulatory Agreement. Unless such uncured Material Default of Maker has occurred, Holder does not intend for Maker to make any principal payments or interest of any kind on this Note - Upon the forgiveness, waiver, and discharge of this Note as set forth above, Holder shall mark this Note "PAID IN FULL" and shall the deliver this Note to the Trustee of the Subordinated Deed of Trust that secures this Note for the Trustee's delivery to Maker in conjunction with the reconveyance of the Deed of Trust 3- No Prepayment. This note may not be prepaid. 4. Acceleration of Obligation- Upon the occurrence of a uncured Material Default of Maker under this Note, the Deed of Trust or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement), or in any other instrument now or hereafter securing the obligations evidenced hereby, then, and in any of such events, Holder may, at its option, and upon thirty (30) days prior written notice to Maker, declare this Note and the entire obligations hereby evidenced that has not been forgiven, waived, and discharged pursuant to Section 1 above, to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity- S. Default Interest- If any event occurs giving Holder the right to accelerate this Note pursuant to Section 4 above, the entire unpaid and unforgiven principal owing hereunder shall, as of the date of such default, commence to accrue interest at a rate equal to two percentage points above the reference rate publisher) by Bank of America N-A., or the maximum non -usurious interest rate permitted by law, whichever is less. 6. Collection Costs, Attorneys' Fees. If any attorney is engaged by Holder because of any event of an uncured Material Default under this Note or the Deed of Trust or to enforce any provision of either instrument, whether or not suit is filed hereon, Holder shall bear its own attorney's fees and costs. 7. Severability- The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. 9. USurv. Notwithstanding any provision in this Note, Deed of Trust or other document securing same, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. SF-98Agrec-Sher•3-hxh-F-1 =31198 - N3 Exhibit -V' - Promissory Note - Pagc 2 of 3 10. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above It SF-98Agmc:Shcr-3-1;'xh-F-1 09/01/98 - k3 "PARTICIPANT" THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership By Its Gcneral Partner: "f11E BRIDGES AMERICA FOUNDA110N, a Delaware Nonprofit Corporation By: 0 ( W - , -C Name: J- 4-e � S r (T)pe or print) Its (circle (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President AND Name: (Type or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary (iii) Chief Financial Officer (iv) Any Assistant "Treasurer Fxtibit ' F" — Promissory Note — Page 3 of 3 ' CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of (4A/Z22__YUA_ V County of 0rGtnge Lf On .S f h� 1 !W? before me, . %_ f'a A Af J,, �1h,&, -t PCh 1,L Date name and Title d Officer I. y-. -Jane Doe. Notary w ) personally appeared STYE->� V. �I s-6 Nerne(sj a S�ar(a� --*--proved to me on the basis of satisfactory evidence to be the person(* whose name(a)iVe" subscribed to the within instrument and acknowledged to me that&9he#diey executed the same inllfrerAtmir authorized capacity(ies), and that by 'I A9etAheir signature(s) on the instrument the person(§), U,uwA AL NELSON or the entity upon behalf of which the personjs) acted, coffwnW "4 1056267 executed the instrument. Notary PRAC — coiromb f orange County MV Corrm Ex w a u 23.1999 0 WITNESS my hand and official seal. Though the information below is not required by law. it may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: I Y40M I SYd — Document Date: a 1 I-qp _ _ Number of Pages: df6zA"_AAA* Signer(s) Other Than Named Above. %1-071e— Capacity(les) Claimed by Signer(s) Signer's Name: .Sr V61LI V. [.I Individual ❑ Corporate Officer Title(s): L7 Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ' -+ 14 Other: 22t PETop of thumb here Signer Is Representing. �vtilD�N7n� Signer's Name: 0 Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited Ll General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: MGM TriuM[ ps:1,11T ,.OF SIGNER 0 19% Neeoryr Nota y AssmLajLon. 8236 nenwr.M Ave - P 0 aox 71&4 - Cenoya Put. CA 91309-7184 Drod No 5907 Reorder Ceu To4Frae 1 -O00.876d,827 Fib-i4-03 04:28cr Ffta-T14 $35 0343 RECORpiNG REQCsESYEr) BY: GFtAtC: +:+OAST TITLE CwderNo. j`�I{t1lQ4i 7Z :� Eruvx No. I.aaa'4o. R'HEN RECORDED MAIL TO: Ra mt Agcxy of d-a City of Hundagtou Be=h 2000 Main Street Kuntirrrotl Beach. CA 92648 Awe: Agas:yScerertary CITY C&MK +.14-836-0349 T-445 p 00./)IC F-117 mtn,%mutxj in rues t,ounty Ot Utange. Valttornsa Gary L. Granville, Clerk/Rawrcfer 1111111111111111111101 No Fee 19980669844 4:08pm 10/02/98 006 26016697 26 59 DI I A36 10 0 12.00 0.00 27.G0 0.00 0.00 0.00 0.00 0.00 0.00 SPACE AWW TIM ME POR ECILMRMIL'S iSEI VMMYrFROL4 RECORMIG M. M WV_ CO[Z 161 SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF hEN-I'S WITH RIDER ATTACKED HERETO N(MC£: THIS SURORDMATED DEED OF TRUST WITH ASSIGNTYKENT OF REFITS WITH RIDER ATTACHED HERETO COrTAIHS A SUBORDINATION CLAUSE WHIC)13 MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BED G SUBJECT TO A LOWER MORTTY THAN( THE LIEN OF SOME OMR OR LATER SECURITY IIiSTRUMNT. Th6 DEED OF TRUST WCni ASSIGNMENIT OF RESITS WITH RIDXR ATTACHED HEBZM ("Deed of Trust'"), made August 31 1998, betweem THE BRMGES AMMUCA SHM LANF, LP., a CBtifamia limited parMership, ho*prt called TRUSTOk chose address is 18g: 7 B ookhtust Stxa, Suite 303, Folmmin Valley, CA 92703. Redevelopment enc City of Huntin ron aCyifprriscorporad*r4htreincallodTPUSIMF—and Beach REDEVELOPMENT AGENCY OF THE CCTV OF HUNIWGTON BEACH. a putlic body. =-porate and politic, 11mion caw BENl.'FfC1ARY, VIrTNESSETH: That Truator gams to Trustee in mst. svah parer of sale, that property in the City of Huntington Eeaclt. Cotmrj of Orange, State of C 1det a, described as. SEE EXHIBIT "A" ATTACEIED HERETO icge+hrl -tth the rots, issues and profits Wvoy nL9jam, however, to the nzt%power and suthoriry 114Linafi given to .nd Mufetred tipoa Bace kiuy io collect gad apply exb rmL% isucs and profits fbf the papose of secnriag (1) payment of the x= of ONE ?dMUON TWO FfLI41DRM THOUSAM SEVEN HUNbRFD 1HR-EY•FOUR DOUARS (3I,200,734M) wrtbour inl� therao11, aocoraicg 11C the toga of thm uataln;mmilwy note o: u- 5 even derarwith made by Tncstar, payable to order of Beae5tiary. and e�ions or nmewals thesenf. (2) &e pafa of emelt ty�,:zsmmt of Trator AwM pcmtad by rdc mce or comtdped husk; and (3) paymmad of a iaMan al sums and k(taeat tbmm ui ich may hes eafl>x be 3o®ed to Truraor, or his successors ar assgrA whan evidenced by a pmmincry now ormas -deism that thay are smWed by Q16 Deed afTtmL To protect the xcutity of this Dad of Trur, and with reepect to the property abox dcszlbed, TrlZox capremly makes cad aid ail of the agracw ccu; and odopO and aged to petfom and be bomd by euh and all of Cc tc= ma provisions xt forth is anh*inm A. and � is mw=lty Mrnc3 dear esci, aa8 An of the tit and;mraioas ad tmh is whdivisiQu B of tht f ml=%ft deed of turf ftc',ded i;% 0=40 Caattty Auguat 17, 1964. and in au oV= comaies Augpa 19, 1964, ire do book and a: the page of 011iciai 1 wm-1 s is ttre oZec of the c-mmty raugdrr of'.he cour:ty tvhe re raid property is located cotad bzkw opposer, tt+e mars of such county, --A- at:-9 r:Ar.mv cr,arEc1- G-1 UKn 1.9x - u) Exdu'bit "G" - Subordirmtce heed of Tsum :crSplion: Orang*.CA Pager: 1 of car: D27MY Cdamcnt tiyTtV OF HIJiTf NGTON SF Aqmmy arpdn�apt � �At Page 1 of 9 io Feb-14-03 04:Uvn Frca-714 133 0343 +714-836-0341 7-445 F 002/210 F-117 �n 77 COL%-ry COOK PA4r CXKRT'Y }100K PAGE COIN -Ty 6[Xa, PI -GE COURW BOOK VALE Aleada IVs 556 K-P RSa 713 placr 110:1 TV lines 39 tY7 Akin. i 130-31 taks 637 110 P1aoz 144 1307 SL&,Yo„ soe M, Ana4ar 133 tar Lnoan lit 367 Rlrue,4c 377a 34 loi42 1297 621 3448 Mo i11 La Masks T-3T:1 SPA awiMMUno SC79 114 $QM4 2"o 4" Cs MMIN INS su r tadcn 411 136 Be e4uu 30G 40 Data Mo 56 Cobs" 3= 39: Mrs 1949 122 Sera Ber4nd to 62; 3 70 ies,e 6S3 so$ IDowe Casa 4614 1 WArmoes 90 437 SaeFbo u i A•la4 "S =4,ama 4i7 133 DMINMIS IN $49 M—tattae 6" 99 sanlo4 2ISS 20 T-W-V 101 M MDorado 706 63S Mau low 7S3 Core teal oho" 1311 _131 IULM 233o toi Rana 7072 ' W Madx 191 93 So MML" 4r6 175 it oho" 1.77 1d0 GUM 40 :G Mora 6) 3D2 "ta831taa =63 M Ypd=a 2607 Msa*aldt s01 93 Iweste" 317 239 sn"Mts 66:6 g,4 Yop M7 IS lov" 1349 701 A -Ma 734 742 eaaucuz 1631C da Y1fta 391 693 k" 165 672 Nr4& 3C 94 SL>owi KX ram. Yen 1736 dw Casa& 71rr t9 Sat D,qo SELMS S bade 1964,314or 140774 shall irmt,e to and birA the patti:s heroes, with respect to the property above d*=fbe4 Said arts, teams and pmvisaas eo * ed in said subdivisions A and H (WcMiGal In all aomsties cad primed on pages 3 and 4 hwccf) arm by the within refcrc= dieMo. innorpntated iusrin and mWe a W of this Deed of That for aff pmposes as folly as if set forth at length her, and Bau iciary may dnrge for a ggeMctrt n%u ding the obltg3ftn seatred hereby, provided do d►arge therefor does not exceed the o aximm n allowed by Law. The tlndaigried'Irwor, rowuests &t a copy of ary notice of default and uW nodcc of sal: hammder be Tailed to him at his Addr=S hereinbefore set forth. NOTICE: THIS SUBORDINATED DEED OIL TRUST UTM ASSIGNME,�IT OF RENTS WITH RiAIX ATTACIFEED HERETO CONTAWS A SUBORDINATION CL&USE WHICH MAV R]f,$ULT IN YOUR SECURITY MEREST M THE PROPERTY SEWC SUBJ'i~CT TO A LOWER PRIORITY THAN THE UMN OF SOME OTHER OR LATH SECURITY INSTRUMENT. This is a third deed cf mist subject to a second deed of trust recording concurrently herevith ir, the aaWME of $800,000.00 and a first deed of trust of record. SiVwi-4c ofTnzw STATE OF CA11FORNIA COUNTY OF ORANGE on Af� i4\t1Qg befgv me. . c r Vp=ed. -ccar ►S L mc (SFr proved to me on me die of atiafactwy evAmoe) to be the permn(d) wtwx nmagm) Lshelfsut;acribed to the widiac iti� and arknowkdr:d to me dw 1itAdmM ey ex wuted tha == in hi+dcd%hw wAcrzed cq=gyCles), and that by his airsigasalres(sy on the inmza imo Me pasmXq ertba eazay cpoa behalf of loch the pmWaf +ctad, cxwuted the Win,. 9VM ESS my hand oaf official seal. SgG17e 35-911ur •;3i1erF�l>-G 1 o1V31AK - 63 THE BRM)C&s A&UMCA SFER I_AXF, LP., a Califurnu Lmtte d pww.ewsp By: �-C'- Its. , r vfol W�5 =4NI COM C)%6 uea too ordeal , oasat eo[, Exhibiz 'G" — S-,bvrdinatcc D*ad of TAist - Pare 2 of 9 7aare r2pt lore: Oranye,Gl 2998.669944 Pa-qo: 2 of 10 3rde.: DritHY Ce3memt: Gab-14-03 0e:29pm From-714 03S 0343 +114-836-0349 T-445 P 003/510 F-ill DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED sr-9enc�u.snor.>�c- � TRUSTEE F,rtnbit "G" — 5ubordinared Deed of Trum - Page 5 cf a Descriptions O_uoye,CA Dooument-Yesr.7oclD 1998.6CPS44 Pager 3 of 20 order: LrJ7-Arx CoJmert _._.. . �ac-14-L'3 04:30pn Frca-714 835 0343 +714-M-3344 T-443 P C4413;0 F-i1T C5G 9i RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS RO)ER TO SUBORDINATED DEED OF TRUST WITS BIDER ATTACRED CRidee), is made as of August 3 l! 1991, by THE BRJDGES AIViF3fLICA S}TER LAB, L.?, a Caiifomia limited partnership ("Truster"), and RFDEVEI.APhffN T AGENCY OF THE CITY OF HUh'TiNGTON BEACH, a public body, corporate and politic ("Benelciary"), as follows: 1. fact ofPa_c4 of Tan 'This Rider is made a gait of that oertain Subotdinafed Deed of Trust With Assignment of Rents ("Deed of Trust"), of even date hereof, to which this Rider is attached. 2. af1iIn the event of any conflict. betweeaa the terms of this Rider and the terms of the Deed of Trust, the terms of this Rider "I control. 3. Priority: Subattiination. Tnastor and Bertficia y entered into that certain Owner Participation Agreement, dated August 31, 1998 (the "OPA'), pursuant to which Beneficiary (narned the "Agency" in the OPA) agreed to subordinate this Deed of Trust to the liens of the deeds of trust identified in the OPA as the First Deed of Trust, the Second Deed o: Trust, and the Construcxion/Peunanent Leader(s)'s deed(s) of trust, and to such odw and further documents as such lenders may be required including but not limited to regulatory age=ents, not to exceed an indebtedness cfFour Million Two Hundred Thirty -fie thousand Dollars ($4,235,000.00) Tht. lien of this Deed of Trust therefore shall be junior and subordinate to the liens of the foregoing listed deeds of trust and such other and Rather documents as such leaders may require Beneficiary agrees to execute such subordination agreetneats, in the form attached as Exhibit `H" to the OPA, as are necessary to effect sucb subordination of the lien of this Deed of Trust. 4. nden Ovation- Section B 1 of the Fictitious Deed of Trust incorporated into the Deed of Trust shall be uaodified to provide that $eueficiary shall not be entitled to any awards or damages payable directly or indim-ctly by reason of a condemnation or proposed condemnation affecting all or any part of, or any interest in, the Property, brought by or pursuant to the direction of Beneficiary 5_ t The term "default" as used in the Deed of Trust shall mean a Material Default" as defined in the OPA or Regulatory Agreement VW31 ss - n Exhibit 'Cr — -qubordinwrd Reed of Trust - Page d of 9 !scr:rttoa: Oraage,CA DocL=eAt-,raar.DOCXD 1998-11(9044 page. 4 of 10 •dor: DfAKY dent: - -- ab-i4-03 04:30om Fr=-714 635 036 +714-836-0340 7-445 P 005/310 F-11i Lam IN WITNESS WHEREOF, TnAtor and Rctt66w5 have r-xecuted this Rider to Subordinated Deed of Ttw-t With Assig=ent of Rents as of the date ofTrustol's aclmowicdgmmt he:einbelow, to be effe`64c for All purposes as of the day and year first set forth above. „PARTICIPANT„ TIE BRIDGES AMMUCA SCR LANE, L.P., a California limited partucenhip By Its General painter. THE BRIDGES AMERICA FOUNDATION, a Delawum Noupmfit Corporation By: (Type or print) - Its (cw- a Qme) (i) Cmitra n of the Boatel (i,) Pr=kiwt (:i) Any Vice President Name: (T)po or Print? its (circle one) (i) Secremy (ii) Any Assistant Sarewy (1-ij) Chief Haanclal Officer (N) Any A-n1z stnt Trcwumr BENEFICIARY: REDEVELOPMENT AGENCY OF THE CIT1" OF HUNTINGTON BEACH, a public body, corporate and politic By. ' Clt ATTEST: APPROVED AS TO FORM: L --0Agency ei--k {-cr Agency Counsel it all fY S F-1 f Air ee. Stier Fa tvC - I 09NIrig 43 Exhibit `G"--Sitardinated Deed of Trot - ?are, 7 of 9 Descs.tptjon= o_ange,Gi LOCYmeRt YeaX.7oclb 1998.663844 Page. S of IO Order: D7WVY Comment:.- =0-I4-03 (14:10pe Fr:.r-?14 83i 04i +114-836-0349 T-445 P OU/316 F-'17 tiTbYI 1 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT Stme Of l.�1, ~, � _• County of on tp ber ��1 , 4before me. _ GfJ'Q ,Q, 1V(404e.,7 1 Gt:4�(ce� perscnally appeared 3'1aYErI V. 6L.-Ih o/S AJ tt w.e{�1 a iqw�• -- roved to me on ttte oasis of satisfactory evidence to be tt'e person( 'whose name(tsawsubscribed to ttio within instrument and acknowledged to me thW r�rcttoApsay executed the Sarno inUer%04r autttOria6d capacRy(iat) and WV. by signatures) on the instrunlerx the pert onib% or the entity upon behaV of which the persor N acted. executed the instrument VA$kA A. ee'sor4 cai -romim+I mmm WITNESS my hard and official seal. rualorr PJAG — caiano ar�,ana�mw so O;TIONAL Pic.gA Lrw 1rronnatla,; odow is > ? wa-%' Dl }4 w e rr+ey wavc vah:able ro pervo s royng an [he Wcur*enr ena amutd prevenr fiavdjrerx .wnavai and rainmerrranr of t/rrc ban to aname- dmownr. Description of Attael ed Document Title or Type of Document: ln 4�J Document Date: g�3_T Number of Pages: Signer's) Outer Than Named Above �ss ? Capacity(les) Claimed by Signer(s) S+gner's Name: SMV6"j V. i S-gner's Name: individual Corporate Officer Title (s): Dartner — _ Li mirted C) General Attorney -in -Fad Trustee Guardian r Conservator ,e,on-er. V /jiv—_G'rbX_ Signer Is Representing: ee &I DG eS AHLcq2r44 FAvw U',M7 TtiL.'.SF.ii�dVl I Individual :3 corporate Otfioer Tals(s). Partner— C1 t.,irtked D Generai :1 Attorney -in —Fact 7 Trustee Guardian or Conservator +� cMer. S+gneris Representing: O $fit.NoWa N=V MMEWL� - MW Urr'az AT.. P_v US -t4 - cl-44 rXX Gj� 114gt741 Aescriptiva- Crange,CA Doc timmt-Year Poc= 2*998.669644 Paju: 6 of i0 0r3ec: DT.il" Cront: =eb-14-0) 04.31on Frcm-714 833 0341 +714-036-0340 T-443 P 007/010 F-11T 569 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County of — On �4dd�r J �Rq� _ before me, -Q. Nei owl r<a,.. ana �. w Duna (. 0p. •pan. x. h�rr perscnally appearedlr $personally known to me - to be the persorArEh whose nam-Ap4e�o subscribed to the within mstno ent and acknowrlvCge to me that hei3 executed the Sarno in autttohZW capactty(;�), and that by »0itosignalurOtQ�on the Irat ment the person( LAW A. N&son or the entity upon behalf of which the persort acted, eOMmum# uxema executed the instrument. rtsvy PLO4e � C:awo+tto &VCamea �G Aj X.11" VYITIVESS rn d and official seal. ecrrare 4x haw • c OPTIONAL rough mr In wfmrlon bavw CS Rot rvQW#d by raw 9 may Dmvp valuable to parrcrw raj ng Ors Me do(—,- and o w dyrsYunt It^a,;darem mmavai and reaMt P-mono of leis bm cc anwo or documw h Description of Attached Document ]� 7 .e or Type of Document: E LLc o f l rricf�' lv c M[� Y �•'rtf Documertt Owe: _ 8� 1 a� —_—� —__ ember of Pages: Signer(s) Othe- Than Named Above: It u-1 fG41 b._-h —!n ._� Capaeity(ies) Claimed by Signer(s) Signer's Name: _�hj ! � { Signer's Narne. 1e. &aek_ ndry I .] r i I D Individual del :1 Corporate Offir:er -D Corporate Officer Title(s): Tibe(s): w Partner -- d Umitec ` General =1 Parmw -- j' limited Z Gene,af C Attorney-m-Fac, :"'j A=weyin-Fact v Trustee _ J Trustee Guardian or ConVrvatcr C Guaroier r Conservator (S Other. rhi [ Yryut� a tiKr-a �. I Othe o± �nuno rw. Signer Is Rvuresent.ng, ! 1 Signer Is Representing. &Vw. 1 a 196 ht% i 11a6Y A ^,.L, . szu Aae-ne: Aa+ . PO dew T :L. - CNoga Pwi :! 41]:4 7'&A Dc— cripci.2_: orange,CA DOCUmCDC-YQai-DQCSD I998.657844 Pager 7 0! 10 order: D2'R..YY Coamen6: P me p4a 5W7 Re dr Cam 'o � i 4e0. 6. &W? �eb-14-03 04:31PM From-T14 830 0341 T-eat P 003i117 F- ' �J EXHIBIT "A" TO DFXD OF TRUST r 4 s L;,.;-r;l—1R (TO BE MSERTED) oer ll9r - q 14'oT PAGE P TJ7�SS/NG Dui 7b PAGIN,,)o-TIo.%/ Exhibit -Q" — Subor6mted Dead of Trutt - Page 9 cf 9 Descriptsanr Orangs,CA boc=cnt-rsar.DOCZD 2993.669844 Page: S of 10 Order: Dr1t3Y Conment: =tb-14-03 04.3:0o Frsm-I14 135 0349 +714-836-0349 7-443 P 009/I10 F-;17 EXHIBIT "A" PAitCFl. i : - TNhT FM7-IC0 OF ThM NaM AS QUNRT R OF Ste; IC 4 23, T0144HIP 5 SOLTTIi, RANGE 11 WEST. PARTLY IN TTa: P-*K2-D LA BOLSA OUCA AM PARTLY IN 7 E RANCHO LAS BOLSAS, IN 7W CITY OF HXrTIt4i" W BEACR. AS PER M KMIADM ZN !BOOK 51, PAGE I3 OF MI9Cf"i -4WjS Kb.PS, IN TFE OFFICE OF THE flOClr?1Y RPCWDE'. OF SAID COUriY. DESOUBED AS FOLd wS: BaojWIN0 AT THE INIEP-CEYTICN OF THE S`J(JIi{ L N-L CF 11M N05ZrN 50- 00 Fr 7 OF =- 9 ST CuARiFR 0=- Thm NommsT qA tm OF SArD NORTHEAST QLPRrER wmv am FAST LINE OF SHM LAN!: AS DESMISED W IW MW TO TM CITY OF K I'INUT1CN BEACH. REocRD. m DECIa'sM i, 1.96). IN BOOK 5937 FAM 35, OFFICIAL Rf MPDS; 'ITE E NOKix 180.00 FEET' AI,CNG SAID !OAST LINE; 7NEbrE EAST 346.00 FIFE PARAU� WI'IW TIE NUMN LINE OF SAIL) SOU 1MISi QUARTM OF TFM NOR"iHn'EST CX7T,RTER OF 7NE NOR T-.TASP CLO►RTZ:R; TMENCE SOUT14 1.00.00 FEEI PARAL AL WITH SAID FAST LITTE; ' Mr-%' EAST 50.00 FBEr PARALLEL Va-.rri- SAID M RTH LIME: 7KENCE SCUM 80.03 FE"T PARA'I_M, W17W SkXD FAST LD4E 'ICJ THE SO[T F LINE OF TIE NORT14 SO.00 Tr'FET OF TFr WJTW'45T QLI kRTER OF ME NORTF AST QUARTER OF SAID NDRTRV ST QLARTM., 7rZ%JM WEST 436.00 FFE'TTO 11-M POINT' OF SE]GIMIM;. Stub LAND 3s INCL om wITHlV THE AYMN 5604N Qt A FAP Flyer IN BOOK 23 PAM 1? OF RECORD OF SJRVEYS. I14 THE OFrlCE OF TI-E COr�N-Y RECOMER OF SAIO COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MIPW-ALS AND Cr-IR WA)ROCARBONS, aELCR A LiE7.K OF 500 Fes; . WITHair 11IT RIORT OF SJRLVVM ENTRY, AS RESEZVZD IN DEQ]S OF REOCZD. PARCEL 2: T-,LNT POFzrION 0= Tim— \,r-)RTVF-NS: WARIER OF SECTION 23. T,->4MJIP 5 - i ;, RANGE 11 'ARST, 10 =- RAVCHO LA MESAS, IN TLE = OF KJN'TrtCllQ4 BEACH, AS PER NA? RECOR,- 0 IN POOH- 51. PAGE 1.3 OF MI:SSCELTAINME VX5S. IN THE OFFla OF --rE C1OUh'IY RzGGnRT]ER OF SAID CAL ay. O1 scRiEITl AS FOIZ045. BMU\'N'IM AT TT-' LV E:tSE7C'rION OF M -c= LL`'E OF T.-M W$UH 50.00 Fes: C OF WE SrJUrrEAS?' OLOUMEP. OF 71-E NORIN ESE O RM OF SAID NURTW-AST OLDUrtFE2 WITH THE EAST LINE OF sHm LANE AS DESCPrBED IN 71-7 'RFD ID TIE CITY OF HUM'n+]L'EM BrAQi, REMRDE] DEC UIBER -1, 1961 IN BOOK 5937 PAfZ 55, OFFICIAL RE.ODRDS; THENCE NOM 190. CO F= ALCM SAID FAST L &0; THEWE MST 346. 00 F 7 PAPjakEL+ WTLH ME NMTH LM OF $AID SOUTHEAST CNAnM OF IM NORTFREST Q►,IWM OF THE NORTMkST a VZM; ONCE SOM 100.00 FEET PARALLEL, WITH SAID Ek'T LINE; 'IMKY FA5'T 90.00 FFEi' PARALLEL WITH SAID NC)RW ME TO A POW: '+4'fI(3j MINI IS IM 'ME PODM AND PLACE OF fi0GImlm; THR4CE 8=134 80.00 FEET MRAUEL xrm SAID FAST mTbm To THE SOUTH LINE OF 'ham t330H 50.00 FEET OF THE SOUIHI%Wr QC:7 gZTM Of 71M �3FST QUVa-ER CF SAID AOR A ' QUARTER; TI09M 408.96 FM- V%SP PARALLEL WITH THE NOKM LINE CF SAID SCJC.II>iE'AST QtARTER OF THE NC3R7Fi1rMT QU.RM Or' 71E BSI' QLFARTER TD TIC' WDS-T Liter: OF PARKSIDE LANE AS L'ESaUaEo IN Tpt£ DE>E]D To aM e-jTy OF HLWMUILN WACH, REMRDa-) SF.PTEM2ER 20, 1966 IN HOOK 6727 PAG`: 541 OF OFFICIAL RDOORDS; THMKE NORTl-i 80.00 FEET .IkL= SAID WEST LIIt- W A LiiE THAT IS PARA;.dFT�., W17H MiE NORTH LINE OF SAID 9OCM AST CUAMFR OF 'THE NORT<•1!we:gr 7-UN OF TTF 'NORTHEAST QLJA U R, AND %HICT4 PASSES 'IT-9 J AND TRJE P01NP AND PLACE OF BEGUWIM: THEKE w-sT 408. 96 FF£T, AL= SAID LAsr Ki rLCIED PAPXALEL LINE, T'O 114E 'IRUS POINF AND PLACE OF BEGIMI.Kr. (LL• AJ, DE'SCt2IMC N Curl'rNJM) Descrlp:lon: Orango.CA D*CUM=t -Year.D, TD 2998.569644 Pace: 9 of 10 Order: D?RXY COmavu c : fob-14-03 04:32ao F(cm-714 836 0343 +I14-836-0349 7-445 P 010/310 F-ili • �s =r (Cult. G�T!?rtiQ! CiNF]N�D) CJla.E • irOZEFRCM /yW OIL, GAS. MXNER LS AM OIVMk 1111Ju-MO M, IEiM A DEVM OP 500 FEET, WrrMM ZM RXWr C F Si11 FACE; IEI+rI>FtY, AS R SERVED IN DEMS OF . SAID LAND IS MCLLY= W THW nE AREA Vk%M CN A MAP FT= IN BOOK 23 PAGE 17 QP p2oQ jw OF-%MvEYS, IN mE OFFICE OF TIT COUNTY R=mm OF SAID Q7 my. Deacrlpt:car Orapge,rA Document-?Pear.Doc2D 1098.669044 page- 20 of 10 Order: T.^RXY Cmmomt: __—.. WHEN RECORDED RETURN TO: AWV j r k Bridgesrher Lane, L.P. ^ 18837 Broolchurst Street Suite 303 Fountain Valley, CA 92708 Attn: JoAnn Ulvan SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "THIS SUBORDINATION AGREEMENT ("Agreement") is entered into this _ day of by and among REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public agency, corporate and politic (the "Agency"); TIIE BRIDGES AMERICA SHER LANE-,- L.P., a California limited partnership ("Participant"); and - _ ("Lender"). RECITALS: A. Participant owns fee title to the real property described on Attachment No. "1" (the "Property") attached hereto and incorporated herein by reference. The Agency and Participant have entered into an Owner Participation Agreement dated as of , 1998 (the "OPA"). Pursuant to the terms of the OPA, Participant has executed a Note in favor of the Agency in the amount of ONE MILLION TWO HUNDRED THOUSAND SEVEN I INDRED THIRTY- FOUR DOLLARS ($1,200,734.00) ("Agency Loan") to assist Participant in the redevelopment of the Property as an affordable housing complex. The Agency Loan is to be secured by a Subordinated Deed of Trust With Assignment of Rents With Rider Attached encumbering the Property (the "Agency Deed of "Trust"). B. Agency and Participant have also entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions recorded against the Property ("Agency Regulatory Agreement"), which, Agency Regulatory Agreement contains, among other terms, certain use restrictions affecting the Property. SF-98Agrce Shcr-1 _E:xh-Ir -1 OV28198 - #3 jrX1i1131T"li"-SU13ORI). AGR. FORM Page 1 of9) C. Participant has obtained a loan from ("the Lender") to lend to Participant the sum of DOLLARS ($- (the "Lender Loan"). To repay the Lender Loan, Participant has executed or is about to execute a deed of trust encumbering the Property to secure a promissory note in the sum of the Lender Loan, payable upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). In connection with the Lender Loan, Participant may also be required by Lender to execute a regulatory agreement to be recorded against the Property, which may contain among other terms, use restrictions affecting the Property (the "Lender Regulatory Agreement"). D. Lender is willing to make the Lender Loan provided the Lender Deed of Trust and Lender Regulatory Agreement are a lien or charge upon the Property prior and superior to the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement, and provided that the Agency will specifically and unconditionally subordinate the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement to the lien or charge of the Lender Deed of "Trust and the Lender Regulatory Agreement. E. It is to the mutual benefit of the Lender, Agency, and Participant that the Lender make the Lender Loan to Participant; and the Agency has agreed that the Lender Deed of Trust and Lender Regulatory Agreement shall, when recorded, constitute a lien or charge upon the Property which is unconditionally prior and superior to the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement, subject to the specific terms and provisions of this Subordination Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the Agency, Lender and Participant, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: .1. Subordination by Agency_. .1.1 Subordination of Agency Deed of Trust and Agency Regulatory Agreement to Lender Deed of Trust and Lender Regulatoryy Agreement. The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder), and the Lender Regulatory Agreement (and any amendments or modifications thereto) shall unconditionally be and -remain at all times a lien or charge on the Property, prior and superior to (1) the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement, (ii) all present and future indebtedness and obligations secured thereby, and (iii) all rights and privileges of Agency thereunder, provided that the Lender Deed of Trust does not exceed Four Million Two Hundred Tturty-Five.Tbousand Dollars ($4,235,000.00). If Participant chooses to refinance the Lender Loan, Agency agrees to subordinate the Agency Deed of Trust and the Agency Regulatory Agreement to the refinancing Lender's Deed of Trust under the same terms and conditions as sex forth in this Agreement, on the condition that the amount of the new loan is no greater than the original principal balance of the Lender Loan. SF-98Agrre Sher-1 _Exh-H -A 082MR - a3 [EXHIBIT -11" - SUBORD. AGR. FORM Page 2 of91 1.2 Covenants of Agency. The Agency declares, agrees and acknowledges that: (a) The Agency consents to all provisions of the Lender Note and the Lender Deed of Trust; and (ii) all provisions of the Lender Regulatory Agreement- (b) To Agency's actual knowledge, there is no breach, event of default or default existing under the Agency Deed of Trust or Agency Regulatory Agreement, or any circumstances, event, omission or failure of condition which would constitute such a breach, default or event of default after notice or lapse of time, or both. 2- Reliance by Lender and Agency. The Lender would not make the Lender Loan and the Agency would not have agreed to subordinate the Agency Deed of Trust and Agency Regulatory Agreement without this Subordination Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this waiver, relinquishment and subordination. 3. Notice to Agene . In the event of a breach or default by Participant under the terms of the Lender Deed of Trust, the party alleging such default shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Participant. Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall have each of the following rights so long as either the Agency Regulatory Agreement or the Agency Deed of Trust encumber any portion of the Property or interest therein: (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or any lien under the Lender Regulatory Agreement. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of "Trust or other lien prior to the date that is thirty (30) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonmonetary default, the Lender shall not foreclose its Lender Deed of Trust or other lien prior to the date specified above for monetary defaults; provided that if said nonmonetary default is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary (x) to obtain possession of the Property by either foreclosing the Agency Deed of Trust, and (y) to cure the default, so long as the Agency does so with reasonable and continuous diligence. (b) To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. (c) To negotiate with the Participant to purchase the Property from Participant, subject to the Lender Deed of Trust without the consent of the holder of the Lender Deed of Trust or enforcing party under the Lender Regulatory Agreement. sF-9savRe sncr-i.E;,-ti -i 08128/98 - H3 (EXHIBIT "H" -- SUBORD. AGR. FORM Pape 3 of 91 The Lender agrees that the exercise of any of the rights set forth in this Section 3.1 by Agency shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan. 3.1 Foreclosure of Agency Deed of Trust. The Lender hereby agrees that in the event that Agency forecloses the Agency Deed of Trust, said foreclosure shall not give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan. 3.2 Disbursements. Lender, in making disbursements of the proceeds of said Loan, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing such Loan shall not defeat the subordination herein made in whole or in part. 4. Miscellaneous. 4.1 Entire AZreement. This Subordination Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and Lender Regulatory Agreement on the one hand, and the Agency Deed of Trust and Agency Regulatory Agreement on the other hand, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Agency Deed of Trust and Agency Regulatory Agreement, which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assigns. This Subordination Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law. This Subordination Agreement shall be construed according to the laws of the State of California 4.4 Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any parry or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice. Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by (i) personal delivery, (ii) by courier service that provides a receipt showing date and time of delivery, or (iii) by registered or certified mail, return receipt requested, postage prepaid. Notices shall be directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be SF-98A8ree;Shu-I Fxh-11-1 ]EXHIBIT- "H" - SURORD- AGR- DORM Page 4 of 9] deemed given upon receipt if by personal delivery or courier service, or if by mail the earlier or (x) actual receipt or (y) forty-eight (48) hours after deposit in the United States mail. If to Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Executive Director If to Participant: The Bridges America Sher Lane, L.P. 18837 Brookhurst Street Suite 303 Fountain Valley, CA 92708 Attention: Executive Director With copy to: Rutan & Tucker 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92628 Attention: Jeffrey M. Oderman, Esq. If to Lender: With copy to: 4.6 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 each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Counte[parts. This Subordination Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. IN WI"I3VL-'SS WHEREOF, the parties have executed this Agreement as of the date first written above. SF-98Agree Skr-I I xh-Ei 1 08/2M)8 - 03 [EXHIBIT "11" — SUBORD. AGR. FORM Page 5 of 91 NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "AGENCY" ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic By: Agency Clerk APPROVED AS TO FORM: By: Agency Counsel S F-98Agrce Sher- I . Cxh-11- 1 09/2 98 - u 3 Lm [Signatures continued on next page.] 11:XHIBIT "i3" - SUFSORn_ AGR_ FORM Page 6 of 91 SF-98ngrcc Sher-1 Exh-11 -1 "Participant" THE BRIDGES AMERICA SHER LANE, L.P., a California li;nited partnership By: Its: "LENDER" By: Its: By: Its- [EXHIBI-I"'H"- SUBORD. AGR FORM Page 7 of9) STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, appeared _ personally personalty known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/shelthey executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] [ADD ADDITIONAL ACKNOWLEDGMENT FORMS AS NECESSARY] SF-98AgrccShcr-1 Fx11-11-I 0828198 - N3 (EXHIBIT -Ii-- SUBORD. AGR. FORM Page 8 of91 SF-98Aj;rcc Shci-1 F.xh-H •1 UBl18/98 - H3 Al-FACHMENT NO. "1" LEGAL DESCRIPTION OF PROPERTY FFO BE INSERTED] [FXHI[31T "H" — SUBORD. AGR. FORM Page 9 of 91 i This document was electronically recorded by Orange Coast Title RECORDING PEGIIESTE{I By. ORANGE CAAST TITLE CQ APANY Reoorded In the County of Orange, Californla _ Gary L. Granville, Clerk/Recorder r" 1 FREERE�CORDINGREQUESTEDBY 1001i�11��i1�1118�11 NO Fee AM WHEN RECORDED Mom- TO: - 19980669841 4:08pm 10/02/98 006 26016695 26 59 &EIMNMDPhIENT AGEN _—Al2 D-M 19 O 12.00 0_00 54.00 0.00 0.00 0.00 CITY OF MWTINGTON BEACH 0.00 0•00 0•00 2000 Main Street Huntington Beach, CA 92648 Attn: - /ry Cte-R,� M (AP tl,'12<-*� R (space Above'Ilu Line for Reeordees Office use Only) (FxenTt from Recording Fee Per Gov. Code §6103) ` UGORYAgRE9199AND DECLARATION OF COVENANTS AND RESTRICTIONS THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this 31 day of August 1998, by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNT I NGTON BEACH, a public body, corporate and politic ("Agency") and THE BRIDGES ANDMICA SHER LANE, L.P., a California limited partnership ("Participant:"). R°E'C h T'A L'Sf A. Agency and Participant have entered into that certain Owner Participation Agreement, dated _ August 31 -- , 1998 (the "OPA"), concerning Participant's redevelopment of that catain real property, owned in fee by Participant, more particularly described in Attachment No. I niched hereto and incorporated by reference herein (the "Site"). The OPA descn'bes the "Project" which generally consists of Participant's rehabilitation of an existing sixty- snc (66) unit apartment complex on the Site and subsequent management thereof as an affordable rental housing complex. The apartment complex consists of thirty-three (33) one bedroom units and thirty-three (3) two -bedroom units. B. Agency and Participant also entered into that certain Note (the "Note"), with a Note Date ofAmal± 3 1998, pursuant to which Agency has provided Participant with a self-liquidating loan in the principal amount One Million Two Hundred Thousand Seven Hundred Thirty-four Dollars ($1,200,734.00) ("Loan Amount"). The Note provides for Agency's waiver and discharge of the Loan Amount by one -thirtieth (1/30) each year for thirty (30) years,: C. Agency and Participant now desire to place restrictions upon the use and operation of the Project, in order to ensure that the Project shall be operated continuously=as atS affordable; SF-9$A&rcc.Sha-3:E%f-,I aN H_ t)1+�1 N A Exhibit "I" - REGULATORY AGREEIv1ENT - PAGE 1 of 15 �% bertc 6Y� housing project available for rental in accordance with the terms set forth below for the term of this Agreement. AGREEMENT: NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators and assigns, and all persons claiming under or through them, that the Site, 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 annual rentals whose amount does not exceed the maximum percentage of income that can be devoted to rent as set forth by California Health & Safety Code Section 50053, or its successor. 1.2 Eligible Low Income Tenant. As used in this Agreement, the term "Eligible Low Income Tenant" shall mean those tenants whose household income does not exceed eighty percent (80%) of the Orange County Median Income, or such other percentage as may be defined in California law from time to time as "low income," and who are other eligible to rent a Unit. 1.3 Eli i� ble 'special -Median Income Tenant. As used in this Agreement, the term "Eligible Special Median Income Tenant" shall mean those tenants whose household income does not exceed one hundred ten percent (I 10%) of the Orange County Median Income, and who are otherwise eligible to rent a Unit. 1.4 Eligible Tenant As used in this Agreement, the term "Eligible Tenant" shall refer to, as the context mandates, individually or collectively, Eligible Very Low Income Tenants, Eligible Low Income Tenants, and/or Eligible Special Median income Tenants, who are otherwise eligible to rent a Unit. 1.5 Elili 'bblle�Very Low Income Tenant. As used in this Agreement, the term "Eligible Very Low Income Tenant" shall mean those tenants whose household income does not exceed filly percent (50%) of the Orange County Median Income, or such other percentage as may be defined in California law from time to time as "very low income," and who are otherwise eligible to rent a Unit. 1.6 _Orange County Median Income. For purposes of this Agreement, the "Orange County Median Income" shall be determined by reference to the regulations published by -the California Department of Housing and Community Development pursuant to California I Iealth and Safety Code Section 50093, or its successor. SF-9$Agrce:Shcr-3:Exh-1 08n"g - JO Exhibit "I" - REGULATORY AGREEMENT - PAGE 2 of 15 1.7 Orange County Moderate Income. As used in this Agreement, the term "Orange County Moderate Income" shall mean household income not exceeding one hundred twenty percent (120%) of the Orange County Median Income, or such other percentage as may be defined in California law from time to time as "moderate income." 1.8 Unit and Units. As used in this Agreement, the term "Unit" shall mean one of the sixty-six (66) rental dwelling units in the Project, and the term "Units" shall mean two or more of the sixty-six (66) of the rental dwelling units in the Project. The term "Unit" and "Units" shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. 2. TERM OF AGREEMENT, RESIDENTIAL RENTAL PROPERTY. The term of this Agreement shall be thirty (30) years from the date hereof. Participant hereby agrees that the Project is to be owned, managed, and operated as a project for Eligible Tenants for the term of this Agreement. To that end, and for the term of this Agreement, the Participant hereby represents, covenants, warrants and agrees as follows: 2.1 Pur qse. The Site will be acquired and the Project developed for the purpose of providing Eligible Tenants rental housing. 2.2 Facilities. All of the dwelling units in the Project shall contain facilities for living, sleeping, eating, cooking and sanitation in accordance with the terms of the OPA. 2.3 Residential Use. None of the dwelling units in the Project 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 without the Agency's prior written consent. 2.4 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Participant take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of Agency. 2.5 Preference to Eligible. Tenants. All of the dwelling units will be available for rental in accordance with the terms of this Agreement, and the Participant shall not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that the dwelling units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.5 below. 2.6 Liability of Participant. Participant and Manager shall not incur any liability under this Agreement as a result of fraud or negligent or intentional misrepresentation by a tenant. 3. OCCUPANCY OF PROJECT 13Y ELIGIBLE TENANTS. Participant hereby represents, warrants, and covenants as follows: SF-98Agrce Sher-3 Eixh-1 0&'2MR - #3 Exhibit I"- REGULATORY AGREEMENT -- PAGE 3 of 15 3.1 Income Restrictions. Except as expressly provided herein, throughout the term of this Agreement, the sixty-six (66) Units shall be subject to the following affordability restrictions: (a) seventeen (17) one -bedroom Units and sixteen (16) two -bedroom Units shall be rented to Eligible Special Median Income Tenants. (b) sixteen (16) one -bedroom Units and six (6) two bedroom Units shall be rented to Eligible Very Low Income Tenants. (c) eleven (11) two -bedroom Units shall be rented to Very Low income Tenants and these Units shall be desl ated as "HOME Units" and the rents for these eleven (11) Units shall not exceed the "low/n__me" rent as defined by HOME Program, a Q as set forth at Section 92.252 of Title 24 of the Code of Federal Regulations. ✓✓ �� 3.2 Further Income Restrictions. Notwithstanding the foregoing, Participant shall be permitted, from time to time and at one or more times, to enter into agreements with any public or private entity or entities, on such terms as Participant may agree in its sole discretion, to convert those Units designated above as for Eligible Special Median Income Tenants to Units for Eligible Tenants at an income level lower than Special Median Income, for example, to Eligible Low Income Tenants or Eligible Very Low Income Tenants (or, if subparagraph (a) of Section 3.1 applies, to also convert the non -restricted Units to restricted Units at Orange County Moderate Income or any lesser income level). 3.3 Rental Rates. Participant shall rent each of the Units at no greater than the Affordable Rent applicable t6the particular Unit. 3.4 Occupancy By Eligible Tenant. A Unit occupied by an Eligible Tenant at the commencement of occupancy shall be treated as occupied by an Eligible Tenant until the Unit is vacated. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until reoccupied. (a) As to the HOME Units, the HOME Program allows tenants to continue residing in income restricted units even if their income increases. Pursuant to the HOME Program, Participant may increase the tenant to no more than thirty percent (30%) of their actual household income if their income exceeds the maximum allowable income for the HOME Unit. (b) As to the non -HOME Units, if the income of an Eligible Very Low Income Tenant increases above the maximum level, Participant may raise the rent to the Special Median Unit level. Then, when the first vacancy occurs in a Special Median Unit, Participant shall rent it to an Eligible Very Low Income tenant. 3.5 Income Computation. Immediately prior to an Eligible Tenant's occupancy of a unit, Participant shall obtain and maintain on file an Income Computation and SF-98ftmc Shcr-3-F.xh-1 t WAM8 - 113 Exhibit "i" - REGULATORY AGREEMEhrr - PAGE 4 of 15 Certification form from each such Eligible Tenant dated immediately prior to the date of initial occupancy in a Unit by such Eligible Tenant. Participant shall use its best efforts to verify that the income provided by an applicant is accurate by taking one or more the following steps as a part of the verification process: (i) obtain two (2) pay stubs for 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 may be reasonably required. 3.6 Rental Priority. Tenants living in the Project prior to Participant's rehabilitation of the Units as contemplated by the OPA ("Initial Rehabilitation") who are Eligible Tenants meeting the income restrictions of the Units as set forth in Section 3.1 shall be given first priority in re -leasing Units in the Project following completion of the Initial Rehabilitation. Except as set forth above, Units shall be rented to Eligible Tenants on a first -come, first -served basis; provided, however, that Participant may, in Participant's sole discretion, maintain an "interest list" or "eligibility list" of potential tenants but that Participant shall not be liable to Agency or any person, firm, or entity in the event a Unit is rented to a person who is not on any such list or is on such list but is listed lower than another person on such list. 3.7 Renting Vacant Units. When a unit becomes available as a result of a tenant vacation, Participant shall rent the unit to an Eligible Tenant in accordance with the following procedure: - (a) First, Participant shall rent the Unit to persons who have been displaced by Agency activities, pursuant to California Health and Safety Code Section 33411.3, provided that Agency provides Participant with reasonable noticeX (b) Second, Participant shall rent any vacant unit in the order of priority as set forth in Section 3.6f (c) Third, if after and despite Participant's reasonable efforts, Participant is unable to rent a unit in the Project reserved for one of the restricted income categories for Eligible Tenants as set forth in Section 3.1, Participant may rent said unit to the next higher income level for Eligible Tenants set forth in Section 3.1, provided that in no event may less than(33) Units be rented to Eligible Very Low Income Tenants. i+hinny -t ti r-cc 3.8 Maintenance of Records. Participant shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency to -inspect the books and records of Participant pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Units. SF-98Agrec Sher-3 Ezh-1 0812M8 - a3 Exhibit "I" - REGULATORY AGREEMENT - PAGE 5 of 15 3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Participant has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. 3.10 Conflicts. The rental priority provision set forth in Section 3.6 shall apply only in the event, and 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 recorded in superior priority to this Agreement. 4. MAINTENANCE. 4.1 Maintenance Covenant. Participant agrees to maintain all interior and exterior improvements, including landscaping, on the Site in good condition and repair (and, as to landscaping, in a healthy condition), reasonable wear and tear excepted, and in accordance all applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction. In addition, Participant shall keep the Site free from all graffiti and any accumulation of debris or waste material. Participant 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 approved materials. The maintenance covenant contained in this Section shall remain in effect for the term of this Agreement. 4.2 Ag ncy'Rights. Agency shall have the right annually to enter upon the Site to inspect both the interiors and exteriors of the Site, upon seventy-two (72) hours notice. Agency may perform or cause to be performed the maintenance necessary to cure any default of these Ml intenancc 90"venants and Participant shall be liable for payment to Agency of Agency's reasonable costs (excluding staff salaries and overhead and other similar costs) to perform such required maintenance; provided, however, that Participant first be given written notice by Agency of the action§ r red to cure any default, and Participant, after receipt of such notice, shall have sit ys to cure such defaults, but Participant shall not be deemed in default of the forego ng maintenance covenatit if such default cannot reasonably be cured within the sixty (60) day period referenced above so long as Participant has commenced to cure such default within the same sixty (60) day period and is diligently proceeding with the work to cure such default. Notwithstanding the foregoing, if any property conditions are reasonably identified by Agency after a property inspection attended by a representative of Participant that pose an immediate danger to life or limb, Participant shall have three (3) days to effect corrections of such condition(s) to Agency's reasonable satisfaction. 4.3 Annual Report. Participant covenants and agrees to submit to the Agency an annual report -(the "Annual Report") required by California Health and Safety Code Section 33418. The Annual Report shall include for each Unit the rental rate and the income and family size of the occupants. The income information shall be supplied by the tenant in a SF-98Agnc Shcc-3 F.xh-1 OgnMg - M3 k.xhibit "I" - REGULATORY AGREEMEW - PAGE 6 of 15 certified statement on a form provided by the Agency. The Participant shall submit the Annual Report on or before the end of the first calendar quarter of the year following the year covered by the Annual Report. The Participant shall provide for the submission of such information in its leases with tenants. Agency shall not charge a fee for reviewing the Annual Report. 4.4 Management Plan. Participant shall prepare, submit to Agency Executive Director within sixty (60) days ofXecordation of this Agreement and maintain in effect a Management Plan in accordance with the following: (a) b�— the-A.g c gen approv des-at--a---- -mi . The Management Plan, including such amendments as may be approved in writing by the Agency, shall remain in effect for the term of this Regulatory Agreement. Participant shall not amend the Management Plan or any of its components without the prior written consent of the Agency. The components of the Management Plan shall include: (1) ManagementAgent. The name and qualifications of the �proposed management agent. The Agency shall approve or disapprove the proposed gement�nt in writi g based on the experience and qualifications of the Xanagemen�ent. TheXaanageme�ent 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 theLowIncome Units,r a,.4 l� 0mu U,,tl.t,,. e�t - 3-x zz' `� Veryy (3)Mafiag-ement Agreement. A copy of the proposed management agreement specifying the amount of the management fee and the relationship and division of responsibilities between Participant and management agent. " - 4 a)y C-- (4) Tenant Lease or Rental Agreement. A copy - of the proposed tenant lease or rental agreement to be used in renting theeLow Income Units. Me r `r`G`'"`�� Ur � (5) Annual Budget. Prior to the completion of construction and annually thereafter not later than fifteen (15) days prior to the beginning of the next fiscal year of the Project, tk6 Participant shall submit a projected operating budget to the Agency Executive Director for review and approval. The Agency shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder, and such matter shall be deemed approved unless the Agency provides to Participant its written disapproval within thirty (30) days after receipt of a request for approval, provided Participant includes SF-98Agrce_Sher-3 fxh-1 0812Sl'98 - u3 Exhibit "I" - REGULATORY AGREEMENT- WAGE 7 of 15 with its request, a written notice, in capital letters, stating as follows: NOTICE: PURSUANT TO SECTION 4.4 OF THE REGULATORY AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND BRIDGES AMERICA S14ER LANE, L.P., FAILURE BY THE AGENCY TO APPROVE OR DISAPPROVE THE MATTER SUBMITTED WITH THIS REQUEST WITHIN 30 DAYS SHALL BE DEEMED AN APPROVAL. Any disapproval shall be in writing and contain the Agency's reasons for disapproval. (b) Participant hereby covenants and agrees the Agency shall have the right, at any time and from time to time, to give notice to Participant if the Agency determines that the Project is not being managed or maintained in accordance with the Management Plan. The Agency may require the Participant to change management practices or to terminate the management agent and retain a different management agent, approved by the Agency. The Agency agrees that prior to requiring the Participant to change its management agent or the management practices the Agency shall informally consult with Participant, in an attempt to resolve '7the dispute. If the Agency determines that such an attempt at informal resolution has been unsuccessful, it shall give the Participant thirty (30) days written notice to change the management agent or practice, as the case may be. If Participant fails to do as requested by the Agency in the written notice, the Agency may then require the immediate change of the management practice or agent, as the case may be. The anagement agreement shall provide that it is subject to termination by the Pahcipant without penalty, upon thirty (30) days prior written notice, at the direction of the Agency. Within ten (10) days following a direction of the Agency to replace the management agent, the Participant shall select another management agent or make other arrangements satisfactory to the Agency for continuing management of the Project_ The Participant shall notify the Agency 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 Agency, the Agency shall be entitled to require the Participant to change the management agent in accordance with the terms of this paragraph. 5. ENFORCEMENT. In the event Participant defaults in the performance or observance of any covenant, agreement or obligation of Participant 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 Agency, or, in the event said default -cannot be cured within said time period, Participant has failed to commence to cure such default within said thirty (30) days and diligently prosecute said cure to completion, then Sr-98 ftmc Sher-3 I:xh-I osn"g -N1 Exhibit -1- -- REGULATORY AGREEMENT - PAGE 8 of 15 Agency shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: (a) By mandamus or other suit, action or proceeding at law or in equity, require Participant to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of this Agreement; or (b) 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 pursuant to the OPA. 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. 6. NONDISCRIMINATION. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Participant, 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 Site, or any part thereof (except as permitted by this Agreement). 6,1 Form of Nondiscrimination and Nonse>7regation Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, religion, ancestry, national origin, sex or marital status of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In Deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. (b) In Leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the follou7ng conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, ancestry, national origin, sex, or marital status in the SF-98Agrce Sher•3 F%h-1 082&98 - #3 F:xhibii "t" - REGULATORY AGRERMEW .-- PAGE 9 of 15 leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." (c) In Contracts: "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, religion, ancestry, national origin, sex, or marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of the land." 7. COVENANTS TO RUN WITH THE LAND. Participant hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Participant 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 Participant's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire. All covenants without regard to technical classification or designation shall be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. 8. ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other parry hereto by reason of the breach of any covenant in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery, and expert witness fees.. 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 real property 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, (ii) 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: Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Executive Director SF-98Agree Sther-3-F-ch-I OUMV8 - 93 Exhibit " 1" - REGULATORY AGREEMENT - PAGE. 10 of 15 Participant: Bridges America Sher Lane, L.P. 18837 Brookhurst Street Suite 303 Fountain Valley, CA 92708 Attn: Executive Director Copy to: Rutan & -fucker bl 1 Anton Blvd., Suite 1400 Costa Mesa, CA 92626-1950 Attn. Jeffrey M. Oderman, Esq. 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. SEVER BILITY/WAIVER/INTCCRA"FION. 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. A 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 remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 11.3 Integration. 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 laws of the State of California. 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. 14. SUBORDINATION. This Agreement shall be junior and subordinate to the liens of the deeds of trust identified in the OPA as the First Deed of Trust, Second Deed of Trust, and the Construction/Permanent Lender's deed(s) of trust, and such other and further documents, including regulatory agreements, as such lenders may require, not to exceed Four Million Two Hundred Thirty-five Thousand Dollars ($4,235,000.00) in debt. If, from time to time and at one or more times, Participant chooses to refinance the loan secured by any deed of trust which is superior to this Agreement, Agency agrees to subordinate this Agreement to the refinancing lender's deed of trust under the same terms and conditions as set forth herein on the condition that the amount of the new loan is no greater than the original principal balance of the refinanced note. Agency agrees to SF-98 Rice Sher-3 _C-Xh-1 08129M - u3 Exhibit "1" - REGULATORY AGREEMENT - PAGE I 1 of 15 execute such subordination agreements as may be required to effect the priority set forth in this Section. SF-98Agmc:Stir-3 Fxh-I o8n8/98 - &.3 [end - signature page follows] Exhibit "1" -. REGULATORY AGREEMENT — PAGE. 12 of 15 IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. ATTEST: By: Agency Clerk APPROVED AS TO FORM: By: Agency Counsel SF-98ngrtc.S1xy-3 Exh-1 08/2W8 - M3 "AGENCY" REDEVL'ELOPMEN'r AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic - By: Chairman "PAR7'ICIPANT-- 11-1E BRIDGES AMERICA SHER LANE, L.P., a California limited partnership By its General Partner: THE BRIDGES AMERICA FOUNDATION, a Delaware Nonprofit Corporation By: Name: (Type or print) Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President AND By: Name: (Type or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary Exhibit " l" - REGULATORY AGREEMENT.— PAGE 13 of 15 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On , before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal - Notary Public [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that helshelthey executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] S1--98Agree:Sher -3 Fxh•1 08n. V98 - & 3 Notary Public ExhibLI "1" — REGULATORY AGRRE:MEtff — PAGE 14 of 15 SF-98Agrtt'Slrcr-3 Exh-I OW29M - 93 ATTACHMENT NO. I LFGAL DESCRIPTION OF SITE [To be inserted.] Exhibit "1" - REGULATORY AGREEMP rl' - PAGE 15 of 15 EXHIBIT J TABLE 1 ESTIMATED PROJECT COSTS SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY --OW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH, CALIFORNIA 1. Property Acquisition' 11. Tem ra Relocation ' III_ Direct Costs -Rehabilitation' IV. Indirect Costs Architecture & Engineering Permits & Fees2 Taxes, Insurance, Legal & Closing Development Management Contingency Total Indirect Costs V. Financing Costs Interest Durtng Rehabilitation 3 Financing Fees ` Total Financing Costs 66 Units $73.790 /Unit $4,870.000 Allowance $0 66 Units $5.190 !Unit $342.500 30 0 Allowance 25,000 Allowance 15.000 3.0°% Direct Costs 10,300 $50.300 8.5°% Interest On $3,520.000 Loan $0 2.0 Points On $3,520.000 Loan 70.400 S70,400 VI. Total Project Costs $5,333,200 Per Unit $80,800 Per Developer Estimates. 2 Developer assumption. should be verified by City staff. 3 Assumes Project income is sufficient to fund the debt service costs incurred during rehabilitation. ` Loan amount is based on an 8.5°% interest rate for 30 years and debt coverage of 120°% Prepared by. Keyser MaMan Assoccates, Inc. Fde Name. SherLane: Stabilized: 8rY98 TABLE 2 ESTIMATED NET OPERATING INCOME SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH. CALIFORNIA I. Income' Moderate Income Set -Aside Units One -Bedroom Two -Bedroom Very -Low Income Set -Aside Units One -Bedroom Two -Bedroom Very -Low Income HOME Units One -Bedroom Two -Bedroom Laundry/Misc Income Gross Income (Less) Vacancy and Collection Gross Effective Income II. Operating Expenses 2 17 Units @ $740 /Month $151,000 16 Units @ $895 /Month 171.800 16 Units @ $658 /Month 126,400 6 Units @ $740 /Month 53,300 0 Units @ $616 /Month 0 11 Units @ $740 /Month 97,700 66 Units @ $18 /Month 14.300 $614,500 4.3% Gross income (26.600) $ 587, 900 Administrative Expenses fib Units @ $1.010 [Unit $66.700 Operations, Maintenance & Utilities 66 Units @ $1.610 [Unit 106.300 _ Insurance & License 66 Units @ $130 /Unit 8,600 Property Taxes 66 Units @ $0 (Unit 0 Operating & Capital Reserve 66 Units @ $250 /Unit 16.500 Total Operating Expenses 66 Units @ ($3,000) /Unit ($198,100) III. Net Operating Income $389.600 ' Rental income is based on the lower of the maximum amount allowed by the relevant government assistance source or the currently prevailing market rent 2 Per Developer's estimates. Prepared by-.. Keyscr Marston Associates, Inc Fide Name: SherLane. Stabihzed, W3198 TABLE 3 WARRANTED FINANCIAL ASSISTANCE CALCULATION SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH, CALIFORNIA I. Supportable Debt Net Operating income $389.800 Threshold Return on Investment 9 6%' Supportable Investment $4,062.000 II. Total Project Costs ($5,333,200) III. Warranted Assistance ($1,271,200) Per Unit $19,300 ' Weighted average of 8.5% interest rate on debt and 12% stabilized return on equity Prepared tyy; Keyser Marston Assouales, Inc. Fde Name: Shertane; Stabd¢ed, ar3nfl ATTACHMENT 3 1 a. Edinger Ave. Property Site mm"� / Q} =j �I { o 0 If iu rkSt. r Sher Lane Apts STREET NAMES —� Map produced by information cantanred in the Grty of CITY BOUNDARY ikwitff gton Beach Intormatm Sen�ces Departmentyrd Geophic Irdwrk*w System Irdcrrrratan vrai rardad forCity use only Hunbington Beach doers not guarantee itsOWOOtanaSS OFaa:uacy.�PrDd1�onWQ%MBUILDINGS ),.7 LPARS w E Team PARCELS0 215 4w n HARBOR One inch equals 215 feel n I - PIER ' n RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Request for Approval of Assignment and Assumption Agreement for the Sale of Sher Lane Apartments COUNCIL MEETING DATE: 7118/05 RCA ATTACHMENTS STATUS Ordinance (wlexhibits & legislative draft if applicable) Attached ❑ Not Applicable ❑ Resolution (wlexhibits & legislative draft if applicable) Attached ❑ Not Applicable ❑ Tract Map, Location Map and/or other Exhibits Attached Not Applicable ❑ Contract/Agreement (wlexhibits if applicable) Attached Not Applicable ❑ (Signed in full by the City Afforne Subleases, Third Party Agreements, etc. AttachedNot Applicable ❑ (Approved as to form by City Attorne Certificates of Insurance (Approved by the City Attorney) Attached Not Applicable El ❑ Fiscal Impact Statement (Unbudget, over $5,000) Attached NotApplicable El Bonds (If applicable) Not Ad Applicable ❑ Staff Report (If applicable) Attached Not Applicable ❑ Commission, Board or Committee Report If applicable) p ( pP } Attached Not Applicable ❑ Findings/Conditions for Approval and/or Denial ApP Attached Not Applicable ❑ EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff Assistant City Administrator (initial) City Administrator (Initial) City Clerk • OR RE URN OF Air UA RCA Author: Terri King i• , PROMISSORY NOTE SECURED BY SUBORDINATED CORPORATION DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED THERETO DO NOT DESTROY THIS NOTE- When paid, this Note, with the Deed of Trust securing same, must be surrendered to Trustee for cancellation before reconveyance will be made. PROMISSORY NOTE SECURED BY SUBORDLNATED DEED OF TRUST Principal Loan Amount- $1,200,734 Note Date: August 31 - 1998 FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Holder"), at a place designated by Holder, the principal sum of ONE MILLION TWO HUNDRED THOUSAND SEVEN HUNDRED THIRTY FOUR DOLLARS AND NO CENTS ($1,200,734.00), or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof, pursuant to an Owner Participation Agreement (the "O P.A.") dated as of August 31, 1998 between Maker and Holder The obligation of the Maker to the Holder hereunder shall be secured by a deed of trust made by the Maker encumbering the Site to be developed (the "Site") pursuant to the OPA and the Deed of Trust and .Assignment of Rents dated August 31, 1998 executed by the Maker and recorded in the Recorder's Office of Orange County, California, on to 142,19$ as Document No IR91o66"4 "the "Trust Deed") The obligation of the Maker set forth in this Note is subject to acceleration as set forth in the OPA. The OPA and the Trust Deed are public records on file in the offices of the Holder 1. Agency -Loan- This Note evidences the obligation of the Maker to the Holder for the repayment of funds loaned to the Maker by the Holder (the "Agency Loan") to finance the development of the Site pursuant to the OPA_ The Maker shall not make any sale, assignment or conveyance, or transfer in any other form, of the Site, or any part thereof, or interest therein without the express written consent of the Holder as set forth in Section 2.4 of the OPA. 2_ Payment of Obligation. Unless a uncured Material Default of Maker shall have occurred under the Deed of Trust (as hereinafter defined) or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement [as such term is defined in the OPA]), or Maker has breached any promise or obligation in this Note, (1) no interest shall accrue.on _ the unpaid principal of this Note, and (ii) a prorated portion of the total principaF advanced hereunder shall be forgiven, waived, and discharged on each anniversary date of Note Date.ser ford%� ' above in an amount equal to the total principal advanced hereunder divided by thirtV�{ O�• i.e., one- -. Ta40mpt-Gov m n fit Abeaey SF 9xAp,rre Sher-3 Eah-E=-I C1TYOF HUNTiNGTQN RWH os: i 1 9R - 43 BroCkway. qi g1brk%_- I-Ahibit "I7" - Promissory Note -- Page I of 3 w �' — �.- BY: dW ail thirtieth of the Note Amount shall be deemed waived and discharged by Maker as of each anniversary date of the Note Date_ Holder is only requiring Maker to execute this Note as a promise to repay the Note Amount in the event of an uncured Material Default of Maker under the Deed of Trust, OPA, or Regulatory Agreement. Unless such uncured Material Default of Maker has occurred, Holder does not intend for Maker to make any principal payments or interest of any kind on this Note Upon the forgiveness, waiver, and discharge of this Note as set forth above, Holder shall mark this Note "PAID IN FULL" and shall the deliver this Note to the Trustee of the Subordinated Deed of Trust that secures this Note for the Trustee's delivery to Maker in conjunction with the reconveyance of the Deed of Trust. 3. No Prepayment. This note may not be prepaid. 4 Acceleration of Obligation_ Upon the occurrence of a uncured Material Default of Maker under this Note, the Deed of Trust or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement), or in any other instrument now or hereafter securing the obligations evidenced hereby, then, and in any of such events, Holder may, at its option, and upon thirty (30) days prior written notice to Maker, declare this Note and the entire obligations hereby evidenced that has not been forgiven, waived, and discharged pursuant to Section 1 above, to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity 5 Default Interest if any event occurs giving Holder the right to accelerate this Note pursuant to Section 4 above, the entire unpaid and unforgiven principal owing hereunder shall, 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. 6. Collection Costs, Attorneys' Fees. If any attorney is engaged by I folder because of any event of an uncured Material Default under this Note or the Deed of Trust or to enforce any provision of either instrument, whether or not suit is filed hereon, Holder shall bear its oWn attorney's fees and costs. 7. Severability_ The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in ail other respects, shall remain valid and enforceable. 8. Modifications_ Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. 9. Usury. Notwithstanding any provision in this Note, Deed of Trust or other document securing same, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. SF-9XAgwc Sher-3 hah.F.l uXr31l99 - 13 Exhibit "I" — Promissory Note — Page 2 of 3 10. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above written. St=-98Agrec.Sh4Lr-3:1:xh-F-1 09101/98 - 43 "PARTICIPANT" THE BRIDGES AMERICA SHER LANE, L.P.. a California limited partnership By Its General Partner: THE BRIDGES AMERICA FOUNDATION, a Delaware Nonprofit Corporation By: Name: (Type or print)oCL— Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President KL I Name: (Type or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary (iii) Chief Financial Officer (iv) Any Assistant Treasurer Exhibit " "' — Promissory Note — Page 3 of 3 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of C" . nca-- County of D ' On S� tg0,%.h�+r I_ �198 before me. ^�'li N�S�rt, Alg '�h 1L Daw Name a�a Tho or Oe cei (e 0. -Jane Doe. Notary 1.0 i personally appeared 57 EY61�,j V . H74efel S-d N Y , Nerne(s) of &gner(sl —proved to me on the basis of satisfactory evidence to be the person(,} whose name(s)&em subscribed to the within instrument and acknowledged to me that&94eA4ey executed the same in f i "eriftir authorized capacity(ies), and that by &herftheir signature('s) on the instrument the person(t,), tAua,, A. r�(sory t or the entity upon behalf of which the persons acted, CWrVrft tan 0 ID66263 � executed the instrument. aat S Notory Pubac — Carrra !, orange county MyCarrm Eq*es ^A 23.19W WITNESS mY hand and official seat. 1- o% Notary P).Aw OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: ID-a%'j� Document Date= 1 Number of Pages: Signer(s) Other Than Named Above: /L 0 71 e— Capacity(ies) Claimed by Signer(s) Signer's Name: Sr v&Av v. k*4ee4Sa,j a' Individual J Corporate Officer T(tle(s)- 11 Partner — El Limited ❑ General Attorney -in -Fact Trustee _ j Guardian or Conservator e )a Other: f2/ ec-e7w— _ Top of thumb here Signer Is Representing: 7& M& 6 4141%(Cl� I �"7?v�ID.4Tl o� Signer's Name: I Individual ❑ Corporate Officer Title(s): G Partner — ❑ Limited ❑ General E. Attorney -in -Fact I Trustee L] Guardian or Conservator MEN L I Other- lop of thumb her- Signer Is Representing: 0 19M Na[onil Notary ASSLxUlon - 8236 Rornrnel Ave.. PO. Box 718e • Canoga Perk. CA 91309.7184 Prod No 59C7 Freoroer Cah Toll -Free i .8W.876-6827 FROM : ' 1111 111111111111 11111 1111 PHONE No. : Sep. 01 19% 04: 44PM P1 RESOLUTION OF THE BOARD OF DIRECTORS OF THE BRIDGES AMERICA FOUNpATION, INC. The following resolutions were adopted by the Aoard of Directors of the Bridges America foundation (the "Corporation') effective as of September 1, 1998. RESOLVED. that Garrett Robinson President of the Corporation, and or Steve Harrison, a member of the board of directors, be and hereby each are severally authorized to execute and deliver such agreements, documents and instruments, and to undertake such acts as they shall deem necessary or advLsahle to consummate the purchase by the Bridges Sher Lane LP., (a Califomia limited partnership of which the Corporation -is the General Partner), of the low-income housing project and real property located at 16112 Sher lane Huntington Heach, Ca. Dated as of September 1, 1998. nine Robinson, ecretary ?eb-i4-03 04:28c:• Frcr-714 13" 0143 RECORDrNG REQMEr] By. ORA, : OCAST TITLE CC�.!i „;yy C-:d= No- Mtclo�# iZ 3 Esc-rora No. Long No. MMN RE(4RAED MAIL TO: Re&ve rat Agex), of fA City of HantingUi Eeach 200D btaia St m-A Kurdar'an Bcmb. CA 92642 Attic A cu.ySatnrtary Cr731 CLXR_K + 14-830-034; T-W F 00 _./310 F-X r%v%.wtutsu m ine s.�ounry of L)Mnge, Valitorna Gary L. Granville, Clerk/Recorder U1111101111111f1HEII No Fee 19980669844 4:08pm 10/02/98 006 26015697 26 58 D11 A36 10 0 12.00 0.00 27.00 0.00 0.00 0 00 0.00 0.00 0.00 SPACE ABOVE: THM LINT, FOR P.Ed:ORDERS US.q E?MPdPT FEC A RSCORDWO FE1 FM CrOV. COfX 161 1 SUBORDINATED DEED OF TRUST' �41 WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO 4 NOTICE: TWS SUBORDINATED DEED OF TRUST WRT a ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHaCH MAY RESULT IN YOUR SECURITY [NTERMT IN THE PROPERTY BEING SUBJECT TO A LOWER 1P)EtIORITY T$AX THE LIEN OF SOME OTECER OR LATER SECURITY INSTRUMENT. Thii DEED OF TRUST WITH ASSIQ"ENT OF RENTS WITH RIDER ATTACHED HERETO ("Deed of Trust"), made AuQt;s t 31 , 1998. between THE BIMMS ANMUCA SHER LANE, L.P., a California batted partauship, ht7cut yelled TRUST k -hose addmss is 188: 7 >3rwkhuru Smet, Suite 302, Fotmmin Valley, CA 92708, $edavgipp=eAt AfiencY City of Rantin&ton.aUiforniaoorporatizn.hcreincallodTRUSTEP—and Beach REDEVELOPM. ENT AGENCY OF ME CfTY OF HUKIDf GTON BEACH, a putlic body, co: orate rend pcliric, 11wein called SENiFFMARY, WITNESSE'1`H: That Tninor gants to Trustee in gust. with power of salt that property in the City of Huntington Beast, Cotmt:: of Orange, State of Ca11Q=A descrrbW as. SEE EXRMIT "A" ATTACHED HERETO 1C$rther ur_th the rears, iaSta`S aid ptofiu thLreo- suaject, however to the rzM power and atxhority hmeUwA— given to And confeava upon B�mef=.ary w :ollec- ¢ad apptly rx:h mts, Lw=2 and profm fbrthe ytapost of socm7int (1) payment of+hr rum of ONE MILLIQN T a E! LNEW.M THOUSAND SEM-1I RUiNDKM IWRIY-FOUR D011ARS (31.200.rA.00) wnbmg bUftmt themn, ammd4 to the tc>sru of that cetin promjw ry note a: even dw bacwith rsadr by Tru3W. p s)t ble to ante- of Bem5ciary. and e:rtmmonz or tmewals thabaf; (Z) ttl+ per<omm=e ar each aWc=nent of ?Yustor ixorpoossted by stfamce or coiae2 him, and (3) payt +mt of edditionnt sass and iutesat tfiemon v:'hich may heeraft'i be k,aaed to Tsuaar, or his xucessars or asagrA Whcm evkkacad t ie a prmaimry ante oT flats -aurora that shay an sewaad by lhb Deed of Trust To protect ibe security of thi= Dad of Trust. vd ►nth erect to the Drope M abw i a dcsru-ibed, Tmsux expressly sakes ewli and all of the its, and adopb and nVew to pafosm arA be bo=d by each and ail cf the tc= and provisions set fort m u:bdP4jcn A. and it is mutually aSp5ld char ace. erd all of tse Y=cp ard provisions sea forth k subdivisson A of Ore Lcetcus dead of trust rtc-.srded in Osage Cat.rAy Ate 17. 1964, and in atilt o2c coantics August I & 1964, m'.he book ad W. the page of OM611 Records is tt otiice of the cuamv recorder of-,bs county where raid pmperty is loomed noted brlaw oppvgw.. the arars of s=h caarh, uumdv W-9ut:Ra;Xhm--F,UrG- t MILIx - a3 Sxlubit -G" - Subordinated Deed of Tru.t :crlyrion: Orarrgs,CA Docr i3C-Ywar.DooZD 1996.563644 Page: I of (er: DrASr r.70asnen t: . - - tL"OF PI Mf1NGTON MACH - PsEe I oC9 IO cth-14-13 04:28or" Frc:n-714 85i 0343 +714-83E-0341i T-445 P v'C:/:10 F-11T COUN y coot ?act' COUN-7r BOOK VAcr, crx"-nr amp, P•GE covxry GOOK PAGE AL.beda Ms ssv K-ap 1aSM 713 Place :xe X-V Q:w" K 1W7 A1Fir ; 130-31 LAkA 437 113 Pam:: :66 1:101 3,a:ry4m Soo 7S: Amader 133 4'e7 L Mun 192 361 e&MAC 377M 341 4abm] 1297 621 ysas 1•so S11 LmAngrka T-Sr.9 Fro ewoww4e X39 124 SMW44 err w c4iff-am W 32: W60M 911 Im e4oe4uu 300 4[3 su,&ISu. 1970 56 c41w4 32r. 39; MW.A 1049 IrA SaaBewwrds,a 62-3 743 191W 653 AS C48" calm 4674 1 Wueoo74 90 ASS Sm Fs�a A-Wd "s Tdu" 4S7 193 BWNit 101 $49 M:wf>aae 6(7 w Sn:*goal zzS 2i 7Yimty 1.M M VDaruda 704 63) Maud 1660 753 E4 ILiObape 1311 131 SYlan 2530 1A tkrtw 30;2 ' w MW76 1i: 92 So man 4-P1, 175 Tljdwra 177 160 1.1qyi 460 N Mai 01 I= 44P4Bmt..n =65 UY1 Via W7 ]37 N'L„!olll 101 93 Nlanitmy 357 739 ialupan Wt. SK Yoe Ana 16 knymw 11169 7]1 _V:p4 734 741. cwacrdz 163F 60 Yana 191 di) D" 163 67.1 N^Cda 30 G4 S1w,a AM C= xen 37% 690 Onmea 71 r_ 16 Son Daete eVKMS S Usti IW rap 146774 shall Muse to and bbW the pani=s htsato, wish respect to the property rboce d=ate Sasd ag en=ts, terms and provisims ca Mined in said s111dlvisions A and B (ideruical in all comades, ad primed on pages 3 and 4 hwecf) art: bV the within reference themo. in=rponned herein and wade a past of ttis Decd of Ttust for all purposes as fully as it set foth at length h==4 and &neciary may daarre for a statement reg8rdLog the obliXWoan sealnod hereby, prpvidpd the dwp d=zfor does Dot exceed the u alomtnn allowed by. law. The undusigned Trustor, regaests that a copy of ary nodct of default and arty nouce of sale havtmaer be Trailed to Win at his sdQrms hotiabefore set forth. NOTICE: THIS SUBOitDINATHD DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED H31LRE;TO CONTAINS A SUBORDWATION CLAUSE WHIC$ MAY RJ SULT IN YOUR SECURMTY INTTBREST IN THE PROPERTY BEP;G, SUZg.1ECi TO A LOWER PRIORITY TH&N THE LIEN OF SOME OTHER OR LATER SECURffY INSTRUR[ENT. Mas is a third deed cf rrust subject to d second deed of tx*-,st recording concurrently herewith ir. the avy=t of $600,OM.00 and a first deed of trust of record. Sigutare ofTr%Ltor STATE OF CALII: ORNIA COUNTY OF ORANGE On i 01 t 1 bdav me, c N ,� •*+r (or proved tc me on QL.-basis of si Wfactwy G% d[ eaj tc be the �' awn(d} whoa I1vzosW 1s/&rFsuk: Slbed to the wld= aw=gw and admwmaigc�_ to = aw ho&aW" VaeM 5d the sR=131 LA=nhw1ut: arced cWmcayro3wd Chu by oa dx imt<stlltimt ttm pasop(q ortlle eatery Wort bChAVof"ilich the pcsall(a) acted, eateeufm she Vr1 ttnlulc WTINESS my hand and oT1CW sad. 5i�arue r l��-`tip S�-9xur-:.S1wr Fah-Cr1 0Fi31�7><- h THE BRM ES A W RICA SHER L411E, L R. a CZfw71u iar tied pamerIMP By jj MARIE LOVE Comm. #IiS6M07 WTAW PUKX - CMACftu OPMA 4EOmNry Corso. LW- 00 17, LM j t7t>4 ,n. (a4 Exhibit "G" - S%Abord,natea Dced of T. - Pagc2 or 9 7esct:pcaoo: orange,Cd DOCUMent-Year.1998.669344 ?4g*: Z of I0 Ssde:: D: PWY Camvn t : Ft:.-14-03 04:29pm FrCte-714 B33 0343 +714-636-0349 T-445 P 003i310 F-117 2�r) DEED OF TRUST WITH ASSIGNMENT OF RENTS W RIDER ATTACI3ED S f-9fAuu.sr.cr.Lrh-G• 1 -9/3 LS 9 - Al Fy-ha i[ "G" — Subordinated Deed of Trod - page 5 of 9 Daacriptioar 0=a.cga,CA �oac�aatnt-'Ietr.T>otlD 39➢a.ii98�� F�agtr 3 et 30 order: urery Coamear_ -.. 04-30on Fron-714 833 0343 + 14-?3:-;346 ;.44l310 r-0 7 3� 9i RIDER TO SUBORDINATED DEED OF TRUST `4VrM ASSIGNvNMaNT OF RENTS THLS RIDER TO SUBORDINATED DEED OF TRUST WITH RMER ATTACHED ("Rider"), is made as of August 31 . 19;8, by TM BRIDGES AN4MCA SHER LANE, L.P, a Califomia limited partaclship ("Trustar"), and REDEVET_OPIvf N-f AGENCY OF THE. CITY OF IRJN- IriGiON BEACH. a public body, oorpomv-- and politic ("Beasftciary"), as Mows: 1 Part d of TZU This Rider is made a part of that certain Subordinated Dead of bust With Assigrttnem of Rents ("Deed of Trust"), of even date hereof, to which. tiis Rider is attached 2.QLnflica. In the event of any conflict between the temts of this Ender and the terns of the Deed of Trust, the terms of this Rider sbz.11 control. 3. Priority: Subordinatio. Trustor and Beneficiary entered irto that certain Owner Participation Agreement, cured August 31, 1998 (the "OPA"), pursuant to which Beneficiary (named the "Agency" in the OPA) agreed to subordinate this Deed of Tnist to the bens of the deeds of uvst identified in the OPA as the First Deed of Trust, the Second Deed of lrust, and the Coastruction/Permanent Leader(s)'s deed(s) of trust, and to such other ar:d further dcc-,tments as such lenders may be required including but not limited to regulatory agreements, not to exceed an indebtedness of lour Million Two Hundred Th;ry-fire thousand Dollars ($4,235,000.00) The lien of this Deed of Trust therefore strap be junior and subordinate to the liens of the foregoing listed deeds of trust. and such other and further doctamcnts as such lenders may require Beneficiary agrees to execute such subordination agreements, in the form at-.x:hed as Exljbit "H" to the OPA, as are necessary to effect vicb subordination of the lien of this Deed of Trust. 4. Co_ndamatio- Section 13.1 of the )rictitious Deed of Trust incorporated into the Deed of Trust shall be modified to provide that Benrticiary shall not be eatitled to any awards or damages payable directly or indirectly by reason of a condemnation or proposed condemnation affecting all or any par[ of, or any interest in, the Property, brought by or pursuant to the direction of Beneficiary 5. ncfassit The term "default" as used in the Dead of Trust shall mean a' -Material Default" as defined in the OPA or Regulatory Agreement S e_98AL7s.Sh*e-Etna 1 UW31 X • 17 Exhibsl ''G- - Subordinated Deed of Trig - Page c of 9 rsCriFctop: Orange,CA DccL=64C-7/az-.D0CLD I998.009849 Page: 4 of 17 dart DrRRY Cpmaent= - - Feb-1 4-03 04:30an Frcn-714 93i 034; +7i4-035-0349 i-4a3 P U05/]tU F- iT L� IN WITN-ESS WHEREOF, TruStOr and Bcneficiar} have executed this Rider to SubotdznaiM Deed of Trust With Assignment cf Re= as of the date of Trustoes acknowledgment hercinbelow, to be eff=v a for all pt:rposc-s as of the day and year first set forth above. "PARTICIPANT" THE BRIDGES AIMERICA SJ= LANE, L.P., a California limited parm-elship By Its General partner. THE BRIDGES AMERICA FOUNDATION, a DelaAwe nonprofit iCorporabon By: Crype or print) - I It.4 cYr q-- fis (circle ono) (i) Chahmm of the Board (u) Przsident (iii) Any Vice President Name: (T)Pa or pit) Its (circle one) (1) SeC+e►-ar.+ (iri) Any Azistant Secrrrsry CW) Chief Financial Officer (iv) Any Auimnt Trtuunr agKI REDEVELOPMENT AGENCY OF THE CITY OF .qU.N TiNGTON BEACH, a public body, corporate and politic ay: , L Ch an ATTEST: APPROVED AS TO FORM: I�I { Agency Clark q +<z Agency Couns� SF-;sAaree-Sher F.ArC-1 cirvilne -d3 Exhibit `C" - Sutordinated Deed of "Crest - Page 7 of 9 Dese:�---Ipttcn: Osaage,CA Doauaeat-Year.DoclD I999.663844 Page. 5 of 10 =el:-1�-03 :4-.opn From-714 83i 04o +714-336-034g CALIFORNIA ALL4PURPOSE ACKNOWLEDGMENT state ot-Q-f„�Yu� _ I-445 P OC2131V F--:r Canty of —�lr� ►?Q� On f� before me, Palo T-da —i f per5Cna.l;y appeared S'a' yEW V. J�4i ,Zee AJ ILr �rw{�) sf igwts; -� — proved 1:0 me on the Caws of satisfactory evidence 10 be the person(* -whose name(k0are-subsafbed to Vie within instru r.sm and acxnowieoged :o me that t&&heRitey exeated the same ggUeAiieir authorized cVaCity(ey. and tta: by ep1eAheir signatureN on the instrument the persont3} or the entir; upon behalf of whlch the per3or+N acted. exec,,ted the instrument. VAMA.NUX" cam*++miena UMMU WITNESS my hard and official seal. Nowt' NQW — parCKWOO +ra My Carom F j, - X HW ! (� zw4me n rxuN hao O / TIONAL ria,gn ma wo.,mak—i Pefow 4 not reauroe Dr !9 w r msy Prove va%ao!a r7 pemrs re"y crn the docutromr erd oodld prevent fracKJjwx nrr ava; +ne rwnacr m..R-r of thn rcrrrr to enortra- docu+nenr. Description of Attached Document Titte or Type of Occumer,t: IY�S C1,W rr�fSr 4T J�/k3 G1l �+j 6%%- s+^ �' Dxurrent Date: _l Iq� / _T Number of Pages: ssQ'r� m 5ignar;s} Other Trap Named Above-. /e Capa city(Ies) Claimed by Signer(s) Signers Narne: SILV6"J V. f�10"JZ ; S-gne-rs Name: L Individa Corporate Officer Trtfe(s): partner — = I_rnited .2 General Attorney-:n-Fad Trustee Guardian,,QQr Conservator ,010t te- 1aljcG7D� rcv or :��r*a r�rr S:finer Is Representing. ,G r AG eS AA(gW44 i ' 0 D r Individual Corporate Officer Titles}: Partner Limited 7 Generai Attorney•in-FaCt Trustee Guardian or Conservator Signer Is Representing: 0 �4n �+t'ror'+r d�rY 4rs[rlrPe" � i2.f Zap re: F�-- P-. gcx -:;• • Car:,;e perk W !ii}�; b+ Aescripti.»: Cranga,CA DoC=c=-Ye&.r.0OC- D 2$98.669F44 Pairs: 6 of =6 or3er: DTR.Y1., gp eat: mr.•rr - K Ur=cetr rr pK.N1f vew.'". Wl r tL'rY.r 1;V To!-! me 1 5.-PQrO-rr °eb-;4-03 04:31pn Fran-714 633 0343 +7;4-836-0349 T-445 P 007/3;0 c-ilt t_16�/ CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County of On u I 149C before me, _ �_ I,A. N�� _ _ —. Boor "I* am w 01 L 1MI ,a 4 .'.lade Dw wsryeer, w Ti perscnatly appeared L64 DE- C IY R r ul C YL� Cr )BperSonelly known to me - — to be the person® whose namaQ4ag% subscribed to the within instrument and acknowledge to me that Nefahq�% executed the sane in authorized capacity[, and that by *►them signaturds"Pon the instrument the personM wua A. NE-3110,n or the entity upon behalf of which the persor sl acted, cOR""yO" a tokmt execiteid tt Instrument. [ea�ps Caa+ey W Carta r�.,aa�, t�9 WITNESS rn d and official se/al. avvVe gnaw pack OPTIONAL i r,pugh 1* M,011r78LGa b*vw Gs R0r M94AW Dr 18w, / ,r. fi+ 0171V Vafi.abfb t0 17OWM rdryrng on VV doct.'rnen: and CiC&;Jd p.,Vws71t fmWmferrr .-err" 4n0 reatm:tmenr rI Ihb Imm rc ~.or doct,'r e . Description of Attached Document T^e or Type of Cocument: r !/uflr' W �6 rt,K�sf Qts41S Document Date. _ aIf —_ rvt,rnber of Page.: S:gner;s) Othe- Than Named Above: -� � � 'Q2,14241 y Capacity(ies) Claimed by Signer(s) Signer's Name: t / i:] Individual Corporate OfSoer Tlie(S): Partner — n Limitbc 7. Gerterai C Attorney-;r-Fac: E3 Trustee C Guardian or Conservatcr 9 Other. Signer Is Atiprewt;ng: ! I ! Signer's Name: e5.Tk_nie. 6,r"e_k Aaq Individudl ,3 Corporate Officer rnle(s): Partner ,] Limited 7-, Gene,al A=Mey-in-FaCt Trustee C ther. n r Conservator O Other. �.Ct�_-- -P ol. w-wroo air• — h Signer Is Representing. y O t9'+5 Faax-a• &.uN A.aaoraus- . LZU Ac• fm.. a» . P0- ad.- `--9a • GrtVAPML, M Descriptia_. O.angv,CA Dpcamenc-Year.DDc= I998.65.�E44 rage. 7 of 10 Order: DTll.YY Common t : Pve Ne.3907 Wovr co "QSF� :-:CGBMm? =eb-14-0? 04:31an F rn-714 83S 0343-714-936-0id T-44, P 00Vi ll F (JCo X��f EXHIBIT "A" TO DEED OF TRUST LFCAL DESCR PTION OF UAL RQP (TO BE NSMID) sr-�c�sr�sax� oarl.3r-r; Ar'ar�: PAGE P T17is-SANG Ddr 72) P#Gliv.t770-ti! Exhibrt "G" — Subordismred prd of Tzr" - Page 9 cf 9 3etcriptiva: orangra,CA n*ct=*ac-Yass-DCCI9 2993-669844 Page: d of 30 Crder: nTR:tY Ccz=eae: 04:32air Frcm-714 83i 0343 .714-a36-034: 7-443 P T EXHI31T "A" PAR.CEL., I - 'IIMT ''<'MTIO0 OF TFEQ N MN AST QUARTER OF SF -' ION 23, 11064NilP 5 MrLE, RANGE 11 MExTr. PARTLY IN ME RANC}D LA BOLSA OiICA AM PAPTLY M 7HE RANOC LAS BOLSAS, IN miE CITY OF FB.mim-roN BEAM AS FOR TEA= FciY1DRAEA IN l3COK S1, PAGE 13 OF ,4I:,CELAA'1DDUS MAPS, IN h>E OFMCE 'OP the COLWY RSCORDER OF SAM C'O rrY, DF,SCRIBM AS FOUjOWS: BEGINNING AT THE INIFR-NEON OF THL SOUTH LrN-E CF ihE NORTt{ 50.00 Mr-1 OF =- SOLgHD ST O(PR ER OF T l M WAMW, MT O'W'17.�2 OF SAID NOFi1�L-^AST' CLPRIfR WITH 'aM FAST L= OF VM LADE AS DES' RIHED IN Mt-� = M il-M CITY OF Mr-114 3 N SE A03, RE=. ED DDCalaPR 7, 19e1 IN BCOK 5937 FAGE 35, OFFICIAL RE--O+DS; 'I7`TEWF- NoF(r.j 180.00 F'EEr ALCNG SAID EAST LINE; 7WEN R FA"T 346.00 FF3:'I' PARR Z:L WITH TT-E NORi;-i LINE OF SAID SOIrr,' S i QUARTER OF _.'rM 4DRlwvszr QtY R= OF Tf-- TDR-n--mksT CriAl ER; r:mNCE scoj 1 100.00 FEET PARALLEL. V,= SAi1 FAST Lr_ E; TSDM EASY 50.00 i rF�'I' PARALLEL WITH- SAID NORTH LINE. 71%IDNCE SO TIF 80.0] FAT' P"X_2_� WITH SAID E457 LINE W1 THE 90[I3k LINT. OF 7HE WRT-3 50.00 rrC OF =3 SOUIHW'a"'"'T ajARTM OF THE NOR"INAST CY-MRTOZ OF SAID NOR-11 AST WhWM; 7 \, = WES"i 436.00 Frm To Trm POINT OF BEGIrVIN3. SA,21) LAND IS IUD WITHIV THE ARLA, SLAW Ctl X MAP _rTl IN BOOK 23 PACE 17 OF �'RD OF SURVEYS, I14 THE OFFICE OF Ti-E CaN Y F�.COriJ:� OF SAID COLMY. EXCEPT THEREFRCM AIL OIL, GAS, MINE.9.ALS FL':D :'T'TR i+ROCARRMS, BELOW A TEP'Iii OF 500 F=, , YTITWOUT 'i1iE RIGhT OF SURFACE EMInY, AS Rc`5L-TZrV'p- IN DOF RCOOZD, E'ARCEL 2: I-riAT FORTI ON O? Ti-'r, N7RT i A9T CMAE7i FR OF SECT : N 23. T04TiS'F I P 5 S Ti H , RAi GE !I IN Ti-E RANCHO LA BOT.-SkS, IN TIHE C17Y OF rJZT'it MrW MCA, AS PER r rCOROM IN BOOK, E1, PAGE 13 OF MISCMAN= "NAPS. IN THE CrrlCE Oc Rmopzrz R OF sAir,, couwm L)ESC3RIEM AS MU04S: BE-M-sT10G AT THES lN`lV .SEM'lON OF T_E 9aM L%N'E OF 7rM WATH 50.00 FAT OF ZI-iE: CXXYT -SAS'.' CUMZIEP, OF 1C NOF IWESf Ci» OF SAID NDKnWASF QLPZ, WITH 7w rA T Ln.;;E OF SHER LxI E AS DCSLRIBED I' 71'T DEED TU T�v_ CITY OF Ff+J rzcT LY BtAC3$, RMMpZL-j DECENBER 7, 1.961 LN BROOK 5937 PAM 35, 07F'ICIAL FZCORJ:S; THWCE Ncfm 180. CO =r AL= SAID EASi LINE; 1hTtkE FAST 346.00 F 1 PARALLE-, WITH ME NCR'N-I LXNE CC SAID SO[MMM QLWn' R OF THE NORTI-'WEST (POW R GP THE MRT? AST QUUMR; 7F�NCE SC>E.TiN 100.00 FEET PARAMEL WTIiH SAID EA':' LINE; T ONLE EAST 90.00 FEET PARAL.CFT, WIMA SAID N KrH LIVE TO A FCL'T-' RM3J POWT IS 71-0 71M PODC AND PLACE ()' SMINNING: TM¢ M SOUL-H 60.00 FEET PTiRAii.F1. WITH SAID FAST *- TO TI-E SOLTIii LIRE GF THE NORTH 50.00 k= OF IHE SWINh'Wr QCART"cT% OF THE NKf<IHEhSf QCARI'M OF SAID BAST Q(JI,F=; THQ= 408.96 FFti EAST PARALLM, WITH TW_ NORM LINE CF SAID SOilI MAST QUARTER OF THE MT111VEl-T CLPMZ3 OF TI-E DEBT QUARTER ID 7w, ti~'F_s-L' LINE OF PARKSIDE LANE AS MUBE 7 IN THE 0E3EX) 7o n-M CITY OF H[ mrn4mW AFACH, RBco4RDDD SEVIV-soz 20, 1966 IN BOOK 8727 PAGa' 541 OF OFFICLikL REo3pDS; TK!:TKE NORM 80.00 FEET JZ CL= SAID %Wr LR E TO A LIM .EAT 1S PARAUrL WITH l[M NOKIN Ll?q Op SAID =TrC-AST 4.VkRTR2 OF 7}0 NMr9K�5-I' 0MV_rB R OF THE'AXMI� CWTE t, AND %liLOi PASSE 'lVJV_lC1i AND 'ER'JE POINT. AND PT OF El GCR 41m; T}EMM WJ:ST 408.9G FEET, ALU43 SAID LAST MEMCMD PARA_::LI LINE, TC 'IlE 'IRM i01+7I' AND PiACE OF B93IMfM'. (LD:-l%J, DESCIP-TMCN CINrINUM) rJe:-ertP:Apa: Oramg&,CA DoceSm=*;-Year.Doc= 399e.569844 Page: 9 et 10 Order r Z)77" Coeu c : - ' Feb-14-03 04:32pm Frcm-T14 63i 0343 +T14-936-031fl 1-445 P 0',C/110 c-:17 EXCEPT T34FAEFR M ALL OIL,, GAS, [riMURALS AM 0T_VM HYMDMMCM, BELM A DFMrM OF, 500 FWr. Wrn4 [3x' THE RtXGRT CF SCMACE 'ENTRY, AS RESOUM 3N t OF RECORD. SAID Lk4D IS INCLLt)E3 WITHIN `THE AREA S"N Ctl A M%P FIIrt] IN Dt1GK 23 PAGE 17 pP RBa)RD OF SURVEYS, IN ME OFFICE OF 11M CD(WrY RQCDRDM OF SAID CD[lT lY. DeDcrlpticni Or"go,CA Documovt-!ear.Doc= Il98.E69844 Page- 10 of IG Order: :YMMI Count: ORANGE COAST TITLE Fax:7146676017 Feb 18 2003 15:04 P.01 ORANGE COAST TITLE COMPANY ESCROW DIVISION 640 N. Tustin Ave., Suite 205 Santa Ana. CA 92705 (114) 55M222 (SM) 540-3515 MARIE LOVE A&*~1 Viol Pf"W40 Ejxtrow mottow Office: (8W) 540-3515 PAX SHEET ORANGE COAST Office: (714) 558-OM TITLF COMPANY E-mail.. mormwooctrile.00m www.ocwe.corn DATE: � � � � "�� 0 North Tg AAvoonU0.. Suits 211 • Sama AAa. Caflfomis 92705 TO: Qa&k r " e...- REF • PAX NO.. q J!E) --:�rl FROM: ESCROW NO.: a -�-- TOTAL PAGES: C1 DIRECT FAX NO. (714) 667-6017 ORANGE COAST TITLE Fax:7146676017 Feb IS 2003 15:04 P.02 PROMISSORY NOTE SECURED BY SUBORDINATED CORPORATION DEED OF TRUST WITH ASSIGNMEENT OF RENTS AND RIDER ATTACHED THERETO DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust securing same, roust be surrendered to Trustee for cancellation before reeonveyance will be made. .. • i • -GIIJLMR-YARNW45111UNIAs a -a i Principal Loan Amount: $1,200,734 Note Date- August: 31 , 1998 FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of the REDEVELOPMENT AGENCY OF THE CrN OF HUNTINGTON BEACH, a public body, corporate and politic ("Holder"), at a place designated by Holder, the principal sum of ONE MILLION TWO HUNDRED THOUSAND SEVEN HUNDRED THIRTY FOUR DOLLARS AND NO CENTS ($1,200,734.00), or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof, piusuant to an Owner Participation Agreement (the "O-P.A.") dated as of August 31, 1998 between Maker and Holder. The obligation of the Maker to the Holder hereunder shall be secured by a deed of trust made by the Maker encumbering the Site to be developed (the "Site') pursuant to the OPA and the Deed of Trust and Assignment of Rents dated August: 31, 1998 , executed by the Maker and recorded in the Recorder's Office of Orange County, California, on , as Document No "the "Trust Deed"). The obligation of the Maker set forth in this Note is subject to acceleration as set forth in the OPA. The OPA and the Trust Deed are public records on file in the offices of the Holder. 1. Agency Loan_ This Note evidences the obligation of the Maker to the Holder for the repayment of funds loaned to the Maker by the Holder (the "Agency Loan'l to finance the development of the Site pursuant to the OPA. The Maker shall not make any sale, assignment or conveyance, or transfer in any other farm, of the Site, or any part thereof, or interest therein without the express written consent of the Holder as set forth in Section 2.4 of the OPA 2. Payment of Qbgatiou Unless a uncured Material Default of Maker shall have occurred under the Deed of Trust (as hereinafter defined) or any obligation secured thereby ('including the obligations in the OPA and the Regulatory Agreement [as such term is defined in the OPA]), or Maker has breached any promise or obligation in this Note, (i) no interest shall awn-ppr,;'n., the unpaid principal of this Note; and (ii) a prorated portion of the total principatAdva wd, hereunder shall be forgiven, waived, and discharged on each anniversary date of Note Dafa �at'olt#� above in an amount equal to the total principal advanced hereunder divided by thirty-(M),- i.e., one- SF-9 BACree-Sher-3. Exh-F- l OR(3 t/9R - #3 Exhibit "F" — Promissory Note — Page r of 3 Tax Adanry CRY OF HUNTINGTON BEECH �9roekwey, pg/ irk EFf ORANGE COAST TITLE Fax:7146676017 Feb 18 2003 15:04 P.03 thirtieth of the Note Amount shall be deemed waived and discharged by Maker as of each anniversary date of the Note Date. Holder is only requiring Maker to execute this Note as a promise to repay the Note Amount in the event of an uncured Material Default of Maker under the Deed of Trust, OPA, or Regulatory Agreement Unless such uncured Material Default of Maker has occtured, Holder does not intend for Maker to make any principal payments or interest of any land on this Note. Upon the forgiveness, waiver, and discharge of this Note as set forth above, Holder shall mark this Note "PAID IN FULL" and shall the deliver this Note to the Trustee of the Subordinated Deed of Trust that secures this Note for the Trustee's delivery to Maker in conjunction with the reconveyance of the Deed of Trust. 3. No Prepayment This note may not be prepaid. 4. Acceleration of Obligation. Upon the occurrence of a uncured Material Default of Maker under this Note, the Deed of Trust or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement), or in any other instrument now or hereafter securing the obligations evidenced hereby, then, and in any of such events, Holder may, at its option, and upon thirty (30) days prior written notice to Maker, declare this Note and the entire obligations hereby evidenced that has not been forgiven, waived, and discharged pursuant to Section 1 above, to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity. S. Default Interest_ If any event occurs giving Holder the right to accelerate this Note pursuant to Section 4 above, the entire unpaid and unforgiven principal owing hereunder shall, 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 maumum non -usurious interest rate permitted by law, whichever is less. 6. Collection Costs ' Fees. If any attorney is engaged by Holder because of any event of an uncured Material Default under this Note or the Deed of Trust or to enforce any provision of either instrument, whether or not suit is filed hereon, Holder shall bear its own attorney's fees and costs. 7. Severability_ The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. R. Modifications. Neither this Note not any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hcroof be effective except by an instrument in writing signed by Maker and Holder. 9. UU u�r . Notwithstanding any provision in this Note, Deed of Trust or other document securing same, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. SF-99AZw Simr-3-Fads-P-1 03/31/98 - 93 Exhibit "F' — Prominory Note —Page 2 of 3 ORANGE COAST TITLE Fax:7146676017 Feb 18 2003 15.05 P.04 10. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above written. SF-98Atae:Sher-3 T.0-F-I 09/01/99 - 93 "PARTICIPANT" -,-=.BRIDGESAMERICA.SHER LANE, L.P.,-a California limited partnership By Its General Partner: THE BRIDGES AMERICA FOUNDATION, a Delaware Nonprofit Corporation By: Name: (Iype or print) ryj� et esCZ� Its (eircle one) (i) Chairman ofthe Board A President (iii) Any vice President 0 In Name: CD7 or Print) Its (circte one) (1) S=etary (iii) Any Assist Secretary (in) Chief Financial Offices (iv) Any Assist Treasurer Exhibit "F" — Prominory Note — Page 3 of 3 ORANGE COAST TITLE Fax:7146676017 Feb 18 2003 15*05 P.05 F;M : 'tlil 111111311111 11111 1111 PEKE W. : RESOLUTION OF THE A0AR0 OF DIRECTORS OF THE BRIDGES AMA WC -A FOUNpATION, INC. Sep. 01 19% 04:44PM Pi The fallowing resolutfons were adopted by the Board of Directors of the Bridges - America fotsridation {the "C�cirgoiaboA'� c$Ective�s of September-L-1998: - - ..- - -- - - -- - - -- - - -• - - RESOLVED, thus Ciwett Robimn, President ofthe Corporation. and or Stove Harrison, a warnber of the board of dtwtom be "hereby each are severally autborized to excetn a and deliver such agreements, documents and Insp uments. and to urk ertake such acts as they shall deem nocawary or edvi- ble to consumnude the pumhm by the Bridges Sher Lanc LP., (a Califomia limited par=nahip of which the Curporation-is the General Pwtner), of the low-income hour Vmjed and crai property located at 161 U She fare HurWWon Beach, Ca. Dated as of September 1,1998. QPRNGE CQgST TITLE Fax:7146676017 Feb 18 2003 15:05 P.06 - CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of CQ.Lc,�vr►'uQ- County of VrQ� On eew, 6.w � � before me, li A Afeis�, V.hL,, ( r L6 6L � Dtrnw And T!y d OlE� h 9-. '1�rM Oo�. MOtaN personally appeared Sr6� YV• l N-00) Ot st.nq .proved to me on the basis of satisfactory evidence to be the person(* whose name(s)&em subscribed to the within instrument same in6i Rterht eir authorized capacity(iss), and that by �A1oifteii signatures) on the Instrument the person(b), USA A. NEL90N or the entity upon behalf of which the person`(* acted, c« vftoma Comm executed the instrument. tro"r KAft — cQ*bmb mvcanm lea ." � WITNESS m hand and official seal. 30wh" or HoWr Pale 77ONAL Though die lnfvmwtion below is not required by law, it may prove vahmble to persons relying on Hie document and could prevent fraudulent removal and reenadmiml of this lbrrn to anomw ducwnenL Description of Attached Document Title or Type'of Document: I I'pM / -5rd r-Z-{ fIN � Document Date: gl3f Number of Pages: ffDtUA T-- Signer(s) Other Than Named Above: %Z-071e— Capacity(tes) Claimed by Signer(s) Signer's Name' fit-1S,&,j M- ❑ Individual. ❑ Corporate Officer Title(s): ❑ Partner = ❑ Limited ❑ General ❑ Atiomey-in-Fact ❑ Trustee ❑ Guardian or Conservator S� Other: 1�l.r2E 7". Signer Is Representing: -Mtr E>I M2 S 4NO-10 �t?vtirD.4�tn� - Signer's Name: ❑ Individual ❑ Corporate Officer TN0(s): ❑ Partner — ❑ Limited ❑ General ❑ Attomey-in-Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other. Top of U+Lts ns,e Signer Is Representing o 1 M 11 W H0UVy A@$0MWn • &= Nrmwt A"., P.Q. Sax 7104 - Cwwpa YUR. CA 01 X@J1 M Pros. Ho. sw? wo.wr Cad TCS-Ftiw 1 -0004 0 OV ORANGE COAST TITLE Fax:7146676017 Feb 18 2003 15:06 ' P.07 ' Order No. PA=W No. Losn No. WHEN RECORDED MAIL TO: itM"elnpmenl Agency of the City of IhuthWan Beach 2000 Main Street Huulington Beach, CA 92648 Atha Agency Secretary C.71► eLekx SPACE ABOVE THIS 11n FOR MORDER'S U9RI t' MSPT FROM RFAORDINO FM PHR WV. OODE $6 t SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO NOTICE- THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY 0STRUMENT. TLis DEED OF TRUST WITH ASSIGNMENT OP RENTS WITH RIDER ATTACI3ED HERETO ("Deed of'1lrust"), made August 31 1998, between THE BRIDGES AMBRICA SHER LANE, L_P., a California limited pattnerdo, h called TRUSTOR, whose addrLSS iS 18837 BTwkhurst Snset, Suite 303, Fomrlain Valley, CA 92708, Redevelopment Agency City of_Huntington.aCalifamiacorporation,hacincalledTRUST F,mid Beach REDEVELOPMENT AGENCY OF THE E CITY OF HLTNMNGMN BEACH, a public body, corporau and politic, herein. called BMOTICTARY, WITNFSSETH: That Mustor grants to Trustee in trust, with power of sale, that proptrty in the City of Hlntangtou Bcarh, County of Orange, Stale of California, described as: SEE EXIT "A" ATTACHED HERETO together with the rents, Lwum and pinEn themof; subject, however, to the right, power and eaftrity herainaRer given to and confarod upon Dateficiary+ w collect and only such meats, issues and profits for the purpose of owmiog (1) payrr=t of the scan of ONE NMUON TWO HUNDRED THOUSAND SLVEN HUNDRED TMTY-FOUR DOU.&M (S1,200,934.00) without infteM thnwn, townliM to the tmms of that celtsim promissory note of wen date huawith made by Ter vw. payable to order of Bewf iary, and c ft3W 3 err rtitcwals 9taoof, (2) the perfonnance of each agreegilew of Thator incorporated by reference or contidned hernia; aad (3) paymeW of additimW same and irtt� diumn which may hanatter be toamd to T tfor, or his auoresaora or asr,igns, when evidenced by a promiswry note or notes reciting that they ate secured by this Dcod of Trust. To prmtwt the security of this Deed of Thrat, and with respect to the property above de n'bed, Trustor expressly makes each and all of the agent% and adopts and agrees to ped'orm and be bound by each and all of the tmms and provisions set forth in subdivision A, and it is mutually agreed dud each and all of the tee and provisions act forth in subdivision B of The fictitious deed of bust rerarded in Ortrtga County August 17, 1964, and in all other count= August 1 t3, 1964, in the book and at the page of Official Racords in lbe office of the courdy recorder of the county whm said property is Located, noted below opposite the nacre of such county, namely: AWW SP-92ngmo:Sh" Exh-G-1 CITY bF 1iUNT1NW0Njwo CH oars 08 - rO order BM*Wg% qtr Alrrh Exhibit "G" _ Subordinated Deed of Trust - Page I of 9 CRY l�Y: ORANGE COAST TITLE Fdx:7146676017 Feb 18 2003 15:06 P.08 COUNTY BOOK PALM COUNIY BOOK PAr1R COUWN QGQK PAGE COUNTY BOOK PAGE A1.meaa 128e 556 Kan+ ask 713 Pima IMS 379 Bice* 39 in A1pnm 3 130-31 Lairs 437 110 pbz*aa 166 1307 ai aym 506 762 Aafador 133 a31 l.aaam 192 367 RNM616 377f 30 8dno 12f7 a21 Bala - - 1330 D3 1.4sAag3les T•317/ 174 asoraado SM9 124 Bamw 2067 427 CaLrao 125 TM MMM 911 1M amBaodo 300 4M >lumabom 1970 36 Cabaa 323 391 MWA 1649 122 But Bamodao 6213 768 Sugar 633 ai3 cant. costs 4M4 1 tea 90 453 $M PrEMUK4 A-104 596 TdUMA 437 183 flag Nam 101 so Maadom* WY 99 gm bee= 2t55 293 T—Y W& "S 14 Detach 704 635 Merced 16M 7" 8rn toms Obi po 1311 137 TWKM 2530 101 rkva, 5022 - 623 M doe 191 93 OMMAMeo 477s 175 T1lak=4 IT? 160 GW M 46D 76 Mahe ap 307 gmteBrbea 2065 1e1 vamr, 2607 237 iivatboldt 101 Ira Mmterey 3S7 739 aamta Clue 6626 664 Y010 769 16 1m9Ma! 11" 701 Napa 704 742 adn4Ceus 1636 607 Yuba M 603 tlY0 10 672 Nevada 363 94 sheu4 Soo 633 Ktam 3756 690 Onnt6 7122 is aa1 Dicta MDURa 5 Back 1964, Pogo 149774 shall inlrre to and bind the parties hem, with rtspea to the prvpeny above desadbed. Said agreements, terms and provisions owttaiued in said subdivisions A and B (identical ta all counties, and ptiated on pages 3 and 4 hereof) act by the within refermce (hereto, incorporated hwein and made a part of this Deed of 7hist for all ptaposes as fully as if set forth at length herein, and Beneficiary may charge for a staternent regarding the obligation somred hertby, provided the doarge thertfor does not exceed the tna)dmum allowed b'y law. The undersigned Tmstor, requests that a copy of any notice of defanit and any notice of sale haellader be mailed to him at his address hereinbefore set forth. NOTICE: THIS SUBORDINATED DEED OF TRUST WITS ASSIGNMIONT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORM THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. STATE OF CALIFORNIA COUNTY OF ORANGE On �611 QO bef M. G pemonAlly Wpezrd S—C�! Scan�Zl (or provj me once biiia of attlamslaetmy evidence) to be the person(d) whose name*) is1n*'s&wmbed to the within irotromalt and aclmaaledged to 111e tha3 hr dwbiry executed the sarne in hitlilaftltw authorized capacityCws). and that by q on the instn mn tt the pemiz(a)- or the erdity upon behalf of which the person(s) acted, executed the cLSSrtanent. WITNESS my hand and offteml seal. Siplatum 9F-92AEm& ."erExi-at 0951/98 - 1V3 Sigluhuz ofTrustor Ili$ BAIDC&,S AJ MUCA SHER I.ANF, L-P., it California limited put=ship Its: MARIE LOVE Comm. stts8sor ; $0r u3r Pt1BM . CMIFO A 0 001 A fti+u acu raaffrat moutt.E4Q,ll Exhibit "G" — Subordinated Decd of Trust - Page 2 of 9 ORANGE COAST TITLE Fax:7146676O1? Feb 18 2003 15:07 P.O9� DO N(yf RECORD The foUowing a a oeyy of Sabdi%%tiorue A and B of the fie itiow DK4 of Trust r000fded it ash ooaaty in C lW fomis as Adod in the foreg" Doed of Trust and woorpotded by reformat in said Deed of That as bema a part tTtaeof as if set form at Img�ft mama A. To protect the socu sty o(this Mused of TnW, Tm etor agues: 1) To ksnp said prvpe ty it pod oonditieo and rgtam. not fib remove or demolish, say bulling ttarason, to omtplds or odors promptly and. so a prod mind wodmtatlt7ae mmrer nuq}y building which may be aaaskurlea duaaged or dwtrvyed thrrson and to pay when due all A— for lebor performed mind mderiab[ Srmithod lbarmfor, to cormoy wino aU lam affiwtitg acid property a teQtuing may afterdiortm or irWvv[memtr to bo tnmds lhe(so4 not to oeoonnt at pemrit wade taut not to . off. or pasts my sit upon acid propeft in violdioo of iffair. to mttsyslk aT1g11<A fstilia0. fum&m, Fmv mad do all other acts which five flea dnracur or tee of amid ply may he mass abl i necessary. the apocific meara>tiom herein eat a the guard 2) To provide, mairdaat sad dshva fo 8areticiay, fain morsnoe aabdukey to and with loss payable to Braafu£ary. Thu nowt oogsatad UrA@r any fire or otha r -zerwe policy may be Rplied by Baw igmy Vm mM ;aidel todneea tresased bo eby and in muds ardor a Bracfiamry nosy ddmrtim or as rho option of Beeefnoiay thus antics mrt3ormt sea ao4ecled ear arty part tlnemsof nray be [aJemsad to Thssta. Bach opploofton or rahme shall not awe at waive any dafwm or notice of defailt havz%da or mval4ft any mat done pur3ung to welt am- 3) To appea in wA defatd say scion at peomedi t pmpWft to &Tend the sewuiy hawf or rho rWo or poavn of Borafuity or Tn~. and to pay aU coats and axpwrmete. i%abidiog owt of evidence of tills and anorneys fear in a regorad to mSmt, in my much ads= a ptoosedmg in which Bcwfx as y or Tnutes may appew. and it arty +at br mi& by Bertefiiewy to fonclose this Rood. 4) To pay- m lam un days befom dw*umry aU tun =dm=wW0 s$ading said prnpevtx iticbldin8 asmunasttm m app[atm.d harder mtorh� vrhe daaq .0 mooumirmack charges mad hens, wigh idesest. an said property or sty part 4latead: vrbirh apyeQ to be prior or supaiot hallo; all oode, fees sit aquas of lhim That Should TnwAr fad to malts any pcymmt ci to do my ad a3 horein provided. the Bm+.6aiwy of Trwr q has withart obligation to to do and wAcut fwdm to or dwamd upon Tkuetor sod wdw%K relcai=g 4hator from may o6Gplioe Iwv*4 mrr rthakm or do the smw a arch mm mer and to suds asfad me anther tray dean aaasaery to pnomot dw smwrity herwf, Bensfica ary or Thwas b" wAhori:ed to amdr upon said property for such puepoeM appear ih and defend soy action or proceeding purpaetind to al}ect the aeotmry hereof or the rip>us or powers of Bavfebuy err Trustee; pay, purdeasa. contort or compromise any ear aanbruv3% chap or lien which it the jodgrnad of ehhr appears to be prior or arpe[ior hwm-. ad. in arecc�+ my much tovem pay nacemagry, expectscm. Hwy Wand alit pay hem ruwanablo fats. S) To pay irr= didehy and wil hen danend an earls ao aspa►ded by Boodsiay or Trnsoeq wigs intermit from the dam of mtpoodmue as ihs armurO .(lowed by lam in eSed in the dde herco( and to pay for my rtdernert provided for by brve in offoat at tho dams hsvef rsaadmS the obripbon scoured hereby any ardmud deohrtdad try the Bernrf1mary not to exacted the marpnamq alkraad by law at dw time when said sedarhent a dtremnded B- It is mutually ageed: 1) That any award in tonne ea with any oondarmatkni fat public use of or it jury to laid properly or my part L'umf m (Hereby assiped and shalt be paid to Beneficiary who may apply or release such moneys toonved by bin is to are taaaur noel with tie mama effect as above provided for drspai+ion of proceeds of fire or other inurinm 2) Tiat by acooptatg paymert of miry man sacred hereby after ita due data BeneSciray dow not waive ha tight oiew to requits prompt payrwevd what dus of all other amtt so secured or to declare default for failure to to pry- 3) Mud at any time fir. from lima to thug widhout debility dwifm and vvkhand netim upm wrrOm request of Beneficiary and pteterQttim oftha Deed and said nods for aatdonetnmt, and widvetd affecting to peramal h bibty of any person far poymed of the owebterdnea aeatnsd hurhy. Thates may: reoonvey any pat of maid Property. com"A to tin malcitg of city map or plattltereot jam to par" my eamtad tttaeaq ar join in, my aatertsm mgrnannR or any ag roomed wbor� to lima or OvvV hareef. 4) Tba uport written request of Baseftciary, stating fist all amis seared hereby have boon paid, mad upon atamtd r of this Deed and said now to Thutme for cutoeam ioa and rska(on or other deposition a Thtstse in its sole dig zdm may choose and upm paymart of ib fees, Trustee mhali mcoavey. withorl wmat rdy. the property the held hsrmaradw Thus recitab in amb mcew your of arty Mmoasm cc ikxm shag be oerdtmve proof of The tnrth&htos eheasof The Orsmee in much reooaveymm may be dmarabsd as -tire person or Parana leplly edified thorsto.' S) Twat as additional searay, Tiustor hereby gva mad moxfas upon Bmefiviary the rigK power and atthcrtty. &xuig On oodunance of throe Troia to cohoot the reeds. iaaee WA profs m of said property. reme vow ado Trustnt the rift, poor to city daftrlah by Ttvodrit in payment of arty iodelutedreros meaaed hereby or is the perfemmunos of cry agreanart helemdet, to ocUeof and Mom vuch mr4 isues and linfrls as may become due mad payable- Upon any gads del utt. Baoefiaay may not cry taro wdwut natim tWw in person. by agenk or be a reowa to be opponod by a ocwt, and vas heart nnW to tau adegceey of cry security for the bdAtedam s hereby seared, enter upw and take potmegaion of mud property or any part lhercK m his on aaile sus far or 0avarwise coued such rant. bump, and profib. 6ie4rlirrg thus. past dos and wgwd. sad sppfy the a nA less oosts ward wipwacs of opasteo mad ooMwm gn4wGug roasoamhw storneyts fax upon any mdebmdnaa scarred hereby. and m rich order as Bmefxaary may ddarviiae. 7hm mtcccrrg wpm mod taking ponemmra of said prop". *a oollaet g of tarh rents, isms end profm and the mpphodict thm wf nos afore" shall not ours or waive any defer$ or rrotirs of defsnit heesleder or wvalidde any ad dope pmrasmat to mph AoGm 6) MLu upon dafnill by Trvstor in pryrawt of mrV indebbedoee seamed hereby or m to perforrt mcs of any ageemme hessuodr, BaeTicuay miry darters all Mures "oared hereby iotmediatety due and paymblm by deimery to shame of widen, decterm4on of dtf uh and demur l for sale and of wratan notice of fit mAt acid of okcam to cam to be sold maid property, which notice Tnutoe sbma cmuto to be filed for record BmidiQrey also amalt depot% with Tha ee this Dood, said now and 4 doo nammom svtdeocias ni Res eaonred hereby. Alum UID &MM Uf GWA urea as atk7 U. t.- .-y. —A Ur &-- r d-, d.- ..n—Ldl art 4 -aid W&es of etaftalt. and rAm of fide hiving bum Ova a anon requizW by law. Tkustaft wrdxxd darowd an 7h oW, aW sell maid PreQaty fit thus tau mad place aced by k bi said notion of sal% o&w a a whoim err err separab p2resK and is such oidr as it may dawnioe, d pthlie auction to the h *oat bAdr for mob in. lawtW money ofthe United Stara, paymbla A liras of sale ThAte, my posyans Sale of all or any portion of maid property by Public annomomae at sndn time kid place of musks mod Erera time to tine dw"A r may posyow Rich saw by public wr4uncezzax as the time Geed by thus preoe6v poetpmtowit. Trades shall de1livarto mutter purchnat its deed oeavayi 4 the property so sofa but wit" wry eavwwsA or wmttaety, et�tsss or implied The mcaab in with dmod of my nuRters at fads shall be mneh mirm proof of the uuttA r ms thesvoC Any perom m 1i mling Tntdor. Tortes, or Battdiciary m hwermtaer dafrmd, fury purchase d such saga SF-98Aplte:5'itesFa[h-0- I OttnIM-#3 Exhibit "G' — Suboi iiantad Dad of Tiu3t - Pape 3 of 9 ORANGE CORST TITLE Fax:7146676017 Feb 18 2003 15:08 P.10 Alta deducting all cast. fog sad agaum of T=w and of to ThM iorludm>< wit of evAIMM of We is caimemoo with gala TruAte shall apply the tuooeedr oisate to payment of All tmrrra eupaWdM undf r tba tWW haea� not gun repaid, wih umind itdt as die air me mllowed by law is aGoat as the dare heceot, aQ %hw arm Own aaowed hereby, aria the rernahrae , if aEy; tao ew pww or ply aAjiW maruo. 7) Baaeftaiary. or any sucoomw in ovv ma* of may Webtadoeoa semaod haaby. may Fran timo to taint by vatumaot in verdxM anbatitute a tawassor or avacsaers to my 7hrAae nama4 ha ran err aoftg hereaixfa. -hi*' ct, atimmasd by ow 8mddrry and dory admoakdged mod rmaatdad m fte office oftl m rwwdw of mo ooraey or oovrnlM wham acid ptepaty is sibraled shall be cmduma proof of proper of rurh raooasar Ttattee or Tnotmk wbo dWk wnbmg oWl ye. m fleas ttra 7him a pradw omsar, vmowd ro all d2 idle. err Aw riOk pow and 6kix t3aid iorartrraaal snit o win the. frame of the o *rra Tmstor. Ttuaaa and Bandkz ry hraetadw, the bolt wd page ahem the. Doed u receadod aed tlr arms and add<e re. of tam rtesr Tiusten 8) 'ihd Cis Dead applies to, kum to to beno& 4, and bieda all partia hereto. &M hd loplmem &maoea, adntiruMucus. a=minrs. wwoaaara and aaaigtR The.twat $mefieiary tthall trrmo the barer sd bntdrrt+ 4 ¢todpW afthe tloia ae=ed bweby, wbdherer notnrtmed as Bvm iltry lta� in air Dead, whaonva the *wow so regzr , the vms mdm f:�a ineiudam &0 fmatmo aadbr aartar, and dr. wkW wr nmbw mob-&* do ptveal 9) Thd That= aampti th's Trust wbm DmdL daly esemaed aced xdmD ted8r4 it mmda a public mootd err provided by law. Tnuteo is riot obtypwd to rrotify any party horvto of patdmg safer uMar my other] Deed of Tani or of gay anion or proeeedalg is which Tru tor. Bwafiw y or Thatea shall be a patty tmlaee bre>'a& by Trurtao. I r DQ NOT RECORD i REQUEST FOR Fi.liZ REGONVEYANCS TO _ T=may TRUSTEE. gn The mvkmsd it the regal cuing aid holder of rho rmw or noraa and of all iodvbt@&o gamed by ore forgoing Deed of Trees Saw sofa or now, tagothw with ail adica 4%MMo&m@ amaed by avid Daad of Y vrt, have barer fully paid and aaballod: and you are hereby rvvWtat and 440CL64 on payr+tma to you of any atria owiskt to you carder to terms of said Dead of Muo. to ur:al said aeee w raw above nwelowd. an aA cfta eviderow of ¢rddxediass sw red by asid Dyad of TM &aNcrvd to you h.r.vftlK together wi& the aid Deed of Trust, and to reowwby. vvAvat win sly. to the putin do pratod by the tuna of acid Doed of Trust, aD the wwat now hdd by you wtdar rho sans, t Dated i Please trail Deed of ThisL Note gad Recomreyance to Do Not lox or deatmy tbie Deed of eanceRatioa, before monveyance wW b Sp- 9 9&gne: Sher:rA -& t Iruat OR THE NOTE which it seeurrs. Both must be delivered to the Ttatatee for made. ziLbit "G" -- Subordinated Deed of Trust - Page 4 of 9 QRRNGE CORST TITLE Fax:7146676017 Feb 18 2003 15:08 DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED 9A-91tAgvc Sher:Euh-C 1 OV31199 - 83 TRUSTEE Exhibit "(7 — Subordinated Deed of Trust - Pagc 5 of 9 ORANGE COAST TITLE Fax:7146676017 Feb 18 2003 15.08 P.12 RIDER TO SUBORDINATED DEED OF TRUST WrM ASSIGNMENT OF RENTS THIS RIDER TO SUBORDINATED DEED OF TRUST WrM RIDER ATTACHED ("Rider"), is made as of August 31 , 1999, by THE BRIDGES AMERICA SHM LANE, L.P., a California limited partnership ('7hator"), and REDEVELOPN ENT AGENCY OF THE C= OF HUNTINGTON BEACH, a public body, corporate and politic ("Beneficiary"), as follows. 1. Part of Deed Qf JWst. This Rider is made a part of that certain Subordinated Deed of Trust With Assignment of Rents ("Deed of Trust"), of even date hereof, to which this Rider is attached. 2_ Conffic In the event of any ooaflict between the terms of this Rider and the terms of the Deed of Trust, the terms of this Rider shall control. 3. Priority, Subordination. Trustor and Beneficiary entered into that certain Owner Participation Agreement, dated August 31, 1998 (the "OPA"), pursuant to which Beneficiary (named the "Agency" in the OPA) agreed to subordinate this Deed of Trust to the liens of the deeds of trust identified in the OPA as the First Deed of Trust, the Second Deed of Trust•, and the Cc ustructionlPermanent LendeKs)'s deed(s) of trust, and to such other and further documents as such lenders may be required including but not limited to regulatory agreements, not to exceed an indebtedness of Four Million Two Hundred Thirty-five thousand Dollars ($4,235,000.00). The lien of this Deed of Trust therefore shall be junior and subordinate to the liens of the foregoing listed deeds of trust and such other and further documents as such lenders may require. Beneficiary agrees to execute such subordination agreements, in the form attached as Exhibit "H" to the OPA, as are necessary to effect such subordination of the lien of this Deed of Trust. 4. Condernnatio. Section B.1 of the Fictitious Deed of Trust incorporated into the Deed of Trust shall be modified to provide that Beneficiary shall not be entitled to any awards or damages payable directly or indirectly by reason of a condemnation or proposed condemnation affecting all or any part of, or any interest in, the Property, brought by or pursuant to the direction of Beneficiary. 5. D ault The term "default" as used in the Deed of Trust shall mean a "Material Drlatilt" as drfival in dio OPA or Rogulrwory Agrssmga#. sP-98Agee._31ter Yxh-o 0ar3 LM - # 1 Exhibit "G" -- Subordinated Deed of Trust - Page 6 of 9 ORANGE COAST TITLE_ Fax:7146676017 Feb 18 2003 15*09 P.13 IN WITNESS WHEREOF, Trustor and Beneficiary have executed this Rider to Subordinated Deed of Trust With Assignment of Rents as of the date of Trustoes arclmowledgment hereinbelow, to be effective for all purposes as of the day and year first set forth above. ATTEST: Agency Clerk' S F-98A Bea Sbc r Ikh dl- 1 99MV98 - 03 "PARTICIPANT"' THE BRIDGES AMEWCA SEER LANE, L.P., a California limited partnership By Its General Partner: THE BRIDGES AMERICA FOUNDATION, a Delaware Nonprofit Corporation By.5& . ! Name: srrkv�," V. IJAFlnts.�,3 -- (Iype or print) - D tf.- its (circle one) () Chairman of the Board 01 President (iii) Any Vice President By: Name: ('type or pit) Its (circle one) (i) Secretary (u) Any Assisdant Secretary (iii) Chief Financial Officer (iv) Any Assotaat Deasurw REDEVELOPMENT AGENCY OF THE CITY OF HUN INGTON BEACH, a public body, corporate and politic Lrisutt,an . APPROVED AS TO FORM: Fl-e- Q2 ftr Agency Counsel WWI Exhibit -G-- Subordinated Deed of Trust - Page 7 of 9 ORANGE COAST TITLE Fax:7146676017 Feb 18 M 15:09 P.14 .. ' CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of�Y�,,:�. _ County of Or n � On t bee Z / �a- before me, Gages d. A dalSdn , 1Vu wY��- Des teen ead TtM of Oftw to -a. aen Doe. M06 P WJn personalty appeared 57ZYE111 V. /5fi4sG2�S0�.1. ZL , — improved to me on the basis of satisfactory evidence to be the parson(S) whose name(Nvafrsubscribed to the within instrument and acknowledged to me tha0sh"IGy executed the same ln�eW"ir authoriz capacity(ies)', and that by &eMlHefr signatureN on the instrument the person ft or the entity upon behalf of which the personN acted. executed the instrument. uww+ A. ratxaa+ CCnV*+tena last WITNESS my hand and official seal. Nowt' K"a — c rain ri [fit` svzkm w MWY Plbc O TIONAL Though the ktormaffon below t9 not requlmd by is w, it may prove valuable to persons retying on lire Woument and could prevent fraudulent removal and tewftachmant of this form to arwther document. Description of Attached Document Title or Type of Document: ar r7alr 9W L/�GC U / IA.) I U-4 r cyy! W, Document Date: g I3 l I q� I Number of Pages: , Signer(s) Other Than Named Above: 1 ud Z_)A1S1/dYy Capacity(ies) Claimed by Signer(s) Signer's Name: SrCu6'F'J V H>«M•GJso?J S ❑ Individual ❑ Corporate Oificor Ttle(s): ❑ Partner — ❑ Limited O General U Attorney -in -Fact ❑ Trustee ❑ Guardian,gr Conservator ,FPOther: a'�' �7� _. _ Top of ft-0 hole Signer Is Representing: , tP6 6S AHeW44 -b9,VAJMVJ�eJ 9 Signer's Name: a ■ ■ ■ ■ ■ Individual Corporato Of!tlear Tide(s): Partner — ❑ Limited ❑ General Attomey-In-Fact Trustee Guardian or Conservator Other: Signer Is Representing notlr 11tULIU PINT OF 4,fi�lF. F; 0 1 M kmMml HatuY AwpdwW • SM gemrt Aye.. P O- Boot 7184 • Canp Park LA 91W9.7184 I'Ma No. 59W horde' Q& TM-Frw 1 -MM764a1:t7 ORANGE COAST TITLE Fax:7146676017 Feb 18 2003 15:10 P.15 CALIFORNIA ALL-PURF%oSE ACKNOWLEDGMENT State of County of Onbefore me, Uk"x_-A• 405�24 personally appeared „2u fr a" C'gxA-e C, �wpc kAAI �) d gww(a) personally known to me — to be the persort(Z whose name*4adDsubscribed to the within instrument and acknowledg2vo me that hftVtelela executed the same In hft#MCMW authorized capac ty e@b, and that by hWherslgnaturg s. pon the Instrument the person( LALMAti NaSM or the entity upon behalf of which the persorkoacted. Co"rr000n s iommoa executed the instrument. N&Mr putft — CA*NxrroCGUMV _ y co"m� rewiftju , IM WITNESS m nd and official seal. swab" a ►my P"C OPTIONAL Though the information below is nor rmMrW by law, It mey prove valuable to person relying an the document and could prevanr fraudulent removal and reeftachment of thrb form to another document. Description of Attached Document Title or Type of Document: �_49!2 _ �� v1_/ruif- to t7� rts�eQnme.e� 1�s�f5 Lsr1 eLAALa Document Date: _g1 4� _ Number of Pages: r �/17Cit-t' Signer(s) Other Than Named Above:Amg �s.�'o J .SfCIJP� y frfYScn 7� Capaclty(ies) Claimed by Signer(s) Signer's Name: _�Ar beftfp ■ ■ ■ u Individual Gorporare Officer Title(s): Partner — ❑ Limited I] General Attomey-in-Fact Tn,stee Guardian or Conservator Other. Ylial rIRLa41 Signer Is Representing: Top of tM here Signer's Name: n5-� :e. &oek-W. ❑ Individual ❑ Corporate onlear Titie(s): - ❑ Partner — ❑ Limited ❑ General ❑ Attomey-in-Fact ❑ Trustee ❑ Guardlan r Conservator , %�, Other: Tw or n7b here Signer Is Representing: tTLcI� 1' d� e seas aaaen�f rt e..y w—ci.aon - ma wm.r� r T. P_O. 5" i1M - G.cjs POD,. G SM641O+ Wok ?W- bw ftordw Lai lb" N i 4M04r? 4M7 GRANGE COAST TITLE Fax:7146676017 Feb 18 2003 15:10 P.16 EXHIBIT "A" TO DEED OF TRUST f Ug L DESCRI MON OE U,AL PROPPRTY I (TO BE INSERTED) SP-98Airve.6Au:P�-4-I � ' 0&31/98-93 NOTE. AACE Q Mlssivr. Due 7b P+6lmtnod Exhibit "G" — Subordinated Deed of Tnwt - Page 9 of 9 ERANGE COAST TITLE Fax:7146676017 Feb 18 2003 15:10 P.17 EXHIBIT NA'' PARCEL 1: THAT PORTION OF THE NORTHsyr QUARTER OF SE7CFB14 23, TOWNSHIP 5 SOUTH, RANCE 11 WEST, PARTLY IN THE RANCHO LA BOLSA CHICA AND PARMY IN THE RAMC H10 LAS BOLSAS, IN THE CITY OF H[oT'I 'IoN =Awxg, AS PER MAP RECORDED TN BOOK 51, PACE 13 OF MI MAPS, IN T}E OFFICE OF 1 E CCaZ TX ROaNE R OF SAID Canny, DELIBED AS FOLLOWS: RE]GINNING AT TIME INTERSECTION OF THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHEAST CUARTMS OF THE NORTHWEST QUARTER OF SAID NORTHEAST QUARTER WITH THE FAST LINE OF SHER-LANE AS DESCRIBED IN THE DEED TO THE CITY of HUNTIN CT N SEA04, RECORDED DECEM6UR 7, 1961 `iN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCE NqwTIH 180.00 FEET ALONG SAID FAST; LINE; THENCE FAST 346.00 FEET PARALL,Ei, WITH THE NORTH LIME OF SAID SOUTHEAST QUAR'iER OF THE t1)R ?4EST QUARTER OF THE NORTHEAST QUA3RI R; THENCE SOUTH 100.00 FIST PARALLEL WITH SAID EAST LINE; Tf EICE EAST 90.00 FEET PARALLEL, WITH -SAID NORTH LINE; THENCE SOUTH 80.00 FEET PARALEEL WITH SAID EAST LINE TO THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SCUT WEST QUARTER OF THE NORTHEAST QUARTER OF SAID NORTHEAST QUARTER; THENCE WEST 436.00 FEET TO THE POINT OF BOGINNINS. SAID LAND IS INCLUDED WI1I4DI THE AREA SRDRN CN A MAP FILED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE CCUNIY RECORDER OF SAID 033 Y. EXCEPT THEREFROM Aral, OIL, G AS, MINERALS AND CTHK R HYDROCARBCNS, BE LCW A DE:PM OF SOO FEET, WITHOUT Tl-iE RIGRV OF SURFACE ENTRY, AS RFSERVTI1 IN DENS OF RECORD. PARCEL 2 : THAT PORTION OF ZiiE NWTHE Sr QCG4 = OF SECTION 23, TOWNSHIP 5 SOUTH, RANUE 11 WEST, IN ISE RAt4CH0 LA BQLSA.S, IN THE CITY OF HUNiTNG ON BEACH, AS PER MAP RECORDED IN BOOK,. 51, PAGE 13 OF MISS MAPS, IN THE OFFICE OF THE 0.7CNNTX RECORDER OF SAID COUNTY, DESCtIBED AS ROL101AS : BOSI GUNS AT THE INTERSECTION OF THE S UD4 LINE OF THE NORTH 50.00 FEET OF THE 90UTHFAS'T QUARTER OF THE QRTHWEST QUARTER OF SAID NORTHEAST QUARTER WITH THE FAST LINE OF SHE R LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNTINGION BEACH, RECORDED DECEMIDEOR 7, 196I ; N BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCE NOMP 180.00 FEET AL093 SAID EAST LINE; THENCE FAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTOR OF THE NORTHAI' QUARTFIR OF THE NORTHEAST QUAR E R; THENCE SOUTH 100.00 FEET PARALLEL WITH SAID FAST LINE; 'TN-ENCE FAST 90.00 FEET rAPALZEL. wriu SAID NORTH LINE RED A POrwr HUTCH PomnRm x8 7m 71= PoINr AND PLA= OF DDGMMI; Tors SOCTIH, 80.00 FEF`I' PARALLM WITH SAID FAST LINE TO THE SOMUT LINE OF 71UE M-WI14 50.00 T"F it OF= Tl-iE Si0UI14WES ' QUARTER OF THE NORTHEAST QCA MER OF SAID NORTHEAST QUARTER; THPNC£ 408.96 FEET EAST PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE NwHwEsT COMR ER OF THE NORTHEAST QUARTER 10 THE WEST LINE OF PARKSIDE LANE AS CESCR BED IN THE DEED TO THE CITY OF Mk+TTINGICN BEACH, RDCORDE D SEPIEI1BER 00, 1968 IN BOOK 8727 PAGE 541 OF OFFICIAL RECORDS; THENCE NORTH 80.00 FAT ALONG SAID WEST LINNE TO A LINE THAT IS PARALLEL WITH THE NORI14 LINE OF SAID SOUTHEsks'T QUARTER OF 7MME NCR7HWEST QUARTER OF TV NOR'LvWmEAST QUARTER, AND WHICH PASUES 71HROUGH AND TRUE POINT AND PLACE OF BEGINNING; THENCE WEST 408.96 FEET, AL.ONS SAID LAST MENTIONNU PARALIL•Z, LINE, TO THE TRUE POINT AND PLACE OF BEGIN NINE. nar • �• �•Umv&sms ORANGE COAST TITLE Fax:7146676017 Feb 18 2003 15:11 P.18 , ._'{IL•�11f, DiSQiIPTIC[V Q�'� D} EXCEPT THEREF" ALL OIL, GAS, MINFPiALS AND 01M traT4CARKNS, BELjCW A DEM OF 500 FEET, WI'I Mr 7HE RIGWr OF SURFACE ENTRY, AS RESERVED IN, DEEDS OF RErr)RD. SAID LAND IS INMMM WIMUN 7M AREA M> V CN A MAP FILED EN BOOK 23 PACM 17 OF RECORD OF SURVS'YS, IN 114E OFFICE OF 71M COUNTY RaDORDER OF SAID C oLnlY. CITY OF HUNTINGTON BEACH Inter -Office Communication k. . Economic Development Department To: Connie Brockway, City Clerk From: Gustavo A. Duran, Housing and Redevelopment Manager Date: February 25, 2003 Subject: Marie Love Letter - Memorandum from Your Office Dated February 20, 2003 am in receipt of your memorandum dated February 20, 2003, inquiring about a letter from Mr. Greg Brown, who previously worked in our department. This letter was sent to Marie Love, Escrow Officer with Orange Coast Title on September 18,1998. As you correctly stated, the letter required that Ms. Love forward the original promissory note and deed of trust to your office. Please be informed that the documents have been in the care of the Economic Development Department since 1998. Apparently, they were returned to Mr. Brown and he did not bring them to your office for safekeeping. I deeply apologize for whatever happened at that time. C: David C. Biggs g gus',nmucv,v oracrneino Jac. CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION TO: Gus Duran, Housing Redevelopment Manager Economic Development Department FROM: Connie Brockway, City Clerkr_h SUBJECT: Attached letter to Marie Love, Escrow Officer DATE: February 20, 2003 As you can see the attached letter, from your department, required that the original promissory note and the deed of trust and regulatory covenant be returned to the City Clerk's office. Please provide a memorandum to this department rescinding the portion of your letter that shows the originals were to be on file in the Clerk's office. This is necessary as the City Clerk's office has always been the repository of the original documents connected with City Council approved matters and persons inspecting files would question why the originals were not on file in the Clerk's office per your department's 9/18/98 instruction to the Title Company. Rr A1'1'D FEB 2 1 2003 I?FPA RT N aNT OFF._, ,'�ri►_LO N -- J,j #& City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF ECONOMIC DEVELOPMENT Director 7141536-5582 Redevelopment 714/536-5582 FAX 714/375-5087 Housing 714/536-5542 September 18, 1998 Marie Love, Escrow Officer Orange Coast Title Company 640 N. Tustin Ave. Santa Ana, CA 92701 Dear Marie: SUBJECT., Escrow No. 102518-ML (16112 Sher Lane & 16121Parkslde Lane) Please take the following actions on behalf of the City of Huntington Beach and the Huntington Beach Redevelopment Agency: • Confirm that casualty insurance in the an aggregate amount necessary to cover all encumbrances is in force; • Secure an ALTA Lenders Title Insurance Policy in the amount of $1,200,734 showing the City of Huntington Beach as a subordinate lien holder; • Execute the promissory note, deed of trust; and regulatory covenant that were delivered to you with this letter. Denote Orange Coast Title Company as 'Trustee' on the deed of trust; record the deeds of trust and covenants (deed certifications are included). • Return the Promissory note to our City Cleric. After the deed -and covenant _have recorded lease send the on inal a set o conformed coDies to me You should refer to Section 3.4 (c) and (d) (page 8) of the agreement as it gives you specific instructions.; A copy of the agreement is enclosed for your review. Thank you for your assistance with this project. Should you need further help with this transaction, please tail me at (714) 960-8831. Sincerely, Vo. rown t Specialist GB:gb Enclosures Copies: JoAnn Ulvan, Bridges America Connie Brockway City Clerk o ��- jzr]a� LIAnt 9 OCTITLE 1 CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION MuNTInG7pn PAC„ Date May 3, 2000 To: David Briggs, Economic Development Director From: Connie Brockway, City Clerk dy L Re: Bridges of America Sher Lane — Owners Participation Agreement (OPA) — Redevelopment Agency Resolution 290 — Acquisition/Rehab — 16112 Sher Lane and 16121 Parkside Lane The City Clerk's Office cannot file this agreement as the documents referenced in your letter to the Orange Coast Title Company have not been returned to the City Clerk. Did the project not proceed? If so, please advise. G:1Cbmerrmost2000cbmemo%Bridges of America Sher Lane.doc-mp ACTION AGENDA CITY COUNCILIREDEVELOPMENT AGENCY SPECIAL MEETING CITY OF HUNTINGTON BEACH MONDAY, AUGUST 31, 1998 5-30 P_M — Council Chambers Civic Center, 2000 Main Street Huntington Beach, California 92648 5:30 P.M. - Special Meeting -- Council Chambers Call City Council/Redevelopment Agency Meetinq To Order Roll Call Julien, Harman, Green, Dettloff, Bauer, Sullivan, Garofalo [Present: ]ulien—arrived 5:40 p.m., Sullivan Absent] City Clerk Reads Call For Special Meeting Notice Public Comments (City Council/Redevelopment Agency) Adopt Redevelopment Agency Resolution No. 290 - Approves Owner Participation Agreement -With Bridges America For The Acquisition And Rehabilitation Of 16112 Sher Lane & 16121 Parkside Lane Communication from the Economic Development Director regarding a loan agreement between the Redevelopment Agency and Bridges America_ The agreement provides up to $1,001,000 in redevelopment housing set aside for the acquisition and rehabilitation of a sixty-six unit project at 16112 Sher Lane & 16121 Parkside_ Additional HOME funds in the amount of $200,122 will be committed to the project at a later date for rehabilitation costs. Recommended Action: Motion to- 1. Adopt Redevelopment Agency Resolution No. 290 - "A Resolution of the Redevelopment Agency of the City of Huntington Beach Approving an Affordable Housing Agreement by and Between the Redevelopment Agency of the City of Huntington Beach and Bridges America Sher Lane, L_ P". for the acquisition and rehabilitation of 16112 Sher Lane and 16121 Parkside Lane and 2. Approve a Owners Participation Agreement by and Between Redevelopment Agency of the City of Huntington Beach, a Public Body, Corporate and Politic and The Bridges America Sher Lane, L.P. a California Limited Partnership and authorize execution of the agreement and all attachments by the Chairperson and Agency Clerk - and 3. Waive the City's insurance requirements for purposes of approving the Agency loan agreement only. Direct staff to ensure that the minimum insurance requirements are met by Bridges America by the start of rehabilitation activities_ and 4. Authorize the transfer of Agency housing funds in the amount necessary to Orange Coast Title Company (Escrow No_ 102518-TA) to effect the closing of the acquisition escrow. [Approved 6-0-1, Sullivan: Absent] Adsournment To Tuesday, September 8, 1998, at 5.00 p.m., in Room B-8, Civic Center, 2000 Main Street, Huntington Beach, California_ CONNIE BROCKWAY, CITY CLERK City or Huntington Beach 2000 Main Street - Second Floor Huntington Beach, California 92648 714/536-5227 i Council/Agency Meeting Held: 3/ 7 SY erred/Continued to: Approved,, 0 Cond)ion4lly ApNovAd, q Denied _b4 J!l/ City Clerk's Signature Council Meeting Date: August 31, 1998 I Department ID Number: ED 98-38 1 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIUREDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY— MEMBERSCO � z � SUBMITTED BY: RAY SILVER, City Administrator/Executive DirectorGlA:� c� , 00 PREPARED BY: DAVID C. BIGGS, Economic Development Directorrn 0094 > _'rnm SUBJECT: Approve L-o" Agreement With Bridges America For The -F x Acquisition and Rehabilitation of 16112 Sher Lane & 161n n Parkside Lane 1QeS Afo 02 q0 Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis. Environmental Status, Attachments) Statement of Issue: On August 3, 1998, the Agency approved conceptual deal points for the acquisition of Sher Lane and directed that a loan agreement be drafted. A loan agreement between the Redevelopment Agency and Bridges America is submitted for approval. The agreement provides up to $1,001.000 in redevelopment housing set aside for the acquisition and rehabilitation of a sixty-six (66) unit project at 16112 Sher Lane & 16121 Parkside Lane. Additional HOME funds in the amount of $200,122 will be committed to the project at a later date for rehabilitation costs. Funding Source: Budgeted funds in Account No. E-TX-ED-968-6-10-00 and Unbudgeted Housing Set Aside Funds. Recommended Action: Motion to: Adopt Redevelopment Agency Resolution No. o� 90 between the Redevelopment Agency and Bridges America for the acquisition and rehabilitation of 16112 Sher Lane and 16121 Parkside Lane. 2. Approve an Owner Participation Agreement between the Redevelopment Agency and Bridges America and authorize execution of the agreement and all attachments by the Chairperson and Agency Clerk. 3. Waive the City's insurance requirements for purposes of approving the Agency loan agreement only. Direct staff to ensure that the minimum insurance requirements are met by Bridges America by the start of rehabilitation activities. REQUEST FOR CITY COUNCILIREDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 4. Authorize the transfer of Agency housing funds in the amount necessary to Orange Coast Title Company (Escrow #102518-TA) to effect the closing of the acquisition escrow. Alternative Action(s): Do not approve the loan agreement, or modify the proposed terms and conditions. Analysis: For many months, staff and Bridges America (Bridges) have been negotiating over Agency financial assistance for the acquisition and rehabilitation of a sixty-six unit rental property located at 16112 Sher Lane and 16121 Parkside Lane. Staff and Bridges have concluded negotiations (a complete outline of deal points for both agreements is included as Attachment No. 1) and have agreed to the following terms: Redevelopment Agency Responsibilities • The Agency will provide $1,000,612 in redevelopment housing set aside funds and up to $200,122 in HOME Investment Partnership funds as a loan to Bridges America (Bridges). These funds will be used to acquire and rehabilitate a sixty- six (66) unit rental property located at 16112 Sher Lane and 16121 Parkside Lane. • The HOME funds will be used exclusively for rehabilitation costs and will be administered through a separate agreement. Developer Responsibilities • All sixty-six (66) units will be subject to income and affordability restrictions, which can be defined as follows: Thirty three (33) units must be rented to median income tenants. The maximum rent can not exceed the standard established by California Health and Safety code Section 50053, and the required unit mix is as follows: • Seventeen (17) one bedroom units, and; • Sixteen (16) two bedroom units. Twenty-two (22) units must be rented to very low income tenants. The maximum rent can not exceed the standard established by California Health and Safety code Section 50053, and the required unit mix is as follows: • Sixteen (16) one bedroom units, and; • Six (6) two bedroom units. Eleven (11) units must be rented to very low income tenants based on HOME program regulations and at no time will the rents for any unit exceed the "low" HOME rent as defined by HUD. All eleven units will be two bedroom units. RAASHER1 -2- 08/28/98 3:52 PM REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 • Bridges agrees to guarantee the amount of capital reserves that it shows on the final approved pro forma that is to be submitted to the Redevelopment Agency. Beginning in the third year of the agreement, and continuing annually through the thirtieth year, Bridges will forward the proceeds of a residual receipts account to the Redevelopment Agency as a means of repayment of the redevelopment set aside funds. The minimum amount of the annual repayment will be fifty percent (50%) of the available cash flow. The remaining fifty percent (50%) will be used for a Capital reserve account until said account reaches an amount equal to an amount determined by the Agency and Bridges to be appropriate. After the Capital Account has reached the agreed balance, one hundred percent (100%) of the available net cash flow will be used for repayment. • The Agency Loan Note shall not bear interest except from and after a default. That potion of the principal amount of the Agency Loan Note will be converted from a loan to a grant to Bridges in the following manner: On the first anniversary after approval of the Agency Loan Note, provided that the Note has not been accelerated and all amounts due and payable, and Bridges is not in default, approximately three and three quarter percent (3.333%) of the original loan amount shall automatically convert from principal under the Agency Loan Note to a grant to Bridges. Project Description The proposed project consists of a sixty-six unit building located on adjacent parcels. Together, the property was appraised at $4.5 million in January of 1998. The project is located south of Edinger Avenue, between Sher Lane and Parkside Lane. (see Attachment No. 2). There are 34 one bedroom and 32 two bedroom units. The units are 725 square feet and 900 square feet respectively. Rents for the units are as follows: �Ury,it°Size�r_ _ lncoirw'ie�l�eiiel -�ProjectedMRe`ritt��; One Bedroom Very Low $658 Two Bedroom Very Low $740 One Bedroom Moderate $695 Two Bedroom Moderate $825 With the income restrictions proposed by the Agency ranging from very low income (50% of median income) to moderate income (110% of median income), the project will be mixed income. Because the properties are located outside the redevelopment area, the Agency will be able to count thirty-three of the very low income units toward its production RAASHER1 -3- 08/28/98 3:52 PM REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT 1D NUMBER: ED 98-38 housing requirements. The balance of the units can be counted toward any replacement housing obligations the Agency will incur through the Waterfront development. Redevelopment Agencies are permitted to assist affordable housing projects outside of project areas if proper legislative findings are made. City Council Resolution No. 6026 and Agency Resolution 174, adopted on June 26, 1989, give the required authorization. A minimum of $350,000 in rehabilitation is needed, as there has been deferred maintenance on both properties. Agency staff is working with Bridges to refine the cost estimates and will continue to work closely throughout the rehab process. Bridges America Bridges America is a Houston -based nonprofit that was formed to improve the distribution of food stuffs to Third World countries, primarily Haiti. Bridges also distributes food in the Houston area on a weekly basis to needy families. Bridges has a local affiliate in Fountain Valley. In the last few years, Bridges has expanded its mission to include the development of affordable housing. More information is included as Attachment No. 3. In 1996, Bridges acquired a troubled eighty unit apartment project in Huntington Beach. Since that time, the property has vastly improved under the ownership and management of Bridges. Forty-two of the units are restricted for affordable rents by covenant by Holly- Seacliff developers who needed to fulfill affordable housing conditions placed on single family projects approved by the Planning Commission and City Council. Bridges also has an acquisition and rehab project underway in the City of Corona. Further, Bridges has entered discussions with the City of Santa Ana over possible affordable housing projects. While the Agency has focused on assisting nonprofit developers acquire and rehab small properties in the Oakview redevelopment project subarea, this project offers an opportunity to meet Agency housing requirements on a larger scale and in more diverse areas of the city. On July 15, 1998, the Council's Economic Development Committee (EDC) heard a presentation on the project by Agency staff and Bridges America. The EDC directed staff to move forward with the project to the full Council (Agency). On August 3, 1998, the Agency directed staff to move forward with the project based on the conceptual dealpoints and to return to the next available meeting with a loan agreement. The Agency's involvement with this project is consistent with the City Council's established goal of providing for a diverse housing stock throughout the community (City Goal #7). RAASHERI -4- 08/28198 3:52 PM REQUEST FOR CITY COUNCILIREDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 Environmental Status: Exempt under the California Environmental Quality Act (CEQA) Attachment(s): 1 Agency Resolut No, �a &Loan Agreement 2. Keyser Marston Associates Report 3. August 3, 1998 Approval Action 4. Location Map 5. Bridges America Backqround Information RCA Author: G. Brown, ext. 8831 RAASHER9 .5. 08/28/98 3:52 PM C Council/Agency Meeting Held: / T ? VA erred/Continued W CIpproved ❑ Con di ion 14y Ap ov d Qenied/ City Clerk's Signature --TCouncil Meeting Date: August 31, 1998 Department ID Number: ED 98-38 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIUREDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY — MEMBERS ar SUBMITTED BY: RAY SILVER, City Administrator/Executive Director�� C__ , PREPARED BY: DAVID C. BIGGS, Economic Development Director CDCDM opR >'' CD SUBJECT: Approve bean Agreement With Bridges America For The Acquisition and Rehabilitation of 16112 Sher Lane & 16121- Parkside Lane �'e$ A1100290 Statement of issue, Funding Source, Recommended Action, Alternative Actionls}, Analysis, Environmental Status, Attachmentls} Statement of Issue: On August 3, 1998, the Agency approved conceptual deal points for the acquisition of Sher Lane and directed that a loan agreement be drafted. A loan agreement between the Redevelopment Agency and Bridges America is submitted for approval. The agreement provides up to $1,001,000 in redevelopment housing set aside for the acquisition and rehabilitation of a sixty-six (66) unit project at 16112 Sher Lane & 16121 Parkside Lane. Additional HOME funds in the amount of $200,122 will be committed to the project at a later date for rehabilitation costs. Fundinq Source: Budgeted funds in Account No. E-TX-ED-968-6-10-00 and Unbudgeted Housing Set Aside Funds. Recommended Action: Motion to: 1. Adopt Redevelopment Agency Resolution No. o� 90 between the Redevelopment Agency and Bridges America for the acquisition and rehabilitation of 16112 Sher Lane and 16121 Parkside Lane. 2. Approve an Owner Participation Agreement between the Redevelopment Agency and Bridges America and authorize execution of the agreement and all attachments by the Chairperson and Agency Cleric. 3. Waive the City's insurance requirements for purposes of approving the Agency loan agreement only_ Direct staff to ensure that the minimum insurance requirements are met by Bridges America by the start of rehabilitation activities. REQUEST FOR CITY COUNCIUREDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 4. Authorize the transfer of Agency housing funds in the amount necessary to Orange Coast Title Company (Escrow #102518-TA) to effect the closing of the acquisition escrow. Alternative Actions : Do not approve the loan agreement, or modify the proposed terms and conditions. Analysis: For many months, staff and Bridges America (Bridges) have been negotiating over Agency financial assistance for the acquisition and rehabilitation of a sixty-six unit rental property located at 16112 Sher Lane and 16121 Parkside Lane. Staff and Bridges have concluded negotiations (a complete outline of deal points for both agreements is included as Attachment No. 1) and have agreed to the following terms: Redevelopment Agency Responsibilities The Agency will provide $1,000,612 in redevelopment housing set aside funds and up to $200,122 in HOME Investment Partnership funds as a loan to Bridges America (Bridges). These funds will be used to acquire and rehabilitate a sixty- six (66) unit rental property located at 16112 Sher Lane and 16121 Parkside Lane. • The HOME funds will be used exclusively for rehabilitation costs and will be administered through a separate agreement. Developer Responsibilities • All sixty-six (66) units will be subject to income and affordability restrictions, which can be defined as follows: Thirty three (33) units must be rented to median income tenants. The maximum rent can not exceed the standard established by California Health and Safety code Section 50053, and the required unit mix is as follows: • Seventeen (17) one bedroom units, and; • Sixteen (16) two bedroom units. Twenty-two (22) units must be rented to very low income tenants. The maximum rent can not exceed the standard established by California Health and Safety code Section 50053, and the required unit mix is as follows: • Sixteen (16) one bedroom units, and; • Six (6) two bedroom units. Eleven (11) units must be rented to very low income tenants based on HOME program regulations and at no time will the rents for any unit exceed the "low" HOME rent as defined by HUD. All eleven units will be two bedroom units. RAASHER1 -2- 08/28198 3:52 PM REQUEST FOR CITY COUNCIUREDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 • Bridges agrees to guarantee the amount of capital reserves that it shows on the final approved pro forma that is to be submitted to the Redevelopment Agency. • Beginning in the third year of the agreement, and continuing annually through the thirtieth year, Bridges will forward the proceeds of a residual receipts account to the Redevelopment Agency as a means of repayment of the redevelopment set aside funds. The minimum amount of the annual repayment will be fifty percent (50%) of the available cash flow. The remaining fifty percent (50%) will be used for a Capital reserve account until said account reaches an amount equal to an amount determined by the Agency and Bridges to be appropriate. After the Capital Account has reached the agreed balance, one hundred percent (100%) of the available net cash flow will be used for repayment. The Agency Loan Note shall not bear interest except from and after a default. That potion of the principal amount of the Agency Loan Note will be converted from a loan to a grant to Bridges in the following manner: On the first anniversary after approval of the Agency Loan Note, provided that the Note has not been accelerated and all amounts due and payable, and Bridges is not in default, approximately three and three quarter percent (3.333%) of the original loan amount shall automatically convert from principal under the Agency Loan Note to a grant to Bridges. Project Description The proposed project consists of a sixty-six unit building located on adjacent parcels. Together, the property was appraised at $4.5 million in January of 1998. The project is located south of Edinger Avenue, between Sher Lane and Parkside Lane. (see Attachment No. 2). There are 34 one bedroom and 32 two bedroom units. The units are 725 square feet and 900 square feet respectively. Rents for the units are as follows: _ == Unit Size-.,iwPi P- - Income Level V;7'f Projected Rent:- One Bedroom Very Low $658 Two Bedroom Very Low $740 One Bedroom Moderate $695 Two Bedroom Moderate $825 With the income restrictions proposed by the Agency ranging from very low income (50% of median income) to moderate income (110% of median income), the project will be mixed income. Because the properties are located outside the redevelopment area, the Agency will be able to count thirty-three of the very low income units toward its production RAASHER1 -3- 08128198 3:52 PM REQUEST FOR CITY COUNCIUREDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 housing requirements. The balance of the units can be counted toward any replacement housing obligations the Agency will incur through the Waterfront development. Redevelopment Agencies are permitted to assist affordable housing projects outside of project areas if proper legislative findings are made. City Council Resolution No. 6026 and Agency Resolution 174, adopted on June 26, 1989, give the required authorization_ A minimum of $350,000 in rehabilitation is needed, as there has been deferred maintenance on both properties. Agency staff is working with Bridges to refine the cost estimates and will continue to work closely throughout the rehab process. Bridges America Bridges America is a Houston -based nonprofit that was formed to improve the distribution of food stuffs to Third World countries, primarily Haiti. Bridges also distributes food in the Houston area on a weekly basis to needy families. Bridges has a local affiliate in Fountain Valley. In the last few years, Bridges has expanded its mission to include the development of affordable housing. More information is included as Attachment No. 3. In 1996, Bridges acquired a troubled eighty unit apartment project in Huntington Beach. Since that time, the property has vastly improved under the ownership and management of Bridges. Forty-two of the units are restricted for affordable rents by covenant by Holly- Seacliff developers who needed to fulfill affordable housing conditions placed on single family projects approved by the Planning Commission and City Council_ Bridges also has an acquisition and rehab project underway in the City of Corona. Further, Bridges has entered discussions with the City of Santa Ana over possible affordable housing projects. While the Agency has focused on assisting nonprofit developers acquire and rehab small properties in the Oakview redevelopment project subarea, this project offers an opportunity to meet Agency housing requirements on a larger scale and in more diverse areas of the city. On July 15, 1998, the Council's Economic Development Committee (EDC) heard a presentation on the project by Agency staff and Bridges America. The EDC directed staff to move forward with the project to the full Council (Agency). On August 3, 1998, the Agency directed staff to move forward with the project based on the conceptual dealpoints and to return to the next available meeting with a loan agreement. The Agency's involvement with this project is consistent with the City Council's established goal of providing for a diverse housing stock throughout the community (City Goal #7). RAASHERI -4- 08/28/98 3:52 PM REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 Environmental Status: Exempt under the California Environmental Quality Act (CEQA) Attachment(: 1 Agency Resolut!?� & Loan Agreement Nc, O 2. Keyser Marston Associates Report 3. August 3, 1998 Approval Action 4. Location Map 5_ Bridges America Backqround Information RCA Author- G. Brown, ext. 8831 RAASHERi -5- 08/28/98 3:52 PM 1A #& City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF ECONOMIC DEVELOPMENT Director 714/536-5582 Redevelopment 7141536-5582 FAX 7141375-5N7 Housing 714/536-5542 September 18. 1998 Marie Love, Escrow Officer Orange Coast Title Company 640 N. Tustin Ave_ Santa Ana, CA 92701 Dear Marie. SUBJECT: Escrow No. 102518-ML (16112 Sher Lane & 16121Parkside Lane) Please take the following actions on behalf of the City of Huntington Beach and the Huntington Beach Redevelopment Agency - Confirm that casualty insurance in the an aggregate amount necessary to cover all encumbrances is in force; • Secure an ALTA Lenders Title Insurance Policy in the amount of $1,200,734 showing the City of Huntington Beach as a subordinate lien holder; • Execute the promissory note, deed of trust; and regulatory covenant that were delivered to you with this letter. Denote Orange Coast Title Company as "Trustee" on the deed of trust; record the deeds of trust and covenants (deed certifications are included). • Return the Promissory note to our City Clerk_ After the deed and covenant have recorded, please send the originals to the City Clerk and one set of conformed copies to me. You should refer to Section 3.4 (c) and (d) (page 8) of the agreement as it gives you specific instructions. A copy of the agreement is enclosed for your review Thank you for your assistance with this project. Should you need further help with this transaction, please call me at (714) 960-8831. Sincerely, Vrown Specialist GB:gb Enclosures 1 Copies: JoAnn Ulvan, Bridges America Connie Brockway City Clerk OCTITLE RESOLUTION NO. 290 A RESOLUTION Of THE REDEVELOPMENT AGENCY OF THE CITY OF HUN"CINGTON BEACH APPROVING AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND BRIDGES AMERICA SHER LANE, L.P. WHEREAS, California Health and Safety Code Section 33334.2 and the Redevelopment Plan for the Huntington Beach Redevelopment Project ('-Project Area") authorize and direct the Redevelopment Agency of the City of Huntington Beach ("Agency") to expend not less than twenty percent (20%) of all taxes which are allocated to the Agency pursuant to California Health and Safety Code Section 33670 (all section references herein are to the Health and Safety Code unless otherwise specified) for the purpose of increasing, improving and preserving the community's supply of low and moderate income housing available at affordable housing cost to persons and families of lo..- and moderate income, lower income, and very low income; and Pursuant to applicable law, the Agency has established a Low and Moderate Income Housing Fund ("Housing Fund"); and Pursuant to Section 33334.2(e), in carrying out its affordable housing activities, the Agency is authorized to provide subsidies to or for the benefit of very low income and lower income households, or persons and families of low and moderate income to the extent those households cannot obtain housing at affordable costs on the open market; and Pursuant to Section 33334.2(g), City Council Resolution No. 6026 dated June 26, 1989, and Agency Resolution No. 174 dated June 26, 1989, the Agency is authorized to make expenditures from the Housing Fund outside redevelopment project areas if such use .will be of benefit to one or more of the project areas. and SF-98Resol Bridges RLS 98.519 0912819$ - 03 Resolution 290 The Agency is required pursuant to Section 33413 to rehabilitate, develop or construct replacement dwelling units for those units housing persons and families of lower income which have been destroyed or removed from the lower income housing market as part of a redevelopment project; and The Agency has destroyed and removed certain units which housed persons of lover income within the Project Area; and In order to carry out and implement the redevelopment plan for the Project and the affordable housing requirements thereof, the Agency proposes to enter into an Owner Participation .agreement ("OPA") with Bridges America Sher Lane, L.P., a California limited partnership (-'Developer"), for the rehabilitation of affordable housing on a site located outside the Project Area (`Site"), as described in the OPA; and The Agency has duly considered all terms and conditions of the proposed OPA and believes that the rehabilitation of the Site pursuant to the OPA is in the best interests of the City and the health. safety and welfare of its residents, and in accord with the public purposes and provisions of applicable State and local law requirements; and Pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act, the rehabilitation project is categorically exempt under CEQA; and The Agency has considered the report of Agency staff on the proposed rehabilitation project to be carried out pursuant to the OPA; NOW, THEREFORE, the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: The Agency finds that the Agreement is categorically exempt under CEQA, pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act. 2 SF-98Resol:13ridges RIS 98-519 OR2&-98 - 03 Resolution 290 2. The Agency finds and determines that expenditures from the }-lousing Fund as contemplated by the Agreement will directly and specifically benefit, improve, and presen-c the community's supply of lower income housing within the meaning of Section 33334.2. 3. The Agency finds and determines that expenditures from the }dousing Fund as contemplated by the Agreement are of benefit to the Project Area. 4. The Agency finds and determines that the housing units to be rehabilitated by the Agreement which are restricted to persons and families of lower income qualify as replacement dwelling units for those dwelling units in the Project Area which were destroyed and removed pursuant to the Redevelopment Project. 5. The Chairman of the Agency is hereby authorized to execute the Ol'A on behalf of the Agency. A copy of the OPA when executed by the Agency shall be placed on file in the office of the Secretary of the Agency. 6. The Executive Director of the Agency (or his or her designee) is hereby authorized, on behalf of the Agency, to sign all documents necessary and appropriate to came out and implement the OPA and to administer the Agency's obligations, responsibilities and duties to be performed under the OPA and related documents. SF-98Resol-Bridges RLS 98-519 08/29/98 - 43 Resolution 290 PASSED AND ADOPTED by the Redevelopment Agency of the City of I iuntington Beach at an adjourned regular meeting thereof held on this 31stday of August , 1998. ATTEST: Agency Clerk q//� Y 9 REVIEWED AND APPROVED: City Ad inistrator 4 SF-98Resol Bridges RLS 98-519 08118/98 - 43 �4,� QL--� Chairman APPROVED AS TO FORM: Agency Attorney . INITIATED AND APPROVED: Director of Economic Development Res. No. 290 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH ) 1, CONTNIE BROCKWAY. Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at an adjourned regular meeting of said Redevelopment Agency held on the 31st day of August, 1998 and that it was so adopted by the following vote: AYES: Julien, Harman, Green, Dettloff, Bauer, Garofalo NOES: None ABSENT: Sullivan ABSTAIN: None Clerk of the Redevelopment Agency of the City of Huntington Beach, Ca. G/resoluti/resbkpg2lRes 281 J J FAX FROM: CONNIE BROCKWAY, CITY CLERK CITY CLERK'S OFFICE CITY OF HUNTINGTON BEACH • P O Box 19012000 Main Street * Huntington Beach, CA 92648 HUNTINGTON BEACH (714) 536-5227 (714) 374-1557 FAX Fax #: �j $_ Date Gj Number of Pages (inqIudin cover page}: eputy City Clerk To: INTERNET ADDRESS: ttp:llwww.ci huntington-beach.ca.us OR httpJlwww_ hbsurfcity_ com/clerk Phone: Date: Remarks: Ur ent For your review Rep! ASAP Please comment Per your request © i TRANSMISSION VERIFICATION REPORT TIME : 10/01/1998 13:19 DATE,TIME 10/01 13:18 FAX NO./NAME 95580278 DURATION 00:00:44 PAGE(S) 02 RESULT OK MODE STANDARD ECM RESOLUTION & LOAN AGREEMENT ATTACHMENT #1 OWNER PARTICIPATION AGREEMENT By and Between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic and THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership VkA,\ NckA 0 OWNER PARTICIPATIOt;ce'nYRE,-,'.I , `1_ By and Be, -Ti4 lm 7 ,E5CxUr1 REDEVELOPMENT AGENCY OF THE 4P4 a public body, corpr r co anue zl noW a 9I') THE BRIDGES AMERI • OQ,G,y� a California limit. U ��-7,e�/e[0/�j'»�/] r �Sr1.BoRa��v�� .Dr.5o dF 7�21S7- �}SS/GiannenT aF IPE�S cJlt)Xr� �/9 �� 3 A&J rD L9 ILE �fyQ16.r1 frc ��om �ss�►�-y �o OWNER PARTICIPATION AGREEMENT By and Between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic and THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership TABLE OF CONTENTS Page SECTION 1. DEFINITIONS ...................... ........... ................................... ........ .. 1 SECTION 2. SUBJECT OF THIS AGREEMENT .................................................. 4 2.1 Purpose of the Agreement.........................................................4 2.2 The Redevelopment Plan ..................................................... 5 2.3 Participant .................................. •... . • • .................................. 5 2-4 Prohibition Against Transfers .................................................. 5 SECTION 3. FINANCING AND ACQUISITION OF THE SITE .......................... 6 3.1 Ownership of the Site .............................................. _................ 6 3.2 Agency Financial Assistance..................................................... 7 3.3 Form of Agency Financial Assistance; Purpose of Note and Security............................................. ................ 7 34 Escrow........................................................ ..... .. ........... ..... 7 3.5 Agency's Conditions to Closing ................................................ 8 3.6 Participant's Conditions to Closing .......................................... 9 3.7 Broker's Fees ...... ... ......... ............................................ ._... . 10 3.8 Subordination Agreements ............................................ . . 10 3.9 Agency Rehabilitation Assistance .......................... .... ...._...... 11 SECTION 4. DEVELOPMENT OF THE SITE .... ...................................... _..... 12 4-1 General ................................................ • ............................... 12 4-2 Construction of the Project .................... ..... ._......................... I2 4-3 Insurance ..................................... • .. • ..... ............................. 14 4.4 Indemnification .......................................................... .. ..... 14 4.5 Hazardous Substances ........................................... .... ............. 15 4.6 Security Financing; Right of Holders ........................................ 15 4.7 Release of Construction Covenants ............................................ 16 4.8 Mechanics Liens, Stop Notices, and Notices of Completion........ 16 SECTION 5. USE OF THE SITE ..........................................................................17 5.1 No Inconsistent Uses............................................................... 17 5.2 Regulatory Agreement.............................................................. 17 5-3 Relocation.......................................................... . 17 5.4 Maintenance of the Site ........................... 5.5 Nondiscrimination ................................... ............................... 18 5.6 Form of Nondiscrimination and Nonsegregation Clauses ............ 18 57 Effect and Duration of Covenants ....................... _ .. _ .. .. .......... . 19 5.8 Capital Reserves ......................................... • . • ...................... 19 5.9 Payment of Portion of Residual Receipts ........................... _..... 19 5.10 Financial Statements....................................................... . . 20 SF-98Aggrree Sher-3 8/ "S - #2 SECTION 6. DEFAULTS AND REMEDIES .. .. .. ................................. .. ........... 20 6 1 Participant Defaults. ...... .. .. .. ............. ...................... .. ........... 20 6.2 Agency Defaults....................................................... .. ....... ... 20 63 Notice of Default .............................. ........................................ 21 6.4 Agency's Remedies ............... .. ................. .......... ..................... 21 6.5 Participant's Remedies..... .. - - - - ................... -- .................. 21 66 Rights and Remedies are Cumulative .......... .. ........................... 21 SECTION 7. GENERAL PROVISIONS ......................... ....................................... 21 7.1 Governing Law ...................................................................... ... 21 7-2 Attorneys' Fees................................................................... .. ... 21 7.3 Notices, Demands, and Communications Between the Parties.............. . .................. ..... .............................................. 21 74 Acceptance of Service of Process ............................................. 22 7.5 Conflicts of Interest ....... .. .. .. ............................. .. ................. 22 7.6 Titles and Captions .................... ....................... ........................ 22 77 Gender .. .................... .......................... .. ... ................... ....... . 22 7-8 Modifications. .. ......... .. .. .................................................... 22 7.9 Merger of Prior Agreements and Understandings ........................ 23 7.10 No Third Parties Benefited ... ..... ..... ................. .. .... .. ..... .. -- 23 7.11 Assurances to Act in Good Faith ................................... ............ 23 7.12 Warranty Against Payment of Consideration for Agreement....... 23 7-13 Nonliability of Agency Officials and Employees ......................... 23 7.14 Interpretation ......... ... I . .......................... ................. ..... .. ..... 23 7.15 Counterparts ...... ................ .. ........................... .... .................. 23 7.16 Severability ... .............. .............................................................. 23 7.17 Extension of Times of Performance ........................................... 23 7 18 Inspection of Books and Records ................................................ 24 7.19 Waivers ......... ...... .............. ........................... .......................... 24 SECTION 8. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE.................................................................. ................. 24 ATTACHNfENTS EXHIBIT "A" LEGAL DESCRIPTION OF SITE EXHIBIT "B" SITE MAP EXHIBIT "C" SCOPE OF DEVELOPMENT )I EXHIBIT "D" SCHIEDULE OF PERFORMANCE EXHIBIT "E" RELEASE OF CONSTRUCTION COVENANTS sr-9stAvcc:Shcr-3 9125/98 - #2 EXHIBIT "F" PROMISSORY NOTE EXHIBIT "G" SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED EXHIBIT "H" FORM OF SUBORDINATION AGREEMENT EXHIBIT "I" REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS EXHIBIT " ]" PROJECT BUDGET/PRO FORMA V250a - 42 OWNER PARTICIPATION AGREEMENT THIS OWNER PARTICIPATION AGREEMENT ("Agreement") is entered into as of the 3 1 " day of August, 1998 ("Effective Date"), by and between REDEVELOPMENT AGENCY OF THE CITY OF HUN INGTON BEACH, a public body, corporate and politic ("Agency"), and THE BRIDGES AMERICA SHER LANE, L.P_, a California limited partnership ("Participant") RECITALS A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (California Health and Safety Code Section 33000 et sec . 13. Participant has opened an escrow to acquire the "Site" (as such term is defined herein) from the Pham Trust ("Pham Trust") and intends to develop the "Project" (as such term is defined herein) on the Site in accordance with the terms of this Agreement. C. Agency desires to meet its affordable housing goals pursuant to the California Community Redevelopment Law by assisting Participant in the acquisition of the Site to facilitate Participant's rehabilitation -in -place of an existing apartment complex on the Site with the units, after rehabilitation, subject to the terms of this Agreement, rented to tenants whose household incomes do not exceed very low income, low income, and median income as defined by California law_ Agency's assistance shall be in the form of a self-liquidating loan in the amount of ONE MILLION SIX HUNDRED TWELVE DOLLARS ($1,000,612) to assist Participant in meeting the cost of acquisition of the Site and rehabilitation of the apartment complex, and additional assistance in the form of a self-liquidating loan of Two Hundred Thousand One Hundred Twenty-two Dollars ($200,122.00) through the HOME Investment Partnership Program, or if such HOME Funds are not timely provided as set forth herein, with additional Agency assistance in that same amount as provided herein_ The total assistance shall be One Million Two Hundred Thousand Seven Hundred Thirty-four Dollars ($1,200,734 00). 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 SECTION 1. DEFINMONS The following terms, as used in this Agreement, shall have the meanings given unless expressly provided to the contrary: SF-98 \brec-Sher-1 0&31/98 • N3 The term "Agency" shall mean the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to, the rights, powers, and responsibilities of Agency The term "Agency Deed of Trust" shall mean the Subordinated Deed of Trust with attached hereto as Exhibit "G". The term "Agency Loan" shall mean collectively, (i) the Agency's self-liquidating loan to Participant in the amount of One Million Six Hundred Twelve Dollars ($1,000,612.00), and (ii) the additional assistance from either HOME Funds or additional Agency Low and Moderate Income Housing Funds in the amount of Two Hundred Thousand One Hundred Twenty -Two Dollars ($200,122.00), as evidenced by the Note in the total amount of One Million Two Hundred Thousand Seven Hundred Thirty -Four Dollars ($1,200,734.00), and secured by the Agency Deed of Trust The term "Agreement" or any reference to this "Agreement" shall mean this Owner Participation Agreement executed by and between Agency and Participant, including all exhibits attached hereto, which exhibits are incorporated herein by this reference and all other documents incorporated herein by reference The term "Approved Project Plans and Permits" shall mean all of the plans, permits, and approvals required for the Project, as approved by the Agency and/or the City including, but not limited to, preliminary and final drawings (final drawings shall be in sufficient detail to obtain a building permit), site plans, building plans and elevations, grading plans, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications that City and Agency customarily require for such a Project, and including all required approvals and findings pursuant the California Environmental Quality Act of 1970, as amended, and regulations promulgated thereunder ("CEQA"), and, if applicable, the National Environmental Policy Act of 1969, as amended, and regulations promulgated thereunder. The term "City" shall mean the City of Huntington Beach, a municipal corporation, having its offices at 2000 Main Street, Huntington Beach, CA 92648. The term "Construction/Permanent Lender" shall mean one or more lenders of Participant's choice providing funds for the Participant's rehabilitation of the Units, including any replacement or permanent lender that replaces the construction lender in an amount not to exceed Thirty-five Thousand Dollars ($35,000.00)_ The term "Days" shall mean calendar days and the statement of any time period herein shall be calendar days and not working days, unless otherwise specified. The term "Effective Date" shall mean the date the Agency approves this Agreement, which date shall be inserted into the preamble of this Agreement. SE:-98AQcc Shcr-34 2 09.1 i %98 -3 The term "Eligible Tenant" shall mean any person entitled to rent a Unit as set forth in the Regulatory Agreement The term "Escrow" shall mean that certain escrow with Orange Coast Title Company, Escrow Division, which has been established to convey the Site from the Pham Trust to Participant, and into which Agency shall deposit the portion of the Agency Loan funds described in Section 3.2 in accordance with the terms of this Agreement The term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of the Agency, or authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or an authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved under California law wholly for Agency Board determination. The term "First Deed of Trust" shall mean the deed of trust recorded in first position at close of escrow as security for the loan obtained by Participant from a lender of Participant's choice in an amount not to exceed Three Million Four Hundred Thousand Dollars ($3,400,000) The term "Force Majeure" shall mean any war; insurrection; strike; lock -out; labor dispute, riot-, flood, earthquake-, fire; casualty; Act of God; act of the public enemy; epidemic; quarantine; restriction; freight embargo; unavoidable lack of transportation; governmental restriction, unusually severe weather; inability to secure necessary labor, materials or tools; delay of any contractor, subcontractor or supplier, economic or market conditions; lack of tenant commitments or tenant changes; inability to secure satisfactory financing; act of the other party including act or failure to act of City or any other public or governmental agency or entity (except that any act or failure to act of City or Agency shall not excuse performance by Agency); or any other cause beyond the control or without the fault of the party claiming an extension of time to perform. The term "Grant Deed" shall mean that certain Grant Deed that conveys the Site from the current owner, the Pham Trust, to Participant The term "Note" shall mean that certain Promissory Note Secured by Subordinated Deed of Trust attached hereto as Exhibit 7". The term "Participant" shall mean THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership, whose address is 18837 Brookhurst Street, Suite 303, Fountain Valley, CA 92708. The Term "Project" shall mean generally the rehabilitation of the existing apartment complex on the Site and the subsequent rental of the Units therein to Eligible Tenants, pursuant to the procedures set forth herein and more particularly described in the Scope of Development. The term "Project Budget/Pro Forma" shall mean the sources and uses of funds for acquisition of the Site and the development of the Project as set forth in Exhibit "J". SF-98 UCC S6:r-3.1 3 WSi3 U98 -3 The term "Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions attached hereto as Exhibit "I". The term "Rehabilitation Account" shall have the meaning ascribed in Section 3.9. The term "Release of Construction Covenants" shall mean that release attached hereto as Exhibit "E" issued by Agency to Participant pursuant to the provisions of Section 4.7 below. The term "Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit "D" setting forth the times upon which performance by the parties under this Agreement is due. The term "Scope of Development" shall mean that certain exhibit attached hereto as Exhibit "C". The term "Second Deed of Trust" shall mean the deed of trust recorded in second position at close of escrow as security for the loan obtained by Participant from the Pham Trust as seller financing in an amount not to exceed Eight Hundred Thousand Dollars ($800,000)_ The term "Site" shall mean that certain real property located in the City of Huntington Beach, County of Orange, State of California commonly known as 16112 Sher Lane, Huntington Beach, California, and legally described in Exhibit "A" and depicted on the Site Map The term "Site Map" shall mean the map attached hereto as Exhibit "B" depicting the location of the Site_ The term "Subordination Agreement" shall mean the form of Subordination Agreement attached hereto as Exhibit "H". The term "Units" shall mean the sixty-six (66) dwelling units comprising the Project and subject to rent restrictions as set forth in the Regulatory Agreement. SECTION 2. SUBJECT OF THIS AGREEMENT. 2.1 Purpose of the Agreement (a) The purpose of this Agreement is to implement the Community Redevelopment Law by providing a loan (the "Agency Loan") to assist Participant to pay a portion of the Project costs, in an amount not to exceed One Million Two Hundred Thousand Seven Hundred Thirty -Four Dollars ($1,200,734.00), as evidenced by the Note secured by the Agency Dedd of Trust, which Agency Loan is composed of (i) One Million Six Hundred Twelve Dollars ($1,000,612) in funds from the Agency's Low and Moderate Income Housing Fund, which funds are not federal funds or the proceeds of a tax-exempt bond issue, and Two Hundred Thousand One Hundred Twenty-two Dollars ($200,122.00) [pursuant to a separate contract with City] in HOME SF-98A ree Sher-3.1 Program rehabilitation funds or that same amount in additional Agency Low and Moderate Income Housing Funds as provided in Section 3.9. (b) This Agreement is intended to facilitate Participant's acquisition of the Site and rehabilitation of the existing apartment complex located thereon for rental to very low and low income tenants_ 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 has been undertaken and is being assisted. (c) The Project will be used and operated for not less than thirty (30) years as mixed income rental housing, with not less than fifty percent (501/6) of the apartments restricted to occupancy to Eligible Very Low Income Tenants at an Affordable Rent, and the remainder restricted to occupancy to Eligible Special Median Income Tenants (as those terms are defined in the Regulatory Agreement)- 2-2 The Redevelopment Plan This Agreement is made in accordance with the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project") which was approved by adoption of Ordinance No 3343 on December 16, 1996, and which merged together four different, previously approved project areas. The Site is located outside of the Merged Redevelopment Project Agency intends this Agreement to meet its obligations pursuant to Health and Safety Code Sections 33413, 33334 2 and 33413(b)(2)(A)(ii). 23 Participant The Participant is The Bridges America Sher Lane, L.P_, a California limited partnership, whose address is 19837 Brookhurst Street, Suite 303, Fountain Valley, CA 92708 2.4 Prohibition Against Transfers_ (a) The qualifications and identity of the Participant are of particular concern to the Agency_ It is because of those qualifications and identity that the Agency has entered into this Agreement with the Participant. No voluntary or involuntary successor in interest of the Participant shall acquire any rights or powers under this Agreement except as expressly set forth herein (b) The Participant shall not assign all or any part of this Agreement without the prior written approval of the Agency. The Agency agrees to reasonably give such approval if- (1) the change is to a limited partnership formed for financing the Project, in which the original Participant or its general partner is the managing general partner, or possesses not less than a 50% interest in the managing general partner, and has control over the management of the partnership; and (2) if in the reasonable determination of the Agency, the proposed reconstituted Participant is comparable in all material respects (including experience, character and financial capability) to the Participant_ Any such change (or assignment of this Agreement in connection therewith) shall be by instruments satisfactory to the Executive Director (or his designee), and be subject to the approval by the Executive Director (or his designee) of evidence of the proposed assignee's qualifications to meet the obligations of the Participant under this Agreement. s1:-9XAvCC snn.3.1 5 ORr3I198 -3 (c) For the reasons cited above, the Participant represents and agrees for itself and any successor in interest that without the prior written approval of the Agency, there shall be no significant change in the ownership of the Participant or in the relative proportions thereof, or with respect to the identity of the parties in control of the Participant or the degree thereof, by any method or means. (d) The Participant shall promptly notify the Agency of any and all changes whatsoever in the identity of the parties in control of the Participant or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by the Agency and the Agency may exercise its remedies pursuant to the Agency Note and Agency Deed of Trust, if there is any significant change (voluntary or involuntary) in membership, management or control, of the Participant (other than such changes occasioned by the death or incapacity of any individual)_ (e) Participant shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Site (referred to hereinafter as a "Transfer"), without prior written approval of the Agency, except as expressly permitted by this Agreement. Consent to a Transfer shall not result in acceleration of the Agency Note. Consent to one such Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Agency, to fulfill the obligations undertaken in this Agreement by the Participant. Any such proposed transferee, by instrument in writing satisfactory to the Agency and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Participant under this Agreement and agree to be subject to all conditions and restrictions applicable to the Participant in this Agreement There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such Transfer, and if approved by the Agency its approval shall be indicated to the Participant in writing. (f) In the absence of specific written agreement by the Agency, no unauthorized Transfer, or approval thereof by the Agency, shall be deemed to relieve the Participant or any other party from any obligations under this Agreement- (g) The provisions of this Section 2 4 shall be of no force or effect as of the expiration of the Regulatory Agreement_ SECTION 3. FINANCING AND ACQUISITION OF TIE SITE. 3.1 Ownership of the Site. As of the Effective Date of this Agreement, Participant is in escrow to acquire the Site from the Pham Trust and as such Participant qualifies as an "owner - participant" within the meaning of the Community Redevelopment Law (Health & Safety Cate §33000_ et seq.) Participant's financing of the acquisition of the Site includes Participant's equity, financing secured by the First Deed of Trust, seller financing secured by the Second Deed of Trust, and use of a portion of the Agency Loan_ SF-98A&r" Sher-3-1 OFAII98 -3 3.2 Agency Financial Assistance. The Agency, in accordance with the terms of this Agreement, shall provide to Participant the Agency Loan_ Upon satisfaction of all conditions precedent (or waiver by Agency) to Agency's obligation to disburse the Agency Loan under this Agreement, Agency shall deposit approximately Seven Hundred Thirty-five Thousand Dollars ($735,000.00) of the Agency Loan funds into Escrow for disbursement to Participant at Close of Escrow (Participant shall provide Agency's Executive Director with notice of the exact amount Agency is to deposit), with the remainder to be disbursed to pay for the costs of rehabilitation of the Site. 3.3 Form of Agency Financial Assistance, Purpose of Note and Security. The parties hereto expressly acknowledge that the Agency Loan funds to be provided to Participant under this Agreement is intended to be a self-liquidating loan, assuming Participant's performance of its obligations hereunder. In the event Participant is in material default of any of its obligations hereunder, including its obligations under the Regulatory Agreement, Agency's sole and exclusive remedy shall be to foreclose under the Agency Deed of Trust 3.4 Escrow. This Agreement, once deposited in Escrow, shall constitute joint escrow instructions of Agency and Participant_ The Escrow agent is hereby empowered to act under the Agreement and upon indicating its acceptance in writing to Agency and Participant within five (5) days after receipt of this Agreement, provided, however, that any undertaking by the Escrow agent of any of the acts or services set forth in this Agreement shall constitute acceptance of the obligation to perform as Escrow agent under this Agreement Any amendment to the Escrow instructions contained herein shall be in writing and signed by both Agency and Participant (a)Closing Date. On or before the date established in the Schedule of Performance, the parties shall satisfy the conditions described in Sections 3.5 and 3.6 and complete the Close of Escrow. If, for any reason, the Close of Escrow has not occurred by the date provided therefor in the Schedule of Performance, either party may terminate this Agreement, by providing notice of termination to the other party. (b) Delivery of Documents and Funds by Participant. On or before twelve noon on the last business day prior to the scheduled Closing Date, Participant shall deposit or cause to be deposited with the Escrow agent the following: (i) the Grant Deed executed and acknowledged by the Pham Trust, the Note, executed by Participant, (iii) the Agency Deed of Trust, including the Rider thereto, executed and acknowledged by Participant; (iv) the Regulatory Agreement, executed and acknowledged by Participant-, and U-78Agree Sher-3.1 7 09131,98 -3 (v) All funds, documents, and deposits Participant is required to deposit with Escrow agent in order to close the Escrow conveying the Site to Participant. (c) Delivery of Documents and Funds by Agency. On or before twelve noon on the last business day prior to the scheduled Closing Date, Agency shall deposit or cause to be deposited with the Escrow agent the following- (i} the Agency Deed of Trust including the Rider thereto, executed and acknowledged by Agency-, the Regulatory Agreement, executed and acknowledged by Participant; and (iii) the portion of the Agency Loan funds described in Section 3.2. (d) Recordation Escrow agent is directed, on the Closing Date, to record against the Site the following documents in the following order of priority- (i) the Grant Deed; (ii) the First Deed of Trust; (iii) the Second Deed of Trust; (iii) any deed of trust from the Construction/Permanent Lender; and (iv) the Agency Deed of Trust; (v) the Regulatory Agreement. One or more Subordination Agreements, if required to effect the proper priority of the Agency Deed of Trust and Regulatory Agreement, shall be recorded at the direction of Participant in accordance with the terms of this Agreement (e) Escrow Agent Duties. The Escrow agent shall (i) record the documents as provided in subparagraph (d); and (ii) at Closing, deliver the original promissory note to Agency and a conformed copy of same to Participant, and upon recordation deliver to Agency the original of the Agency Deed of Trust and the Regulatory Agreement and a conformed copy of same to Participant. (0 Interest Bearing Accounts Escrow agent shall hold all funds received in an interest bearing account with the interest accrued paid at Closing to the party depositing such funds- (g) Title Insurance. Escrow agent shall deliver to Agency at Closing a CLTA standard form owner's policy of title insurance in an amount not to exceed $1,200,734 00, issued by a title insurer acceptable to Agency, insuring in favor of Agency the priority of the Agency Deed of Trust and Regulatory Agreement in accordance with the priority established by this Agreement. The cost of said policy shall be shared equally between the parties_ 3.5 " Agency's Conditions to Closing. Agency's obligations to deposit the portion of Agency Loan funds described in Section 3.2 in Escrow for disbursement to Participant at Closing shall be conditioned and contingent upon satisfaction, or Agency's waiver of each of the following conditions precedent (collectively, the "Agency's Conditions to Closing")- Sr-98Agrcc Sher-3.1 $ 08/31P98 -3 (a) Participant has deposited in escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow, (b) Escrow agent, at Closing, holds and will deliver to Agency the Note, Deed of Trust, Regulatory Agreement, and Title Insurance Policy. (c) Participant shall deliver evidence acceptable to the Agency Executive Director that Participant has obtained the insurance policies as required by Section 4.3 of this Agreement. (d) Participant shall deliver to the Agency a good standing certificate issued by the California Secretary of State's office indicating that Participant exists in good standing at the time of the proposed Close of Escrow. (e) The Agency shall determine that Participant is in full compliance with the terms and conditions of this Agreement and all documents and instruments referred to herein or executed by Participant in furtherance of this Agreement. In the event any of the Agency's Conditions to Closing are not satisfied (or waived by Agency), Agency may cancel the Escrow and terminate this Agreement by delivering thirty (30) days prior written notice to Participant and the Escrow agent. Participant may nullify Agency's notice to terminate if, within such thirty (30)-.day period Participant (at no cost to Agency) cures any unsatisfied Agency's Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds deposited by Agency shall be returned to it with any accrued interest earned on such funds; (ii) Participant shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. 3.6 Participant's Conditions to Closing. Participant's obligations to close Escrow shall be conditioned and contingent upon satisfaction, or Participant's waiver of each of the following conditions precedent (collectively, the "Participant's Conditions to Closing"). (a) The Pham Trust have signed and acknowledged the Grant Deed and have deposited same in Escrow; (b) Participant has obtained the financing secured by the First Deed of Trust, the Second Deed of Trust, any such deed(s) of trust securing any financing from the Construct ionlPermanent Lender, and all documents and instruments related to same have been deposited in Escrow as required by the agreements and documents pertaining thereto, (c) Agency has deposited in escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow, including but not limited to the portion of the Agency Loan funds described in Section 3.2, the Agency Deed of Trust, Regulatory Agreement, and such Subordination Agreements as may be required to effect the priority required by this Agreement, S1 -9;ALVec Sne..3-1 9 (d) All conditions to Closing set forth in (i) the agreements and any amendments thereto between Participant and the Pham Trust for conveyance of the Site, including as pertaining to the Second Deed of Trust; and (ii) agreements and financing documents pertaining to Participant's financing of the acquisition of the Site, including as pertaining to the First Deed of Trust, financing by the Construction/Permanent Lender, have been satisfied (or waived by the appropriate party)_ In the event any of the Participant's Conditions to Closing are not satisfied (or waived by Participant), and provided Participant has fully performed its obligations hereunder, Participant may cancel the Escrow and terminate this Agreement by delivering thirty (30) days prior written notice to Agency and the Escrow agent Agency may nullify Participant's notice to terminate if, within such thirty (30) day period Agency (at no cost to Participant) cures any unsatisfied Participant's Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds deposited by Participant shall be returned to it with any accrued interest earned on such funds; (11) Participant shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. 3 7 Brokers Fees Participant and Agency shall 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 3.8 Subordination Agreements Pursuant to Section 33334.14 of the Health and Safety Code, Agency is permitted to subordinate the Agency Deed of Trust and the Regulatory Agreement to superior deed of trust and regulatory agreements, including but not limited to the First Deed of Trust, the Second Deed of Trust, and Construction/Permanent Lender's deed of trust, and such other and related documents as such lender(s) may require, if certain findings are made and certain written commitments are obtained. In accordance with said Section, the Agency hereby finds that no economically feasible alternative method of financing the Project on substantially comparable terms and conditions without subordination is reasonably available and the Agency has obtained written commitments to protect the Agency's investment in the event of a default. Therefore, the Agency hereby agrees to subordinate the Agency Deed of Trust and the Regulatory Agreement to the First Deed of Trust, Second Deed of Trust, the Deed(s) of Trust of the Construction/Permanent Lender, and such other and related documents as such lender(s) may require, not to exceed a total indebtedness of Four Million Two Hundred Thirty -Five Thousand Dollars ($4,235,000.00). Participant may apply to Agency to increase said indebtedness, which approval the Agency shall not unreasonably withhold. The pri6rity of such deeds of trust shall be effected through the order of recordation of documents as set forth in Section 3.4(d). Such subordination agreement shall provide for: (i) A right of the Agency to cure a default on the First Deed of Trust, Second Deed of Trust,. and Deed(s) of Trust of the Construction/Permanent Lender; (ii) A right of the Agency to negotiate with any lenders after notice of default from the lender; (iii) An agreement that if prior to foreclosure of any SF-9KAgrcc:Sher-3-1 10 0813 JNX •3 of said loans, the Agency takes title to the Site and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan by reason of the transfer of title to the Agency, and (iv) A right of the Agency to purchase the Site from the Participant at any time after a default on the loan If a Subordination Agreement is required to effect the foregoing order of priority, such subordination agreement shall be generally in the form set forth as Exhibit "H". If, from time to time and at one or more times, Participant chooses to refinance any loan secured by a deed of trust which is superior to the Agency Deed of Trust and Regulatory Agreement, Agency agrees to subordinate the lien of the Agency Deed of Trust to the refinancing lender's deed of trust under the same terms and conditions as set forth in the Subordination Agreement, on the condition that Participant's total indebtedness pursuant to the liens of the First Deed of Trust, Second Deed of Trust, and Construction/Permanent Deed of Trust shall not exceed, in the aggregate, the sum of Four Million Two Hundred Thirty -Five Thousand Dollars ($4,235,000 00). 3.9 Agency Rehabilitation Assistance_ (a) Immediately upon the Close of Escrow, Agency shall set aside into a separately identifiable Agency account to be used exclusively for the rehabilitation of the Site pursuant to this Agreement (the "Rehabilitation Account") a portion of the Agency Loan equal to (1) One Million Six Hundred Twelve Dollars ($1,000,612.00), less (ii) the portion of such One Million Six Hundred Twelve Dollars ($1,000612.00) that Agency deposited into Escrow pursuant to Section 3 2 [Agency and Participant anticipate the foregoing deposit into the Rehabilitation Account will be Two Hundred Sixty -Five Thousand Six Hundred Twelve Dollars ($265,612 00)]. Pursuant to subparagraph (c) below, Agency later shall deposit the HOME Program funds of Two Hundred Thousand One Hundred Twenty -Two Dollars ($200,122.00) into the Rehabilitation Account when City and Participant execute a HOME Program agreement- (b) Participant shall invoice Agency Executive Director the costs of rehabilitation as they are incurred, which invoices the Executive Director shall pay within ten (10) days of receipt. In no event shall Agency pay rehabilitation costs in excess of Four Hundred Sixty- five Thousand Seven Hundred Thirty-four Dollars ($465,734.00). (c) City and Participant shall enter into an agreement for the provision of City assistance to the Project in the amount of Two Hundred Thousand One Hundred Twenty -Two Dollars ($200,122.00) from the United States Department of Housing and Urban Development ("HUD") HOME Investment Partnerships Program ("HOME Program") (42 U_S.C. §12741 et seq.) ("HOME Funds") by no later than October 31, 1998. City shall transfer such funds to Agency and Agency shall then deposit the HOME Funds into the Rehabilitation Account. Such HOME Funds shall be part of, and repaid through, the self-liquidating Agengy Loan. If such HOME Funds agreement is not timely executed, Agency shall deposit the same amount into the rehabilitation account from the Agency's Low and Moderate Income Housing Fund, and in such an instance the parties shall cause the eleven (11) HOME Units described in the Regulatory Agreement to be redesignated as Units for Eligible Very Low Income Tenants. (d) Within 90 days after the Agency issues the Release of Construction Covenants, Participant shall cause to be prepared and shall submit to the Agency for reasonable approval a cost certification (the "Cost Certification"), setting forth all Project Costs, certified by the SF-98Agee Sher•3.1 1 Z 0811.198 -1 Chief Financial Officer of Participant. In the event the actual total Project Costs, as certified by Participant and approved by Agency, are less than Five Million Three Hundred Thirty-five Thousand Seven Hundred Thirty-four Dollars ($5,335,734.00), the balance of the Agency Loan shall be reduced by the same amount, and the Agency and Participant will cause a reduced Agency Note, Deed of Trust and related instruments to be executed and recorded. SECTION 4. DEVELOPMENT OF TFIE SITE. 4.1 General The Project shall consist of rehabilitation of an existing 66-unit apartment complex on the Site and the use of the Site as an affordable rental apartment complex in accordance with this Agreement and the Regulatory Agreement 4.2 Construction of the Project_ (a) Development in Accordance with Approved Project Plans and Permits. Participant shall undertake the Project and rehabilitate the Site in accordance with this Agreement, the Scope of Development, and the Approved Project Plans and Permits and any changes thereto as may be subsequently approved in writing by both Participant and Agency and, if necessary, City_ As completed, the Project (a) shall comply with all applicable laws and ordinances of all governmental authorities, including, without limitation, all Federal Housing Quality Standards as set forth at Section 982.401 of Title 24 of the Code of Federal Regulations All Units must be rehabilitated no later than eighteen (18) months from the close of escrow. (b) Agency Approvals. Participant will furnish to the Agency a list of proposed repairs and improvements to the Site prior to submittal of plans to the City. The Agency will have the right to review and approve the list prior to the start of any rehabilitation work. Participant shall provide to Agency an executed construction contract with a contract price that is consistent with the Project Budget Upon request, the construction contract, together with all other contracts for services necessary to construct the Project shall be submitted to the Agency for approval. The Agency shall approve the contracts if they are consistent with the Project Budget. Participant will furnish copies of all building permits for all items required to be permitted under the Huntington Beach Municipal Code, with proof of inspection by the Huntington Beach Building Department, where applicable. (c) Evolution of Project Plan. On or before the date set forth in the Schedule of Performance, Participant shall submit to City, and shall use reasonable efforts to obtain approval of, the Approved Project Plans as may be required for the rehabilitation work, and Permits. including City approval of, preliminary, and thereafter final drawings and specifications for development of the Site in accordance with the Scope of Development, and all in accordance with the City's requirements. The term preliminary and final drawings shall be deemed to include site plans, building plans and elevations, grading plans, if applicable, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications as City and Agency customarily require for such a Project_ Final SF -98 Ace: Sher-3 -1 12 08 U98 -3 drawings will be in sufficient detail to obtain a building permit. Said plans, drawings and specifications shall be consistent with the Scope of Development and the various development approvals referenced hereinabove, except as such items may be amended by City (if applicable) and by mutual consent of Agency and Participant. Participant shall not be in default of this Agreement due to any delay of Agency or City processing any plans or permit applications submitted by Participant. (d) Other Governmental Permits. Participant shall, at its own expense and before commencement of construction or rehabilitation of any buildings, structures, or other work of improvement upon the Site, secure or cause to be secured any and all permits and approvals which may be required by any governmental agency affected by such construction, development, or work to be performed by Participant pursuant to the Scope of Development, including but not limited to, necessary building permits and all approvals required under the California Environmental Quality Act ("CEQA") In constructing and developing the Project, Participant shall comply with all applicable development standards in City's Municipal Code and shall comply with all building code, landscaping, signage, and parking requirements (except as may be permitted through approved variances and modifications). (e) Approval by Agency. The Agency shall approve or disapprove any submittal made by the Participant pursuant to this Agreement within ten (10) days after such submittal_ Any disapproval shall state in writing the reason for the disapproval and the changes which the Agency requests to be made. After Participant resubmits the corrected submittal, Agency shall have an additional seven (7) days for the review of the resubmittal but if the Agency disapproves the resubmittal, then the cycle shall repeat, until the Agency's approval has been obtained. (f} Agency Assistance. So long as Participant is not in material default of any term or provision of this Agreement, Agency agrees to provide reasonable assistance to Participant, at no cost to Agency, in the processing of Participant's submittals required under this Agreement in order that Participant may obtain a final City action on such matters on or before the date set forth in the Schedule of Performance, provided that Agency does not warrant or represent that such approval shall be obtained- (g) Cost of Rehabilitation. Participant (with the assistance of the Agency Loan) shall bear all costs for the Project, including, but not limited to any and all costs for preparing or obtaining the Approved Plans and Permits, environmental remediation, interim and permanent financing, broker's and leasing commissions, and fees or charges for development and building, except as specifically provided herein. (h) Pro-ject Budget_ Participant shall develop the Project in accordance with the Project Budget/Pro Forma attached hereto as Exhibit 'Tt. 0) Project Schedule. Participant shall commence and complete the construction of the Project within the times set forth in the Schedule of Performance. Sf-98AgTcc sh,T-3.1 13 08/31ON -3 4.3 Insurance. Participant shall procure and maintain, at its sole cost and expense, until the date that Agency issues or is required to issue the Release of Construction Covenants, the following policies of insurance: (a) Worker's Compensation Insurance. Pursuant to California Labor Code Section 1861, Participant acknowledges awareness of Section 3700 et seq of said code which requires every employer to be insured against liability for workers' compensation. Participant covenants that it will comply with such laws and provisions prior to commencing any work of construction or rehabilitation on the Site. Participant shall maintain such Workers' Compensation Insurance in an amount not less than One Hundred Thousand Dollars ($100,000) bodily injury, each occurrence, One Hundred Thousand Dollars ($100,000) bodily injury by disease, each employee, and Two Hundred Fifty Thousand Dollars ($250,000) bodily injury by disease, policy limit, at all times incident thereto, in forms and underwritten by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Participant shall require all subcontractors to provide such Workers' Compensation Insurance for all of the subcontractor's employees. Participant shall furnish Agency with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Participant shall similarly require all subcontractors to waive subrogation- (b) General Liability Insurance_ Participant shall 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 One Million Dollars ($1,000,000), combined single limit_ Such insurance shall also include automotive bodily injury and property damage liability insurance. All such insurance shall be provided by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Such insurance shall name the City and Agency and their officers, agents, and employees acting in their official capacity, as additional insureds pursuant to a pre-I990 CG 20 10 11 85 endorsement form In the event of aggregate coverage, -such limit shall be no less than One Million Dollars ($1,000,000.00)_ Participant shall require its insurer to waive its subrogation rights against Agency and shall provide certificates of insurance evidencing same. (c) Certificates of Insurance; Additional Insured Endorsements. Prior to performance of any work upon the Site, Participant shall furnish to Agency certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement Such certificates and endorsements shall be subject to the reasonable approval of the City Attorney and shall provide the name and policy number of each carrier and policy and shall state that the policy is currently in force and shall promise to provide that such policies will not be cancelled without thirty (30) days prior written notice to Agency. 4.4 Indemnification_ During any period of construction of any of the Project pursuant to this Agreement and until such time Agency issues or is required to issue the Release of Construction Covenants, Participant agrees to and shall protect, defend, indemnify and hold the Agency and City harmless from and against all liability, loss, damage, cost or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of (1) Participant'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 SF-98Al,,rcc Sher-3-1 14 USi3l:'98 -3 to any person or to the property of any person which shall occur on the Site and which shall be directly or indirectly caused by the acts of, or any errors or omissions of, the Participant - or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Participant shall not be responsible for, and the Agency shall protect, defend, hold harmless and indemnify Participant against any liability, loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result of the active concurrent negligence, sole negligence or sole willful misconduct of the Agency or the City or their respective members, officers, officials, employees, agents, representatives, servants, or contractors 4.5 Hazardous Substances. Participant, from and after the Close of Escrow, and until a transfer, sale, or assignment of the Site upon which the following covenant shall then be the obligation of the transferee, purchaser, or assignee, shall indemnify, defend, and hold harmless Agency 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 Site or (ii) contamination of the Site by a release of hazardous materials. Participant, prior to the Closing Date, shall provide to Agency a copy of any notices, orders, or reports concerning the presence of any hazardous materials on or affecting the Site that is in Participant's possession For the purposes of the foregoing, the term "hazardous materials" shall mean any hazardous or toxic substance, material or waste which, as of the date of Close of Escrow, is regulated by the State of California, or the United States Government, and including asbestos and any material containing asbestos 4.6 Security Financing, Right of Holders. (a) Permitted Encumbrances Participant, prior to the date Agency issues or is required to issue the Release of Construction Covenants, shall be permitted to enter into mortgages, deeds of trust, conveyances, and leases -back or any other form of conveyance in which the Site is used as security for the purpose of securing loans of funds to be used for the acquisition of the Site and construction of the Project thereon without the consent of the Agency provided such conveyance (i) is for the purposes permitted herein and (ii) is given to a financial or lending institution or other acceptable person or entity capable of performing or causing to be performed Participant's obligations under this Agreement, including without limitation a pension fund, insurance company, or real estate investment trust_ Conveyances for financing purposes not meeting the foregoing requirements shall be subject to the prior approval of the Agency's Executive Director, which approval shall not be unreasonably withheld. (b) Holder Not Obligated to Construct Improvements. The holder of any mortgage or deed of trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to constrict or complete the improvements or to guarantee such construction or completion, nor shall any covenant or any provision in the Regulatory Agreement be construed to so obligate such holder- (c) Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders-, Right to Cure. Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or default by Participant in completion of construction of the improvements, SF-98figcc-Shcr-3-1 15 08/11/98 -3 Agency shall at the same time deliver a copy of such notice or demand to each approved holder of record of any mortgage, deed of trust, or other security interest which has previously requested such notice in writing Each such holder shall (insofar as the rights of Agency are concerned) have the right, at its option within ninety (90) days after the receipt of the notice, to commence and thereafter to diligently proceed to cure or remedy such default and add the cost thereof to the security interest debt and the lien on its security interest. Any holder completing the improvements in accordance with this Agreement shall be entitled to a Release of Construction Covenants upon written request made to Agency 4.7 Release of Construction Covenants. Upon satisfactory completion of the Project, Agency shall issue to Participant a Release of Construction Covenants_ The Release of Construction Covenants shall be, and shall so state, a conclusive determination of satisfactory completion of the Project required by this Agreement, and of full compliance with the terms of this Agreement relating to commencement and completion of the Project. The Release of Construction Covenants is not a notice of completion as referred to in California Civil Code Section 3093. If Agency refuses or fails to furnish a Release of Construction Covenants upon completion of the Project, Agency, after written request from Participant, shall, within fifteen (15) days of Participant's written request, provide Participant a written statement of the reasons Agency refused or failed to furnish a Release of Construction Covenants. The statement shall also contain a detailed description of the specific actions Participant must take to obtain a Release of Construction Covenants. If the Agency shall have failed to provide such written statement within fifteen (15) days_ Participant shall be deemed entitled to the Release of Construction Covenants. If Agency refuses or fails to furnish the Release of Construction Covenants for the reason that specific items or materials are not available or landscaping is not complete, Agency shall issue the Release of Construction Covenants upon the posting by Participant with Agency of a cash deposit, bond or irrevocable letter of credit (in a form acceptable to Agency) in an amount representing the fair value of the work not yet completed_ 4.8 Mechanics Liens, Stop Notices, and Notices of Completion (a) If any claim of lien is filed against the Site or the Project, or a stop notice is served on any lender or other third party in connection with the Project, then the Participant shall, within twenty (20) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the party entitled thereto a surety bond in sufficient form and amount, or provide other assurances satisfactory to the Agency that the claim of lien or stop notice will be paid or discharged- (b) If the Participant fails to discharge any lien, encumbrance, charge, or claim in the manner required in subsection (a) of this Section 4.8, then in addition to any other right or remedy, the Agency may (but shall be under no obligation to) require the Participant to immediately deposit with the Agency the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The Agency may use such deposit to satisfy any claim or lien that is adversely determined against the Participant_ SF-98 &TCe:Shcr-3.1 16 0801198 -3 (c) The Participant shall file a valid notice of cessation or notice of completion upon cessation of construction on the Project for a continuous period of thirty (30) days or more, and take all other reasonable steps to forestall the assertion of claims or liens against the Project. The Agency may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that the Agency deems necessary or desirable to protect its interest in the Project. SECTION 5. USE OF THE SITE. 5.1 No InconsistenUses- Participant covenants and agrees, for itself, its successors, its assigns, and every successor in interest to the Site, or any part thereof, that for the period beginning on the Close of Escrow and ending on the expiration date of the Regulatory Agreement, Participant and such successors shall not devote the Site to uses inconsistent with the applicable zoning restrictions, this Agreement, and the Regulatory Agreements provided that, in the event of any inconsistency, the provisions of the provisions of the Regulatory Agreement shall prevail over this Agreement. 5.2 Rep gulatory Agreement At the Close of Escrow the Regulatory Agreement shall be recorded against the Site in the priority set forth in the Section 3.4(d)- 5.3 Relocation. (a) Relocation Plan As the Project is a "rehabilitation -in -place," no relocation of tenants living on the Site as of the Effective Date of this Agreement is contemplated by the parties hereto or is required to occur as a result of this Agreement- In the event, however, that off -Site relocation of existing tenants becomes necessary as a result of the Project, Participant, prior to such off -Site relocation, shall submit a relocation plan to Agency for review and approval ("Relocation Plan")- The Relocation Plan shall include the name, gender, age, ethnicity, household income, and amount of relocation payment to be paid, provided, however, that Participant shall not be obligated to provide any of the foregoing referenced personal information about relocatees if such relocatees refuse to provide such information or the gathering or provision of such information is contrary to applicable law. Participant shall be obligated to meet the notice requirements of applicable relocation law and shall provide the Agency with true and correct copies of such notices - Participant shall also retain all required records and copies of notices in its files as mandated by applicable law- (b) Relocation Cost Participant shall be obligated for the payment of all relocation benefits and costs identified in the Relocation Plan, as well as relocation benefits and costs that arise from the acquisition or rehabilitation of the Site beyond those obligations identified in the Relocation Plan- Participant shall indemnify, defend, and hold harmless the Agency from and against any claims for relocation and the payment of relocation benefits that are the obligations of Participant under this Agreement. Notwithstanding the above, Agency shall provide relocated tenants Section 8 HUD housing certificates, which Participant may use to offset its relocation obligations. SF-98Agee. Sher-3-1 1 "] OS131199 -3 - 54 Maintenance of the Site. All Units must meet Federal Housing Quality Standards (24 CFRS 982.401) while occupied. Further, Participant shall maintain the Site in accordance with the terms of the Regulatory Agreement. 5.5 Nondiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Participant, 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 Site, or any part thereof. 56 Form of Nondiscrimination and Nonsetre$ation Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, religion, ancestry, national origin, sex or marital status of any person All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses-. (a) In Deeds- "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land- (b) In Leases: -The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions - That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, ancestry, national origin, sex, or marital status in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased_" (c) InContracts- ""There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, religion, ancestry, national origin, sex, or marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of the land_" sr-9sAej« Sher-3-1 13 ox.133,9x -; 5.7 Effect and Duration of Covenants. The Participant has, concurrently with the execution of this Agreement, executed in recordable form the Regulatory Agreement_ Every covenant and condition and restriction contained in the Regulatory Agreement shall remain in effect thirty (30) years, except that the covenants against discrimination set forth in Sections 5.5 and 5.6 shall remain in effect in perpetuity. 58 Capital Reserves_ Participant, commencing with the fiscal year starting on the July I that follows the third (3rd) anniversary date of the Effective Date of this Agreement, shall deposit from Project revenues at least Two Hundred Fifty Dollars ($250.00) per unit per year into a reserve for capital repairs Should Project revenues be insufficient to permit Participant to make such a full deposit in any year, the shortfall shall be repaid into the Capital Reserve as soon as economically feasible 5.9 Payment of Portion of Residual Receipts. (a) Percentage Payment to AQencv. Commencing with the fiscal year starting on the July I that follows the third anniversary date of the Effective Date of this Agreement, and continuing annually through expiration of the Regulatory Agreement. Participant shall pay to Agency an amount equal to fifty percent (501/6) of the Net Operating Income of the Project, with the other fifty percent (501/o) of the Net Operating Income or Two Hundred Fifty Dollars per unit, whichever is more (subject to the terms of Section 5.8) to be deposited into the Capital Reserve Account as described in Section 5.9, provided, however, that once the Capital Reserve Account reaches the cumulative total shown on the Project Budget/Pro Forma (Exhibit " T'), Participant shall pay to Agency one hundred percent (100%) of the Net Operating Income. If a payment is required by Participant pursuant to the terms hereof, Participant shall make such payment no later than ninety (90) days following the end of the reporting year (calendar year or fiscal year)_ If the first or final payment is based on a portion of a year, the payment shall be pro rata based on a 360 day year (b) Definition of Net Operating Income_ As used herein, the term "Net Operating Income of the Project" shall mean, for any reporting period (calendar year or fiscal year), (a) all income derived by Participant from the Site, including without limitation all tenant rent, but excluding such income to Participant or the Project as may be derived from the acquisition of further income restriction of Units as authorized by Section 3.2 of the Regulatory Agreement, (b) less (i) payments of principal and interest, if any, required to be paid in such year by Lessee with respect to any note, mortgage, or deed of trust with respect to the Site or Project, (ii) all expenses actually incurred (or to be incurred if accounted for on an accrual basis) by Participant in leasing, managing, operating, maintaining, and repairing the Site, (iii) all capital expenses incurred pertaining to the Site; (iv) the deposits into the Capital Reserve Account; (v) property management fees, administrative costs, salaries, benefits, overhead costs, and such other and further operating and management expenses incurred in operating the Site. Depreciation expenses shall not be a reduction against income (c) Adjustment of Payment to .Agent. In the event Participant determines that it cannot make the Agency payment as described in subparagraph (a) of this Section and at the same time retain the economic viability of the Project, Participant shall notify the Agency and Sr-9XA gcc Shcr-3-1 19 O8f31/98 -3 request postponement, cancellation, forgiveness, or adjustment of the Agency payment. Participant shall provide financial and other evidence supporting its request_ Agency may, in the exercise of its reasonable discretion and in light of its desire to see the Site used as an affordable rental apartment complex and maintained at the level required by the Regulatory Agreement, reduce, suspend, postpone, forgive, cancel, or renegotiate the terms of the Agency payment. 5.10 Financial Statements. Participant shall submit to Agency, on an annual basis, a true and correct copy of Participant's audited financial statement for the Project_ After receipt of Participant's audited financial statements for the Project, Agency may, at its cost, request additional financial analyses or obtain a third party review of Participant's financial statement for the Project to verify the accuracy of Participant's payments made to the Agency pursuant to Section 5.9 or the deposits by Participant into the Capital Reserve Account pursuant to Section 5.8. SECTION 6. DEFAULTS AND REMEDIES. 6.1 Participant Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Participant hereunder if, after receiving written notice from Agency as provided in Section 6.3 below identifying such event, Participant fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within) thirty (30) days, Participant commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default - (a) Participant has failed to Close Escrow to acquire fee title to the Site within sixty (60) days after the time set forth in the Schedule of Performance, (b) Participant fails to observe or perform any material term of this Agreement or any agreement incorporated hereunder by reference including, but not limited to, the Regulatory Agreement, the Note, the Deed of Trust, or the Subordination Agreement (if applicable), within the time set forth in this Agreement or any of the documents referred to herein; or (e) Participant knowingly and intentionally makes or delivers to Agency any statement, report, or certificate that is not true or correct in any material respect_ 6.2 Amy Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Agency hereunder if, after receiving written notice from Participant as provided in Section 6.3 below identifying such event, Agency fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within thirty (30) days, Agency commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default: (a) Agency fails to observe or perform any material term of this Agreement within the time set forth in this Agreement, including but not limited to timely deposit into Escrow of the required portion of Agency Loan funds; or SF-98Agrcc Sher-3.1 20 09n 1 f98 -3 (b) Agency knowingly and intentionally makes or delivers to Participant any statement, report, or certificate that is not true or correct in any material respect 6.3 Notice of Default. The non -defaulting party shall give written notice of any default under this Section to the defaulting party, clearly specifying the default. Copies of any notice of default given to the defaulting party shall also be given to any permitted lender requesting such notice. Any failure or delay in giving such notice or in asserting any of either party's rights and remedies as to any default shall not constitute a waiver of any default, nor shall it change the time of default, nor shall it deprive either party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 6.4 Agency's Remedies. (a) The Agency, at its option, may terminate this Agreement prior to the Close of Escrow in the event of any material default that the Participant fails to cure within the time set forth in Section 6.1 (subject to the right of notice and expiration of applicable cure periods)_ (b) Following the Close of Escrow, in the event of any material default that the Participant fails to cure within the time set forth in Section 6.1 (subject to the right of notice and expiration of applicable cure periods), the Agency's sole remedy shall be to foreclose on the Agency Deed of Trust pursuant to Agency's right and remedies thereunder 6.5 Participant's Remedies. Subject to any applicable cure periods and the general right to notice provided for in this Agreement, upon a default or breach of this Agreement by Agency, Participant may bring an action for specific performance of this Agreement or any term or provision hereof, or may terminate this Agreement. Participant may not sue for monetary damages. 6.6 Rights and Remedies are Cumulative_ Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties hereto 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. SECTION 7. GENERAL PROVISIONS. 7.1 Governing Law_ The laws of the State of California shall govern the interpretation and enforcement of this Agreement_ 7.2 Attorneys' In the event of litigation between the parties arising out of this Agreement each party shall bear its own attorneys' fees, and other costs 7.3 Notices, Demands, and Communications Between the Parties_ Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if (i) personally delivered, (ii) delivered by same day or overnight courier (acknowledged by receipt SF-98Agcc ShcF-3-1 21 0851/98 -3 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 Participant: The Bridges America Sher Lane, L.P. 18837 Brookhurst Street Suite 303 Fountain, Valley, CA 92708 Atin JoAnn Ulvan With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626 Attn: Jeffrey M. Oderman If to Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648, Attn: Executive Director Notices personally delivered or delivered by courier shall be effective 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. 74 Acceptance of Service of Process. In the event that any legal action is commenced by Participant against Agency, service of process on Agency shall be made by personal service upon Executive Director or the Secretary of Agency, or in such other manner as may be provided by law. In the event that any legal action is commenced by Agency against Participant, service of process on Participant shall be made by in any manner provided by law, and shall be valid whether made within or without the State of California 7.5 Conflicts of Interest. No member, official, or employee of Agency shall 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. 7.6 Titles and Captions. Titles and captions are for convenience only and shall not be construed to limit or extend the meaning of this Agreement 7.7 Gender_ As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates- 7-8 Modifications. Any amendment, alteration, change, or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. Sr-98Agcc Sher-3-1 22 08.131;99 -3 7.9 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, including but not limited to that certain "Deal Point Memorandum" approved by Participant and the Agency and/or City Council of the City of Huntington Beach, are merged herein and shall be of no further force or effect. 7.10 No Third Parties Benefited. Other than the general and limited partners of Participant, this Agreement shall 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- 7 11 Assurances to Act in Good Faith. Participant and Agency each agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to accomplish the redevelopment of the Site in accordance with the provisions hereof 7.12 Warranty Against Payment of Consideration for Agreement. Except as provided in this Agreement, Participant 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. 7.13 Nonliability of Agency Officials and Emplgvees. No member, official, or employee of the Agency shall be personally liable to the Participant or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Participant or to its successor, or on any obligations under the terms of this Agreement. 7.14 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 7.15 Countemarts_ This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument- 7 16 Severabilij_ Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 7.17 Extension of Times of Performance. Notwithstanding the foregoing, in addition to the specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default during an event of Force Majeure. An extension of time for an event of sF-98n7rc Sher-3-1 23 09.131.98 -3 Force Majeure shall be limited to the period of such event, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause_ In the event of such delay, the party delayed shall continue to exercise reasonable diligence to minimize the period of delay. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Participant_ In addition, the Executive Director shall have the authority on behalf of Agency to approve extensions of time not to exceed a cumulative total of one (1) year. 7.18 Inspection of Books and Records The Agency or its designee has the right at all reasonable times to inspect the books, records, and/or other documents of the Participant pertaining to the Site and/or the Project as pertinent to the purposes of this Agreement 719 Waivers. The waiver by Agency or Participant of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach SECTION 8. EXECUTION OF AGREEMENT; TrNl E FOR ACCEPTANCE This Agreement shall be executed in five duplicate originals, each of which is deemed to be an original_ This Agreement consists of /"-f- yF; ve (2_5) pages and ten (10) attachments which constitute the entire understanding and agreement of the parties This Agreement does not take effect until executed by the Participant and Agency_ This Agreement, when executed by the Participant and delivered to the Agency, must be authorized, executed and delivered by the Agency within thirty (30) days after the date of signature by the Participant, or this Agreement may be terminated by the Participant on written notice to the Agency_ The Agency Executive Director 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 Agency as may be necessary or proper to effect the terms of the Owner Participation Agreement on behalf of the Agency. [end - signature page follows] sr-98Agce snn-3-1 24 Ow 3 1:99 -3 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. ATTEST: Agency Clerk APPROVED AS TO FORM: By:� Agency Counsel S`f "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: hat man "PARTICIPANT" THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership By Its General Partner: THE BRIDGES AMERICA FOUNDATION, a Delaware Nonprofit Corporation By: 4111tv- � � Name: 'z-'T6 61-J v i.,+n, Zu krv: , /— (Type or print) % ac-t 1 QfL — Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President MWE Un Name: (Type or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary (iii) Chief Financial Officer (iv) Any Assistant Treasurer SF-98Agree:Sher-3-1 25 08/31/98 -3 FROM : ' 1111 111111111111 11111 1111 PFQrE No. : Sep. 01 1998 04: A :PM P1 RESOLUTION OF THE BOARD OF DIRECTORS OF THE FRIDGES AMERICA FOUNpATION, INC. The following resolutions were adopted by the Aoard of Directors of the Bridges America foundation (tile "Corporation") effective as of September 1, 1998. RESOLVED, that Garrett Robinson. President of the Corporation, and or Steve Harrison, a member of the board of directors. be and hereby each are severally authorized to execute and deliver such agreements, documents and instruments, and to undertake such acts as they shall deem necessary or advisable to consummate the purchase by the Bridges Sher Lanc LP.. (a California limited partnership of which the Corporation -is the General Partner), of the low-income housing project and real property located at 16112 Sher lane Huntington Beach, Ca. Dated as of September 1, 1998. nine Robinson, ecretary CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of C-�G� ►'� County of �►^C[�tAL — On -�Pa_0- ✓ 1, /gntf before me, (444#,4-A A/els.Tx_ 64�G�-iZLcU Oate / Namee+and Tiuo of Cf:rc*r (o-Jr,ne Doe Note b6c') personally appeared-fAlileg bGif�v, Q r�Q7t e- ,�rot-kcZ"o-, �( Nam(s) or &gner(s) personally known to me — e to be the persor<D whose name(Q 19f subscribed to the within instrument and acknowledged to me that 4eAssa executed the same in e) authorized capacit )e ), and that by t.wttAA. NEL90K h+qihetq�signature�s on the instrument the persorlp cormftsion t 10662Ai or the entity upon behalf of which the persoros] acted, Notary P� t*c — cciffam o orCngecotnty executed the instrument. Mr Cortm E res.lu 23. IW9 Ill WITNESS my hand and official seal. Signature of Ncaary PuW OPTIONAL Though the information below is not required by law. it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document- V w!) eX Aeh c-_ ax �ree melL ' Document Date- 3 qf Number of Pages: a5 Signer(s) Other Than Named Above: Paul ��4�eSsa.taC•� stef/en U.t/r/S Capacity(ies) Claimed by Signer(s) Signer's Name: Sti 1 / l)," D rt Individual �� Corporate Officer Title(s): L Partner—[] Limited 0 General Attorney -in -Fact Trustee Guardian or Conservator ',9; Other: _r��tawma.4,1 ' s,� c9 thumb her• I _ Signer Is Representing - it r , o % TIP, Signer's Name: Co-n '1 fe ZevcC _uric "' Individual L__1 Corporate Officer Title(s): _ . Partner — CG Limited L 1 General ) ± Attorney -in -Fact 01 Trustee _ i �� Guardian /r_�Conserrvpfo�r( ;�, W.� Other' liae44Gf Signer Is Representing: er` y+' eapk 0 19% Nar.onai Naary ASSOC-atgn • 6:36 Remmat Ave. PG Box 71 A4 • Canoga Perk. CA 91309,7184 Prod No 5907 Reorder- Can ioa-Fred t •g00.676.6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County of 6/rQ�1 On '' 1 '0 �8 before me, {,tr,c�e.�-�i.•,A. tJdSzni NoEar.I~j If bI4 L Da!e Name and Tme of ON cet to 9 .'Jane Doe. ry Putke ) IL personally appeared .S"TEV 1 V. _- t4 � Names) of Sgnerts) — proved to me on the basis of satisfactory evidence to be the person whose name(s) ®am subscribed to the within instrument and acknowledged to me that®/ley executed the same in ii ItaeF-1!heiauthorized capacity(", and that by hi /40MNeir signature(* on the instrument the person( LAURAA� NELSON or the entity upon behalf of which the person(* acted, cornmw ons 10%263 executed the instrument- y Notary RAAC — Carlo" orange C.ounly Mir coffm E>presJlJ 23.1999 WITNESS and and official seat. 01 Notary PUNK L Though the information below ,s not required by law, it may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document_ Description of Attached Document ,L, t Title or Type of Document- toner ��IV ( q:: -' `C Al Document Date- _ J?/31 Iq S2 Signer(s) Other Than Named Above:.Gll D `�IGS�e�ry Capacity(les) Claimed by Signer(s) Signer's Name: SSreyw V. -Is vj Jr— C'. Individual Corporate Officer Title(s): Partner — ❑ Limited ! i General Attorney -in -Fact Trustee Guardian or Conservator Other: 2>12G7aQ Signer Is Representing RIGHT TH BPRINT OF SIGNER Signer's Name: ❑ Number of Pages- Individual Corporate Officer Title(s)- Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other- Signer Is Representing RIGHT THUMBPRINT OF SIGNER 0 1995 Nam onal Notary Assocwr on • SM Rerrmer Ave . P 0 Bo: 7184 • Canoga Park. CA 91309-7184 Prod No 5907 Reorder CeR Too -Flee 1-S00-876-6627 FROM : '1111 111111111111 11111 1111 PHCt%E NO. : Sep 01 1998 04:44PN P1 RESOLUTION OF THE ROARU OF I)IRECTORS OF THE BRIDGES AMERICA FOUNDATION, INC. The following resolutions were adopted by the Board of Directors of the Bridges America foundation (the "Corporation') effective as of September 1, 1998. RESOLVED, that Garrett Robinson, President of the Corporation, and or Steve Harrison, a member of the board of directors, be and hereby each are severally authorized to execute and deliver such agreements, documents and instruments, and to undertake such acts as they shall deem necessary or advisable to consummate the purchase by the Bridges Sher T.anc LP., (a California limined partnership of which the Corporation -is the General Partner), of the low-incorne housing project and real property located at 16112 Sher lane Huntington Beach, Ca. Dated as of September 1, 1998. nine Robi4i�� retary EXHIBIT A EXHIBIT "A" PARCEL 1: THAT PORTION OF TW, NORTHEAST QUARTER OF SECTION 23, MWNSHIP 5 SOUTH, RANGE 11 WEST, PARTLY IN THE RANCHO LA BOLSA CHICA AND PARTLY IN THE RANCf30 LAS BOLSAS, IN THE CITY OF HUNTIN"TON BEACH, AS PER MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID CL7[itM, DESCRIBED AS FOLLCWS: BEJGINNING AT THE INTERSECTION OF THE SOUTH LINK' OF THE NORT'II 50.00 FEET OF THE SOUTHEAST Q[lARTFR OF THE NOR TNWESI' QCiATt'TIIZ OF SAID NORTHEAST QLiARTER WITH i 'THE EAST LINE OF SITED LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUrTTHT,I BEACH, RECORDED DECETTdER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCS NORTH 180.00 FEET ALONG SAID EAST LINE; THENCE FAST 346.00 FEET PARALLEL WITI.1 THE NORTH LINE OF SAID SOI.TT EAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER; THENCE SOUTH 100.00 FEET' PARALLEL WITH SAID FAST LINE; THENCE FAST 90.00 FEET PARALLEL WITH. SAID NORTH LINE; THENCE SCUM 80.00 FEEL' PARALLEL, WITH SAID EAST LINE TO THE SOUTH LINE OF THE NORTH 50.00 F= OF THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF SAID NORTHEAST QUARTER; TIT- HEST' 436.00 FEET TO THE POINT OF BEGINNING. SAID LAND IS INCLUDED LUDrED WITHIN THE AREA Slia IN ON A Mr'1P FILM IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN 77-E OFFICE OF THE COUNT' RECORDER OF SAID COUvTY. EXCEPT Tf TtRE FRC M ALL OIL, GAS, M I NrRAL.S AND OTHER } [YDROCAR.Pti' NS , BEL a4 A DEPTH OF 500 FEET, WITTICUT THE RIGTi' OF SURFACE E7\'3RY, AS RESERVED IN DMDS OF RECORD. PARCEL, 2: THAT PORTION OF THE NOFMFFJLST QUARTER OF SECTICiN 23, TOItNSHIP 5 SOLM4, RANGE 11 WlEST, IN THE RAI\'C}i0 LA BOLSAS, IN THE CITY OF IUJT INMU7 BLAG?, AS PER NAP RECORDED IN BOOK 51, PAGE 13 OF MISC£LUMBOUS ','LAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID CtXIM, DESCRIBED AS FOLDS: BEGINNING AT TIE: INTERSECTION OF THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHEAST QLTP= OF THE NORTHWEST QCIARTiR OF SAID NORTHEAST QUARTER WITH THE EAST LINE OF SHER LANE AS DESCRIBED IN THE DEED TO THE CITY OF ili.WINGrON BEACH, RECORDED DECVQER 7, 1961 IN BOOK 5937 PACE 35, OFFICIAL RECORDS; THENCE NORTH 180.00 FEET ALONG SAID EAST LINE; THENCE EAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QIi 77ER OF THE A]012 T HWEST QUAR= OF THE NORTHEAST QUARTER; THEWE SOUTH 100.00 FEET PARALLEL, WITH SAID EAST LINE; TH= EAST 90.00 FEET PARALLEL WITH SAID NORTH LINE TO A POINT WHICH POINT IS THE TRUE POINT AND PLACE OF BEGINNING; 'THENCE SOUTH 80.00 FEET PARALLEL WITH SAID EAST LINE TO THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF SAID NORTHEAST QUARTER; THENCE 408.96 FEET FAST PARALL,EI, WITH THE NORTH LINE OF SAID SOUTHEAST W%R TER OF THE NORTHWEST QUA= OF THE NORTHEAST QUARTER TO THE WEST LINE OF PARKSIDE LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNTINGILCN BEACH, RECORDED SEPT0-lBER 20, 1968 IN BOOK 6727 PAGE 541 OF OFFICIAL REGARDS; TiIENCE NORTH 60.00 FEET' ALONG SAID WEST LINE TO A LINE THAT IS PARALLEL_, WITH THE NORTH LINE OF SAID SOLM4EAST QUARTER OF THE NORTH�QUARTER OF THE NORTHEAST QUARTER, AND WHICH PASSES THROUN AND TRUE POINT AND PLACE OF BEGINNING; TTIENCE WEST 4 08.9 6 FEE, ALOTvG SAID LAST MENTIONED PARALLEL, LINE, Tb THE TRUE POINT AND PLACE OF BEGINNINS. {IRM, LA:5,CR.IFTICN M11 NUM) (iti. AI, DL•5C3ZIMCN CINT7TAJM) a � � • i t • • a • � a• ar r r aar. • - aa• • r SAID LAND IS INCLUDED WITHIN TIE AREA SHC WN CaN A MAP FILED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF -aE CaRM RECORDER OF SAID COUNTY. EXHIBIT B .9 14, 0 OIBf u" "! * CfE N MQGNI RETHERFORD BqC4 11 PJYMZA uwlEolunv 6 AUBURN LOYQLA OEFMCE : 7�iVE.RLE P A IV 7 w 0: Zo i I . . .1 1 -, , OZO � IS n4s CENILR I A u ID ani I u LORGE SUBJECT - aB�UESAILS.. UJVO-_t;A l CANDLEk;LIT; BOUQUET 1 ,OL I .STAPLV,; tT I At, tTA MAC.DONAL MOAD I I .'JUL iP T E L ()',y I ANCY =.GLENCOE klr%P.BF4A I v'1 I !HELL PASS OltWun Z) Ld Er W S. w LL EARL cc LAMANOI MOONSH, a: DAA.A.SK NQRTHLAKE TWOUSE I I WA' HING ON WOODUXE Z: H A PE T E RS PALYERRES CWRALF 1 5 rtw- COOY WL F CECO w z \ALLA YOR.0-.\ OK 4a up AAJ EAS). ED R .]BRYANT AW- �L 111 �,-.BkF�T_ _QRI A E �Y )w STEL rm Amp NE T I 7 ROUDOUX $MV u 0 m TAMARy n -BOW br, SITE ANALYSIS Plat Map --rw M W, 56C 2J. r55, R.It W_ 'EC141- t-1467E M2-119 f019 FEE r!rLE- 4ssEssAfE1vr BELQW SUNf,4cE 07 •S PAFC£L MAP PA/. 3-5Ct /89�V- HOYE - AWSSCWS StOGC 8 s" wN at CAKUS IOpK F4 2 RAGE I I COUNTY OF ORANGE 37 EXHIBIT "C" SCOPE OF DEVELOPMENT Participant's rehabilitation of the existing 66-unit apartment complex located at 16112 Sher Lane in the City of Huntington Beach shall be undertaken as follows: 1. The rehabilitation shall be in substantial conformance with the Approved Plans and Permits_ In the event of any conflict between the description of the Project and rehabilitation work described in this Agreement and in the Approved Plans and Permits, the Approved Plans and Permits shall control Notwithstanding the above, the rehabilitation of the Units shall result in Units meeting, at a minimum, federal housing quality standards as existing on the Effective Date of this Agreement; said standards are set forth at Title 24 of the Code of Federal Regulations, Section 982.401. Participant shall provide Agency with copies of all required permits under the City Municipal Code and proofs of City inspections 2. Participant, prior to undertaking any work of rehabilitation on the Site (other than repairs immediately needed for habitability or removal of waste, debris, and general clean-up) shall submit to Agency for review a rehabilitation work list that describes the nature and order of the rehabilitation work 3_ The parties hereto acknowledge that the Site, as of the Effective Date, has received City code violation notices_ Participant shall have a reasonable period to effect corrections of those conditions to which the code violation notices relate. Participant shall provide Agency with confirmation that the conditions to which the code violation notices relate have been corrected. 4. Participant shall be responsible for remediatiog any asbestos and any lead -based paint where the levels of those substances are found to be in violation of applicable law_ Copies of all test results, tenant notifications, and remediation plans shall be provided to the Agency or its authorized representatives or consultants_ 5. Agency shall have the right to inspect the progress of the rehabilitation work, including both interiors and exteriors of the Units, upon forty-eight (48) hours prior notice to Participant; provided that such inspections shall not interfere with Participant's rehabilitation work_ 6. Subject to Section 4.2(a) and Exhibit D of the OPA, Participant shall complete the rehabilitation work within eighteen (18) months after the Closing Date. S F-Agree: Sher-] : E xh-C [Exhibit "C" - Scope of Development - Page I of 10:4811:3ma SCHEDULE OF PERFORMANCE ITEM OF PERFORMANCE TIME FOR PERFORMANCE REFERENCE 1 Participant and Agency each execute alt documents Not later gain twelve noon on the §3 4(b); §3.4(c). and deposit all documents and funds into Escrow as business day immediately prior to the required by this Agreement. scheduled Closing Date. 2_ Closing Date_ Not later than September 15, 1998 §3.4(a)_ 3_ Participant obtains die Approved Plans and Permits Within sixty (60) days after the §4.2(a)-(e) for the Project and commences the rehabilitation Closing Date. work on the Site- 4- Participant submits a Management Plan to the Within sixty (60) days after the §4.4 of Exhibit 1 Agenvy. Closing Date- 5- Participants completes the rehabilitation of the Site_ Within eighteen (18) months after §4.2(i) commencement of the work 6_ Agency issues Release of Construction Covenants Upon completion by Participant of the §4 7 rehabilitation work on the Site. 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 performance 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- Perfonnance 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 both the Participant and the Agency_ The Executive Director of Agency shall have the authority to approve extensions of time without action of the Board of Directors of Agency not to exceed a cumulative total of one (1) year SF-9SAgree_ %hrr-3:E:Nh-1)-1 o xn 1 r9x I E•XHIBU- -D" - SCHEDULE1. OF Pl'RFORMANCE - PAGE 1 OF 11 Cd"oy- P Ec5-6PA1+/ PROMISSORY NOTE jVof, SECURED BY SUBORDINATED CORPORATION DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED THERETO DO NOT DESTROY T141S NOTE: When paid, this Note, with the Deed of Trust securing same, must be surrendered to Trustee for cancellation before reconveyance will be made PROMISSORY NOTE SECURED BY SUBORDNNATED DEED OF TRUST Principal Loan Amount- $1,200,734 Note Date- august 31 , 1998 FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Holder"), at a place designated by Holder, the principal sum of ONE MILLION TWO HUNDRED THOUSAND SEVEN HUNDRED THIRTY FOUR DOLLARS AND NO CENTS ($1,200,734-00), or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof, pursuant to an Owner Participation Agreement (the "O_P.A_") dated as of August 31, 1998 between Maker and ):`colder_ The obligation of the Maker to the Holder hereunder shall be secured by a deed of trust made by the Maker encumbering the Site to be developed (the "Site") pursuant to the OPA and the Deed of Trust and Assignment of Rents dated August 31, 1998 , executed by the Maker and recorded in the Recorder's Office of Orange County, California, on , as Document No "the "Trust Deed") The obligation of the Maker set forth in this Note is subject to acceleration as set forth in the OPA. The OPA and the Trust Deed are public records on file in the offices of the Holder. I - Agency Loan. This Note evidences the obligation of the Maker to the Holder for the repayment of funds loaned to the Maker by the Holder (the "Agency Loan") to finance the development of the Site pursuant to the OPA The Maker shall not make any sale, assignment or conveyance, or transfer in any other form, of the Site, or any part thereof, or interest therein without the express written consent of the Holder as set forth in Section 2.4 of the OPA 2 Payment of Obligation Unless a uncured Material Default of Maker shall have occurred under the Deed of Trust (as hereinafter defined) or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement [as such term is defined in the OPA]), or Maker has breached any promise or obligation in this Note, (i) no interest shall accrue on the unpaid principal of this Note, and (ii) a prorated portion of the total principal advanced hereunder shall be forgiven, waived, and discharged on each anniversary date of Note Date zet forth above in an amount equal to the total principal advanced hereunder divided by thirty (,0), i.e., one- SF-M rce Sher-3 Fxh-F-1 0 R'31/98 - K3 Exhibit "r- — Promissory Note — Page 1 of 3 Tax-Exempt-Govemment Agency CITY OF HUNTINGTON BEACH c—nnle Brockway. C7y Der% BY: eputy ity Clerk thirtieth of the Note Amount shall be deemed waived and discharged by Maker as of each anniversary date of the Note Date Holder is only requiring Maker to execute this Note as a promise to repay the Note Amount in the event of an uncured Material Default of Maker under the Deed of Trust, OPA, or Regulatory Agreement Unless such uncured Material Default of Maker has occurred, Holder does not intend for Maker to make any principal payments or interest of any kind on this Note Upon the forgiveness, waiver, and discharge of this Note as set forth above, Holder shall mark this Note "PAID IN FULL" and shall the deliver this Note to the Trustee of the Subordinated Deed of Trust that secures this Note for the Trustee's delivery to Maker in conjunction with the reconveyance of the Deed of Trust. 3 _ No Pre avment_ This note may not be prepaid. 4_ Acceleration of Obligation. Upon the occurrence of a uncured Material Default of Maker under this Note, the Deed of Trust or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement), or in any other instrument now or hereafter securing the obligations evidenced hereby, then, and in any of such events, Holder may, at its option, and upon thirty (30) days prior written notice to Maker, declare this Note and the entire obligations hereby evidenced that has not been forgiven, waived, and discharged pursuant to Section 1 above, to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity. 5 Default Interest_ If any event occurs giving Holder the right to accelerate this Note pursuant to Section 4 above, the entire unpaid and unforgiven principal owing hereunder shall, 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. 6_ Collection Costs: Attomevs' Fees If any attorney is engaged by Bolder because of any event of an uncured Material Default under this Note or the Deed of Trust or to enforce any provision of either instrument, whether or not suit is filed hereon, Holder shall bear its own attorney's fees and costs. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable 8. Modifications_ Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally, nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. 9. U_ suDY_ Notwithstanding any provision in this Note, Deed of Trust or other document securing same, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California_ SF-98Agree-Sher-3 E xh-F-1 09r3 u98 - #3 Exhibit "F ' — Promissory- Note — Page 2 of 3 10. Govcrning Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance %Kith the laws thereof. IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above «ritten. 9F-98AgreeSher-3:Exh-F - l 09/01/98 - N3 "PARTICIPANT" THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership By Its General Partner: THE BRIDGES AMERICA FOUNDATION, a Delaware Nonprofit Corporation By: Name: (Type or print) c r r-- Z Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President AND 13 Name: (Type or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary (iii) Chief Financial Officer (iv) Any Assistant Treasurer Exhibit ' F" — Promissory Note — Page 3 of 3 FROM : 'Jill 111111111111 11111 111 i P! -W NO. : Sep. 21 19% 0_;: 44PM P1 RESOLUTION OF THE ROARD OF DIRECTORS OF THE BRIDGES A`fEWCA FOUNDATION, INC. The following resolutions were adopted by the Aoard of Directors of the Bridgcs Amcrica foundation (the "Corporation') effective as of September 1, 1998. RESOLVED, that Garrett Robinson. President of the Corporation, and or Steve Harrison. a membcr of the board of directors, be and hereby each are severally authorized to execute and deliver such agreements, documents and instruments, and to undertake such act9 as they shall dean necessary or advisable to consummate the purchase by the Bridges Sher Lane LP.. (a California limited partnership of which the Corporatiou-is the General Partner), of the low-income housing project and real property located at lbl 12 Sher lane Huntington Beach, Ca. Dated as of September 1,1998. Jan2ine Robinson, ecretary CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of ("VLc.Cc-- County of 0lahGie_4.0 Q , On :5ateyL6Z..r lj I F9, _ before me, � .�. /1%�Scri7, 1V0 ` ►c %L Da:e Name artl L!b or Orcer (e g . 'Jare Doe. No'a i __i c-) personally appeared .5TEy&tj V. H-,?4W�► sdAj y Name,S) of S,9ner;s} - _ proved to me on the basis of satisfactory evidence to be the person(* whose name*)&" subscribed to the within instrument and acknowledged to me that&94eA4ey executed the same in isi/her,_ it authorized capacity(ies), and that by Nheiglheir signaturet4s) on the instrument the person(. LAURA A. NELSON or the entity upon behalf of which the person` * acted. corTvnLtion # 106Q63 executed the instrument- y Notary R OC — CC00111110 Orange Ccuntlt 1„yCornm Eggiesm23.19D9 WITNESS my hand and official seal. L Though the information below is not required bylaw, it may prove va'uable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document- Ar-om % SS'd r-Z �VC4 Document Date: eAt Igg R__ Number of Pages- .S� rri?A,t' Signer(s) Other Than Named Above: %1.071G Capacity(ies) Claimed by Signer(s) Signer's Name- -SrEV&,, ! V H4-fz�Sory IL - F Individual Di Corporate Officer Title(s): G Partner — - Limited - General E, Attorney -in -Fact E Trustee r=-f Guardian or Conservator Other: k tQEGTAEL _ :1F c, ir., -nC rere Signer Is Representing: 77fe &4&6 4qaw44 'z FZYVAJDAY? o AJ Signer's Name: Individual Corporate Officer T'itle(s): Partner — E1 Limited El General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGM T1+UMEL RM OF SIGNER O 1995 Nar ones NCraryASSO[argn - 8236 Remmel Ave . P O Bo- 718a • Canoga Pa-k. CA 91309.7184 Prod Nc 5907 Recr_e• Call TOUFree 1-2^,4.876-6827 RECOR[IING RE(JUESTE+) gy. ORANGE COAST TITLE CO, JrAify order No. MfG f0�i72 F%row No. Loan No - WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Atrn: Agency Secretary C17Y cLeRw, This document was electronically recorded by Orange Coast Title Recorded in the County of Orange, California Gary L. Granville, Clerk/Recorder IIII�Irg0p1111g3I10111lal111111 11 No Fee 19980669844 4:08pm 10/02/98 D06 26016697 26 59 DI A36 10 0 12.00 0.00 27.00 0.00 0.00 0.00 0.00 0.00 0.00 SPACE ABOVE THIS LINT FOR RECORDER'S USE) EXEMPT FROM RECORDLV G FEE PER GOV. CODE §61 SUBORDINATED DEED OF TRUST Q11 WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO NOTICE: THIS SUBORDINATED DEED OF TRUST WITH. ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUB,}ECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTRER OR LATER SECURITY INSTRUMENT. This DEED OF TRUST WITH ASSIGNMENT OF RENTS WrM RIDER ATTACHED HERETO ("Deed of Trust"), made August _31 , 1998, between THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership, herein called TRUSTOR, whose address is 18837 Brookhurst Street, Suite 303, Fountain Valley, CA 92708, Redevelopment Agency City of Huntington , a California corporation, herein called TRUSTEE, and Beach REDEVELOPMENT AGENCY OF THE CIT1f Or HUN INGTON BEACH, a public body, corporate and politic, herein called BENEFICIARY, WITNESSETH-.1liat Trustor grants to Trustee in trust, with power of sate, that property in the City of Huntington Beach, County of Orange, State of California, described as - SEE EXHIBIT "A" ATTACHED HERETO together with the rcxnts, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and prof is for the purpose of securing (1) payment of the sum of ONE MILIJON IWO IiUNDRED THOUSAND SEVEN HUNDRED THIRTY-FOUR DOLLARS (S1,200,734-00) without interest thereon, according to the terms of that certain promissory note of even date herewith made by Tnrstor, payable to order of Beneficiary, and extensions or renewals thereof-, (2) the performance of each agreement of Trustor incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terns and provisions set forth in subdivision A, and it is mutually agreed that each and all of the tears and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: SF-98Agcetiher Eah•G-1 0851198 - 03 Exhibit "G" — Subordinated Deed of Trust Tn-EmrW43t>emrr.am regency CIi'1( OF HUNTINGTON BEACH miler Brockway, ctty r`Aerk - Page 1 of 9 deputy CttY Clark COUNTY BOOK PAGE COUNTY BOOT: PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 12SS 556 Karp E58 713 Placer 102s 379 Sierra 36 1S7 Alpine 3 130-31 Lake 437 110 Ptumas 166 1307 Siskgou 506 762 Amador 133 439 raasrn 192 367 Riverside 3778 347 solano 12V 621 Butte 1330 513 Ias Angeles T-3S79 E74 Saerarnc= 5039 124 Sonoma 2D67 427 c4brAras 185 336 Niadera 911 136 San Bcrum 300 405 Staoalaus 1970 56 Cohan 323 391 Morin 1949 122 SanBerrard6no 6213 768 Sutter 655 595 Contra costa 4684 1 Mariposa 90 453 San Fnrcueo A-904 596 Tehar:ta 457 183 Dd None 101 549 Mrndor no 667 99 San 30aqum 2655 263 T—ry 108 595 El Dorado 704 635 Merced 1660 753 Sib Luis Obapo 1311 137 Tutart 2530 108 Fresno 5052 623 Modoc 191 93 sanMateo 477E 175 Tualurme 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 981 Yennua 2607 237 Humboldt Sol 63 Monterey 357 239 Santa Clam 6626 664 Yolo 769 16 brqmry 1169 701 Nspa 704 742 Santa Cru 163E 607 Yuba 396 693 lrtyo 165 672 Nevada 363 94 Shasta s00 633 Krim 3756 690 Orange 7192 Is San Mega SERIES 5 Book 1964. Pace 149774 shall inure to and bind the parties hereto, with respect to the property above describers_ Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, inoorporated herein and made a part of this Deed of Trust for all. purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to hirer at his address hereinbefore set forth. NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRU'l LENT. This is a third deed of trust subject to a second deed of trust recording concurrently herewith in the amount of $800,000.00 and a first deed of trust of record. Signature of Trustor STATE OF CALIFORNIA COUNTY OF ORANGE N N6Wgt On bef me, persowfly appeared S-T4ar so**i )1 (or proved to me on the basis of satisfactory evidence) to be thepown(s) whose names(a) is/arLS-subscribed to the within 4Lstnunent and acknowledged to me that htkieJ3hey executed the same in flislhcrtLhenir authorized capacity(iea), and that by his4ta/thvirsiglahurs(a'j on the instnlrnmit the pmwn(sy or the entity upon behalf of which the person(s) acted, executed the instrument. W TMSS my hand and official seal. Signature SF-98Agree.Sher Exh-G-I 0&3"S - a3 THE BRIDGES AMERICA SHER LANE, L-P., a California limited partnership By: Its: 7D1(r vttw' MARIE i.OVE Q COMM.41158807 NOTARY PUBLIC - CAt_IFOR1fIA ORANGECouNTy 0 Gomm_ Eire, p0. 77. 200, -► Ma area Car offiraal MDLs a1 scsll Exhibit "G" — Subordinated Deed of Trust - Page 2 of 9 DO NOT RECORD Teo following is a Copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each comity in Califomia as stated in the forel;ouug Deed of Teat and incorporxtod by reference in said Dead of Trust as being a part thereof as if sct forth at length therein A- To protect the security of this Deed of Trust, Tnntor agrees; 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and Wodan• ilike amno[i any building which may be conslractr4 damaged or destroyed thereon and to pay when duo all claims for labor performed and marrials furnished therefor, to comply with all laws affecting sad property or requiring any alterations or improvernenb to be nude thereon; not to commit or permit waste thereof, not to oommit, suffer or pemnd any act upon said property in violation of law, to cultivate, irrigate, fertilize, fiunigate, prune and do all other acts which from the character or use of said property may be masornably necessary, the sp=fie eaumeraftons herein not exchnding the general. 2) To provide, ruacntaah and deliver to Bertefiaary fire irmi arrce saaisfactory to and with loss payable to Beneficiary- The amount collected under any fire or otber instrrswe policy may be applied by Beneficiary upon any indebtedness seared hereby and in such order as Beneficiary may determine, or it the option of Beneficiary this entire arnotari to coiladrd or any part thereof may be released to Truster. Such application or release shall not acre or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice_ 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Tmwm. and to pay all costs and ergxases, including cost of evidenoc of title and atlornoys fees in a reasonable su 6 in any such action or proceeding ern which Beneficiary or Trustee may appear, and in any suit broug}rt by Beneficiary to foreclose this Deed ..-4)-Tapa}C-VASA17nliaYL Fnrc rlitl 11xttendxccrcSM �/}'m;ng SliC(_pIDppfl}�, inch �djq xg cvccm•..?�n:�3CK ttDGiwhen.duetal�. erhattnbranca charges and liens, with intrsrst, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Tnatot fail to make any paynuat or to do any ad as herein provided, then Beneficiary ofTrustee, but without obligation so to do and without notice to or demand upon Th>.stor and without releasing "Itustor from any obligation hereof, may; make or do the same is such manner and to such extant as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hextof or the rights or power of Beneficiary or Trustee; 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, pay necessary expenses. employ counsel and pay has reasonable fees_ S) To pay immediately and without demand all sure so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effed at the dale bucof and to pay for any stattnrattprovidod for by law in effect at the date hereof regarding the obligation se limed hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded B. It is mutually agreed- 1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or nelewe such moneys received by him in the same manner and with the same effect as above provided for deposition of proceeds of fire or other insurance. 2) That by aoctpting payment of any sum secured hereby aftm its due date, Beneficiary does not waive his tight either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsemer, and without affecting the personal liability of any person for payment of the indebtedness senmd hereby, Trustee may re. onvey any part of said property; conserd to the making of any reap or plat thereof; join in granting any easement thereoo4 or join in any extension agreement or any argeement subordinating the lien or charge hereof 4) Thal upon written request of Beneficiary string the all sums aoeured hereby have been paid, and upon stmender of this Deed and said note to Trtree for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder- The recitals in such reconveyance of any rmattas or fads shall be conclusive proof of the truthfulness thereof. The Crruttec in such reconveyanee may be described as "the person or persons legally ermined thereto--" 3) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Truss, to collect the tents, issues and profits of said property, reserving unto Trtutor the right, prior to any default by Truster in payment of say indebtedness secured hereby or in the performahoe of any agreement hereunder, to collect and retain such rents, issues and profits as they become dint and payable. Upon any such default. Beneficiary may at any time without notice, either in person. by agent, or be a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby segued, enter upon and take possession of said property or any part thereof; in his own name sue for or otherwise co9ed such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and oolloamn, including reasonable allomeys fees, upon any indebtedness seared hereby and in such order as Beneficiary may determine. The entering upon and taking possession of said pmpety, the cogauing of such rents, issues and profits and the application thereof as aforesaid, shall not cane or waive any dafa h or notice of default hereunder or invalidate any act done purnwit to such notice_ t7 That upon defauh by TniMr in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and danand for sale and of %Ttmen notice of default and of elation to cause to be sold said property, which notice Trustee shall came to be filed for record Beneficiary also shall deposit with Tinwee this Deed, said note and all documents evidencing expenditures secured hereby After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been giver as then required by law. Trustee, without demand on Tnrstor, shall sell said property rt the time and place fixed by d in said notice of sale, either as a whole a in separate parcels, and in such order as it may determine, al public auction to the highest bidder for cash in lawful stoney of the United States, payable at time of sal- Trustee rmay postimorhe sale of all or any portion of said property by public announcement at such time and place of sales and from time to time thereafter may postpone such sale by public nrrontlzrcernerR ai the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any coverant or warranty, express or implied. The recitals in such deed of any n unen or facts shall be conclusive proof of the truthfulness thereof Any person, including Trtntor, Trustee, or Beneficiary as hereinafter defined, may purchase at svrh sale. SF-9SAgree- Sher: Fxh-G-1 Ogg! 1/98 - #3 Exhibit "G" — Subordinated Deed of Trust - Page 3 of 9 After deductol; all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Truster shall apply the pr000eds of sale to payment of-- all stuns expended under the texas hereof, net then nepud., with accrued interest at the amosau allowed by law in effect at the date hereof, all other sums then secured hereb}. and the rernaindw. if any, to the prawn or pcoongtiegally entitled thereto 7) Benefeary, or any suocessor in ownership of any indebtedness secured hereby, may from tune to time. by instrumrm in wrtiting, substitute a suwessor or suocessors to any Trustee narnod herein or acting hereunder, which iaclrument, executed by the Beneficiary and duty aclrnowledged and recorded in the office of the recorder of tuna county or counties where said property is situated shall be conclusive proof of proper substitution of such succassor Trustee or Trustees, who shall, without conveyance flmn the Trustee predecessor, succeed to all its tale, estate, rights, powers and duties. Said iustr merst must contain the name of the original Truster, Trustee and Beneficiary herctmder, the book and page where this Deed is recorded and the name and address of the new Trustees 8) That this Deed applies to, inures to the benefit of, mud binds all parties hereto, their heirs, legatees. devisees, admirustrators, exeevlors, suocessors and assigns - The term Beneficiary shall mesrn the owner and holder, including pledgees, of the note seared hereby, whether or not named as Beneficiary herein- In this Deed, whenever the context so tzgtn[at, the masculine gender mcluodes the femin= andlor Healer, end the singular numtxr %nctudea the pturaL 9) That Trustee accepts this Trust when this Deed, duly executed and Acknowledged, is made a public record as provided by law Trustee is not obligated to ratify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Truster, Beneficiary or Tnwee shall be a party unless brought by Trustee_ DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO .TRUSTEE: The undersigned is the Legal owner and holder of the rote or motes and of all indebtedness secured by the foregoing Deed of Trust- Said note or notes, together with alt other indebtedness secured by said Deed of Trutt have been fully paid and satisfied, and you are hereby requested and durctrd, on patTnent to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Dad of Trust delivered to you herewith, together with the said Deed of Truss, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust. all the estate now held by you ruder the same. Dated Please mail Deed of Trust, Note and Reoonveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance. will be matte. S F-98Agree. S her. Exh. G- l 08I31198 - N3 Exhibit "G" - Subordinated Deed of Trust - Page 4 of 9 DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED SF-98Agree:Sher Fath-G-1 0&131)98 - W3 TRUSTEE Exhibit "9' — Subordinated Deed of Trust - Page 5 of 9 RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS RIDER TO SUBORDINATED DEED OF TRUST WITH RIDER ATTACHED ("Rider"), is made as of August 31 1998, by THE BRIDGES AN ERICA SHER LANE, L.P., a California limited partnership ("Trustor"), and REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Beneficiary"), as follows 1. Part of Deed of Trust. This Rider is made a part of that certain Subordinated Deed of Trust With Assignment of Rents ("Deed of Trust"), of even date hereof, to which this Rider is attached_ 2. Conflict In the event of any conflict between the terms of this Rider and the terms of the Deed of Trust, the terms of this Rider shall controi_ 3. Priority; Subordination Trustor and Beneficiary entered into that certain Owner Participation Agreement, dated August 31, 1998 (the "OPA"), pursuant to which Beneficiary (named the "Agency" in the OPA) agreed to subordinate this Deed of Trust to the liens of the deeds of trust identified in the OPA as the First Deed of Trust, the Second Deed of Trust, and the Construction/Permanent Lender(s)'s deed(s) of trust, and to such other and further documents as such lenders may be required including but not limited to regulatory agreements, not to exceed an indebtedness of Four Million Two Hundred Thirty-five thousand Dollars ($4,235,000.00). The lien of this Deed of Trust therefore shall be junior and subordinate to the liens of the foregoing listed deeds of trust and such other and further documents as such lenders may require. Beneficiary agrees to execute such subordination agreements, is the form attached as Exhibit "H" to the OPA, as are necessary to effect such subordination of the lien of this Deed of Trust. 4. Condemnation. Section B_ 1 of the Fictitious Deed of Trust incorporated into the Deed of Trust shall be modified to provide that Beneficiary shall not be entitled to any awards or damages payable directly or indirectly by reason of a condemnation or proposed condemnation affecting all or any part of, or any interest in, the Property, brought by or pursuant to the direction of Beneficiary. 5 Default_ The term "default" as used in the Deed of Trust shall mean a "Material Default" as defined in the OPA or Regulatory Agreement. S F-9SAgrce: Sher Exh-G-1 09/31/98 - t/3 Exhibit "G" — Subordinated Deed of Trust - Page 6 of 9 2to IN WITNESS WHEREOF, Trustor and Beneficiary have executed this Rider to Subordinated Deed of Trust With Assignment of Rents as of the date of Trustor's acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set forth above. "PARTICIPANT" THE BRIDGES AMERICA SHER LANE, L.P., a California. limited partnership By Its General Partner: THE BRIDGES A.MERICA FOUNDATION, a Delaware Nonprofit Corporation By: Name: Srlm� ✓. �.�'-� �J.� Cape or print) - 14� Its (circle one) (i) Chairman of the Board (d) President (iii) Any Vice President Name: (Type or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary (iii) Chief Financial Officer (iv) Any Assistant Treasurer BENEFICIARY: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic -By: - — - �a, . Chaan ATTEST: Agency Clerk SF-Mgmc SherFxh-G-1 09101 /98 - a3 APPROVED AS TO FORM: ¢ i . Agency Counsel 3/`' q/1/fy Exhibit "G" — Subordinated Dced of Trust - Page 7 of 9 S69r CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County of T hq� On eo_•�e. % /474?00 before me,w'GL Date Nam* rnd T46 of O•Trar (s.q..'sans Dos. W26 PuEfc' personally appeared 574VEi4 V. ISOtiIg Zr , Narne(s) a 9"115) —roved to me on the basis of satisfactory evidence to be the personN whose name(&)9are-subscribed to the within instrument and acknowledged to me that ri stww� executed the same in I it authorized capacity(ier4, and that by &4efft r signatures on the instrument the person(3y or the entity upon behalf of which the person* acted, executed the instrument. LAURA A. Na80M CAxr*n s 1WITNESS my hand and official seal. ..� Notmy PUW — CaMOM _ Orange Cflul" My Comrr4 Eq1res .RI 23. 1094 Synar.,rs d xayry Puplic D TIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: / lt-5T�W arWr ir AVA-113' W I /'Jy VX44t4�- Document Date: �q� Number of Pages: Signer(s) Other Than Named Above: i0aid JAe•S.uLiU _ _ _ Capacity(ies) Claimed by Signer(s) Signer's Name: Srev&,j V. t4rha isosl a ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner.— ❑ Limited `_General ❑ Attorney -in -Fact ❑ Trustee _ ❑ Guardian�r Conservator Z RUN ,Other: 1191!f-63V4 Top of thamb here Signer Is Representing. Signer's Name: A L ■ ■ ■ ■ L■ Individual Corporate Officer Title(s): Partner — ❑ .Limited ❑-General Attomey-in-Pact Trustee Guardian or Conservator Other: Signer Is Representing FLIGHT THUMBPRINT OF SIGNER 0 1995 Nato.'1s1 Nota+v Assoaat w - 8236 Rerrnel Ave., PO. Box 7184 - GwNva Putt, CA 91309.7184 Prod. No. 5907 Roomer: Cap To4Fras 1-800-B76-M7 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State ofrh.tA- County of On ��,4u�sG+r ii Pi before me, l,rt-r� A kd%-ro Data Tne O �p Name and aa of 0 cer (e g.. 'Jaoa, Notary PuNc ) r � personally appeared _5ht.'Deekg Q A Co-1,LAAe, �_'oC-L,_"L , Name(a) of SV+Vrta) Xpersonally known to me— to be the persor s>a whose name{ 4stosubscribed to the within instrument and acknowledge to me that � executed the same in authorized capaci fe , and that by I9is}herAt0signa1urQsj)on the instrument the personQj v+urA,t rat" or the entity upon behalf of which the persor soacted, CQnVNMk3n 6 1066263 executed the instrument. �+► Nwm Ramc -- Ccoormia Orange County Mr Contra � JU 23. IM WITNESS my nd and officialseaaL $.(-,n ma or Notary Pubk OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document:.-S- bex-d d f bruit W /"A Document Date. 8I3� 1 Q� _ _ Number of Pages: �_ y Signerns) Other Than Named Above: f �',cc-1 ���L� �'d -S l(IP-h �% r�S&n Capacity(ies) Claimed by Signer(s) Signer's Name: -be-Wo* G Individual ❑ Corporate Officer Title(s): ❑ Partner — © Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator 12 Other: Y l/ M rrNa-" Signer Is Representing �r� I 2fM , 1 � � i R1G1iT TMUMBFRINT OF SIGNER V. Signer's Name: CZRA le. &0 ❑ Individual ❑ Corporate Officer Title(s). ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator Q. Other: Top o1 th.imb here Signer Is Representing: T. O t995 t{a0mes Notary Assoa,ua+ • 6236 Rersrsrat Ava-. P O. Bat 7L84- C4rM9a Pask CA 9130%7161 Prod %0. $907 Rwxger. CaR4 Tpr.-Froa 1-BM-476-6U7 EXHIBIT "A" TO DEED OF TRUST LEGAL DESCRIPTION OF REAL PROPERTY (TO BE INSERTED) SF-93Agrw- Sher Exh-E'r5 0901/98 - u3 NoTF: PAG E 9 ;"nl ✓NG Dui 7b P,¢ G �ivRnonl F,xliibit "9'— Subordinated Dced of Trust - 'age 9 of 9 36 91 EXHIBIT "A" THAT PORTION OF THE NORTHEAST' QUARTER OF SECTION 23, TORNSHIP 5 SOUTH, RANGE 11 WEST, PARTLY IN THE RANCHO LA BOLSA CHIC► AND PARTLY IN 'IHE RANCHO LA~S EiOLSAS, IN THE CITY OF HuNrING•ION BEACH, AS PER NAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE CI] KN RECORDER OF SAID OOLR�TTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF 714E SOMH LDZ OF THE N3RI44 50.00 FEET OF THE SOUII- A QCTARTER OF THE NEST UJARIIR OF SAID NORIH'AST QUARTER WITH THE FAST LINE OF SHER-_ LANE AS DESCRIBED IN THE DEED TU THE CITY OF H wrm;ION BEACH, RECORDED DECKER 7, 1961 IN BOOK 593-7 PACE 35, OFFICIAL RFC, THENCE NORTH 160.00 FEET AL(M SAID EAST LINE; THENCE EAST 346.00 FEET PARALLEL WITH IHE NORT%4 LINE OF SAID SOUTHEAST QUARTER OF THE NORTi-{WEST Q[V� OF THE NORTHFASI' QUAR'hR; 7HENCE SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; THENCE EAST 90.00 FEET PARALLEL WITH- SAID NORTH LINE; THENE SCM 80.00 FEET PARALLEL, WITH SAID EAST LINE TO THE 90UM LINE OF THE NORIH 50.00 FEFI' OF THE SCXJrWEST QUARTER OF THE NORTHEAST QUARTER OF SAID NORTHEAST QUARTER; "Ih"a10E WEST 436.00 FEET TO THE POINL' OF BEGINNING. SAID LAND IS INCLUDED WITHIN THE AREA Stia4N ON A MAP FILED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN TT-E OFFICE OF THE CO[JM RECORDER OF SAID CUJNTY. EXCEPT TIEREFRCM ALL OIL, GAS, MINERALS AND OTI[ER ITYDROCA!RBONS, BELOW A DEPTH OF 500 FEET, WITHOUT THE RIG 14T OF SURFACE ENTRY, AS RESERVED IN DEEDS Or RECORD. PARCEL, 2. 714AT PORTION OF THE NORTHEAST QUARTI�- OF SECTICtN 23, Tt PINSHIP 5 SOUTH, RAN ;E 11 WEST, IN THE RANCHO LA BOLSAS, IN THE CITY OF HUNTII�Gii3N BEACH, AS PER MAP RECORDED IN B`OY, 51, PAGE 13 OF MISCEI.LkK CUS N'A.PS, IN THE OFFICE OF THE: O=glY RECORDER OF SAID COUN'LY, DESCRI13ED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTH LUE OF THE NORTH 50.00 FEET OF THlr- SCILTTTAST QUARTER OF THE NORI'T-LWEST QUARTER OF SAID NORTHEAST QUA= WITH THE FAST LINE OF SH]ER LANE AS DESCRIBED IN THE DM) TO T}E CITY OF HUNTINGION BEACH, RECORDED DECEMBER 7, 1961 IN BOOK 5937 PAGE 35,. OFFICIAL RECORDS; THENCE NORTH 180.00 FEET ALCM SAID FAST LINE; 7HENCE FAST 346.00 FEET PARALLEL, WITH THE NORTH LINE OF SAID SCJUIHEAST QUA911R OF ME NaZll-W= QUARTER OF 'THE NORTHEAST QS RIERR ; "ham SOUTH 100.00 FEET' PARALLEL WITH SAID FAST LINE; THENCE FAST 90.0E FEET PARALLEL WITH SAID NORTH LINE TO A POINT WHICH POINT IS THE TRUE POINT AND PLACE OF BEGINNING; THENCE SOUTH 80.00 FEET PARALLEL WITH SAID EAST LINE Tn TIE SOUTH LINE OF THE DOM 50.00 FEET OF 'IHE Sam-4EsT QUA= OF 'THE NOMHFAST U ARTER OF SAID NORTHEAST' QU5*Z1r:.R; INENCE 408.96 FEET EAST PARALLEL WITH THE NORTH LINE OF SAID SaYT FFAST QUARTER OF THE: NOftII-1WEST QUARTER OF THE NORTHEAST QUARTER TO THE WEST LINE OF PARKSIDE LANE AS DESCRIBED IN Ti-E DEED TO THE CITY OF HLWrINGTON BEAC34, RECORDED SEPT MBER 20, 1966 IN BOOK 8727 PAGE 541 OF OFFICIAL. RECORDS; THENCE NORTH 80.00 FEET ALONG SAID WEST LINE TO A LINE THAT IS PARALLEL WITH THE NORTH LINE OF SAID SST QUARTER OF THE NORTHWEST QUARTER OF THE ' NOST Q[JA MER, AND WNICN PASSES 7W<CUGH AND TRUE POINT AND PLACE OF BEGINNING; 11¢73CE WEST' 408.96 FEEL', AUJNG SAID LAST h04rIONED PARALLEL LINE, To THE 'TRUE FOINT AND PLACE OF BeGINNINC;. 5�� • (FIdGNT, UCSQ2.1PnCN CEM-INUM) 500 FEEr, WITHOUT 7HE R:1GHT OF SURFACE WIRY, AS RESERVED IN DEEDS OF RECORD - SAID LAND is rNcujom WITHIN 'IvE ARFA SH wN C N A MAP FILFD 3N SOOK 23 PAGE 17 OF ROZORD OF SURVEYS, IN THE OFFICE OF THE COUNIY RECORDER OF SAID COMM FROM : 11111 111111111111 11111 111, Fl-I'Z t`c. . Sep. 01 1593 e4: 44Fr'i Pi RESOLUTION OF THE ROAM) OF DIRECTORS OF'IHE BRIDGES AMERICA FOUNDATION, INC. The following resolutions were adopted by the board of Directors of the Bridges America foundation (the "Corporation') effective as of September 1, 1998. RESOLVED, that Garrett Robinson. President of the Corporation, and or Steve Harrison, a member of the board of directors. he and hcrcbv each are severally authorized to excctne and deliver such agreements, documents and instruments, and to undertake such acts as they shall deem necessary or advisable to consurtunate the purchase by the Bridges Sher T_anc LP.. (a California limited partnership of which the Corporation -is the General Partner), of the low-income housing project and r;:al property located al 16112 Sher lane Huntington Beach, Ca. Dated as of September 1, 1998. irl.+aj, AM 6!:-� a Robinson, ecretary . e J. Z CITY OF HUNTINGTON BEACH. 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK DEED CERTIFICATION CALIFORNIA 92648 This is to certify that the interest in real property conveyed by the Deed dated August 31 1998 from THE BRIDGES AMERICA SHER LANE, L.P., A California limited partnership, to the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic, is hereby accepted by the undersigned officer or agent on behalf of the Agency pursuant to the authority conferred by Resolution No. 278 of the Agency adopted October 21, 1996 and the grantee consents to the recordation thereof by its duly authorized officer. Dated: September 16, 1998 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH CONNIE BROCKWAY, CMC CLERK By: AW puty Clerk {Telephone: 714-536-5227 ) WHEN RECORDED RETURN TO - The Bridges America Sher Lane, L.P_ 18837 Brookhurst Street Suite 303 Fountain Valley, CA 92708 Attn: JoAnn Ulvan (Space Above This Line For Recorder's Oflicc Use Only) (Exempt from Recordtng Fee Per Gov. Code: Sec- 0103 - See Below) This Release of Construction Covenants is recorded at the request and for the benefit of the Redevelopment Agency of the City of Huntington Beach and is exempt from the payment of the recording fee pursuant to Government Code Section 6103_ REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By Its. Dated: RELEASE OF CONSTRUCTION COVENANTS WHEREAS, THE BRIDGES-AMREICA SI-IER LANE, L.P., a California limited partnership ("Owner"), is the owner of the fee interest in that certain real property more particularly described in the legal description attached hereto as Exhibit No_ 1 and incorporated herein (the "Site"); and WHEREAS, by an Owner Participation Agreement (hereinafter referred to as the "Agreement") dated as of August 31, 1998, by and between Owner and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (hereinafter referred to as "Agency"), Owner has constructed the improvements on the Site according to the terms and conditions of said Agreement; and S F-9XAgrcc_Sher-3: tsh-L-1 ORMNS - 93 [Exhibit "li" — Release of Constnictfon Covenants — Page 1 of 51 WHEREAS, pursuant to the Agreement, promptly after completion of all construction work by Owner upon the Site, Agency shall furnish Owner with a Release of Construction Covenants in such form as to permit it to be recorded in the Official Records of the County of Orange, and WHEREAS, the issuance by Agency of the Release of Construction Covenants shall be conclusive evidence that Owner has complied with the terms of the Agreement pertaining to the construction of improvements on the Site, and WHEREAS, Agency has conclusively determined that the construction of improvements on the Site has been satisfactorily completed as required by the Agreement, and NOW, THEREFORE: 1 As provided in the Agreement, Agency does hereby certify that construction of the improvements on the Site have been fully and satisfactorily performed and completed, and that such development is in full compliance with said Agreement_ 2. This Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of Owner to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction w°ork on the Site, or any part thereof. Nothing contained herein shall modify in any way any other provision of said Agreement 3 This Release is not a Notice of Completion as referred to in California Civil Code Section 3093_ IN WITNESS WHEREOF, Agency has executed this Release as of this day of , 199 REDEXIT-LOPMENT AGENCY OF THE CITY OF HLJ\iTL\IGTON BEACH, a public body corporate and politic By: Its: ATTEST: Agency Clerk CONSENT TO RECORDATION THE 13RIDGES AMERICA SHER LANE. L.P., a California limited partnership, owner of the fee interest in the Site legally described in Exhibit No. 1 attached hereto does hereby consent to the recordation of the foregoing Release of Construction Covenants against the Site. "PARTICIPANT' THE BRIDGES AMERICA SHFR LANE, L.P., a California limited partnership By Its General Partner: THE BRIDGES AMERICA FOUNDATION. a Delaware Nonprofit Corporation BV: Name: (Type or print) Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President AND Name: (Type or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary (iii) Chief Financial Officer (iv) Any Assistant Treasurer STATE OF CALIFORNIA ) ss_ COUNTY OF ORANGE ) On before me, personally appeared ^T , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that helshe/they executed the same in his/her/their authorized capaciry(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument WITNESS my hand and official seal Notary Public (SEAL) STATE OF CALIFORNIA ) ) ss_ COUNTY OF ORANGE ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument_ WITNESS my hand and official seal. Notary Public (SEAL) EXHIBIT NO. 1 LEGAL DESCRIPTION OF SITE [TO BE LNSERTED] EX111BIT "A" PARCEL 1- THAT PORTION OF THE NORTHEAST QCIAFtIIIt OF SECTION 23, TOWNSHIP 5 SOUTH, RANGE 11 WEST, PARTLY IN THE RANCHO LA BOLSA CHICA AND PARTLY IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINmw BEACH, AS PER MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN 71-E OFFICE OF THE CCL IY RECORDER OF SAID COUIM, DE:SCRI13ED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THIr SOUni LINE OF THE NORTH 50.00 FEET OF THE SOUTHEAST OLmRTER OF THE NORTM7E`ST QUARTER OF SAID NORTHEAST QUARTS WITH THE FAST LINE OF SHER LANE AS DESCRIBED IN TT-E D® TO THE CITY OF HUNTING'ION BEACH, RECORDED DECEMBER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCE NORTH 180.00 FEET ALONG SAID EAST LINE; THENCE FAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SCXITH Al T QUARTER OF THE NtORTS- NI ST QUARTER OF THE NORTHEAST QU%RTE R ; THENCE SOUM 100.00 FEET PARALLEL WITH SAID EAST LINE; THEIR FAST 90.00 FEET PARALLEL WITH- SAID NORTH LINE; THENCE SC U H 80.00 FEET PARALLEL WITH SAID EAST LINE TO THE SOUTH LINE OF THE NORTH SO.00 FEET OF THE SOUT ,'erEST QUARTER OF THE NORTHEAST QUARTER OF SAID NORTHEAST 4-V�1=; TTf NCE WEST 436.00 FEST Tl7 nE POINT OF BEGINNING. SAID LAND IS INCLUDED WITHIN THE AREA SHC%AV ON A MAP FILET] IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COCNIY RECORDER OF SAID COUNTY. EXCEPT-=EFRCM ALL OIL, GAS, MINERALS AND OTHER HYDROCAPIMIS, BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEEDS OF RECORD. PARCEL 2: THAT PORTION OF THE NORTHF� QUM= OF SECTION 23, TC WNSH I P 5 SOLIT H , RANGE. 11 WEST, IN THE RANCHO LA BOLSAS, IN = CITY OF HUNTINGTON BEACH, AS PER MAP RECORDED IN BOOK- 51, PAGE 13 OF MISCELIANDOUS MAPS, IN THE OFFICE OF THE OJU[vIY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF SAID NORTHEAST QUARTER WITH THE EAST LINE OF SHER LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUN`rRUION BEACH, RECORDED DEC EMBER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCE NORTH 180.00 FEET ALONG SAID FAST LINE; THII4CE EAST 346.00 FEET PARALLEL WITH THE NORTH LTNE OF SAID SO MMAST QUARTER OF 711E NORTHEAST QUARTER OF THE NORTHEAST QLTARTE R ; THENCE SOUTH 100.00 FEET PARALLEL WITH SAID FAST LINE; THD KE FAST 90.00 FIFT PARALLEL WITH SAID NORTH LINE TO A POINT WHTOH POINT IS THE TRUE POINT AND PLACE OF BEGINNING; THENCE SOUTH 80.00 FIST PARALLEL WITH SAID EAST LINE TO THE SOUTH LINE OF THE NORTH 50.00 FEEF OF THE SWM4= QUARTER OF THE NORTHEAST QUARTER OF SAID NORTHEAST QUARTER; THENCE 406.96 FEET EAST PARALLEL WITH THE NORM LINE OF SAID SOUMEAST QUARTER OF THE NORTHWEST QUARTER OF THE NpRI FAST QUARTER TO THE WEST LINE OF PARKSIDE LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNT'INGION BEACH, RECORDED SEPTEMEtER 20, 1968 IN BOOK 6727 PAGE 541 OF OFFICIAL RECORDS; THENCE NORTH 80.00 FEET ALONG SAID WEST LINE TO A LINE THAT IS PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE UXURWE T QUWIfR OF 7HE NORTH]EA-FT QUARTER, AND WHICH PASSES TTiRO(JGH AND TRUE POINT AND PLACE OF BEGINNING; THENCE WEST 408.96 FEET', ALONG SAID LAST MENTIONED PARALLEL LINE, TO THE TRUE POINT AND PLACE OF BEGINNING. . (LMiAL DCS=PIZCN CCXTr HUED) (Irani, DC-SMPFIGN CCHrINUCD) l EXCEPT -D EREFRCM ALL OIL, GAS, MINUL S AND 01MM HYDROGkREONS, BELOW A DEPTH OF 500 FEET, WITHOUT THE R-IGHT OF SURFACE EVIRY, AS RESERVED IN DEEDS OF RECORD. SAID LAND IS INCLUDED WITHIN THE AREA SHCWN ON A MAP FILED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE 0 R'TIY RECORDER OF SAID 0XWlY. s WHEN RECORDED RETURN TO= The Bridges America Sher Lane, L.P. 18837 Brookhurst Street Suite 303 Fountain Valley, CA 92708 Attn- JoAnn Ulvan SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE, LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT ("Agreement") is entered into this _ day of by and among REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public agency, corporate and politic (the "Agency"), THE BRIDGES AMERICA SHER LANE, L.P , a California limited partnership ("Participant"). and _ ("Lender") RECITALS A. Participant owns fee title to the real property described on Attachment No. "1" (the "Property") attached hereto and incorporated herein by reference. The Agency and Participant have entered into an Owner Participation Agreement dated as of Augsut 31, 1998 (the "OPA"). Pursuant to the terms of the OPA, Participant has executed a Note in favor of the Agency in the amount of ONE MILLION TWO HUNDRED THOUSAND SEVEN HUNDRED THIRTY-FOUR DOLLARS ($1,200,734.00) ("Agency Loan") to assist Participant in the redevelopment of the Property as an affordable housing complex_ The Agency Loan is to be secured by a Subordinated Deed of Trust With Assignment of Rents With Rider Attached encumbering the Property (the "Agency Deed of Trust"). B. Agency and Participant have also entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions recorded against the Property ("Agency Regulatory Agreement"), which Agency Regulatory Agreement contains, among other terms, certain use restrictions affecting the Property. sr-9xAbT« 0&13 U98 - a3 tF.ximrr --ir — SUBORD_ AGR. FORM Page 1 of 91 C Participant has obtained a loan from ("the Lender") to lend to Participant the sum of DOLLARS ($ (the "Lender Loan"). To repay the Lender Loan, Participant has executed or is about to execute a deed of trust encumbering the Property to secure a promissory note in the sum of the Lender Loan, payable upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). In connection with the Lender Loan, Participant may also be required by Lender to execute a regulatory agreement to be recorded against the Property, which may contain among other terms, use restrictions affecting the Property (the "Lender Regulatory Agreement") D. Lender is willing to make the Lender Loan provided the Lender Deed of Trust and Lender Regulatory Agreement are a lien or charge upon the Property prior and superior to the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement, and provided that the Agency will specifically and unconditionally subordinate the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement to the lien or charge of the Lender Deed of Trust and the Lender Regulatory Agreement. E It is to the mutual benefit of the Lender, Agency, and Participant that the Lender make the Lender Loan to Participant, and the Agency has agreed that the Lender Deed of Trust and Lender Regulatory Agreement shall, when recorded, constitute a lien or charge upon the Property which is unconditionally prior and superior to the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement, subject to the specific terms and provisions of this Subordination Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the Agency, Lender and Participant, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: l _ Subordination by Agency .l.l Subordination of Agency Deed of "!-rust and Agency Regulatory Agreement to Lender Deed of Trust and Lender Regulatory Agreement. The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder), and the Lender Regulatory Agreement (and any amendments or modifications thereto) shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior to (1) the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement, (ii) all present and future indebtedness and obligations secured thereby, and (iii) all rights and privileges of Agency thereunder, provided that the Lender Deed of Trust does not exceed Four Million Two Hundred Thirty -Five. Thousand Dollars ($4,235,000 00) If Participant chooses to refinance the Lender Loan, Agency agrees to subordinate the Agency Deed of Trust and the Agency Regulatory Agreement to the refinancing Lenders Deed of Trust under the same terms and conditions as set forth in this Agreement, on the condition that the amount of the new loan is no greater than the original principal balance of the Lender Loan SF-9xAgrcc Sher-1.Exh-11 I oxn 119x - _• [HAI-11131T "H-, - SUBOR11 ACR_ FORM Page 2 of 91 12 Covenants of Agency The Agency declares, agrees and acknowledges that. (a) The Agency consents to all provisions of the Lender Note and the Lender Deed of Trust, and (11) all provisions of the Lender Regulatory Agreement. (b) To Agency's actual knowledge, there is no breach, event of default or default existing under the Agency Deed of Trust or Agency Regulatory Agreement, or any circumstances, event, omission or failure of condition .which would constitute such a breach, default or event of default after notice or lapse of time, or both. 2. Reliance: by Lender and Aeencv. The Lender would not make the Lender Loan and the Agency would not have agreed to subordinate the Agency Deed of Trust and Agency Regulatory Agreement without this Subordination Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination, specific loans and advance are beins, and will be made and, a part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this waiver, relinquishment and subordination 3. notice to Agency. In the event of breach or default by Participant under the terms of the Lender Deed of Trust; the party alleging such default shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Participant Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall have each of the fallowing rights so long as either the Agency Regulatory Agreement or the Agency Deed of Trust encumber any portion of the Property or interest therein (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of -Crust or any lien under the Lender Regulatory Agreement. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of Trust or other lien prior to the date that is thirty (30) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonmonetary default, the Lender shall not foreclose it, Lender Deed of Trust or other lien prior to the date specified above for monetary defaults, provided that if said nonmonetary default is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary (x) to obtain possession of the Property by either foreclosing the Agency Deed of Trust, and (y) to cure the default, so long as the Agency does so with reasonable and continuous diligence- (b) To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. (c) To negotiate with the Participant to purchase the Property from Participant, subject to the Lender Deed of Trust without the consent of the holder of the Lender Deed of Trust or enforcing party under the Lender Regulatory Agreement. SI-IMArrecSher-I Eih-11-1 Uxl3I:9R - :=3 1F:xttutr1'-tr' - sUIIORD. nett. DORM Page 3 of9l The Lender agrees that the exercise of any of the rights set forth in this Section 3 l by Agency shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan- 3-1 Foreclosure of Agency Deed of "Trust- The Lender hereby agrees that in the event that Agency forecloses the Agency Deed of "Trust, said foreclosure shall not give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan. 3 2 Disbursements_ Lender, in making disbursements of the proceeds of said Loan, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing such Loan shall not defeat the subordination herein made in whole or in part. 4_ %Miscellaneous. 4 1 Entire Agreement This Subordination Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and Lender Regulatory Agreement on the one hand, and the Agency Deed of Trust and Agency Regulatory Agreement on the other hand, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Agency Deed of Trust and Agency Regulatory Agreement, which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property 4.2 Successors and Assigns This Subordination Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto 4 3 California Law_ This Subordination Agreement shall be construed according to the laws of the State of California. 4.4 Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to 'whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law_ 4.5 Notice. Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by (i) personal delivery, (ii) by courier service that provides a receipt showing date and time of delivery, or (iii) by registered or certified mail, return receipt requested, postage prepaid. Notices shall be directed at the address of such parry hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be SF-9XAgrce:Shcr-I } UK'.31:99 - ::3 n-'xi n'r "I r — tiUBORI - AGR FORM Page 4 491 deemed given upon receipt if by personal delivery or courier service, or if by mail the earlier or (x) actual receipt or (y) forty-eight (48) hours after deposit in the United States mail. If to Agency- Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention- Executive Director If to Participant- The Bridges America Sher Lane, L.P. 18837 Brookhurst Street Suite 303 Fountain Valley, CA 92708 Attention- Executive Director With copy to: Rutan & Tucker 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92628 Attention: Jeffrey M. Oderman, Lsq If to Lender - With copy to- 4-6 Attorney's 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 attomeys' 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. 4.7 Counterparts. This Subordination Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above_ SF-9KAgrec Sher-1 I:0-11 —1 OR'3li)% - #3 IF:X111RTT — ii" -- St1RORr). AGR_ FORM Page 5 of 91 NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN FOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "AGENCY" ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic By: By: Agency Cleric APPROVED AS TO FORM- By - Agency Counsel S1:-98Agrcc Shcr.I Exh-F! -.1 OK-/1 D" - G'; [Signatures continued on next page-] IEx111131T "It" - SUBORt)_ AGR. FORM Page 6 of 91 tir-9XAl;rccShcr-lTxh-ll -1 ow3 l!9x - ii 3 "Participant" THE BRIDGES AMERICA SHER LANE, L P , a California limited partnership By - Its: "LENDER" I3y- Its: By Its [f XHIBIT "I I" — SUBORD AGR- DORM Page 7 of' 9[ STATE OF CALIFORNIA COUNTY OF } ss. } On before me, appeared _ personally personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument Witness my hand and official seal Notary Public [ADD ADDITIONAL ACKNOWLEDGMENT FORMS AS NECESSARY] sr-9RAb«< Sher-1 eta,-11 —1 09.131199 - 10 11"XI-1113I1- "IF — SLJI30Rr3. AGR- DORM Page 8 of 91 SF-9RA&ee Sher - I Exh•It - I 0K!31.99 - Al ATTACHMENT NO " 1 " LEGAL DESCRIPTION OF PROPERTY [TO HE INSERTED] til"xi 1l n -f i' — SUBORD. ACiR_ FORM Page 9 of 91 EXHIBIT 1 THAT PORTION OF 1HF NORTHEAST QUAR= OF SECTIO[d 23, TOWNSHIP 5 SOUTH, RANGE 11 WEST, PARTLY IN THE RANCHO LA BOLSA 04ICA AND PARTLY IN THE RANCHO LAS BOLSAS, IN THE CITY OF HWTINGTCIN BEACH, AS PER MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN TIE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCR I BED AS FOLI.OWS : BEGINNING At T1iE INTER.S£CTION OF THE SOUM LINE OF THE WRT14 50.00 FEET' OF THE SOUTHER-!' QUVn-ER OF THE NORTTWEST Q(-WZIUZ OF SAID N0FM-FAST QUARTER WITH THE FAST LINE OF SEER LANE AS DESCRIBED IN *11-LE DEED TO 711C CITY OF HUNTII, I BEACTi, RECORDED DECO-SER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; 'I}ENCE NOR**' i 180.00 F -.r ALONG SAID EAST LINE; TH04M FAST 346.00 FEET PARALLEL WITH 71-M NORTH LINE OF SAID SOU'D TEtST QiDURTER OF THE NOR n4Wf S I' OLV�J= OF THE NORTH=]' QUART R ; THENCE SOUTH 100.00 FEET PARALLEL WIT14 SAID FAST LINE; 7104CE EAST' 90.00 FEEI PARALLEL W ITN - S_n.I D NORTH LINE; THENCE SCUM 80.00 FEET PARALLEL W I TI T SAID FAST' LING. TO THE SOUTH LINE OF '11-IE NORTH 50.00 =- - r OF T-IE SOUI'rrvJC T QLIIIR'I'ER OF '11TE NORTHEAST QUARTER. OF SAID NORTHEAST QMRTER: IIIENCE W-Egr 436.00 FEET TO THE POINT OF BDGINNING- &'k.ID LAND IS INC]IJDED WITHIN THE AREA SHOWN ON A MVILP F'IT.I) IN BOOK 23 PA(E 17 OF RECORD OF SURVEYS, IN T1iE OFFICE OF '11iE COU[sf'Y RECORDF?2 OI' SAID Cr-UlTY. EXCEPT 'nrj :ZEFRC[•1 ALL OIL, GAS, MINERALS AND C 1=— lPfOROCARBONS, Baoll A DEPTH OF 500 FX- l', ;•1i'I11OUT' 114E RIG'NI' OF SURFACE ENTRY, PS RESFRVL37 IN D =- OF RECORD. PARCEL 2: TART PORTION OF THE NORTHEAST QUARTER OF SF..CTION 23, TOWNSHIP 5 SOJTII, MYT, 3.1 4%rLSF, IN 'IHE RANCY.0 TA BOLSAS, 114 THE CITY OF H[UN]'ITJ=N BFAGI, AS P-FJZ f-I-P RECORDED IN BOOK 51, PAGE 13 OF MISCEIIANM- US MAPS, IN ITE OFFICE- OF THE MINTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS - BEDINNIN-; AT T11E IN17E RSECFICN OF '114E SOUTH LINE OF 'ME T,YJRTH 50. 00 FEET OF Tim. SOU HEAST QUM TER OF THE NORTHWEST QLIWt'IFR OF SAID NORTH6AST QUARTER WITH 'THE FAST LINE OF SHM LANE AS DESCRIBED IN THE DEED TO 'THE CITY OF BEACH, RECORDED DECD•'2ER 7, 1961 IN BOOK 5937 PACE'. 35, OFFICIAL RECORDS; THENCE NORTii 180.00 FEET ALIEN ; SAID FAST LINE; THENCE EAST 346.00 FELT PARALLEL WIT14 TI3 E NORTH LINE OF SAID SWIlEAST QIAAaER OF THE NORTHWEST QLARTF.R OF THE NORTEAST QUARTER; IEEtXE SOUIH 100.00 FEET PARALLEL WITH SAID £AST LINE; IHFI7 CE FAST 90.00 FEET PAPJU,LP, W111I SAID NORTH LINE TO A POINT WIIIQi POI M* IS THE TRUE POINT' AND PLACE OF BEGINNING; T7-E= SOUTH 80.00 FEET PARALLEL WITH SAID EAST LINE TO THE SOUII-I LINE OF 714E NORTH 50.00 FEE OF THE SOUIHWES!' QUARTER OF THE NaMMASI' QUARTER OF SAID NORTI FAST QUARTER; THENCE 4 0 8.9 6 FEET EAST PARALLEL WITH TIIE NORTH LINE OF SAID SOUTHEAST Q(-TIIRTFR OF THE NORTHWEST Qf1ARTER OF THE NORTHEAST QUARTER TO THE WEST LINE OF PARKSIDE LANE AS DESCRIBOJ IN THE DEED TO 714E CITY OF HUNTING CN BEACH, REC70RDM SEPTEMBER 20, 1968 IN BOOK 8727 PAGE 541 OF OFFICIAL RECORDS; THENCE NORTH 80.00 FEET ALONG SAID WEST LINE TO A LINE TEAT IS PARALLEL WITH THE NORTH LINE OF SAID noun -FAST QUARTER OF THE NORTI =- QUARTER OF THE- NORTTHFAST QUARTER, AND WHIC]i PASSES 'IVROMI AND TRUE POINT AND PLACE OF BEGINNING; THENCE WEST 408.96 FEET, ALA.; SAID LAST MW- FIONF- PARALLEL LINE, To THE 'TRUE POINT AND PLACE OF 13EGINN 1 W,3 . (I1-x;n[� I)I:��C72TI7I'TCXT (xx7I7NIJf�)) {l!"7[x-C%N G111, souvr3ON CINuL•71) EKCElyI' 'nUiREFRCM ALL OIL, GIBS, MINERALS AND GIHER MROCIARBONS, BELOW A DEPTH OF. 500 fE'Ei, Wl'nK= ITT, RIMT OF SURFACE ENIRY, AS RESERVED IN DEEDS OF RECORD. SAID LAND IS INC LUDFD WITHIN THE AREA S 4CM ON A MAP FILED IN GOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE CUtJ[M RECC)RDFR OF SAID CUUNIY. WR This document was electronically recorded by Orange Coast Title RECOROItVG REQIESTFO flY: OfWNGE COAST TITLE COMPANY Recorded in the County of Orange, Califomia Gary L. Granville, Clerk/Recorder FREE RECORDING REQUESTED BY R111111011111IM11191M E 1111ill No Fee AND WHEN RECORDED MAIL TO: - 19980669841 4.08pm 10/02/98 006 26016695 26 59 REDEVELOPMENT AGENCY-OETHE . Al2 D02 19 0 12.00 0.00 54.00 0.00_0_ _00 o_.00_ CITY OF HUNTINGTON BEACH 0.00 o_oa 0.00 2000 Main Street Huntington Beach, CA 92648 Attn: 'Cir'Y CLe_R,� M VPc47 z -__3 (Space Above T}us Line for Recorder's Office Use Only) (Exempt from Recording Fee Per Gov. Cock §6103) REGULATORY AGREEMENT AND DECLARATION OF COVFNAN'TS AND RESTRICTIONS THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this 31 day of August 1998, by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency") and THE BRIDGES ANfMCA SHER LANE, L.P., a California limited partnership ("Participant") RECITALS: A. Agency and Participant have entered into that certain Owner Participation Agreement, dated _ August 31 1998 (the "OPA"), concerning Participant's redevelopment of that certain real property, owned in fee by Participant, more particularly described in Attachment No. 1 attached hereto and incorporated by reference herein (the "Site"). The OPA describes the "Project" which generally consists of Participant's rehabilitation of an existing sixty- six (66) unit apartment complex on the Site and subsequent management thereof as an affordable rental housing complex. The apartment complex consists of thirty-three (33) one bedroom units and thirty-three (3) two -bedroom units B. Agency and Participant also entered into that certain Note (the "Note"), with a Note Date of Avgv3-f -31 , 1998, pursuant to which Agency has provided Participant with a self -liquid gloan in the principal amount One Million Two Hundred Thousand Seven Hundred Thirty-four Dollars ($1,200,734.00) ("Loan Amount") The Note provides for Agency's waiver and discharge of the Loan Amount by one -thirtieth (1130) each year for thirty (30) years. C. Agency and Participant now desire to place restrictions upon the use and operation of the Project, in order to ensure that the Project shall be operated continuously as an affordable SF-98Agree-Sher-3 £xh-1 Tax -Exempt -Government Agency 08l31198 - 0 CITY OF HUNTINGTON BEACH r Exhibit "r' — REG15LATORY AGREEMENT — PAGE, 1 of 15 r� I B=kway, Clerk BY: housing project available for rental in accordance with the terms set forth below for the term of this Agreement. AGREEMENT: NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators and assigns, and all persons claiming under or through them, that the Site, 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 annual rentals whose amount does not exceed the maximum percentage of income that can be devoted to rent as set forth by California Health & Safety Code Section 50053, or its successor 1.2 Eligible Low Income Tenant. As used in this Agreement, the term "Eligible Low Income Tenant" shall mean those tenants whose household income does not exceed eighty percent (80%) of the Orange County Median Income, or such other percentage as may be defined in California law from time to time as "low income," and who are other eligible to rent a Unit. 1.3 Eligible Special Median Income Tenant. As used in this Agreement, -the term "Eligible Special Median Income Tenant" shall mean those tenants whose household income does not exceed one hundred ten percent (l 10%) of the Orange County Median Income, and who are otherwise eligible to rent a Unit. 1.4 Eligible Tenant_ As used in this Agreement, the term "Eligible Tenant" shall refer to, as the context mandates, individually or collectively, Eligible Very Low Income Tenants, Eligible Low Income Tenants, and/or Eligible Special Median Income Tenants, who are otherwise eligible to rent a Unit_ 1.5 Eligible Very Low Income _Tenant. As used in this Agreement, the term "Eligible Very Low Income Tenant" shall mean those tenants whose household income does not exceed fifty percent (50%) of the Orange County Median Income, or such other percentage as may be defined in California law from time to time as "very low income," and who are otherwise eligible to rent a Unit. 1.6 Orange County Median income. For purposes of this Agreement, the "Orange County Median Income" shall be determined by reference to the regulations published by the California Department of Housing and Community Development pursuant to California Health and Safety Code Section 50093, or its successor SF-98Agcee-Sher•3-Each-1 08r31198 - H3 Exhibii "r' - REGULATORY AGREEMENT - PAGE 2 of 15 1.7 Unit and Units. As used in this Agreement, the term "Unit" shall mean one of the sixty-six (66) rental dwelling units in the Project, and the term "Units" shall mean two or more of the sixty-six (66) of the rental dwelling units in the Project. The term "Unit" and "Units" shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. 2. TERM OF AGREEMENT. RESIDENTIAL RENTAL PROPERTY_ The term of this Agreement shall be thirty (30) years from the date hereof. Participant hereby agrees that the Project is to be owned, managed, and operated as a project for Eligible Tenants for the term of this Agreement. To that end, and for the term of this Agreement, the Participant hereby represents, covenants, warrants and agrees as follows- 2 1 Pumose. The Site will be acquired and the Project developed for the purpose of providing Eligible Tenants rental housing. 2.2 Facilities. All of the dwelling units in the Project shall contain facilities for living, sleeping, eating, cooking and sanitation in accordance with the terms of the OPA 2.3 Residential Use. None of the dwelling units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, roaming house, nursing home, hospital, sanitarium, or trailer court or park without the Agency's prior written consent. 24 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shalt the Participant take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of Agency. 2.5 Preference to Eligible Tenants. All of the dwelling units will be available for rental in accordance with the terms of this Agreement, and the Participant shall not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that the dwelling units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.4 below. 2.6 Liability of Participant. Participant and Manager shall not incur any liability under this Agreement as a result of fraud or negligent or intentional misrepresentation by a tenant. 3. OCCUPANCY OF PROTECT BY ELIGIBLE TENANTS. Participant hereby represents, warrants, and covenants as follows: 3.1 Income Restrictions. Except as expressly provided herein, throughout the term of this Agreement, the sixty-six (66) Units shall be subject to the following affordability restrictions: SF-98Agree:S6er-3 Exh-I 08131,198 - #3 Exhibit "I" - REGULATORY AGREENTNT - PAGE 3 of 15 (a) seventeen (17) one -bedroom Units and sixteen (16) two -bedroom Units shall be rented to Eligible Special Median Income Tenants. (b) sixteen (16) one -bedroom Units and six (6) two bedroom Units shall be rented to Eligible Very Low Income Tenants. (c) eleven (11) two -bedroom Units shall be rented to Very Low Income Tenants and these Units shall be designated as "HOME Units" and the rents for these eleven (11) Units shall not exceed the "low Income" rent as defined by HOME Program, as set forth at Section 92252 of Title 24 of the Code of Federal Regulations. 3.2 Further Income Restrictions. Notwithstanding the foregoing, Participant shall be permitted, from time to time and at one or more times, to enter into agreements with any public or private entity or entities, on such terms as Participant may agree in its sole discretion, to convert those Units designated above for Eligible Special Median Income Tenants to Units for Eligible Tenants at an income level lower than Special Median Income, for example, to Eligible Low Income Tenants or Eligible Very Low Income Tenants. 3.3 Rental Rates_ Participant shall rent each of the Units at no greater than the A.f'fordable Rent applicable to the particular Unit_ 3.4 Occupancv By Eligible Tenant. A Unit occupied by an Eligible Tenant at the commencement of occupancy shall be treated as occupied by an Eligible Tenant until the Unit is vacated. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until reoccupied. (a) As to the HOME Units, the HOME Program allows tenants to continue residing in income restricted units even if their income increases_ Pursuant to the HOME Program, Participant may increase the tenant to no more than thirty percent (30%) of their actual household income if their income exceeds the maximum allowable income for the HOME Unit (b) As to the non -HOME Units, if the income of an Eligible Very Low Income Tenant increases above the maximum level, Participant may raise the rent to the Special Median Unit level. Then, when the first vacancy occurs in a Special Median Unit, Participant shall rent it to an Eligible Very Low Income tenant 3.5 Income Computation_ Immediately prior to an Eligible Tenant's occupancy of a unit, Participant shall obtain and maintain on file an Income Computation and Certification form from each such Eligible Tenant dated immediately prior to the date of initial occupancy in a Unit by such Eligible Tenant. Participant shall use its best efforts to verify that the income provided by an applicant is accurate by taking one or more the following steps as a part of the verification process. (1) obtain two (2) pay stubs for the most recent pay periods, (u) obtain a written verification of income and employment from applicant's current employer-, (iii) obtain an income verification form from the Social S F-98 Agee_Sher-3: Exh-I Exhibit ' P' - REGULATORY AGREEMENT - PAGE 4 of 15 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 may be reasonably required. 3.6 Rental Priority. Tenants living in the Project prior to Participant's rehabilitation of the Units as contemplated by the OPA ("initial Rehabilitation") who are Eligible Tenants meeting the income restrictions of the Units as set forth in Section 3.1 shall be given first priority in re -leasing Units in the Project following completion of the Initial Rehabilitation. Except as set forth above, Units shall be rented to Eligible Tenants on a first -come, fast -served basis; provided, however, that Participant may, in Participant's sole discretion, maintain an "interest list" or "eligibility list" of potential tenants but that Participant shall not be liable to Agency or any person, firm, or entity in the event a Unit is rented to a person who is not on any such list or is on such list but is listed lower than another person on such list_ 3.7 Renting_Vacant Units. When a unit becomes available as a result of a tenant vacation, Participant shall rent the unit to an Eligible Tenant in accordance with the following procedure: (a) First, Participant shall rent the Unit to persons who have been displaced by Agency activities, pursuant to Califomia Health and Safety Code Section 33411.3, provided that Agency provides Participant with reasonable notice- (b) Second, Participant shall rent any vacant unit in the order of priority as set forth in Section 3 6 (c) Third, if after and despite Participant's reasonable efforts, Participant is unable to rent a unit in the Project reserved for one of the restricted income categories for Eligible Tenants as set forth in Section 3.1, Participant may rent said unit to the next higher income level for Eligible Tenants set forth in Section 3.1, provided that in no event may less than thirty-three (33) Units be rented to Eligible Very Low Income Tenants. 3.8 Maintenance of Records. Participant shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency to inspect the books and records of Participant pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Units. 3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Participant has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. Si-9L'AEMC:Shcr-3:F_xh.1 OW V98 - a3 Exhibit'7 - REGULATORY AGREEMENT - PAGE 5 of 15 3.10 Conflicts_ The rental priority provision set forth in Section 3.6 shall apply only in the event, and 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 recorded in superior priority to this Agreement 4. MAINTENANCE. 4.1 Maintenance Covenant Participant agrees to maintain all interior and exterior improvements, including landscaping, on the Site in good condition and repair (and, as to landscaping, in a healthy condition), reasonable wear and tear excepted, and in accordance all applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction- In addition, Participant shall keep the Site free from all graffiti and any accumulation of debris or waste material Participant 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 approved materials. The maintenance covenant contained in this Section shall remain in effect for the term of this Agreement. 4.2 Agtricy Rights- Agency shall have the right annually to enter upon the Site to inspect both the interiors and exteriors of the Site, upon seventy-two (72) hours notice Agency may perform or cause to be performed the maintenance necessary to cure any default of these maintenance covenants and Participant shall be liable for payment to Agency of Agency's reasonable costs (excluding staff salaries and overhead and other similar costs) to perform such required maintenance; provided, however, that Participant first be given written notice by Agency of the actions required to cure any default, and Participant, after receipt of such notice, shall have sixty (60) days to cure such defaults, but Participant shall not be deemed in default of the foregoing maintenance covenant if such default cannot reasonably be cured within the sixty (60) day period referenced above so long as Participant has commenced to cure such default within the same sixty (60) day period and is diligently proceeding with the work to cure such default Notwithstanding the foregoing, if any property conditions are reasonably identified by Agency after a property inspection attended by a representative of Participant that pose an immediate danger to life or limb, Participant shall have three (3) days to effect corrections of such condition(s) to Agency's reasonable satisfaction. 4.3 Annual Report. Participant covenants and agrees to submit to the Agency an annual report (the "Annual Report") required by California Health and Safety Code Section 33418. The Annual Report shall include for each Unit the rental rate and the income and family size of the occupants The income information shall be supplied by the tenant in a certified statement on a form provided by the Agency. The Participant shall submit the Annual Report on or before the end of the first calendar quarter of the year following the year covered by the Annual Report The Participant shall provide for the submission of such information in its leases with tenants. Agency shall not charge Participant a fee for reviewing the Annual Report, or for Agency's or Participant's compliance with Health and Safcty Code §33418. SF-Mgme Sher-3.Exh-I 08/3If" - #3 Exhibit' P' - REGULATORY AGREEMENT - PAGE 6 of 15 4.4 Management Plan. Participant shall prepare, submit to Agency Executive Director within sixty (60) days of Recordation of this Agreement and maintain in effect a Management Plan in accordance with the following: (a) The Management Plan, including such amendments as may be approved in writing by the Agency, shall remain in effect for the term of this Regulatory Agreement. Participant shall not amend the Management Plan or any of its components without the prior written consent of the Agency. The components of the Management Plan shall include: (1) Management Agent The name and qualifications of the proposed management agent. The Agency 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 -Pro -gram A description of the proposed management, maintenance, tenant selection and occupancy policies and procedures for the Special Median Income, Very Low Income and Home 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 Participant 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 Special Median Income, Very Low Income and Home Units. (S) Annual Budget Prior to the completion of construction and annually thereafter not later than fifteen (IS) days prior to the beginning of the next fiscal year of the Project, Participant shall submit a projected operating budget to the Agency Executive Director for review and approval The Agency shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder, and such matter shall be deemed approved unless the Agency provides to Participant its written disapproval within thirty (30) days after receipt of a request for approval, provided Participant includes with its request, a written notice, in capital letters, stating as follows: SF-98Agme-Shes-3=E,11• i OW31/98 - #3 NOTICE: PURSUANT TO SECTION 4.4 OF THE REGULATORY AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF 14UNTINGTON BEACH AND BRIDGES AMERICA SHER LANE, L.P., FAILURE BY THE AGENCY TO APPROVE OR Exhibit "I" — REGULATORY AGREEME T —PAGE 7 of 15 DISAPPROVE THE REQUEST WITHIN APPROVAL_ MATTER SUBMITTED WITTT THIS 30 DAYS SHALL BE DEEMED AN Any disapproval shall be in writing and contain the Agency's reasons for disapproval. (b) Participant hereby covenants and agrees the Agency shall have the right, at any time and from time to time, to give notice to Participant if the Agency determines that the Project is not being managed or maintained in accordance with the Management Plan. The Agency may require the Participant to change management practices or to terminate the management agent and retain a different management agent, approved by the Agency. The Agency agrees that prior to requiring the Participant to change its management agent or the management practices the Agency shall informally consult with Participant, in an attempt to resolve the dispute. If the Agency determines that such an attempt at informal resolution has been unsuccessful, it shall give the Participant thirty (30) days written notice to change the management agent or practice, as the case may be. If Participant fails to do as requested by the Agency in the written notice, the Agency may then require the immediate change of the management practice or agent, as the case may be. The management agreement shall provide that it is subject to termination by the Participant without penalty, upon thirty (30) days prior written notice, at the direction of the Agency. Within ten (10) days following a direction of the Agency to replace the management agent, the Participant shall select another management agent or make other arrangements satisfactory to the Agency for continuing management of the Project. The Participant shall notify the Agency 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 Agency, the Agency shall be entitled to require the Participant to change the management agent in accordance with the terms of this paragraph. 5_ ENFORCEMENT_ In the event Participant defaults in the performance or observance of any covenant, agreement or obligation of Participant 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 Agency, or, in the event said default cannot be cured within said time period, Participant has failed to commence to cure such default within said thirty (30) days and diligently prosecute said cure to completion, then Agency shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: (a) By mandamus or other suit, action or proceeding at law or in equity, require Participant to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of this Agreement, or SF-98AI,,ree_Sher-3:E• xh-I 08t31198 - #3 Exhibit ,r - REGULATORY AGREEMENT - PAGE 8 of 15 (b) 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 pursuant to the OPA. 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. 6_ NONDISCRIMINATION. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Participant, 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 Site, or any part thereof (except as permitted by this Agreement)_ 6. l Form of Nondiscrimination and Nonsepregration Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, religion, ancestry, national origin, sex or marital status of any person. All such deeds, Iases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In Deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land- (b) In Leases. "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through hint, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, ancestry, national origin, sex, or marital status in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." SF-98Agme Sher-3:E�1-I 081.31/98 - d3 Exhibit " r' — REGULATORY AGREEMENT — PAGE 9 of 15 (c) In Contracts: "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, religion, ancestry, national origin, sex, or marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Iand, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of the land." 7. COVENANTS TO RUN WITH THE LAND. Participant hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement Agency and Participant 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 Participant's successors in title to the Site, provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire. All covenants without regard to technical classification or designation shall be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. 8. ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any covenant in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery, and expert witness fees.. 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 real property records of the County of Orange. t0. NOTICE. Any notice required to be given hereunder shall be made in writing and shall be given by (i) personal delivery, (d) courier service that provides a receipt showing date and time of delivery, or (iu) 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 Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Executive Director Participant: Bridges America Sher Lane, L-P. 18837 Brookhurst Street Suite 3 03 Fountain Valley, CA 92708 Attn- Executive Director S F- 98A9ree-Sher-3- Exh-1 08/31/98 - #3 Exhibit " I" - REGULATORY AGRE. EMENIi - PAGE 10 of 15 Copy to: Rutan & Tucker 611 Anton Blvd_, Suite 1400 Costa Mesa, CA 92626-1950 Attn: Jeffrey M. Oderman, Esq. 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/WATVER/RZMGRATION. 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. A 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 remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 11.3 Inteuration. This Agreement contains the entire Agreement between the parties and neither party relies on any warranty or representation not contained in this Agreement. 12. GOVERN11,TG LAW. This Agreement shall be governed by the laws of the State of California. 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. 14. SUBORDINATION. This Agreement shall be junior and subordinate to the liens of the deeds of trust identified in the OPA as the First Deed of Trust, Second Deed of Trust, and the Construction/Permanent Lender's deed(s) of trust, and such other and further documents, including regulatory agreements, as such lenders may require, not to exceed Four Million Two Hundred Thirty-five Thousand Dollars ($4,235,000.00) in debt. If, from time to time and at one or more times, Participant chooses to refinance the loan secured by any deed of trust which is superior to this Agreement, Agency agrees to subordinate this Agreement to the refinancing lender's deed of trust under the same terms and conditions as set forth herein on the condition that the amount of the new loan is no greater than the original principal balance of the refinanced note. Agency agrees to execute such subordination agreements as may be required to effect the priority set forth in this Section. SF-98Agrec Slier-3.Exh-1 08/3IM - 93 [end - signature page follows] Exhibit "r, - REGULA"I'ORY AGREEMENT - PAGE I I of 15 IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. "AGENCY" ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic By c.L Agency Clerk APPROVED AS TO FORM: By. - Agency Counsel sr-9sAgrre Sher-3 E: jj-t 08131/98 - 93 By: Chairman "PARTICIPANT" THE BRIDGES AMERICA SHER LANE, L P., a Califomia limited partnership By Its General Partner: THE BRIDGES AM ERICA FOUNDATION, a Delaware Nonprofit Corporation By: Name: 1�1- i"el-vil-1-1 V, PWVI#--4 csv�, ( We- or print) a)cre c Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President 00- Name: M-pe or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary Exhibit "I" - REGULATORY AGREEMENT -PAGE 12 of 15 FRCri : `1111 111111111111 11111 1111 PHDP,E No, : cxp. 81 19Ge a4:44PM Pi RESOLUTION OF THE ROXRD OF DIRECTORS OF THE BRIDGES AMERICA FOUNDATION, INC. The following resolutions were adopted by the Award ofDirectors of the Bridges America foundation (the "Corporation') effective as of September 1; 1998. RESOLVED, that Garrett Robinson, President of the CorPOTation, and or Steve Harrison, a member of the board of directors, be and bgreby each are severally authorized to exccute and deliver such agreements, documents and instruments, and to undertake such acts As they shall deem necessary or advisable to consummate the purchase by the Bridges Sher Lane LP., (a Ca fomia limited partnership of which the Corporation -is the Genre? Partner), oftho low-income housing project and real property located at 16112 Sher lane Huntington Beach, Ca. Dated as of September 1, 1998. FRW : ' 1111 111111111111 11111 1111 PH0tE ID. : Sep. 01 19% 0.4 : 44PM PI RESOLUTION OF THE BOARD OF DIRECTORS OF THE BRIDGES AMERICA FOUNDATION INC. The following resolutions were adopted by the Award of Directors of the Bridges America foundation (the "Corporation") effective as of September 1, 1998. RESOLVED, that Garrett Robinson, President of the Corporation, and or Steve Harrison, a member of the board of directors. be and hereby each are severally authorized to execute and deliver such agreements, documents and instruments, and to undertake such acts as they shall deem necessary or adv sahle to consummate the purchase by the Bridges Sher Lane LP., (a California limited partnership of which the Corporation -is the Gencrai Partner), of the low-income housing project and real property located at 16112 Sher lane Huntington Beach, Ca. Dated as of September 1, 1998. '_R anine Robinson, ecretary CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of CdAkYn fa - County of On iC.n� �� jqg - before me, '� !��Sd+') �� u-loci Date Nan'e and Tale d Orsar (e g , 'Jane Doe. Notts personally appeared-STtVC'AJ V. hh4Y2W�S6AJ n Name(s) a! & ,gnee(s) 9pemmnety known to 4 proved to me on the basis of satisfactory evidence to be the personN whose name%&&re-subscribed to the within instrument and acknowledged to me tha&e� executed the same in&/tr authorized capacity(t". and that by LAURA A- NELSON +, ANesfttTen signatureN on the instrument the person(s-y cam, ,0 106626a or the entity upon behalf of which the persont&} acted, NO?MRXAC—Ct3lMIC executed the instrument. My COMM lea ij 23. WW WITNESS m,,hfnd and official seal. ,Wre V Not" PuD c L Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Cl Number of Pages: 15P l'S 'j� rYtGs1�T Signer(s) Other Than Named Above: &t, Capacity(ies) Claimed by Signer(s) Signer's Name: STLCV6-rj V. fiuzxj Ic ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ,5- Other. bI,QC�G7Z)9__ Signer Is Representing: 7W ,B9t,r)GfS AktexofcA FVLAvDA'Lan J RIGHT THUMBPRINT OF SIGNER .�Y Signer's Name: Cl Individual Corporate Officer Title(s). Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGHT THU. 7BPRINT OF SIGNER .. 'thumb here 0 IM NaUor-W Homely ASSsoc aupn • 5236 Rtm%irat Ave. P.O. Box 75$4 • Canoga Pe15� CA g5304.75g4 Ptvd. NO 59,37 Root6er. Cali T05-rme 1 $00.1176 W7 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of [. VLc-A County of PC4�n� On ]�-P.s/►�- �� 19�g _ before me, "A. NO Date e t X" and T01e of Ofrtar (a g . 'Jena Doe. N=ffQ&ej personally appeared k�'{ tg a- C,�nA_f� 6 " Ck —� Nama(f) at Sgneffs) T personally known to me —OR _691ee;eFy evideme to be the persorw whose names?"_Jg!g)subscribed to the -within. instrument and acknowledged to me that+he� executed the same in+isi'tre� authorized capacity�I�9€ ), and that by signatures on the instrument the person=, LAURA A- NELSON or the entity upon behalf of which the persorQ D acted, corm uon fJ 1066263 executed the instrument. Notary Plot — caefoRVo Orarve County WITNESS m handZ eal. W Comm bz*es M 23. 19W vUpc O VTIONAL Though the information below is not required by taw it may prove 'valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document - Description of Attached Document Title or Type of Document. I�Y.6m_La i`D�' dgray"� be�'"�m_�d Z � 1�-.� _ Document Date- 13 jQ� Number of Pages: Signer(s) Other Than Named Above: a"a a.,.-P,> WM V,/-b n n Capacity(ies) Claimed by Signer(s) Signer's Name: SkIrL-I Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator Y4 Other: 6kaAr'ftla i Top of thumb he. Signer Is Representing- Signer's Name. °� 1 0 Individual ❑ Corporate Officer Title(s): C. Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian 9f conservator ITIP Other: CZ11L of thurb here Signer is Representing: 0 1995 NatiCnat Notary Assoauwn • 8236 Remmet Ave.. P O_ Boa 7184 • Canoga Park CA 9t309.719e Prod No 5907 Reoroar Cam 7o9-Free i -1100.876-6827 ATTACHMENT NO. I LEGAL DESCRIPTION OF SITE [To be inserted.] SF-98AgrerSher-3-Exh•I 08,'3119R - #3 M0T[: ArF 3 IV,07- Axe- Jv,E -A)o A611)157-1 ✓ Exhibit "1" - REGULA"!'ORY AGREEMENT -PAGE 14 of 15 EXHIBIT 1 THAT PORTION OF THE NORTHEAST QUARTER OF SECTION 23, TOWNSHIP 5 SCU114, RAiUE 11 WEST, pARTLy IN THE RANCHO LA BOLSA CHICA AND PARTLY IN THE RANCHO LAS BOLSAS, IN THE CITY OF IZLR rINGIUN BEACH, AS PER MAP RECORDED IN BOOK 51, PAGE 1.3 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUMY RDOORDER OF SAID COUWY, DESCRIBED AS FOLLOWS: BEGINNING AT THE It3TFRSECTION OF THE SOUTH LINE OF IVEE NDRIH 50.00 FITI OF THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF SAID NORTHEAST QUARTER WITH ME EAST LINE OF SHER. LANE AS DESCRIBED IN THE DEED TO IHE CITY OF HUNTINGION BEACH, RECORDED DECEMER 7, 1961 IN BOOK 5937 PACE 35, OFFICIAL REC.ORAS; THE KE NORTH ].430..00-FE. T ALONG -SAID- AST- LI ; TlI EAST 34f; - O _F= PARALLEL- =-.TNE-NORTK LINE OF SAID SOUTHEAST QUARTER OF THE NORTHWEST QUARTER R OF THE NORTHEAST QUWT R ; THENCE SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; THENCE FAST 90.00 FEET PARALLEL WITH • SAID NORTH LINE; THENCE SOUTH 8 0.0 0 FEET PARALLEL WITH SAID FAST LIME TO THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUIRAE9T QtIART'ER OF THE NORT}IFAST QL%RTFR OF SAID NORTHEAST QUARTER; T14ENCE WEST 436.00 FEET' TO TI-E POINT OF BEGINNING. SAID LAND IS INCLUDED WITHIN THE AREA S14OWN ON A ViAP FILED IN BOOK 23 PAC E~ 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID CCUqIY. EXCEPT TNER.EFROM ALL OIL, GAS, MINERALS AND OTHER IffDROCARBONS, BELCV A DEPTH OF SOO FEAT, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEMS OF RECORD. PARC!'L 2: THAT RORTION OF THE NORTH AST QUARTER OF SECTION 23, TOWNSHIP 5 SaTIN, RANC;E 11 WEST, IN THE: RANCHO LA BOLSAS, IN THE CITY OF HU TTINGION BEACH, AS PER MAP RECORDED IN BOOK.. 51, PAGE 13 OF MISCELLANEOUS t4APS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOULWS: BEGINNING AT THE INTERSECTION OF THE SOUTH LINE OF THE NORTH 50.00 FEET OF THE SOUTHEAST Q(PRTIR OF ITE NORTHWEST QU*ZTER OF SAID NORTHEAST QUARTER WITH TIE FAST LINE OF S4IER LANE AS DESCRIBED IN THE DEED M 'THE CITY OF BEACH, RECORDED DEMCER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; TIif:N M NORTH 180.00 FEEIALONG SAID EAST LINE; THENCE FAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QLEA = OF IHE NORIHWEST 91 IER OF THE NORTHEAST QUARTER; Tr{ENCE SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; THENCE FAST 90.00 FEET PARALLEL, WITH SAID NORTH LINE Ill A POINT WHI04 POINT IS THE TRUE POINT AND PLACE OF BEGINNING; 'THENCE SOLMI 80.00 FEET PARALLEL WITH SAID EAST LINE TO THE SOUIH LINE OF THE NORTH 50.00 FF1EI' OF THE -qaM46= QUARTER OF THE NORTfIEASF QUA= OF SAID NORTHEAST QUARTER; THENCE 408.96 FEET EAST PARALLEL WITH IlE NORTH LINE OF SAID SOUTHEAST VJVZI fR OF THE NORTHWEST 93*n-ER OF THE NORTHEAST QUARTER TO THE WEST LINE OF PARKSIDE LANE AS DESCRIBED IN 7HE D® TO 7E4E CITY OF H[.Jl`TTINGION BEACH, RECORDED SEPTEMBER 20, 1968 IN BOOK 8727 PAGE 541 OF OFFICIAL RECORDS; THENCE NORTH 60.00 FEET ALONG SAID WEST LINE 70 A LINE THAT IS PARALLEL WITH THE MRT14 LINE OF SAID 9OU HEAST QUARTER OF THE NORT VEST QUARTER OF TEE' NORTIIEF QUARTER, AND WHICH PASSES THROUGH AND TRUE POINT AND PLACE OF BEGINNING; THENCE WEST 408.96 FEET, ALONG SAID LAST MENTIONED PARALLM LINE, TO T-E TRUE ROINF AND PLACE OF BEEGItVING. (UrIAL I]LlSCFLiT>I'ICN CTrTl- NCT(:7D) '_ �iLTr�t, DISQ2�PTION cnvrrNUc�) SAID LAND IS INCUJDID WITHIN 'THE AREA SHCWN ON A MAP FILED IN BWK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE: OFFICE OF THE QXW Y RECDRDER OF SAID COL M. EXHIBIT J TABLE 1 ESTIMATED PROJECT COSTS SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH, CALIFORNIA _ I. Property Acquisition' il. Temporary Relocation ' III. Direct Costs -Rehabilitation' IV. Indirect Costs Architecture & Engineering Permits & Fees2 Taxes, Insurance, Legal & Closing Development Management Contingency Total Indirect Costs V. Financing Costs Interest During Rehabilitation 3 Financing Fees' Total Financing Costs 66 Units $73,790 /Unit Allowance 66 Units $5.190 /Unit Allowance Allowance 3.0% Direct Costs 8.5% Interest On $3,520,000 Loan 2.0 Points On $3,520,000 Loan $0 0 25,000 15,000 10.300 $0 400 $4,870.000 $0 $ 342, 500 $50.300 $70,400 VI. Total Project Costs $5.333.200 Per Unit $80.800 ' Per Developer Estimates. k 7 Developer assumption. should be verified by City staff. 3 Assumes Project income is sufficient to fund the debt service costs incurred during rehabilitation. Loan amount is based on an 8.5% interest rate for 30 years and debt coverage of 120% Prepared by. Keyser Marston Associates, Inc. File Name: SherLane; Stabilized; 8l3198 SABLE 2 ESTIMATED NET OPERATING INCOME SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH CALIFORNIA I. Income' Moderate income Set -Aside Units One -Bedroom 17 Units @ $740 (Month $151,000 Two -Bedroom 16 Units @ $895 /Month 171.800 Very -Low Income Set -Aside Units One -Bedroom 16 Units @ $658 /Month 126,400 Two -Bedroom 6 Units @ $740 /Month 53,300 Very -Low Income HOME Units One -Bedroom 0 Units @ $616 /Month 0 Two -Bedroom 11 Units @ $740 [Month 97,700 Laundry/Misc Income 66 Units @ $18 /Month 14,300 Gross Income $614,500 (Less) Vacancy and Collection 4.3% Gross Income 26,600 Gross Effective Income S587,900 II. Operating Exl>cnses2 Administrative Expenses 66 Units @ $1,010 /Unit $66,700 Operations, Maintenance & Utilities 66 Units @ $1,610 /Unit 106,300 Insurance & License 66 Units @ $130 /Unit 8.600 Property Taxes 66 Units @ $0 /Unit 0 Operating & Capital Reserve 66 Units @ $250 /Unit 16,500 Total Operating Expenses 66 Units @ ($3,000) !Unit ($198,100) III. Net Operating Income $389.800 it ' Rental income is based on the lower of the maximum amount allowed by the relevant government assistance source or the currently prevailing market rent. Z Per Developer's estimates. Prepared by: Keyser Marston Associates, Inc_ File Name: Shedane, Stabilized, 8/3G8 i TABLE 3 WARRANTED FINANCIAL_ ASSISTANCE CALCULATION SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH, CALIFORNIA I. Supportable Debt Net Operating Income Threshold Return on Investment Supportable Investment It. Total Project Costs $389.800 9.6%' $4.062.000 ($5, 333,200) III. Warranted Assistance ($1.271,200) Per Unit $19,300 Weighted average of 8 5% interest rate on debt and 12% stabilized return on equity Prepared by Keyser Marston Associates, Inc_ File Name Shertane; Stabilized, & 3W OWNER PARTICIPATION AGREEMENT THIS OWNER PARTICIPATION AGREEMENT ("Agreement") is entered into as of this day of _ , 1998 ("Effective Date"), by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and #RIDGES AMERICA SHER LANE, L.P., a California limited partnership ("Participant"). / \ -T'N (� RECITALS A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (California Health and Safety Code Section 33000 et sM. B. Participant has opened an escrow to acquire the "Site" (as such term is defined herein) from the Pham Trust ("Pham Trust") and intends to develop the "Project" (as such term is defined herein) on the Site in accordance with the terms of this Agreement. C. Agency desires to meet its affordable housing goals pursuant to the California Community Redevelopment Law by assisting Participant in the acquisition of the Site to facilitate Participant's rehabilitation -in -place of an existing apartment complex on the Site with the units, after rehabilitation, subject to the terms of this Agreement, rented to tenants whose household incomes do not exceed very low income and low income as defined by California law. Agency's assistance shall be in the form of a self-liquidating loan in the amount of ONE MILLION SIX HUNDRED T'VELVE DOLLARS ($1,000,612) to assist Participant in meeting the cost of acquisition of the Site and rehabilitation of the apartment complex, and additional assistance of Two Hundred Thousand One Hundred Twenty-two Dollars ($200,122.00) through the HOME Investment Partnership Program. The total assistance shall be One Million Two Hundred Thousand Seven Hundred Thirty-four Dollars ($1,200,734.00). 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 SECTION 1. DEFINITIONS The following terms, as used in this Agreement, shall have the meanings given unless expressly provided to the contrary: ti1'-98A;;rcc Sher -I 0Sf7898 - a3 The term "Agency" shall mean the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to, the rights, powers, and responsibilities of Agency. The term "Agency Deed of Trust" shall mean the Subordinated Deed of Trust with attached hereto as Exhibit "G". The term "Agency Loan" shall mean the Agency's self-liquidating loan to Participant in the amount of One Million Six Hundred Twelve Dollars ($1,000,612.00) as evidenced by the Note and secured by the Agency Deed of Trust. The term "Agreement" or any reference to this "Agreement" shall mean this Owner Participation Agreement executed by and between Agency and Participant, including all exhibits attached hereto, which exhibits are incorporated herein by this reference and all other documents incorporated herein by reference. The term "Approved Project Plans and Permits" shall mean all of the plans, permits, and approvals required for the Project, as approved by the Agency and/or the City including, but not limited to, preliminary and final drawings (final drawings shall be in sufficient detail to obtain a building permit), site plans, building plans and elevations, grading plans, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications that City and Agency customarily require for such a Project, and including all required approvals and findings pursuant the California Environmental Quality Act of 1970, as amended, and regulations promulgated thereunder ("CEQA"), and, if applicable, the National Environmental Policy Act of 1969, as amended, and regulations promulgated thereunder. The term "City" shall mean the City of Huntington Beach, a municipal corporation, having its offices at 2000 Main Street, Huntington Beach, CA 92648. The term "Construction/Permanent Lender" shall mean one or more lenders of Participant's choice providing funds for the Participant's rehabilitation of the Units, including any replacement or permanent lender that replaces the construction lender in an amount not to exceed "shirty -five Thousand Dollars ($35,000.00). The term "Days" shall mean calendar days and the statement of any time period herein shall be calendar days and not working days, unless otherwise specified. The term "Effective Date" shall mean the date the Agency approves this Agreement<which date shall be inserted into the preamble of this Agreement. The term "Eligible Tenant" shall mean any person entitled to rent a Unit as set forth in the Regulatory Agreement. The term "Escrow" shall mean that certain escrow with Orange Coast Title Company, Escrow Division, which has been established to convey the Site from the Pham Trust to Participant, sr -')SA? -rep Sher-3.1 O:sn_8/98 -3 and into which Agency shall deposit the Agency Loan funds in accordance with the terms of this Agreement. - The term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of the Agency, or authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or an authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved under California law wholly for Agency Board determination. The term "First Deed of Trust" shall mean the deed of trust recorded in first position at close of escrow as security for the loan obtained by Participant from a lender of Participant's choice in an amount not to exceed Three Million Four Hundred Thousand Dollars ($3,400,000). The term "Force Majeure" shall mean any war; insurrection; strike; lock -out; labor dispute; not; flood; earthquake; fire; casualty; Act of God; act of the public enemy; epidemic; quarantine; restriction; freight embargo; unavoidable lack of transportation; governmental restriction; unusually severe weather; inability to secure necessary labor, materials. or tools; delay of any contractor, subcontractor or supplier; economic or market conditions; lack of tenant commitments or tenant changes; inability to secure satisfactory financing; act of the other party including act or failure to act of City or any other public or governmental agency or entity (except that any act or failure to act of City or Agency shall not excuse performance by Agency); or any other cause beyond the control or without the fault of the party claiming an extension of time to perform. The term "Grant Deed" shall mean that certain Grant Deed that conveys the Site from the current owner, the Pham Trust, to Participant. The term "Note" shall mean that certain Promissory Note Secured by Subordinated Deed of Trust attached hereto as Exhibit 7". //_T�E The term "Participant" shall mean/BRIDGES AMERICA SI ER LANE, L.P., a California limited partnership, whose address is 18837 Brookhurst Street, Suite 303, Fountain Valley, CA 92708. The Term "Project" shall mean generally the rehabilitation of the existing apartment complex on the Site and the subsequent rental of the Units therein to Eligible Tenants, pursuant to the procedures set forth herein and more particularly described in the Scope of Development. The term "Project Budget/Pro Forma" shall mean the sources and uses of funds for acquisition of the Site and the development of the Project as set forth in Exhibit "J". The term "Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions attached hereto as Exhibit "1". The term "Release of Construction Covenants" shall mean that release attached hereto as Exhibit "F;" issued by Agency to Participant pursuant to the provisions of Section 4.7 below. SY-98Agrcc.Slrcr-3- I 3 O.V28198 -3 The term "Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit "D" setting forth the times upon which performance by the parties under this Agreement is due. The term "Scope of Development" shall mean that certain exhibit attached hereto as Exhibit "C". The term "Second Deed of Trust" shall mean the deed of trust recorded in second position at close of escrow as security for the loan obtained by Participant from the Pham Trust as seller financing in an amount not to exceed Eight Hundred Thousand Dollars ($800,000). The term "Site" shall mean that certain real property located in the City of Huntington Beach, County of Orange, State of California commonly known as 16112 Sher Lane, Huntington Beach, California, and legally described in Exhibit "A" and depicted on the Site Map. The term "Site Map" shall mean the map attached hereto as Exhibit "B" depicting the location of the Site. The term "Subordination Agreement" shall mean the form of Subordination Agreement attached hereto as Exhibit "H". The term "Units" shall mean the sixty-six (66) dwelling units comprising the Project and subject to rent restrictions as set forth in the Regulatory Agreement. SECTION 2. SUR.IECT OF THIS AGREEMENT. 2.1 Purpose of the A regiment . C7ne Oui I I;os, iv- v►�(,-c.J Tw�l jlnilar� (a) The purpose of this Agreement is to implement the Community redevelopment Law by providing a loan (the "Agency Loan") in an amount not to exceed 1.000,612�in funds from the Agency's Low and Moderate Income Housing Fund, which funds are not federal funds or the proceeds of a tax-exempt bond issue, to assist Participant to pay a portion of the Project Costs, and to provide further assistance from HOME Program rehabilitation funds of Two Hundred Thousand One Hundred Twenty-two Dollars ($200,122.00) pursuant to a separate contract. (b) This Agreement is intended to facilitate Participant's acquisition of the Site and rehabilitation of the existing apartment complex located thereon for rental to very low and low income tenants. 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 has been undertaken and is being assisted. SF-Me.rce Sher-3-1 03128198 -3 -to (c) The Project will be used and operated for not less than thirty (30) years as mixed inco c rental housing, with not less than fifty percent (50%) of the apartments restricted to occupancy Eligible Very Low Income Tenants at an Affordable Rent, and the remainder restricted to occupancy Eligible Special Median Income (as those terms are defined s in the Regulatory Agreem nt). Te Ke. N t5_ fi 2.2 The Redevelopment Plan. This Agreement is made in accordance with the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project") which was approved by adoption of Ordinance No. 3343 on December 16, 1996, and which merged together four different, previously approved project areas. The Site is located outside of the Merged Redevelopment Project. Agency intends this Agreement to meet its obligations pursuant to Health and Safety Code Sections 33413, 33334.2 and 33413(b)(2)(A)(ii). -p 6- ,4 w" e- ri CA 2.3 Participant. The Participant issBridgesig'her Lane, L.P., a California limited partnership, whose address is 18837 Brookhurst Street, Suite 303, Fountain Valley; CA 92708. 2.4 Prohibition Against Transfers. (a) The qualifications and identity of the Participant are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Participant. No voluntary or involuntary successor in interest of the Participant shall acquire any rights or powers under this Agreement except as expressly set forth herein (b) The Participant shall not assign all or any part of this Agreement without the prior written approval of the Agency. The Agency agrees to reasonably give such approval if- (1) the change is to a limited partnership formed for financing the Project, in which the original Participant is the managing general partner, or possesses not less than a 50% interest in the managing general partner, and has control over the management of the partnership; and (2) if in the reasonable determination of the Agency, the proposed reconstituted Participant is comparable in all material respects (including experience, character and financial capability) to the Participant. Any such change (or assignment of this Agreement in connection therewith) shall be by instruments satisfactory to the Executive Director (or his designee), and be subject to the approval by the Executive Director (or his designee) of evidence of the proposed assignee's qualifications to meet the obligations ofthe Participant under this Agreement. (c) For the reasons cited above, the Participant represents and agrees for itself and any successor in interest that without the prior written approval of the Agency, there shall be no significant change in the ownership of the Participant or in the relative proportions thereof, or with respect to the identity of the parties in control of the Participant or the degree thereof, by any method or means. (d) The Participant shall promptly notify the Agency of any and all changes whatsoever in the identity of the parties in control of the Participant or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by the Agency and the Agency may exercise its remedies pursuant to the Agency Note and Agency Deed of Trust, if there is any significant change (voluntary or Sf7-98AgrttSh[r-3• I 5 W281W -3 involuntary) in membership, management or control, of the Participant (other than such changes occasioned by the death or incapacity of any individual). (e) Participant shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Site (referred to hereinafter as a "Transfer"), without prior written approval of the Agency, except as expressly permitted by this Agreement. Consent to a "Transfer shall not result in acceleration of the Agency Note. Consent to one such Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers. Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Agency, to fulfill the obligations undertaken in this Agreement by the Participant. Any such proposed transferee, by instrument in writing satisfactory to the Agency and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Participant under this Agreement and agree to be subject to all conditions and restrictions applicable to the Participant in this Agreement. There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such Transfer- and if approved by the Agency its approval shall be indicated to the Participant in writing. J (f) In the absence of specific written agreement by the Agency, no unauthorized Transfer, or approval thereof by the Agency, shall be deemed to relieve the Participant or any other party from any obligations under this Agreement. (g) The provisions of this Section 2.4 shall be of no force or effect as of the expiration of the Regulatory Agreement. SECTION 3. FINANCING AND ACQUISITION OF THE SITE. 3.1 Oymership of the Site. As of the Effective Date of this Agreement, Participant is in escrow to acquire the Site from the Pham Trust and as such Participant qualifies as an "owner - participant" within the meaning of the Community Redevelopment Law (Health & Safety Code §33000 et seq.) Participant's financing of the acquisition of the Site includes Participant's equity, financing secured by the First Deed of Trust, seller financing secured by the Second Deed of Trust, and use of a portion of the Agency Loan. 3.2 A ency Financial Assistance. The Agency, in accordance with the terms of this Agreement, shall provide to Participant the Agency Loan. Upon satisfaction of all conditions precedent (or waiver by Agency) to Agency's obligation to disburse the Agency Loan under this Agreement, Agency shall deposit approximately Seven Hundred Thirty-five Thousand Dollars ($735,000.00) of the Agency Loan funds into Escrow for disbursement to Participant at Close of Escrow, with the remainder to be disbursed to pay for the costs of rehabilitation of the Site. 3.3 Form of A eenncv Financial Assistance, Purpose of Note and Security. The parties hereto expressly acknowledge that the Agency Loan funds to be provided to Participant under this Agreement is intended to be a self-liquidating loan, assuming. Participant's performance of its obligations hereunder. In the event Participant is in material default of any of its obligations SF-98A--ncc Shcr-1-1 6 M28198 -1 hereunder, including its obligations under the Regulatory Agreement, Agency's sole and exclusive remedy shall be to foreclose under the Agency Deed of Trust. 3.4 Escrow. This Agreement, once deposited in Escrow, shall constitute joint escrow instructions of Agency and Participant. The Escrow agent is hereby empowered to act under the Agreement and upon indicating its acceptance in writing to Agency and Participant within five (5) days after receipt of this Agreement; provided, however, that any undertaking by the Escrow agent of any of the acts or services set forth in this Agreement shall constitute acceptance of the obligation to perform as Escrow agent under this Agreement. Any amendment to the Escrow instructions contained herein shall be in writing and signed by both Agency and Participant. (a) Closing Date. On or before the date established in the Schedule of Performance, the parties shall satisfy the conditions described in Sections 3.5 and 3.6 and complete the Close of Escrow. If, for any reason, the CIose of Escrow has not occurred by the date provided therefor in the Schedule of Performance, either party may terminate this Agreement, by providing notice of termination to the other party. (b) Delivery of Documents and Funds by Participant. On or before twelve noon on the last business day prior to the scheduled Closing Date, Participant shall deposit or cause to be deposited with the Escrow agent the following: {i} the Grant Deed executed and acknowledged by the Pham Trust; (ii) the Note, executed by Participant; (iii) the Agency Deed of Trust, including the Rider thereto, executed and acknowledged by Participant; (iv) the Regulatory Agreement, executed and acknowledged by Participant; and (v) All funds, documents, and deposits Participant is required to deposit with Escrow agent in order to close the Escrow conveying the Site to Participant. (c) Delivery of Documents and Funds by Agency. On or before twelve noon on the last business day prior to the scheduled Closing Date, Agency shall deposit or cause to be deposited with the Escrow agent the following: (i) the Agency Deed of' Trust including the Rider thereto, executed and acknowledged by Agency; (ii) the Regulatory Agreement, executed and acknowledged by Participant; and Sf--98Agrcc Shcr-3-1 7 (iii) the Agency Loan funds. (d) Recordation. Escrow agent is directed, on the Closing Date, to record against the Site the following documents in the following order of priority: (i) the Grant Deed; (ii) the First Deed of Trust; (iii) the Second Deed of Trust; (iii) any deed of trust from the Construction/Permanent Lender; and (iv) the Agency Deed of Trust; (v) the Regulatory Agreement. One or more Subordination Agreements, if required to effect the proper priority of the Agency Deed of Trust and Regulatory Agreement, shall be recorded at the direction of Participant in accordance with the terms of this Agreement. (e) Escrow Agent Duties. The Escrow agent shall (i) record the documents as provided in subparagraph (d); (ii) at Closing, deliver the original promissory note to Agency and a conformed copy of same to Participant, and upon recordation deliver to Agency the original of the Agency Deed of Trust and the Regulatory Agreement and a conformed copy of same to Participant; and (iii) disburse the portion of the Agency Loan funds not used for acquisition of the Site to Participant. (f) Interest Bearing Accounts. Escrow agent shall hold all funds received in an interest bearing account with the interest accrued paid at Closing to the party depositing such funds. (g) Title Insurance. Escrow agent shall deliver at Closing a CLTA standard form owner's policy of title insurance in an amount not to exceed il,200,734.00, issued by a title insurer acceptable to Agency, insuring in favor of Agency the priority of the Agency Deed of Trust and Regulatory Agreement in accordance with the priority established by this Agreement. The cost of said policy shall be shared equally between the parties. 3.5 Agency's Conditions to Closin . Agency's obligations to deposit the Agency Loan funds in Escrow for disbursement to Participant at Closing shall be conditioned and contingent upon satisfaction, or Agency's waiver of each of the following conditions precedent (collectively, the "Agency's Conditions to Closing"): (a) Participant has deposited in escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow; (b) Escrow agent, at Closing, holds and will deliver to Agency the Note, Deed of Trust, Regulatory Agreement, and Title Insurance Policy. (c) Participant shall deliver evidence acceptable to the Agency Executive Director that Participant has obtained the insurance policies as required by Section 24.3 of this Agreement. (d) Participant shall deliver to the Agency a good standing certificate issued by the California Secretary of State's office indicating that Participant exists in good standing at the time of the proposed Close of Escrow. SP-98Abrce Sher-3-1 ORON/9x •3 (e) The Agency shall determine that Participant is in full compliance with the terms and conditions of this Agreement and all documents and instruments referred to herein or executed by Participant in furtherance of this Agreement. In the event any of the Agency's Conditions to Closing are not satisfied (or waived by Agency), Agency may cancel the Escrow and terminate this Agreement by delivering thirty (30) days prior written notice to Participant and the Escrow agent. Participant may nullify Agency's notice to terminate if, within such thirty (30) day period Participant (at no cost to Agency) cures any unsatisfied Agency's Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds deposited by Agency shall be returned to it with any accrued interest earned on such funds; (ii) Participant shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. 3.6 Participant's Conditions to Closing. Participant's obligations to close Escrow shall be conditioned and contingent upon satisfaction, or Participant's waiver of each of the following conditions precedent (collectively, the "Participant's Conditions to Closing"): (a) The Pham Trust have signed and acknowledged the Grant Deed and have deposited same in Escrow; (b) Participant has obtained the financing secured by the First Deed of Trust, the Second Deed of Trust, any such deed(s) of trust securing any financing from the Construction/Permanent Lender, and all documents and instruments related to same have been deposited in Escrow as required by the agreements and documents pertaining thereto; (c) Agency has deposited in escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow, including but not limited to the Agency Loan funds, the Agency Deed of Trust, Regulatory Agreement, and such Subordination Agreements as may be required to effect the priority required by this Agreement; (d) All conditions to Closing set forth in (i) the agreements and an), amendments thereto between Participant and the Pham Trust for conveyance of the Site, including as pertaining to the Second Deed of Trust; and (ii) agreements and financing documents pertaining to Participant's financing of the acquisition of the Site, including as pertaining to the First Deed of Trust, financing by the Construction/Permanent Lender, have been satisfied (or waived by the appropriate party). In the event any of the Participant's Conditions to Closing are not satisfied (or waived by Participant), and provided Participant has fully performed its obligations hereunder, Participant may cancel the Escrow and terminate this Agreement by delivering thirty (30) days prior written notice to Agency and the Escrow agent. Agency may nullify Participant's notice to terminate if, within such thirty (30) day period Agency (at no cost to Participant) cures any unsatisfied Participant's Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds SF-98ngreC Shuc-3-1 O 08128, -3 deposited by Participant shall be returned to it with any accrued interest earned on such funds; (ii) Participant shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. ` 3.7 Broker's Fees. Participant and Agency shall 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. 3.8 Subordination Agreements. Pursuant to Section 33334.14 of the Health and Safety Code, Agency is permitted to subordinate the Agency Deed of Trust and the Regulatory Agreement to superior deed of trust and regulatory agreements, including but not limited to the First Deed of Trust, the Second Deed of Trust, and Construction/Permanent Lendees deed of trust, and such other and related documents as such lender(s) may require, if certain findings are made and certain written commitments are obtained. In accordance with said Section, the Agency hereby finds that no economically feasible alternative method of financing the Project on substantially comparable terms and conditions without subordination is reasonably available and the Agency has obtained written commitments to protect the Agency's investment in the event of a default. Therefore, the Agency hereby agrees to subordinate the Agency Deed of Trust and the Regulatory Agreement to the First Deed of Trust, Second Deed of Trust, the Deed(s) of "Trust of the Construction/Permanent Lender, and such other and related documents as such lender(s) may require, not to exceed a total indebtedness of Four Million Two Hundred Thirty -Five Thousand Dollars ($4,235,000.00). Participant may apply to Agency to increase said indebtedness, which approval the Agency shall not unreasonably withhold. "The priority of such deeds of trust shall be effected through the order of recordation of documents as set forth in Section 3.4(d). Such subordination agreement shall provide for: (i) A right of the Agency to cure a default on the First Deed of Trust, Second Deed of Trust,_and Deed(s) of Trust of the Construction /�rmakc.�r_ orb— Lender; (ii) A right of the Agency to negotiate with any lenders after notice of default from the lender; (iii) An agreement that if prior to foreclosure of any of saidXoans, the Agency takes title to the Site and cures the default on the loan, the lender will not exercis any right it may have to accelerate the loan by reason of the transfer of title to the Agency; and A right of the Agency to purchase the Site from the Participant at any time after a default on the loan. If a Subordination Agreement is required to effect the foregoing order of priority, such subordination agreement shall be generally in the form set forth as Exhibit "I -I". If, from time to time and at one or more times, Participant chooses to refinance the loan secured by any deed of trust which is superior to the Agency Deed of Trust and Regulatory Agreement, Agency agrees to subordinate the lien of the Agency Deed of Trust to the refinancing lenders deed of trust under the same terms and conditions as set forth in the Subordination Agreement, on the condition that the amount of the new loan is no greater than the original principal balance of the refinanced note. SF-98Abree Sher-3-1 10 08,Q"S -3 3.9 Agency Rehabilitation Assistance. (a) Immediately upon the Close of Escrow, Agency shall set aside o Hundred Sixty-five Thousand Six Hundred Twelve Dollars ($265,612.00) of the �Agenc Loan into a r rehabilitation account. Agency shall deposit the HOME Program funds of Two Hundred Thousand One Hundred 'Twenty -Two Dollars ($200,122.00) into the rehabilitation account when Agency and Participant execute a HOME Program agreement. (b) Participant shall invoice Agency Executive Director the costs of VM rehabilitation as they are incurred, which invoices the Executive Director shall pay within ten (10) days of receipt. In no event shall Agency pay rehabilitation costs in excess of Four Hundred Sixty- five 1.1ousand Seven Hundred Thirty-four Dollars ($465,734.00). 4 Within 90 days after the Agency issues the Release of Construction Covenants, Participant shall cause to be prepared and shall submit to the Agency for reasonable approval a cost certification (the "Cost Certification), setting forth all Project Costs, certified by the Chief Financial Officer of Participant. In the event the actual total Project Costs, as certified by Participant and approved by Agency, are less than Five Million three Hundred Thirty-five Thousand Seven Hundred Thirty-four Dollars ($5,335,734.00), the balance of the Agency Loan shall be reduced by the same amount, and the Agency and Participant will cause a reduced Agency Note, Deed of Trust and related instruments to be executed and recorded. City and Participant shall enter into an agreement for the provision of City assistance to the Project in the amount of Two Hundred Thousand One Hundred Twenty -Two Dollars ($200,122.00) from the United States Department of Housing and Urban Development ("HUD") HOME Investment Partnerships Program ("HOME Program") (42 U.S.C. §12741 et seq.) ("HOME Funds") by no later than October 31, 1998. If such an agreement is not timely executed, Agency will deposit the same amount into the rehabilitation account from the Agency's Low and Moderate Income I Iousing Fund. In such an instance the parties shall cause the eleven (11) HOME Units described in the Regulatory Agreement to be redesignated as Units for Eligible Very Low Income Tenants. SECTION 4. DEVELOPMENT OF THE SITE. 4.1 General The Project shall consist of rehabilitation of an existing 66-unit apartment complex on the Site and the use of the Site as an affordable rental apartment complex in accordance with this Agreement and the Regulatory Agreement. 4.2 Construction of the Project. (a) Development in Accordance with Approval Project Plans and Permits. Participant shall undertake the Project and rehabilitate the Site in accordance with this Agreement, the Scope of Development, and the Approved Project Plans and Permits and any changes thereto as may be subsequently approved in writing by both Participant and Agency and, if necessary, City. As completed, the Project (a) shall comply with all applicable laws and ordinances of all governmental authorities, including, without limitation, all federal Housing Quality Standards asset 5i--98Aprec sner-3-1 11 nsn&'98 -3 forth at Section 982.401 of "Title 24 of the Code of Federal Regulations. All Units must be rehabilitated no later than eighteen (18) months from the close of escrow. (b) Agency Approvals. Participant 11 furnish to the Agency a list of proposed repairs and improvements to the Site prior to submittal of plans to the City. The Agency will have the right to review and approve the list prior to the start of any rehabilitation work. Participant shall provide to Agency an executed construction contract with a contract price that is consistent with the Project Budget. Upon request, the construction contract, together with all other contracts for services necessary to construct the Project shall be submitted to the Agency for approval. The Agency shall approve the contracts if they are consistent with the Project Budget. Participant will furnish copies of all building permits for all items required to be permitted under the Huntington Beach Municipal Code, with proof of inspection by the Huntington Beach Building Department, where applicable. (c) Evolution of Project Plans. On or before the date set forth in the Schedule of Performance, Participant shall submit to City, and shall use reasonable efforts to obtain approval of, the Approved Project Plans and Permits. including City approval of, preliminary, and thereafter final drawings and specifications for development of the Site in accordance with the Scope of Development, and all in accordance with the City's requirements. The term preliminary and final drawings shall be deemed to include site plans, building plans and elevations, grading plans, if applicable, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings. and specifications as City and Agency customarily require for such a Project- Final drawings will be in sufficient detail to obtain a building permit. Said plans, drawings and specifications shall be consistent with the Scope of Development and the various development approvals referenced hereinabove, except as such items may be amended by City (if applicable) and by mutual consent of Agency and Participant. Participant shall not be in default of this Agreement due to any delay of Agency or City processing any plans or permit applications submitted by Participant (d) Other Governmental Permits. Participant shall, at its own expense and before commencement of constriction or rehabilitation of any buildings, structures, or other work of improvement upon the Site, secure or cause to be secured any and all permits and approvals which may be required by any governmental agency affected by such construction, development, or work to be performed by Participant pursuant to the Scope of Development, including but not limited to, necessary building permits and all approvals required under the California Environmental Quality Act ("CEQA"). In constructing and developing the Project, Participant shall comply with all applicable development standards in City's Municipal Code and shall comply with all building code, landscaping, signage, and parking requirements (except as may be permitted through approved variances and modifications). (e) Approval by Agency. The Agency shall approve or disapprove any submittal made by the Participant pursuant to this Agreement within ten (10) days after such submittal. Any disapproval shall state in writing the reason for the disapproval and the changes which the Agency requests to be made. After Participant resubmits the corrected submittal, Agency shall have an additional seven (7) days for the review of the resubmittal but if the Agency SF-98A9rec Sher-3-1 1 08/28/98 -3 disapproves the resubmittal, then the cycle shall repeat, until the Agency's approval has been obtained. (f) Agency Assistance. So long as Participant is not in material default of any term or provision of this Agreement, Agency agrees to provide reasonable assistance to Participant, at no cost to Agency, in the processing of Participant's submittals required under this Agreement in order that Participant may obtain a final City action on such matters on or before the date set forth in the Schedule of Performance; provided that Agency does not warrant or represent that such approval shall be obtained. (g) Cost of Rehabilitation. Participant shall bear all costs for the Project, including, but not limited to any and all costs for preparing or obtaining the Approved Plans and Permits, environmental remediation, interim and permanent financing, broker's and leasing commissions, and fees or charges for development and building, except as specifically provided herein. (h) Prsiect Budget. Participant shall develop the Project in.accordance with the Project Budget/Pro Forma attached hereto as Exhibit "J". (i) Project Schedule. Participant shall commence and complete the construction of the Project within the times set forth in the Schedule ol'I'erformance. 4.3 Insurance. Participant shall procure and maintain-, at its sole cost and expense, until the date that Agency issues or is required to issue the Release of Construction Covenants, the following policies of insurance: (a) Worker's Compensation Insurance. Pursuant to California Labor Code Section 1861, Participant acknowledges awareness of Section 3700 et seq. of said code which requires every employer to be insured against liability for workers' compensation. Participant covenants that it will comply with such laws and provisions prior to commencing any work of construction or rehabilitation on the Site. Participant shall maintain such Workers' Compensation Insurance in an amount not less than One I-lundred Thousand Dollars ($100,000) bodily injury, each occurrence, One Hundred Thousand Dollars ($100,000) bodily injury by disease, each employee, and Two Hundred Fifty Thousand Dollars ($250,000) bodily injury by disease, policy limit, at all times incident thereto, in forms and underwritten by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Participant shall require all subcontractors to provide such Workers' Compensation Insurance for all of the subcontractor's employees. Participant shall furnish Agency with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Participant shall similarly require all subcontractors to waive subrogation. (b) General Liability Insurance. Participant shall 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 One Million Dollars ($1,000,000), combined single limit. Such insurance shall also include automotive bodily injury and property damage liability insurance.. All such insurance shall be provided by insurance SF-99Agrcc Sher -:-I 13 as,zsn�s -3 companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Such insurance shall name the City and Agency and their officers, agents, and employees acting in their official capacity, as additional insureds pursuant to a pre-1990 CG 20 10 11 85 endorsement form. In the event of aggregate coverag uch limit shall be no less than One Million Dollars ($1,000,000.00). Participant shall require its insurer to waive its subrogation rights against Agency and shall provide certificates of insurance evidencing same. (c) Certificates of Insurance; Additional Insured Endorsements Prior Prior to performance of any work upon the Site, Participant shall furnish to Agency certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement. Such certificates and endorsements shall be subject to the reasonable approval of the City Attorney and shall provide the name and policy number of each carrier and policy and shall state that the policy is currently in force and shall promise to provide that such policies will not be cancelled without thirty (30) days prior written notice to Agency. 4.4 Indemnification. During any period of construction of any of the Project pursuant to this Agreement and until such time Agency issues or is required to issue the Release of Construction Covenants, Participant agrees to and shall protect, defend, indemnify and hold the Agency and City harmless from and against all liability, loss, damage, cost or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of (1) Participant'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 shall occur on the Site and which shall be directly or indirectly caused by the acts of, or any errors or omissions of, the Participant or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Participant shall not be responsible for, and the Agency shall defend, hold harmless and indemnify Participant againsthe active concurrent negligence, sole negligence or sole willful misconduct of the Agency or tYfe City or their respective officers, officials, employees, agents, representatives, servants, or contractors. 4.5 Hazardous Substances. Participant, from and after the Close of Escrow, and until a transfer, sale, or assignment of the Site upon which the following covenant shall then be the obligation of the transferee, purchaser, or assignee, shall indemnify, defend, and hold harmless Agency 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 Site or (ii) contamination of the Site by a release of hazardous materials. Participant, prior to the Closing Date, shall provide to Agency a copy of any notices, orders, or reports concerning the presence of any hazardous materials on or affecting the Site that is in Participant's possession. For the purposes of the foregoing, the term "hazardous materials" shall mean any hazardous or toxic substance, material or waste which, as of the date of Close of Escrow, is regulated by the State of California, or the United States Government, and including asbestos and any material containing asbestos. SF-9XA,,,rcc Shrr -1 14 4.6 Securi1y Financing, Right of Holders. (a) Permitted Encumbrances. Participant, prior to the date Agency issues or is required to issue the Release of Construction Covenants, shall be permitted to enter into ; mortgages, deeds of trust, conveyances, and leases -back or any other form of conveyance in which the Site is used as security for the purpose of securing loans of funds to be used for the acquisition of the Site and construction of the Project thereon without the consent of the Agency provided such conveyance (i) is for the purposes permitted herein and (ii) is given to a financial or lending institution or other acceptable person or entity capable of performing or causing to be performed Participant's obligations under this Agreement, including without limitation a pension fund, insurance company, or real estate investment trust. Conveyances for financing purposes not meeting the foregoing requirements shall be subject to the prior approval of the Agency's Executive Director, which approval shall not be unreasonably withheld. (b) Holder Not Obligated to Construct Improvements. The holder of any mortgage or deed of trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to construct or complete the improvements or to guarantee such construction or completion; nor shall any covenant or any provision in the Regulatory Agreement be construed to so obligate such holder. (c) Notice of Default to Mortgage. Deed of Trust or Other Security Interest Holders; Right to Cure. Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or default by Participant in completion of construction of the improvements, Agency shall at the same time deliver a copy of such notice or demand to each approved holder of record of any mortgage, deed of trust, or other security interest which has previously requested such notice in writing. Each such holder shall (insofar as the rights of Agency are concerned) have the right, at its option within ninety (90) days after the receipt of the notice, to commence and thereafter to diligently proceed to cure or remedy such default and add the cost thereof to the security interest debt and the lien on its security interest. Any holder completing the improvements in accordance with this Agreement shall be entitled to a Release of Construction Covenants upon written request made to Agency. 4.7 Release of Construction Covenants. Upon satisfactory completion of the Project, Agency shall issue to Participant a Release of Construction Covenants. The Release of Construction Covenants shall be, and shall so state, a conclusive determination of satisfactory completion of the Project required by this Agreement, and of full compliance with the terms of this Agreement relating to commencement and completion of the Project. The Release of Construction Covenants is not a notice of completion as referred to in California Civil Code Section 3093. If Agency refuses or fails to furnish a Release of Construction Covenants upon completion of the Project, Agency, after written request from Participant, shall, within fifteen (15) days of' Participant's written request, provide Participant a written statement of the reasons Agency refused or failed to furnish a Release of Construction Covenants. The statement shall also contain a detailed description of the specific actions Participant must take to obtain a Release of Construction Covenants. If the Agency shall have failed to provide such written statement within fifteen (15) days. Participant shall be deemed entitled to the Release of Construction Covenants. If Agency SF-98Agrce Shcr-3.1 08/29/98 -3 refuses or fails to furnish the Release of Construction Covenants for the reason that specific items or materials are not available or landscaping is not complete, Agency shall issue the Release of Construction Covenants upon the posting by Participant with Agency of a cash deposit, bond or irrevocable letter of credit (in a form acceptable to Agency) in an amount representing the fair value ` of the work not yet completed. 4.8 Mechanics Liens, Stop Notices, and Notices of Completion (a) If any claim of lien is filed against the Site or the Project, or a stop notice is served on any lender or other third party in connection with the Project, then the Participant shall, within twrenty (20) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the party entitled thereto a surety bond in sufficient form and amount, or provide other assurances satisfactory to the Agency that the claim of lien or stop notice will be paid or discharged. (b) If the Participant fails to discharge any lien, encumbrance, charge, or claim in the manner required in subsection (a) of this Section 4.8, then in addition to any other right or remedy, the Agency may (but shall be under no obligation to) require the Participant to immediately deposit with the Agency the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof The Agency may use such deposit to satisfy any claim or lien that is adversely determined against the Participant. (c) The Participant shall file a valid notice of cessation or notice of completion upon cessation of construction on the Project for a continuous period of thirty (30) days or more, and take all other reasonable steps to forestall the assertion of claims or liens against the Project. The Agency may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that the Agency deems necessary or desirable to protect its interest in the Project. SECTION 5. USE OF THE SITE. 5.1 No Inconsistent Uses. Participant covenants and agrees, for itself, its successors, its assigns, and every successor in interest to the Site, or any part thereof, that for the period beginning on the Close of Escrow and ending on the expiration date of the Regulatory Agreement, Participant and such successors shall not devote the Site to uses inconsistent with the applicable zoning restrictions, this Agreement, and the Regulatory Agreement; provided that, in the event of any inconsistency, the provisions of the provisions of the Regulatory Agreement shall prevail over this Agreement. 5.2 Regulatory Agreement. At the Close of Escrow the Regulatory Agreement shall be recorded against the Site in the priority set forth in the Section 3.4(d). 5.3 Relocation. SF-98Agrce Sher - I - I 1 n oxns19s -3 (a) Relocation Plan. As the Project is a "rehabilitation -in -place," no relocation of tenants living on the Site as of the Effective Date of this Agreement is contemplated by the parties hereto or is required to occur as a result of this Agreement. In the event, however, that off -Site relocation of existing tenants becomes necessary as a result of the Project, Participant, prior ; to such off -Site relocation, shall submit a relocation plan to Agency for review and approval ('Relocation Plan"), The Relocation Plan shall include the name, gender, age, ethnicity, household income, and amount of relocation payment to be paid; provided, however, that Participant shall not be obligated to provide any of the foregoing referenced personal information about relocatees if such relocatees refuse to provide such information or the gathering or provision of such information is contrary to applicable law. Participant shall be obligated to meet the notice requirements of applicable relocation law and shall provide the Agency with true and correct copies of such notices. Participant shall also retain all required records and copies of notices in its files as mandated by applicable law. (b) Relocation Cost. Participant shall be obligated for the payment of all relocation benefits and costs identified in the Relocation Plan, as well as relocation benefits and costs that arise from the acquisition or rehabilitation of the Site beyond those obligations identified in the Relocation Plan. Participant shall indemnify, defend, and hold harmless the Agency from and against any claims for relocation and the payment of relocation benefits that are the respective obligations of Agency and Participant. Notwithstanding the above, Agency shall provide relocated tenants Section 8 HUD housing certificates, which Participant may use to offset its relocation obligations. 5.4 Maintenance of the Site. All Units must meet Federal Housing Quality Standards (24 CFRS 982.401) while occupied. Further, Participant shall maintain the Site in accordance with the terms of the Regulatory Agreement. 5.5 Nondiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer. use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Participant, 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 Site, or any part thereof 5.6 Form of Nondiscrimination and Nonsegreg-ation Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, religion, ancestry, national origin, sex or marital status of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In Deeds: "The grantee herein covenants by and for himself; his heirs, executors, administrators and assigns, and all persons claiming under or through him, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the Sf-98Agree_Sher-3-1 08,28/98 -3 grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. (b) In Leases: "Me lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, ancestry, national origin, sex, or marital status in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." (c) In Contracts: "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, religion, ancestry, national origin, sex, or marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of the land." 5.7 Effect and Duration of Covenants. The Participant has, concurrently with the execution of this Agreement, executed in recordable form the Regulatory Agreement. any -interest .therciw- Every covenant and condition and restriction contained in this Article 5 of the Regulatory Agreement shall remain in effect thirty (30) years, except that the covenants against discrimination set forth in Sections 5.5 and 5.6 shall remain in effect in perpetuity. 5.9 Capital Reserves. Participant shall deposit from Project revenues at least Two Hundred Fifty Dollars ($250.00) per unit per year into a reserve for capital repairs, beginning on the July 1 that follows the third anniversary date of the Effective Date of this Agreement. Should Participant fail to make such a deposit in any year, the shortfall shall be repaid ,\as soon as economically feasible. 5.10 Payment of Portion of Residual Receipts. (a) Percentage Payment to Agency. Commencing with the fiscal year starling on the July 1 that follows the third anniversary date of the Fffective Date of this Agreement, and continuing annually through expiration of the Regulatory Agreement.Participant shall pay to Agency an amount equal to fifty percent (50%) of the Net Operating Income of the Project, with the other fifty percent (50%) of the Net Operating Income or Two Hundred Fifty Dollars per unit, whichever is more to be deposited into the Capital Reserve Account as described in Section 5.9; sf-98ftocc.sf,«-3-1 18 08.28/98 -3 provided, however, that once the Capital Reserve Account reaches the cumulative total shown on the Project Budget/Pro Forma (Exhibit "J'), Participant shall pay to Agency one hundred percent (100%) of the Net Operating Income. If a payment is required by Participant pursuant to the terms hereof, Participant shall make such payment no later than ninety (90) days following the end of the reporting year (calendar year or fiscal year). If the first or final payment is based on a portion of a year, the payment shall be pro rats based on a 360 day year. (b) Definition of Net Oncratinr- Income. As used herein, the term "Net Operating Income of the Project" shall mean, for any reporting period (calendar year or fiscal year), (a) all income derived by Participant from the Site, including without limitation all tenant rent, but excluding such income to Participant or the Project as may be derived from the acquisition of further income restriction of Units as authorized by Section 3.2 of the Regulatory Agreement, (b) less (i) payments of principal and interest, if any, required to be paid in such year by Lessee with respect to any note, mortgage, or deed of trust with respect to the Site or Project, (ii) all expenses actually incurred (or to be incurred if accounted for on an accrual basis) by Participant in leasing, managing, operating, maintaining, and repairing the Site, (iii) all capital expenses incurred pertaining to the Site; (iv) the deposits into the Capital Reserve Account; (v) property management fees, administrative costs, salaries, benefits, overhead costs, and such other and further operating and management expenses incurred in operating the Site. Depreciation expenses shall not be a reduction against income. (c) Adjustment of Payment to Agency. In the event Participant determines that it cannot make the Agency payment as described in subparagraph (a) of this Section and at the same time retain the economic viability of the Project, Participant shall notify the Agency and request postponement, cancellation, forgiveness, or adjustment of the Agency payment. Participant shall provide financial and other evidence supporting its request. Agency may, in the exercise of its reasonable discretion and in light of its desire to see the Site used as an affordable rental apartment complex and maintained at the level required by the Regulatory Agreement, reduce, suspend, postpone, forgive, cancel, or renegotiate the terms of the Agency payment. 5.11 Financial Statements. Participant shall submit to Agency, on an annual basis, a true and correct copy of Participant's audited financial statement for the Project. After receipt of Participant's audited financial statements for the Project, Agency may, at its cost, request additional financial analyses or obtain a third party review of Participant's financial statement for the Project to verify the accuracy of Participant's payments made to the Agency pursuant to Section or the deposits by Participant into the Capital Reserve Account pursuant to Section 5-.6, S 7 --5'- 1 0 SECTION b. DEFAULTS AND REMEDIES. 6.1 Participant Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Participant hereunder if, after receiving written notice from Agency as provided in Section 6.3 below identifying such event, Participant fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within) thirty (30 Vays, "Participant commences to cure said event within thirty 30) days and diligently and in good faith continues to cure the event of default: sr-San-,nc Shcr-3-1 19 OSRR/9x -3 (a) Participant has failed to Close Escrow to acquire fee title to the Site within sixty (60) days after the time set forth in the Schedule of Performance; (b) Participant fails to observe or perform any _material term of this Agreement or any agreement incorporated hereunder by reference including, but not limited to, the Regulatory Agreement, the Note, the Deed of Trust, or the Subordination Agieement (if applicable), within the time set forth in this Agreement or any of the documents referred"to herein; or (c) Participant knowingly and intentionally makes or delivers to Agency any statement, report, or certificate that is not true or correct in any material respect. 6.2 Agency Defaults. The occurrence of any one or more of the .following events shall constitute a "Material Default" by Agency hereunder if, after receiving written notice from Participant as provided in Section 6.3 below identifying such event, Agency fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within sixty (60) days, Agency commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default: (a) Agency fails to observe or perform any material term of this Agreement within the time set forth in this Agreement, including but not limited to timely deposit of the Agency Loan funds into Escrow; or (b) Agency knowingly and intentionally makes or delivers to Participant any statement, report, or certificate that is not true or correct in any material respect. 6.3 Notice of Default. The non -defaulting parry shall give written notice of any default under this Section to the defaulting party, clearly specifying the default. Copies of any notice of default given to the defaulting party shall also be given to any permitted )ender requesting such notice. Any failure or delay in giving such notice or in asserting any of either parry's rights and remedies as to any default shall not constitute a waiver of any default, nor shall it change the time of default, nor shall it deprive either party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 6.4 Aeencv's Remedies. (a) The Agency, at its option, may terminate this Agreement prior to the Close of Escrow in the event of any material default that the Participant fails to cure within the respective time set forth in Section 6.1. (b) Following the Close of Escrow, in the event of any material default that the Participant fails to cure within the respective time set forth in Section 6.1, the Agency's sole remedy shall be to foreclose on the Agency Deed of Trust pursuant to Agency's right and remedies thereunder. SF-98Agrcc:Shcr-3-1 20 08/29/98 -3 6.5 Participant's Remedies. Subject to any applicable cure periods and the general right to notice provided for in this Agreement, upon a default or breach of this Agreement by Agency, Participant may bring an action for specific performance of this Agreement or any term or provision hereof, or to terminate this Agreement. Participant may not sue for monetary damages. 6.6 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties hereto 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. SECTION 7. GENERAL PROVISIONS. 7.1 Governing Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 7.2 Attorneys' Fees. In the event of litigation between the parties arising out of this AgreemerlE each party shall bear its own attorneys' fees, and other costs. 7.3 Notices. Demands, and -Communications Between the Parties. Formal notices, demands, and communications between Agency and Participant shall 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 (i i) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the addresses set forth below: If to Participant: Bridges America Sher Lane, L.P. A 18837 Brookhurst Street Suite 303 Fountain, Valley, CA 92708 Attn: JoAnn Ulvan With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626 Attn: Jeffrey M. Oderman If to Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648, Attn: Executive Director Notices personally delivered or delivered by courier shall be effective 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- SF-3xn.,«e srcr-1-1 21 0W...8X8 -} 7.4 Acceptance of Service of Process. In the event that any legal action is commenced by Participant against Agency, service of process on Agency shall be made by personal service upon Executive Director or the Secretary of Agency, or in such other manner as may be provided by law. In the event that any legal action is commenced by Agency against Participant, service of process on Participant shall be made by in any manner provided by law, and shall be valid whether made within or without the State of California. 7.5 Conflicts of Interest. No member, official, or employee of Agency shall 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. 7.6 Titles and Captions. Titles and captions are for convenience only and shall not be construed to limit or extend the meaning of this Agreement. 7.7 Gender. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. 7.8 Modifications. Any amendment, alteration, change, or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. 7.9 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, including but not limited to that certain "Deal Point Memorandum" approved by Participant and the Agency and/or City Council of the City of Huntington Beach, are merged herein and shall be of no further force or effect. 7.10 No Third Parties Benefited. Other than the general and limited partners of Participant, this Agreement shall 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. 7.11 Assurances to Act in Good Faith. Participant and Agency each agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to accomplish the redevelopment of the Site in accordance with the provisions hereof. 7.12 Warranty Against Payment of Consideration for Agreement. Except as provided in this Agreement, Participant 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. SF-98ngree Sher-3-1 22 08/28198 -? 7.13 Nonliability of Agency Officials and Employees. No member, official, or employee of the Agency shall be personally liable to the Participant or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Participant or to its successor, or on any obligations under the terms of this Agreement. 7.14 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 7-15 Counter parts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 7.16 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. T 17 Extension of Times of Performance. Notwithstanding the foregoing, in addition to the specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default during an event of Force Majeure. An extension of time for an event of Force Majeure shall be limited to the period of such event, and shall 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 (60) days of the commencement of the cause. In the event of such delay, the party delayed shall continue to exercise reasonable diligence to minimize the period of delay. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Participant. In addition, the Executive Director shall have the authority on behalf of Agency to approve extensions of time not to exceed a cumulative total of one (1) year. 7.18 Inspection of Books and Records. The Agency or its designee has the right at all reasonable times to inspect the books, records, and/or other documents of the Participant pertaining to the Site and/or the Project as pertinent to the purposes of this Agreement 7.19 Waivers. The waiver by Agency or Participant of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. SECTION 8. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE This Agreement shall be executed in five duplicate originals, each of which is deemed to be an original. This Agreement consists of ( ) pages and ten (10) attachments which constitute the entire understanding and agreement of the parties. SF-98Agrec .Shur-3-1 23 08I28/98 -3 This Agreement does not take effect until executed by the Participant and Agency. This Agreement, when executed by the Participant and delivered to the Agency, must be authorized, executed and delivered by the Agency within thirty (30) days after the date of signature by the Participant, or this Agreement may be terminated by the Participating on .written notice to the Agency. C- TWiw kqfr [end - signature page follows] 5F-9XA f.rcc Shcr- i-1 24 OWS198 - i r/The Owner Participation Agreement, a copy of which is on With the Agency� Clerk, is hereby approved. The Aenc Zhorizes and direct— ee Agency Executive Dir -onto make final technical modification o the form —of Owner Participation Agreement hereby approved, and pare the owner Participation t Agreement for signature b he Agency Cfila-irman. and the Agency Chairman is thereafte authorized and directed t�s q` the owner Participation— regiment on behalf of the Agency. The Agency Executive Director is hereby authorized and [Agency irected to take such other and further actions, and sign such ther and further agreements and documents on behalf of the as may be necessary or proper to effect the terms of the wner Participation Agreement and the purposes of this Resolution n behalf of the Agency. r r Co yr� `O co IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. "AGENCY" AT I'EST: REDEVELOPMENT AGENCY of THE CI-I-Y OF UUNTINGTON BEACH, a public body corporate and politic By: Agency Clerk Chairman APPROVED AS TO FORM: By: Agency Counsel "PARTICIPAN'I"' THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership By Its General Partner: THE BRIDGES AN4ERICA FOUNDATION, a Delaware Nonprofit Corporation By: Name: (Type or print) Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President M111 By: _ Name: (Type or print) Its (circle one) (1) Secretary (ii) Any Assistant Secretary (iii) Chief Financial Officer (iv) Any Assistant Treasurer SF-98Agrcc Sher-3-1 25 08nM8 -3 EXHIBIT A EXIII IT "A" PARCEL 1: 'MT PORTION OF IHE NORTHEAST QL1Ai= OF SECTION 23, TOWNSHIP 5 SOUTH, RANGE 11 WEST, PARTLY IN THE RANCHO LA BOLSA CHICA AND PARTLY IN THE RANC140 LAS BOLSAS, IN THE CITY OF HUaTI%-MN BTAC34, AS PER MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT Ti-E INTERSECTION OF THE SOUTH LINE OF THE: NORTH 50.00 FEET OF THE SOUTHEAST QUARTER OF 7I-E NORTHWEST QUARTER OF SAID NORTHEAST QUARTER WITH 7HE FAST LINE OF SHER LANE AS DESCRIBED IN THE DI) TO THE CITY OF HUNTINGION BEACH, RECORDED DECE4BER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCE NORTH 180.00 FEET ALONG SAID FAST LINE; THENCE EAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SOUnl= QUARTER OF THE NORTHWEST QUARTER ER OF THE NORTHEAST QUARTER; THENCE SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; THENCE FAST 90.00 FEET PARALLEL WITH- SAID NORTH LINE; TH= SOUTH 80.00 FEET PARALLEL WITH SAID EAST LINE TO THE SOUTH LINE OF THE NORTH 50.00 FEET OF 714E; SOUTHiWEST QUARTER OF THE NORTHEAST QUARTER OF SAID NORTHEAST QUARTER; 'THENCE WEST 436.00 FEET' TO THE POINT OF BEGINNING - SAID LAND IS INCLUDED WITHIN THE AREA SHOWN ON A MAP FILED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT TtTEREFRCM ALL OIL, GAS, MINERALS AND OTHER HYDROCARBONS, BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEEDS OF RECORD. PARCEL 2: 114AT PORTION OF THE NORTHF= QUArZTER OF SECTION 23, TOWNSHIP 5 SOUTH, RANGE 11 WEST, IN THE RANCHO LA BOLSAS, IN 'THE CITY OF HUNTiNGION BEACH, AS PER MAP RECORDED IN BOOK,. 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE 00U TY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTH LINE OF THE NORTH 50. 00 FEET OF ME SOUTHEAST QUARTER OF THE BEST QUARTER OF SAID NORTHEAST QUARTER WITH THE FAST LINE OF SHER LANE AS DESCRIBED IN THE DEED TO THE CITY OF HUNTINGION BEACH, RECORDED DECE MBER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; 'IHEVCE NORTH 180.00 FEET AL003 SAID FAST LINE; THENCE FAST 346.00 FEET PARALLEL WITH THE NORTH LINE OF SAID SGUTHEAST QUARTER OF THE NORTHWEST QUARTER OF 714E NORTflFAST QUARTER, THENCE SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; THENCE EAST 90.00 FEET PARALLEL, WITH SAID NORTH LINE TO A POINT WHICH POINT IS THE TRUE POINT AND PLACE OF BEGINNING; THENCE SOUTH 80.00 FEET PARALLEL WITH SAID FAST LINE TO THE SOUTH LINE OF THE NORTH 50.00 FEET OF TI-E SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF SAID NORTHEAST QUARTER; 'IM-4CE 408.96 FEET EAST PARALLEL WITH THE NORTH LINE OF SAID SOUTHEAST QUARTER OF THE NORTHWEST QLW= OF THE NORTHEAST QUARTER TO TIE WEST LINE OF PARKSIDE LANE AS DESCRIBED IN 'THE DEED TO THE CITY OF HUNTIN13110I BEACH, RECORDED SEPTEIvBER 20, 1968 IN BOOK B727 PAGE 541 OF OFFICIAL RECORDS; 714ENCE NORTH 80.00 FEET ALONG SAID WEST LINE TO A LINE THAT IS PARALLEL WITH THE NORTH LINE OF SAID SOUII-TFAST QUARTER OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER, AND WHICli PASSES 7EROM-1 AND TRUE FOINT AND PLACE OF BEGINNING; THENCE WEST 408.96 FEET, ALONG SAID LAST MWrIONED PARALLEL LINE, TO THE TRUE POINT AND PLACE OF BEGINNING. ' - . (L=, DES=PTICN OliiINUCD) (i MAI, DUf-;CRI lM CN CrWMIM) ) 0 EXCEPT '114OZEFRCM ALL OIL, GAS, MINERALS AND OTHER HYDROCARBONS, BELOW A DEPTH OF 500 FEET, WI'nK= 'ii-iB RICri' OF SURFACE WMY, AS DESERVED IN DEF17S OF RECORD. SAID LAND IS INKLUDED WITHIN `I E AREA S'E4OON ON A MAP FILED IN BOOK 23 PACE 17 OF RECORD OF SURVEYS, IN 'II-E OFFICE OF 'THE COUN Y RECORDER OF SAID COUN Y. 41 EXHIBIT B Pi YvIfw Nyfw ENI,M( RETJ , qFtfORD 6 AUN RN LOYQLA DOM �qN I t , a =-r xm. H EDONNlf Is Wl AM 1r4d:*l 14.m.. Ll 5'04L Ijb4 i ; ORGq SUBJECT -VOLGA.. A I�AMAZON AN(TA tI WE I TE L�W NANCY I I MACDONAL A Z".. PETERS uj > It INGRAJ CARNEG E VIL GELD EL V¢L,AYQR;7, lit -9 F, rkL PON ........... 7 m y iAk A IN T z A L _RRRY LAMANCH MOON$l L I >oW PRINC'Er AAL xE A ROOLDOUX $mu CN)q cKjSE W L TAMA T 0 LDA31 E WASHING J__ t qf IR I;Z(-T- lAl 91 Parkvirla I n/103 f f) (Zhp, f n,, Hwitinntnn FtP;;rh 92647 Ppno:' 9 rrirf R27,113 IOTO�NFWVOOD MunDY c/NIXE iKPIT1 DMOUET STAPLIG IT ROAD T SUNl10 RO1D.( In m If SITE ANALYSIS Plat Map Raj N. LIZ. SCC 23. T- 5S, R. // W- 'ECI.44 HcGE "2-1I9 FOR FEE TITLE ASSESSMENT BE40W .SURfAC£ 07 "' •, lJ N iI PfL4M AUP PAt 3-.54 /89-&- a MOPE - Asmssors BIoOC a AiiEt Irl AM PARCEL LtPAM 9 j=142 PAGE 11 S47tvN 61 cAtaft COUWY OF CWARGE 37 EXHIBIT C F.XWBY " C" SCOPE OF DEVELOPMENT Participant's rehabilitation of the existing 66-unit apartment complex located at 16112 Sher Inane in the City of Huntington Beach shall be undertaken as follows: 1. The rehabilitation shall be in substantial conformance with the Approved Plans and Permits. In the event of any conflict between the description of the Project and rehabilitation work described in this Agreement and in the Approved Plans and Permits, the Approved Plans and Permits shall control. Notwithstanding the above, the rehabilitation of the Units shall result in Units meeting, at a minimum, federal housing quality standards as existing on the Effective Date of this Agreement; said standards are set forth at Title 24 of the Code of Federal Regulations, Section Participant shall provide Agency with copies of all required permits under the City Municipal Code and proofs of City inspections. 2. Participant, prior to undertaking any work of rehabilitation on the Site (other than repairs immediately needed for habitability or removal of waste, debris, and general clean-up) shall submit to Agency for review a rehabilitation work list that describes the nature and order of the rehabilitation work. 3. The parties hereto acknowledge that the Site, as of the Effective Date, has received City code violation notices. Participant shall have a reasonable period to effect corrections of those conditions to which the code violation notices relate. Participant shall provide Agency with confirmation that the conditions to which the code violation notices relate have been corrected. 4. Participant shall be responsible for remediating any asbestos and any lead -based paint where the levels of those substances are found to be in violation of applicable law. Copies of all test results, tenant notifications, and remediation plans shall be provided to the Agency or its authorized representatives or consultants. 5. Agency shall have the right to inspect the progress of the rehabilitation work, including both interiors and exteriors of the Units, upon forty-eight (48) hours prior notice to Participant; provided that such inspections shall not interfere with Participant's rehabilitation work. 6. Subject to Section 7.16 of the OPA, Participant shall complete the rehabilitation work within eighteen (18) months after the Closing Date. SF-Agrce.Sher-3 Exh-C-1 O8118J98 - 43 [Exhibit "C" -- Scope of Development — Page I of 1 EXHIBIT D EXHIBIT "D" SCHEDULE Or PERFORMANCE ITEM OF PERFORMANCE TIME FOR PERFORMANCE REFERENCE 1. Participant and Agency each execute all documents Not later than twelve noon on the §3.4(b)-, §3.4(c). and deposit all documents and funds into Escrow as business day immediately prior to the required by this Agreement_ scheduled Closing Date. 2. Closing Date. September 8, 1998 §3.4(a). 3. Participant obtains the Approved Plans and Permits Within sixty (60) days afler the §5.3_ for the Project and commences the rehabilitation Closing Date. work on the Site. 4. Participant submits a Management Plan to the Within sixty (60) days after the §4.4 of Exhibit I Agency. Closing Date. 5- Participants completes the rehabilitation of the Site. Within eighteen (18) months after §4.2(h). commencement of the work. 6. Agency issues Release of Construction Covenants. Upon completion by Participant of the §4.7 rehabilitation work on the Site. 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 performance 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 both the Participant and the Agency. The Executive Director of Agency shall have the authority to approve extensions of time without action of the Board of Directors of Agency not to exceed a cumulative total of one (1) year. SF-98AErec Shtr-3-Exh-D-1 o8f28r98 1EX11113[T "D" - SCIiEDULE. OF PERFORMANCE - PAGE t OF I I EXHIBIT E WI IEN RECORDED RETURN TO: Bridges -Sher Lane, L.P. 18837 Brookhurst Street Suite 303 Fountain Valley, CA 92708 Attn: JoAnn Ulvan (Space Above This Line For Recorder's Office Use Only) (Exempt from Recording Fee Per Gov. Code Sec. 6103 - See Below) This Release of Construction Covenants is recorded at the request and for the benefit of the Redevelopment Agency of the City of Huntington Beach and is exempt from the payment of the recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By:_ Its: Dated: RELEASE OF CONSTRUCT CON COVF-,NANTS T�1t' �MEk2�c-�i WHEREASYBIUDGESJ�R LANE, L.P., a California limited partnership ("Owner"), is the owner of the fee interest in that certain real property more particularly described in the legal description attached hereto as Exhibit No. 1 and incorporated herein (the "Site"); and WHT_REAS, by an Owner Participation Agreement (hereinafter referred to as the "Agreement") dated , 1998, by and between Owner and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (hereinafter referred to as "Agency"), Owner has constructed the improvements on the Site according to the terms and conditions of said Agreement; and WHEREAS, pursuant to the Agreement, promptly after completion of all construction work by Owner upon the Site, Agency shall fumish Owner with a Release of Construction Covenants in such form as to permit it to be recorded in the Official Records of the County of Orange; and SEA-98Agrcc Sher-3 Exh-E-1 OW28M - A3 I Lxhibit "F" — Release of Construction Covenants — Page 1 of 51 WHEREAS, the issuance by Agency of the Release of Construction Covenants shall he conclusive evidence that Owner has complied with the terms of the Agreement pertaining to the construction of improvements on the Site; and WHEREAS, Agency has conclusively determined that the construction of improvements on the Site has been satisfactorily completed as required by the Agreement; and NOW, THEREFORE: i . As provided in the Agreement, Agency does hereby certify that construction of the improvements on the Site have been fully and satisfactorily performed and completed, and that such development is in full compliance with said Agreement. 2. This Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of Owner to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction work on the Site, or any part thereof. Nothing contained herein shall modify in any way any other provision of said Agreement. 3. Tlus Release is not a Notice of Completion as referred to in California Civil Code Section 3093. IN WITNESS WfiEREOF, Agency has executed this Release as of this day of 199. REDEVELOPMENT AGENCY OF THE Cl'1'Y OF HUNTINGTON BEACH, a public body corporate and politic LIn Its: A"1TEST: Agency Clerk M acO�NSENT TO RECORDATION V BRIDGESaR LANE, L.P., a California limited partnership, owner of the fee interest in the Site legally described in Exhibit No. 1 attached hereto does hereby consent to the recordation of the foregoing Release of Construction Covenants against the Site. -r'c �AMC2:c-/1 �BRIDGESjSHER LANI", L.P., a California limited partnership Its: STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On before me, personally appeared personally known to me (or proved to me on the basis of' satisfactory evidence) to be the person(s) whose name(s) islare subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public (SEAL) STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE On appeared _ personally personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. before me, WITNESS my hand and official seal. Notary Public (SEAL) EXHIBIT NO. 1 LEGAL, DESCRIPTION OF SITE [TO BE INSERTED] EXHIBIT F PROMISSORY NOTE SECURED BY SUBORDINATED CORPORATION DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED THERETO DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust securing same, must be surrendered to Trustee for cancellation before reconveyance will be made. PROMISSORY NOTE SECURED BY SUBORDINATED DEED OF TRUST Principal Loan Amount: S 1,200,734 Note Date: , 1998 FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Holder"), at a place designated by Holder, the principal sum of ONE MILLION TWO HUNDRED THOUSAND SEVEN HUNDRED THIRTY FOUR DOLLARS AND NO CENTS ($1,200,734.00), or such lesser amount which shall from time to time be owing hereunder pursuant to a to s hereof, pursuant to an Owner Participation Agreement (the "Oo,P�,A�') dated as of Y r 1998 between*akcr and Molder. The obligation of the Maker to the Holder hereunder shall be secured by a deed of trust made by the Maker encumbering the Site to be developed (the "Site") pursuant to the OPA and the Deed of Trust and Assignment of Rents dated , executed by the and recorded in the Recorder's Office of Orange County, California, on Document No. "the "Trust Deed"). The obligation of the Maker set forth in this N e is subject to acceleration as set forth in the OPA. The OPA and the Trust Deed are public ecords on file in the offices of the Holder. 41 [nCo, k n is Note evidences the obligation of the Maker to the Holder for the repayment of funds loaned to the Maker by the Holder (the "Agency Loan") to finance the development of the Site pursuant to the OPA. The Maker shall not make any sale, assignment or conveyance, or transfer in any other form, of the laps, or any part thereof, or interest therein without the express written consent of the Holder. L 5- f i-C 2. Payment of Obliptation. Unless a uncured Material Default shall have occurred under the Deed of Trust (as hereinafter defined) or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement [as such term is defined in the OPA]), or breached any promise or obligation in this Note, (1) no interest shall accrue on the unpaid principal of this Note; and (ii) a prorated portion of the total principal advanced hereunder shall be forgiven, waived, and discharged on each anniversary date of Note Date set forth above in an amount equal to SF-98Agrec.Shcr-3 J7xh-F- O80919R - N3 Exhibit " F" — Promissory Note — Page I of 3 the total principal advanced hereunder divided by thirty (30), i.e., one -thirtieth of the Note Amount shall be deemed waived and discharged by Maker as of each anniversary date of the Note Date. Holder is only requiring Maker to execute this Note as a promise to repay the Note Amount in the event of an uncured Material Default under the Deed of Trust, OPA, or Regulatory Agreement. Unless such uncured Material Default has occurred, Holder does not intend for Maker to make any principal payments or interest of any kind on this Note. Upon the forgiveness, waiver, and discharge of this Note as set forth above, Holder shall mark this Note "PAID IN FULL" and shall the deliver this Note to the Trustee of the Subordinated Deed of Trust that secures this Note for the Trustee's delivery to Maker in conjunction with the reconveyance of the Deed of Trust. 3 N _ hrr Aiok rHar ytort k� Pc `fard q. Acceleration of Obligation. Upon the occurrence of a uncured Material Default under this Note (whether by acceleration or otherwise), the Deed of Trust or any obligation secured thereby (including the obligations in the Ol'A and the Regulatory Agreement), or in any other instrument now or hereafter securing the obligations evidenced hereby, then, and in any of such events, Holder may, at its option, and upon thirty (34 days prior written notice to Maker, declare this Note and the entire obligations hereby evidenced that has not been forgiven, waived, and discharged pursuant to Section I above, to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity. 4. Default Interest. If any event occurs giving Holder the right to accelerate this Note pursuant to Section 4 above, the entire unpaid and unforgiven principal owing hereunder shall 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 Iaw, whichever is less. 5. Collection Costs; Attorneys' Fees. If any attorney is engaged by Holder because of any event of an uncured Material Default under this Note or the Deed of Trust or to enforce any provision of either instrument, whether or not suit is filed hereon, then Maker shall pay upon demand reasonable attorneys' fees and costs so incurred by Holder together with interest thereon at the reference rate published by Bank of America N.A., or the maximum non -usurious interest rate permitted by law, whichever is less, until paid as if such fees and costs had been added to the principal owing hereunder. 6. Severabilit . The unenforccability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circum-stances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 7. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. SF-98Agrcc Sher-3.Exh-F-I 0812M8 - a3 Exhibit "F" - Promissory Note - Page 2 of 3 8. UM. Notwithstanding any provision in this Note, Deed of Trust or other document securing same, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. 9. Governing Law. "Ibis Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above written. SF-98Agrcc Sher-3:1-xh•F-1 0812R198 - 93 +L" T`� BRIDGES AMERICA SHER LANE, L.P., a California limited partnership By: Its: Exhibit " F" — Promissory Note — Page 3 of 3 EXHIBIT G Order No_ Escrow No Loan No WHEN RECORDED MAIL TO: Redevelopment Agency of the City of I iuntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Secretary SPACF ABOVE TIFFS LINE FOR RECORDER'S USE] EXEMPT FROM RECORDING FEE PER GOV_ CODE §61031 SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. TWC AMC_ Esc ►k This DEED OF TRUST WITH ASSIGIy ENT OFtNTS WITH RIDER ATTACHED HERETO ("Deed of Trust"), made 1998, between ((BRIDGES RLANE, L-P-, a California limited partnership, herein called TRUSTOR, whose address is 18837 Brookhtust Street, Suite 303, Fountain Valley, CA 92708, a Califomia corporation, herein called TRUSTEE, and REDEVELOPMENT AGENCY OF TFIE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, herein called BENEFICIARY, WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Huntington Beach, County of Orange, State of California, described as: SEE EXHIBIT "A" ATTACHED HERETO together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of ONE MILLION TWO HI NDRED THOUSAND SEVEN THIRTY-FOUR DOLLARS (51,200,734.00) without interest thereon, according to the terms of that certain promissory note of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof: (2) the performance of each agreement of Trustor incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust_ To protect the security of this Deed of Trust, and with respect to the property above described, TnLstor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located. noted below opposite the name of such county, namely_ SF-98Agrcc Shcf Fxh-6•1 08/28198 - #3 Exhibit "G" — Subordinated Deed of Trust - Page I of 9 COUN-11, IMK PAGE COUNIY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGL Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 take 437 110 Plumas 166 1307 Stsr.tyuu 506 762 Amador 133 438 Lassen 192 367 Riven,& 3778 347 Solana 1297 621 Bum 1330 513 Los Angeles T-3978 874 Sacramerno 5039 124 Sonoma 2067 427 Calavrras 185 338 Madera 911 136 San Bentto 300 405 Stanislaw 1970 56 Cclusa 323 391 Main 1849 122 San Bernardino 6213 768 surter 655 535 con"cosu 4684 1 Mariposa 90 453 SanFrarrciscn A-904 596 Tehama 457 183 Del None 101 549 Mendocino 667 99 San Joaquin 2855 283 Tnruty 108 595 ES Dorado 704 635 Merced 1660 753 San Luts Obispo 131 I 137 Tulare 2530 108 Fresco 5052 623 Modoc 191 93 San Marco 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 vemtua 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yoln 769 16 Imperial 1199 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 900 633 Kern 3756 690 (range 7192 t8 San Diego SERlLS 5 Book 1%4, Part 149774 shall inure to and bind the parties hereto, with respect to the property above described_ Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. STATE OF CALIFORNLA COUNTY OF ORANGE On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to he the person(s) whose narnes(s) is/are subscribed to the within instrument and acknowledged to me that helsheithey executed the same in his/her/their authorized capacity(ics), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Sf-98Ayrec.S1cr Exh-G-1 08128I98 - N 3 Signature of Trustor } THE BRIDGES AMERICA SHER LANE, L P , a California limited } partnership } By: Its: (lhts arra for official nntanal stall Ivxhibit "G" — Subordinated Deed of Trust - Page 2 of 9 DO NI( l' 9V( ()!!l) The following is a copy of SuhdiviSiUm A and B of the ficutimis. Qeed of Trust recorded in each tctunty in California ai stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Tru m as being a pan thcrrxrf as if set forth at tcagth therein. A- To protect t!u security of this Deed of "fool, Tractor agrees- l) To keep said property in good condition and rtpait, not to remove or demolish any building thcnew -, w complete or restore promptly and in a good and vrotfonanlike mariner any building which Way be constnuctett, datrtagal or destroyed therbron and to pay when due all claims Ior labor perfortaed and matcnats furnished therefor, to comply with ell laws affectirrg said property or requiring any alterations or improvements to be Rude thereon, not W commit or permit waste thereof, not to consmit, suffer or ptm q any as upon said property in violatictn of taw; to cultivate, irrigate, fenilitx, fumigate, prone and do all other acts which from the character or use of said property may be reasonably natssttry, the specific enumcratians herein coat excluding the genera! 2) To provide, maintain and deliver to llem6cian- fire insurance satisfactory to and with loss payable to Beneficiary- The amount collected under any firs or outer i t mince policy may be applied by Bencficiary upon any 4tdehtedness secured hereby and in such order as Beneficiary may determine, or at the option of Berieficiary- the entire amount so reflected or any past thereof maybe released to Trusmi Such application or telcasr shall not curc or waive any default or notice of default hereunder or invatidaw any act done garsuarst to such tvatice- 3) To appear in and defend army action or proceeding purporting to affW the security hereof or the rights on powcm of Beneficiary or Trustee; and w pay ali costs a +d txpertses- inducing cost of evidence of tide and atsomty 5 fees in a reasonable sum in any such action or prucocding in whichfltnefrctaty or Trustee may appear, and in any snit brought by Bcmfictary to foreclose this Deed 4) To pay_ at least tcn days before delinquency art takes and a>ccssrrcn(s affecting said property. including assessments on appurtenant water stock, when due, all enLumbrartces, charges and lierts, with inicsrst, on said property err any part thereof, which appear to be prior or superior hereto; all costs, fees and c><pertsts of this Trust Should Truster fail to matte any payrnenr or to do any au as heron provided, Win PAneficiary of Trustee, but without obligation so to do and veithoul notice to or demand upon TnzWr and without releasing Trustor from any obligation hereof, may: make of do the same is such manner and to such extent as either may drem necessary to pmtea We security hemcf. Dicneficiary or Trustee being authorized to enter up rt said property for such purposes; appear in and defend any action or pmxeding purporting to affect the security hetoofor the rights or Bowers of Beneficiary or -Trustee; pay, purchase, contest or ,ompromiss any encumbrance, chaige or lien whkh in the judgment of tither appears to be prior at superior hereto-, and, W exercising any such power;, pay necessary expenses. employ sounscl and pay his rcavonabie fees - 5) To pay immediately and without demand all sums so expended by Bertcftciary or Trustee, with interest ftorn the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by lave in effect at the date hereof regarding the obligation secured hereby any amount drmantied by the E%zteficia y reel to exceed the mmnim%sm allowed by law at the time When said statement is dcmanded- 11 Ir is mutually agreed. 1) That any award in conntctton with any cwndertirration lot public use of or injury to said property or arty part thereof is hereby assigned and shall be paid to Bern-ftciary who may apply or release such W.mys received by trim in the same mariner and with the same effect as about provided for disposition of proceeds of fire or other insurance2) That by accepting payment of any stair seared hereby after its duc date, Beneficiary does not waive his nghl either to mgwrc prompt pkwitent when due of all other sums so seosrcd or to declare default for failure so to ray- 3) That at any time or Gem time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property, consent to the making of ahy map or plat thcrcof, join in granting any easement Lhtmon, or join in any extension agreement or any agreement subordinating the lien or charge hereof 4) Thal upon A-rinem request of Beneficiary stating that all sums secured hcrthy have been paid, and upon surrender of this Diced and said note to Trailer for cancellation and retention or other disposition as Trustee in its sok discretion mar choox and upon payment of its fees, Tr usim stroll mccinvey, without warrant;, the properry then held hereunder. The recitals in such teconveyance of any matters or facts shall be condinwe pr*af of the truthftdmis thereof. Tltc Grantee in such recor veywm may be described as "the person or persons legally entitled thereto-" 5) T2tat as additional security, Truster hereby gives to grid confers upon Beneficiary the right, power and authority, during the continuance of [hest Tracts, to collect the cots, issues and profits of said property, reserving unto Trurstor the right. prior to any default by Truster in payment of any indebtedness secured hereby or in the performance of any argfeerrlun hereunder. to collect and retain such rents, issues and profits as they become due and payable Upon any such default, Beneficiary may at any time wil!htmt notice, either in person, by agent, or be a cove rver to be appointed by a coral, and withoul regard to the adequacy of any security for the indcbtedness hereby secured, enter upon and take possession of said property or any pan theroof, in his own name sue for or ottserwisc coticet such rents, issues, and profits. including those past due and unpaid, and apply the same, less costs and expenses of operation and collcciinn, including reasonable a*llmcys fees, upon any indebtedness secured hereby, and in such order as Beneficiary may deiermine The tnterutg upon and taking p0,=Lon of .said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not curs; or waive any default or notice of dcfauit hereunder or invalidate any act done ptubttant to such notice 6) That upon default by Tnrstur in payment of arty indebtedness secured hereby or in the performance of any agreensetit hereunder. Beneficiary may dtciare all sums seccrrrd hcretty immediately due and payable by delivery to Truster of wmtren declaration of default and demand for sale and of written notice of defauh and of election to cause to be ;old said property, which notice Trustee shall cause to be filed for record Beneficiary also shall deposit with Tnsscx this Dad, slid note and aft doeu-rtcats evidencing expersditures secured hcttby- Afler the lapse of such time as may then be required by law following the rccrtrdatiort of said notice of default, and notice of sale having been given as then required by law. Trustee, without demand on Trustee, shall scil said property of the lime and place fixed by it in said notice of sale, either as a whl:ft or in separ m parcels, xW in such order as it may determine, at public auction to the highest bidder for cssh in lawful money of rite smiled States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public titu"Ancernent at such time and place of sale, and from erne to time thereafter may postpone such sale by public announim neat at the time fixed by the preceding postporictnent. Trustee shalt deliver to such pun;Ykiscr its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shalt be oonctrurve proof of the truthfnlncss thcrenf Any perbon, including Tnuctor, Trustec, or Beneficiary as hereinafter deftted, may purchase at such sale. ti!�-9$Agrec-Slues- fkh-G• 1 0829NS - p3 F�xhihit "ii" -- Subordinated laced of Trust - Page 3 of 9 Allcr deducting all costs, fees and expenses of "Trustee and of this Trust, including cost Of evidence Of title in connection with sale. Trustee shall apply the proceeds of sale to payment of all sums expended under Ilse terms hereof, not then repaid, with accrued interest at the amotn3t allowed by law in effect at the date hereof, all other sums then secured hereby; and the remainder, if any, to the person or peaons legally entitled thereto 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly actsowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive pmof of proper substitution of such successor Trursiee or Trustees, who shall, without conveyance from the Trustee predecessor, succad to all its title, estate, rights, powers and duties- Said insuumcni must contain the name of the original Tnrstor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Tr utee. g) That this Deed applies to, inure to the bcncftt of, and binds all parties hereto, their heirs, legatees, devisees, administrators, exeeutors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, wfigher or not reamed as Beneficiary herein_ In this Deed, whenever the comiext so requires, the masculine gender includes the feminine andror neuter, and the singular number includes the plural_ 9) Thai Trustee accepts this Trust when this Eked duly executed and acknowledged, is made a public record as provided by law_ Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Truutor. Beneficiary or Trustee shall be a party unless brought by Trustee DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO TRUSTEE - The undersigned is die legal owner and holder of the we or notes and of all indebtedness secured by the foregoing Deed of Trust. Said rote or notes, together with all other indebtedness secured by said Deed of Test, have been fully paid and satisfied. and you arc hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of "Trust, to cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Dad of Trust delivered to you herewith, together with the said Deed ofTrust, and to rcconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same Dated Please mail Deed of Trust, Note and Reconveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. S1�-98Agree Slier 0&(2&98 - k3 Exhibit "G" — Subordinated heed of Trust - Page 4 of 9 DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED SF-98A&rcc Shcr.L-xh-G-1 O8R8198 - 43 TRUSTEE Fxhibit "G" — Subordinated Deed of Trust - Page 5 of 9 RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS -T4G AMFRScA THIS RIDER TO SUBORDINATED DEE OF TRUSg1TH RIDER ATTACHED ("Rider"), is made as of 1998, b BRIDGES HER LANI", L.P., a California limited partnership ("Trustor"), and REDEVELOPMENT AGENCY OF THE CITY OF I IUNTINGTON BEACH, a public body, corporate and politic ("Beneficiary"), as follows: 1. Part of Deed of Trust. This Rider is made a part of that certain Subordinated Deed of "Crust With Assignment of Rents ("Deed of Trust"), of even date hereof, to which this Rider is attached. 2. Conflict. In the event of any conflict between the terms of this Rider and the terms of the Deed of Trust, the terms of this Rider shall control. 3. Priority; Subordination. Trustor and Beneficiary entered into that certain Owner Participation Agreement, dated , 1998 (the "OPA"), pursuant to which Beneficiary (named the "Agency" in the OI'A) agreed to subordinate this Deed of "Crust to the liens of the deeds of trust identified in the OPA as the First need of Trust, the Second Deed of Trust, and the Construction/Permanent Lender(s)'s deed(s) of trust, and to such other and further documents as such lenders may be required including but not limited to regulatory agreements, not to exceed an indebtedness of Four Million Two Hundred Thirty-five thousand Dollars ($4,235,000.00). The lien of this Deed of Trust therefore shall be junior and subordinate to the liens of the foregoing Iisted deeds of trust and such other and further documents as such lenders may require. Beneficiary agrees to execute such subordination agreements, in the form attached as Exhibit "H" to the 011A, as are necessary to effect such subordination of the lien of this Deed of Trust. 4. Condemnation. Section B. ] of the Fictitious Deed of Trust incorporated into the Deed of Trust shall be modified to provide that Beneficiary shall not be entitled to any awards or damages payable directly or indirectly by reason of a condemnation or proposed condemnation affecting all or any part of. or any interest in, the Property, brought by or pursuant to the direction of Beneficiary. 5. Default. The term "default" as used in the Deed of Trust shall mean a "Material Default" as defined in the OPA or Regulatory Agreement. SF-98Agrcc:Shcr 1=xh4i-t 08n9198 - t: , Exhibit "C" — Subordinated Deed of Trust - Page 6 of 9 IN WITNESS WHEREOF, Trustor and Beneficiary have executed this Rider to Subordinated Deed of Trust With Assignment of Rents as of the date of 1 rustor's acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set forth above. ATTEST: Agency Clerk APPROVED AS TO FORM: Agency Counsel 5f-98Agrcc-Shcr-rxh-6- l OVUM - X3 TRUSTOR. THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership Its: BENEFICIARY: REDEVELOPMENT AGENCY OF THE CITY OF HUNTiNGTON BEACH, a public body, corporate and politic By: Chairman Exhibit "G" — Subordinated Deed of Trust - Page 7 of 9 STA"rE OF CALIFORNIA COUNTY OF ORANGE On appeared ss. before me, personally personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA } } ss. COUNTY OF ORANGE } On before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] S F-98Agree-Shu. L:x h-G- 0&'28198 - #3 Notary Public Exhibit "G" — Subordinated Deed of Trust - Page 8 of 9 SIB-98Agrcc Stier _E -,h-G-I W28198 - k 3 EXHIBIT "A" TO DEED OF TRUST LEGAL DESCRIPTION OF REAL PROPERTY (TO BE INSERTED) Exhibit "G" — Subordinated Deed of Trust - Page 9 of 9 EXHIBIT H WHEN RECORDED RETURN TO: �%BridgesfS—Iher Lane, L.P. A 18837 Brookhurst Street Suite 303 Fountain Valley, CA 92708 Attn: JoAnn Ulvan SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT ("Agreement") is entered into this day of by and among REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public agency, corporate and politic (the "Agency"); THE BRIDGES AMERICA SHER LANE,- L.P., a California limited partnership ("Participant"); and ("Lender"). RECITALS: A. Participant owns fee title to the real property described on Attachment No. "1" (the "Property") attached hereto and incorporated herein by reference. The Agency and Participant have entered into an Owner Participation Agreement dated as of 1998 (the "OPA"). Pursuant to the terms of the OPA, Participant has executed a Note in favor of the Agency in the amount of ONE MULLION TWO HUNDRED THOUSAND SEVEN HUNDRED THIRTY- FOUR DOLLARS ($1,200,734.00) ("Agency Loan") to assist Participant in the redevelopment of the Property as an affordable housing complex. The Agency Loan is to be secured by a Subordinated Deed of Trust With Assignment of Rents With Rider Attached encumbering the Property (the "Agency Deed of Trust"). B. Agency and Participant have also entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions recorded against the Property ("Agency Regulatory Agreement"), which- Agency Regulatory Agreement contains, among other terns, certain use restrictions affecting the Property. SF-98A9fee.Sher- Q8!28!98 - p3 [EXHIBIT "H" - SURORD. AGR. FORM Page 1 o(91 C. Participant has obtained a loan from ("the Lender") to lend to Participant the sum of DOLLARS ($ (the "Lender Loan"). To repay the Lender Loan, Participant has executed or is about to execute a deed of mist encumbering the Property to secure a promissory note in the sum of the Lender Loan, payable upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). In connection with the Lender Loan, Participant may also be required by Lender to execute a regulatory agreement to be recorded against the Property, which may contain among other terms, use restrictions affecting the Property (the "Lender Regulatory Agreement"). D. Lender is willing to make the Lender Loan provided the Lender Deed of Trust and Lender Regulatory Agreement are a lien or charge upon the Property prior and superior to the lien or charge of the Agency Deed of "Trust and Agency Regulatory Agreement, and provided that the Agency will specifically and unconditionally subordinate the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement to the lien or charge of the Lender Deed of Trust and the Lender Regulatory Agreement. E. It is to the mutual benefit of the Lender, Agency, and Participant that the Lender make the Lender Loan to Participant; and the Agency has agreed that the Lender Deed of Trust and Lender Regulatory Agreement shall, when recorded, constitute a lien or charge upon the Property which is unconditionally prior and superior to the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement, subject to the specific terms and provisions of this Subordination Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the Agency, Lender and Participant, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is her eby declared, understood and agreed as follows: .1. Subordination by_Agency. .1.1 Subordination of Agency Deed of Trust and Agency Regulatory Agreement to Lender Deed of Trust and Lender Regglatory Agreement. The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder), and the Lender Regulatory Agreement (and any amendments or modifications thereto) shall unconditionally be and -remain at all times a lien or charge on the Property, prior and superior to (i) the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement, (ii) all present and future indebtedness and obligations secured thereby, and (iii) all rights and privileges of Agency thereunder, provided that the Lender Deed of Trust does not exceed Four Million Two Hundred Thirty-Five.`I housand Dollars ($4,235,000.00). If Participant chooses to refinance the Lender Loan, Agency agrees to subordinate the Agency Deed of Trust and the Agency Regulatory Agreement to the refinancing Lender's Deed of Trust under the same terms and conditions as set forth in this Agreement, on the condition that the amount of the new -loan is no greater than the original principal balance of the Lender Loan. S F-98Agrcr5hcr- I .E.ih41-1 08/28/98 - #3 [EXHIBIT "H" - SUBORt3. AGR_ FORM Pagc 2 of91 1.2 Covenants of Aaencv. The Agency declares, agrees and acknowledges that: (a) The Agency consents to all provisions of the Lender Note and the Lender Deed of Trust; and (ii) all provisions of the Lender Regulatory Agreement. (b) To Agency's actual knowledge, there is no breach, event of default or default existing under the Agency Deed of Trust or Agency Regulatory Agreement, or any circumstances, event, omission or failure of condition which would constitute such a breach, default or event of default after notice or lapse of time, or both. 2. Reliance by Lender and Agency. The Lender would not make the Lender Loan and the Agency would not have agreed to subordinate the Agency Deed of Trust and Agency Regulatory Agreement without this Subordination Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this waiver, relinquislunent and subordination. 3. Notice to Agency. In the event of a breach or default by Participant under the terms of the Lender Deed of Trust, the parry alleging such default shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Participant. Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall have each of the following rights so long as either the Agency Regulatory Agreement or the Agency Deed of Trust encumber any portion of the Property or interest therein: (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or any lien under the Lender Regulatory Agreement. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of Trust or other lien prior to the date that is thirty (30) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonmonetary default, the Lender shall not foreclose its Lender Deed of Trust or other lien prior to the date specified above for monetary defaults-, provided that if said nonmonetary default is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary (x) to obtain possession of the Property by either foreclosing the Agency Deed of Trust, and (y) to cure the default, so long as the Agency does so with reasonable and continuous diligence. (b) To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. (c) To negotiate with the Participant to purchase the Property from Participant, subject to the Lender Deed of Trust without the consent of the holder of the Lender Deed of Trust or enforcing party under the Lender Regulatory Agreement. SF-98Agree Shcr-1 FO-11 —1 09l28198 - K3 ]EXHIBIT "H" — SUBORD. AGR. FORM Page 3 of 9] The Lender agrees that the exercise of any of the rights set forth in this Section 3.1 by Agency shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan. 3.1 Foreclosure of Agency Deed of Trust. The Lender hereby agrees that in the event that Agency forecloses the Agency Deed of Trust, said foreclosure shall not give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan. 3.2 Disbursements. Lender, in making disbursements of the proceeds of said Loan, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing such Loan shall not defeat the subordination herein made in whole or in part. 4. Miscellaneous. 4.1 Entire Agreement. This Subordination Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and Lender Regulatory Agreement on the one hand, and the Agency Deed of Trust and Agency Regulatory Agreement on the other hand, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Agency Deed of "Trust and Agency Regulatory Agreement, which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assigns. This Subordination Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law. This Subordination Agreement shall be construed according to the laws of the State of California. 4.4 Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice. Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by (1) personal delivery, (ii) by courier service that provides a receipt showing date and time of delivery, or (iii) by registered or certified mail, return receipt requested, postage prepaid. Notices shall be directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be S17-98A6rcc.Shcr-1 FA-11-1 0912FJ99 - 93 (EXHIBIT "H" - SUBORD. AGR. FORM Page 4 of 91 deemed given upon receipt if by personal delivery or courier service, or if by mail the earlier or (x) actual receipt or (y) forty-eight (48) hours after deposit in the United States mail. If to Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Executive Director If to Participant: The Bridges America Sher Lane, L.P. 18837 Brookhurst Street Suite 303 Fountain Valley, CA 92708 Attention: Executive Director With copy to: Rutan & Tucker 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92628 Attention: Jeffrey M. Oderman, Esq. If to Lender: With copy to: 4.6 Attorney's 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 each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 C_ountelp . This Subordination Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. SF-98AYrcc-Shcr-I E:xh-1I —I Q8f18198 - k3 [EXHIBIT " 1-i" — SUBORD. AGR. FORM Pagc 5 of 91 NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "AGENCY" ATTEST: REDEVELOPMENT AGENCY OF '11-1E CITY OF HUNTINGTON BEACH, a public body, corporate and politic By: Agency Clerk APPROVED AS TO FORM: By: Agency Counsel SF-9KAgrcc-Shtr 1 lizh-If -1 08/2Xl98 - t:3 I0 [Signatures continued on next page.] [FXHIB1'I--1ii'-- SUBORN. AGR. FORM Page 6 of9l 51=-48Agrce Sher -I lxb-11 —1 0R.29,98 - f:3 "Participant" THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership By: Its: "LENDER" By: Its: By: Its: [i;XHIBIT "H" — SUB0RD. AGR_ FORM Page 7 of 91 STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] [ADD ADDITIONAL ACKNOWLEDGMENT NORMS AS NECESSARY] SF-984icc_Shcr-Llixh-11 -I ORP8/98 - 43 [EXHIBIT "H" - SUBORD. AGR_ FORM Page 8 of 9] S1--98AVrceYicr-I Exit- il-1 081--W98 - 93 ATTACHMENT NO. "I" LEGAL DESCRIPTION OF PROPERTY ['I'O ICE FNSIRTED] [EXHIBIT " F I" — SUBORD. AGR. FORM Page 9 of 9] EXHIBIT I FREE RECORDING REQuFs'CED BY AND WHEN RECORDED MAIL TO: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: Executive Director (Space Above'l7his Line for Recorder's Office Use Only) (Exempt from Recording Fee Per Gov. Code §6103) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS THIS REGULATORY AGREEMENT RESTRICTIONS ("Agreement") is made and 1998, by and between REDEVELOPMENT BEACH, a public body, corporate and politic California limited partnership ("Participant"). AND DECLARATION OF COVENANTS AND entered into this day of AGENCY OF TIIE CITY OF HUNTINGTON ("Agency") and /BRIDGES fSI-IER LANE, L.P., a TH C_ Alm etzrc i RECITALS: A. Agency and Participant have entered into that certain Owner Participation Agreement, dated , 1998 (the "OPA"), concerning Participant's redevelopment of that certain real property, owned in fee by Participant, more particularly described in Attachment No. 1 attached hereto and incorporated by reference herein (the "Site"). The OPA describes the "Project" which generally consists of Participant's rehabilitation of an existing sixty- six (66) unit apartment complex on the Site and subsequent management thereof as an affordable rental housing complex. The apartment complex consists of thirty-three (33) one bedroom units and thirty-three (3) two -bedroom units. B. Agency and Participant also entered into that certain Note (the "Note"), with a Note Date of , 1998, pursuant to which Agency has provided Participant with a self-liquidating loan in the principal amount One Million Two Hundred Thousand Seven Hundred Thirty-four Dollars ($1,200,734.00) ("Loan Amount"). The Note provides for Agency's waiver and discharge of the Loan Amount by one -thirtieth (1/30) each year for thirty (30) years. C. Agency and Participant now desire to place restrictions upon the use and operation of the Project, in order to ensure that the Project shall be operated continuously as an affordable SF-98Agree Sher-3 _Fxh-1 =28198 - #3 Exhibit "I" - REGULATORY AGREEMENT- PAGE I of 15 housing project available for rental in accordance with the terms set forth below for the term of this Agreement. AGREEMENT: NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators and assigns, and all persons claiming under or through them, that the Site, 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: DEFINITIONS. 1.1 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall mean annual rentals whose amount does not exceed the maximum percentage of income that can be devoted to rent as set forth by California Health & Safety Code Section 50053, or its successor. 1.2 Eligible Low Income Tenant. As used in this Agreement, the term "Eligible Low Income Tenant" shall mean those tenants whose household income does not exceed eighty percent (80%) of the Orange County Median Income, or such other percentage as may be defined in California law from time to time as "low income," and who are other eligible to rent a Unit. 1.3 Eligible Spgcial 'Median Income Tenant. As used in this Agreement, the term "Eligible Special Median Income Tenant" shall mean those tenants whose household income does not exceed one hundred ten percent (110%) of the Orange County Median Income, and who are otherwise eligible to rent a Unit. 1.4 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall refer to, as the context mandates, individually or collectively, Eligible Very Low Income Tenants, Eligible Low Income Tenants, and/or Eligible Special Median Income Tenants, who are otherwise eligible to rent a Unit. 1.5 Eligible Very _Low Income Tenant. As used in this Agreement, the term "Eligible Very Low Income "Tenant" shall mean those tenants whose household income does not exceed fifty percent (50%) of the Orange County Median Income, or such other percentage as may be defined in California law from time to time as "very low income," and who are otherwise eligible to rent a Unit. 1.6 Orange _County Median Income. For purposes of this Agreement, the "Orange County Median Income" shall be determined by reference to the regulations published by -the California Department of Housing and Community Development pursuant to California Health and Safety Code Section 50093, or its successor. Sf -98 AXree.Shc*-3 .Exh-I 08/29M - a3 Exhibit "I" - REGULATORY AGREEMENT - PAGE 2 of 15 1.7 Orange County Moderate Income. As used in this Agreement, the term "Orange County Moderate Income" shall mean household income not exceeding one hundred twenty percent (120%) of the Orange County Median Income, or such other percentage as may be defined in California law from time to time as "moderate income." 1.8 Unit and Units. As used in this Agreement, the term "Unit" shall mean one of the sixty-six (66) rental dwelling units in the Project, and the term "Units" shall mean two or more of the sixty-six (66) of the rental dwelling units in the Project. The term "Unit" and "Units" shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. 2. TERM OF AGREEMENT-, RESIDENTIAL RENTAL PROPERTY. The term of this Agreement shall be thirty (30) years from the date hereof. Participant hereby agrees that the Project is to be owned, managed, and operated as a project for Eligible Tenants for the term of this Agreement. To that end, and for the term of this Agreement, the Participant hereby represents, covenants, warrants and agrees as follows: 2.1 Pttmose. The Site will be acquired and the Project developed for the purpose of providing Eligible Tenants rental housing. 2.2 Facilities. All of the dwelling units in the Project shall contain facilities for living, sleeping, eating, cooking and sanitation in accordance with the terms of the OPA. 2.3 Residential Use. None of the dwelling units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rdoming'house, nursing home, hospital, sanitarium, or trailer court or park without the Agency's prior written consent. 2.4 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Participant take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of Agency. 2.5 Preference to Eli ible Tenants. All of the dwelling units will be available for rental in accordance with the terms of this Agreement, and the Participant shall not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that the dwelling units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.5 below. 2.6 Liability of Participant. Participant and Manager shall not incur any liability under this Agreement as a result of fraud or negligent or intentional misrepresentation by a tenant. 3. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS. Participant hereby represents, warrants, and covenants as follows: tiF-9RAgrec:Sher- 3 170-1 0&?..&/98 - a3 Exhibit" ]" — REGULATORY AGRUMEN-t — PAGE 3 of 15 3.1 Income Restrictions. Except as expressly provided herein, throughout the term of this Agreement, the sixty-six (66) Units shall be subject to the following affordability restrictions: (a) seventeen (17) one -bedroom Units and sixteen (16) two -bedroom Units shall be rented to Eligible Special Median Income Tenants. (b) sixteen (16) one -bedroom Units and six (6) two bedroom Units shall be rented to Eligible Very Low Income Tenants. (c) eleven (11) two -bedroom Units shall be rented to Very Low Income Tenants and these Units shall be desig ated as "I IOME Units" and the rents for these eleven (11) Units shall not exceed the "low rent as defined by HOME Program, a as set forth at Section 92.252 of Title 24 of the Code of Federal Regulations. 3.2 Further Income Restrictions. Notwithstanding the foregoing, Participant shall be permitted, from time to time and at one or more times, to enter into agreements with any public or private entity or entities, on such terms as Participant may agree in its sole discretion, to convert those Units designated above as for Eligible Special Median Income Tenants to Units for Eligible Tenants at an income level lower than Special Median Income, for example, to Eligible Low Income Tenants or Eligible Very Low Income Tenants (or, if subparagraph (a) of Section 3.1 applies, to also convert the non -restricted Units to restricted Units at Orange County Moderate Income or any lesser income level). 3.3 Rental Rates. Participant shall rent each of the Units at no greater than the Affordable Rent applicable t6the particular Unit. 3.4 Occupancy -By F,liuible Tenant. A Unit occupied by an Eligible Tenant at the commencement of occupancy shall be treated as occupied by an Eligible Tenant until the Unit is vacated. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until reoccupied. (a) As to the HOME Units, the HOME Program allows tenants to continue residing in income restricted units even if their income increases. Pursuant to the HOME Program, Participant may increase the tenant to no more than thirty percent (30%) of their actual household income if their income exceeds the maximum allowable income for the HOME. Unit. (b) As to the non -HOME Units, if the income of an Eligible Very Low Income Tenant increases above the maximum level, Participant may raise the rent to the Special Median Unit level. Then, when the first vacancy occurs in a Special Median Unit, Participant shall rent it to an Eligible Very Low Income tenant. 3.5 Income Computation. Immediately prior to an Eligible Tenant's occupancy of a unit, Participant shall obtain and maintain on file an Income Computation and SF-98AErec Sher I:xh-I 0812V;S - a3 Exhibit "1" - REGULATORY AGREEMENT PAGE 4 of 15 Certification form from each such Eligible Tenant dated immediately prior to the date of initial occupancy in a Unit by such Eligible Tenant. Participant shall use its best efforts to verify that the income provided by an applicant is accurate by tatting one or more the following steps as a part of the verification process: (i) obtain two (2) pay stubs for 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 may be reasonably required. 3.6 Rental Priority. Tenants living in the Project prior to Participant's rehabilitation of the Units as contemplated by the OPA ("Initial Rehabilitation") who are Eligible Tenants meeting the income restrictions of the Units as set forth in Section 3.1 shall be given first priority in re -leasing Units in the Project following completion of the Initial Rehabilitation. Except as set forth above, Units shall be rented to Eligible Tenants on a first -come, first -served basis; provided, however, that Participant may, in Participant's sole discretion, maintain an "interest list" or "eligibility list" of potential tenants but that Participant shall not be liable to Agency or any person, firm, or entity in the event a Unit is rented to a person who is not on any such list or is on such list but is listed lower than another person on such list. 3.7 Renting Vacant Units_. When a unit becomes available as a result of a tenant vacation, Participant shall rent the unit to an Eligible Tenant in accordance with the following procedure: (a) First, Participant shall rent the Unit to persons who have been displaced by Agency activities, pursuant to California Health and Safety Code Section 33411.3, provided that Agency provides Participant with reasonable notice. (b) Second, Participant shall rent any vacant unit in the order of priority as set forth in Section 3.69 (c) Third, if after and despite Participant's reasonable efforts, Participant is unable to rent a unit in the Project reserved for one of the restricted income categories for Eligible Tenants as set forth in Section 3.1, Participant may rent said unit to the next higher income level for Eligible Tenants set forth in Section 3.1, provided that in no event may less thar\(33) Units be rented to Eligible Very Low Income Tenants. 114k;rr}. .4 h O-C� 3.8 Maintenance of Records. Participant shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency to inspect the books and records of Participant pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Units. SF-98AFrcc_Shcr-3 Fah-1 0828,% - 43 Exhibit "I" - RFGULATORY AGREEMENT - PAGE 5 of 15 3.9 Reliance on Tenant _Representations. Each tenant lease shall contain a provision to the effect that Participant has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. 3.10 Conflicts. The rental priority provision set forth in Section 3.6 shall apply only in the event, and 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 recorded in superior priority to this Agreement. 4. MAINTENANCE. 4.1 Maintenance Covenant. Participant agrees to maintain all interior and exterior improvements, including landscaping, on the Site in good condition and repair (and, as to landscaping, in a healthy condition), reasonable wear and tear excepted, and in accordance all applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction. In addition, Participant shall keep the Site free from all graffiti and any accumulation of debris or waste material. Participant 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 approved materials. The maintenance covenant contained in this Section shall remain in effect for the tern of this Agreement. 4.2 Agency -Rights. -Agency shall have the right annually to enter upon the Site to inspect both the interiors and exteriors of the Site, upon seventy-two (72) hours notice. Agency may perform or cause to be performed the maintenance necessary to cure any default of these Mr intenance 901-venants and Participant shall be liable for payment to Agency of Agency's reasonable costs (excluding staff salaries and overhead and other similar costs) to perform such required maintenance; provided, however, that Participant first be given written notice by Agency of the action r �iced to cure any default, and Participant, after receipt of such notice, shall have siaays to cure such defaults, but Participant shall not be deemed in default of the foregoing maintenance covenant if such default cannot reasonably be cured within the sixty (60) day period referenced above so long as Participant has commenced to cure such default within the same sixty (60) day period and is diligently proceeding with the work to cure such default. Notwithstanding the foregoing, if any property conditions are reasonably identified by Agency after a property inspection attended by a representative of Participant that pose an immediate danger to life or limb, Participant shall have three (3) days to effect corrections of such condition(s) to Agency's reasonable satisfaction. 4.3 Annual Report. Participant covenants and agrees to submit to the Agency an annual report.(the "Annual Report") required by California Health and Safety Code Section 33418. The Annual Report shall include for each Unit the rental rate and the income and family size of the occupants. The income information shall be supplied by the tenant in a SF-98Agrcc Shcr-3.Exh-1 0812&Ng - d3 Exhibit "I" - REGULATORY AGREEMENT - PAGE 6 of 15 certified statement on a form provided by the Agency. The Participant shall submit the Annual Report on or before the end of the first calendar quarter of the year following the year covered by the Annual Report. The Participant shall provide for the submission of such information in its leases with tenants. Agency shall not charge a fee for reviewing the Annual Report.. 4.4 Ma=_,ement Plan. Participant shall prepare, submit to Agency Executive Director within sixty (60) days ofXecordation of this Agreement and maintain in effect a Management Plan in accordance with the following: (a)o;,;i zfeipant submitted -to -- the --erg a gent pprov odes -at -a- -minim . The Management Plan, including such amendments as may be approved in writing by the Agency, shall remain in effect for the term of this Regulatory Agreement. Participant shall not amend the Management Plan or any of its components without the prior written consent of the Agency. The components of the Management Plan shall include: (1) Management Agent. The name and qualifications of the ;faa sed management agent. The Agency shall approve or disapprove the proposed gement Agent in writi g based on the experience and qualifications of the Xanagemen�Agent. The agemept-Ag-ent 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 thelLow Income Units,e a.�1 HOAJE niC�ltf-� �N c.�f Vc ryy (3) Me- agement Agreement. A copy of the proposed management agreement specifying the amount of the management fee and the relationship and division of responsibilities between Participant and management agent. (4) Tenant Lease or Rental Agreement. A copy -of the f Vyr�s proposed tenant lease or rental agreement to be used in renting the,,Low Income / Units. (5) Annual Bud>;et. Prior to the completion of construction and annually thereafter not later than fifteen (15) days prior to the beginning of the next fiscal year of the Project, M Participant shall submit a projected operating budget to the Agency Executive Director for review and approval. The Agency shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder, and such matter shall be deemed approved unless the Agency provides to Participant its written disapproval within thirty (30) days after receipt of a request for approval, provided Participant includes SF-98Agrccshcr-3 I_0-1 osngM -93 Exhibit" 1" — REGUI,Al ORY AGREEMENT- — PAGE 7 of 15 with its request, a written notice, in capital letters, stating as follows: NOTICE: PURSUANT TO SECTION 4.4 OF THE REGULATORY AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND BRIDGES AMERICA SHER LANE, L.P., FAILURE BY THE AGENCY -1'0 APPROVE OR DISAPPROVE THE MATTER SUBMITTED WITH THIS REQUEST WITHIN 30 DAYS SHALL BE DEEMED AN APPROVAL. Any disapproval shall be in writing and contain the Agency's reasons for disapproval. (b) Participant hereby covenants and agrees the Agency shall have the right, at any time and from time to time, to give notice to Participant if the Agency determines that the Project is not being managed or maintained in accordance with the Management flan. The Agency may require the Participant to change management practices or to terminate the management agent and retain a different management agent, approved by the Agency. The Agency agrees that prior to requiring the Participant to change its management agent or the management practices the Agency shall informally consult with Participant, in an attempt to resolve the dispute. If the Agency determines that such an attempt at informal resolution has been unsuccessful, it shall give the Participant thirty (30) days written notice to change the management agent or practice, as the case may be. If Participant fails to do as requested by the Agency in the written notice, the Agency may then require the immediate change of the management practice or agent, as the case may be. Theeanagement agreement shall provide that it is subject to termination by the Participant without penalty, upon thirty (30) days prior written notice, at the direction of the Agency. Within ten (10) days following a direction of the Agency to replace the management agent, the Participant shall select another management agent or make other arrangements satisfactory to the Agency for continuing management of the Project. The Participant shall notify the Agency upon leaming that there is a voluntary change in the management or control of the management agent, and, if the change is unsatisfactory to the Agency, the Agency shall be entitled to require the Participant to change the management agent in accordance with the terms of this paragraph. 5. ENFORCEMENT. In the event Participant defaults in the performance or observance of any covenant, agreement or obligation of Participant 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 Agency, or, in the event said default -cannot be cured within said time period, Participant has failed to commence to cure such default within said thirty (30) days and diligently prosecute said cure to completion, then SF-98Agrcc:ShCr-3-Exh-1 0808198 - a3 Exhibit "I" - REGULATORY AGREEMENT - PAGE 8 of 15 Agency shall declare an "Event of Default" to have occurred hereunder, and, at it-s option, may take one or more of the following steps: (a) By mandamus or other suit, action or proceeding at law or in equity, require Participant to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of this Agreement; or (b) 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 pursuant to the OPA. 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. 6. NONDISCRIMINATION. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Participant, 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 Site, or any part thereof (except as permitted by this Agreement). 6.1 Form of Nondiscrimination and Nonseplepation Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, religion, ancestry, national origin, sex or marital status of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In Deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. (b) In Leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, ancestry, national origin, sex, or marital status in the SF-98Auce Sher-3:1_xh-] OW28/98 - s 3 Exhibit "I" — REGULATORY AGREEMENT ... PAGE 9 MA 5 leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." (c) In Contracts-. "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, religion, ancestry, national origin, sex, or marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of the land." 7. COVENANTS TO RUN WITH THE LAND. Participant hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Participant 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 Participant's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire. All covenants without regard to technical classification or designation shall be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. 8. ATTORNEYS' PEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any covenant in this Agreement, or otherwise arising out of this Agreement, the prevailing parry in such action shall be entitled to recover from the other reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorneys fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery, and expert witness fees.. 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 real property records of the County of Orange. 10. NO"[ -ICE. Any notice required to be given hereunder shall be made in writing and shall be given by (i) personal delivery, (ii) 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: Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Executive Director SF-98Agrcc Seer-3 xh-I 08/28/98 - #3 Exhibit "I" - REGULATORY AGREEMENT - PAGE 10 of 15 Participant: Bridges America Sher Lane, L.P. 18837 Brookhurst Street Suite 303 Fountain Valley, CA 92708 Attn: Executive Director Copy to: Rutan & Tucker 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626-1950 Attn: Jeffrey M. Oderman, Esq. 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.I 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. A 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 remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 11.3 Intep-ration. This Agreement contains the entire Agreement between the parties and neither parry relies on any warranty or representation not contained in this Agreement. 12. GOVERNING LAW. This Agreement shall be governed by the laws of the State of Califomia. 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. 14. SUBORDINATION. "Ibis Agreement shall be junior and subordinate to the liens of the deeds of trust identified in the OPA as the First Deed of Trust, Second Deed of Trust, and the Construction/Permanent Lender's deed(s) of trust, and such other and further documents, including regulatory agreements, as such lenders may require, not to exceed Four Million Two Hundred Thirty-five "thousand Dollars ($4,235,000.00) in debt. If, from time to time and at one or more times, Participant chooses to refinance the loan secured by any deed of trust which is superior to this Agreement, Agency agrees to subordinate this Agreement to the refinancing lender's deed of trust under the same terms and conditions as set forth herein on the condition that the amount of the new loan is no greater than the original principal balance of the refinanced note. Agency agrees to 5F-98 Agrt;c Sher-3 E:xh-1 48128/98 - 93 Exhibit "I" - REGULATORY AGREEMFNT- PAGE I i of IS execute such subordination agreements as may be required to effect the priority set forth in this Section. SI-98AgrCC SiMr- 5 Exh-I 08R8148 - 43 [end - signature page follows] Exhibit "i" REGULATORY AGREEMENT - PAGE 12 of 15 IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. A'IT1:S'I': By: Agency Clerk APPROVED AS TO FORM: By:` Agency Counsel SIB-98Az,rcc Slier-3 Fxh-I QRRRM - 113 "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic - By: Chairman "PARTICIPANT" THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership By Its General Partner: THE BRIDGES AMERICA FOUNDATION, a Delaware Nonprofit Corporation By: Name: (Type or print) Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President AND Name: (Type or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary Exhibit "I" — REGULATORY AGREEMENT.— PAGE 13 of 15 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On _ _ _ — , before me, _ _ , personally appeared personally ]mown to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in Ws/her/their authorized capacity(ies), and that by histher/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that helshe/they executed the same in his/her/their authorized capacity(ics), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] SF-48Agree Sher-3 E xh-1 08.'2V)8 - X3 Notary Public Exhibit "I" - REGULATORY AGREEMENT - PAGE. 14 of 15 SF-98Agrcc.5hcr-3-I:xh-I 09(28198 - u3 ATTACHMENT NO. 1 LEGAL DESCRIPTION OF SITE ITo be inserted.] Exhibit "I" — REGULATORY AGREEMENT — PAGE 15 of 15 EXHIBIT J TABLE 1 ESTIMATED PROJECT COSTS SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH, CALIFORNIA 1. Property Acquisition' IL Temporary Relocation' III. Direct Costs -Rehabilitation' IV. Indirect Costs Architecture & Engineering Permits & Fees Taxes, Insurance, Legal & Closing Development Management Contingency Total indirect Costs V. Financing Costs Interest Dunng Rehabilitation s Financing Fees ` Total Financing Costs 66 Units $73,790 !Unit 54,870,000 Allowance SO 66 Units $5.190 /Unit S342,500 $0 0 Allowance 25,000 Allowance 15,000 3.0% Direct Costs 10,300 550.300 8.5°% Interest On $3,520,000 Loan $0 2.0 Points On $3.520,000 Loan 70,400 $70,400 Vi. Total Project Costs $5.333.200 Per Unit $80.800 ' Per Developer Estimates, 2 Developer assumption; should be verified by City staff. 3 Assumes Project income is sufficient to fund the debt service costs incurred during rehabilitation ` Loan amount is based on an 8.5°% interest rate for 30 years and debt coverage of 120% Prepared by. Keyser Marston Associates, Inc File Name. Sherlane. Stabilized, 8/3/98 TABLE 2 ESTIMATED NET OPERATING INCOME SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LAW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH. CALIFORNIA I. Income' Moderate Income Set -Aside Units One -Bedroom 17 Units @ S740 /Month $151,000 Two -Bedroom 16 Units @ $895 /Month 171.800 Very -Low Income Set -Aside Units One -Bedroom 16 Units @ $658 /Month 126.400 Two -Bedroom 6 Units @ $740 /Month 53,300 Very -Low Income HOME Units One -Bedroom 0 Units @ $616 /Month 0 Two -Bedroom 11 Units @ $740 /Month 97,700 Laundry/Misc Income 66 Units @ S18 /Month 14,300 Gross Income $614,500 (Less) Vacancy and Collection 4.3% Gross Income (26,600) Gross Effective Income $587.900 II. Operating Expenses Administrative Expenses 66 Units @ $1,010 /Unit $66.700 Operations, Maintenance & Utilities 66 Units @ $1,610 /Unit 106,300 _ Insurance & License 66 Units @ $130 /Unit 8,600 Property Taxes 66 Units @ $0 /Unit 0 Operating & Capital Reserve 66 Units @ $250 /Unit 16,500 Total Operating Expenses 66 Units @ ($3,000) /Unit ($198,100) III. Net Operating Income $389.800 ' Rental income is based on the lower of the maximum amount allowed by the relevant government assistance source or the currently prevailing market rent. 2 Per Developers estimates Prepared by. Keyser Marston Associaaes. Inc File Names Sherl-ane, Stabir¢ed. 8/31% TABLE 3 WARRANTED FINANCIAL ASSISTANCE CALCULATION SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH, CALIFORNIA I. Supportable Debt Net Operating Income S389,800 Threshold Return on Investment 9 6% ' Supportable Investment $4,062,000 It. Total Project Costs ($5,333.200) III. Warranted Assistance ($1,271,200) Per Unit ($19,300) 1 Weighted average of 8 5% interest rate on debt and 12% stabilrred return on equity Prepared by Keyser Marston Associates, Inc Fde Name Shert-ane, Stabil¢ed, 813M KEYSER MASRTON ASSOC. REPORT ATTACHMENT #2 K r_ Y s r_ R M A R S -r 0 IN A S S () C I A T E S I N C. 500 SOUTH GRAND AVENUE, ScnTT 1480 1,01 A. (CELES, CALIFORNIA 900%l PIIO.NE:213/622-8095 FAX 213/622-5204 F-MAIL kmala©kmamc-com WEEE SITE http //w%v%,-km tmr cnm MEMORANDUM TO: Mr. David Biggs, Economic Development Director City of Huntington Beach FROM: Keyser Marston Associates, Inc /11):'1S:JRS fti REAL FSTATE RtDLVFLorfHrNT AFFORDABLE I•{OLISIvG F(owmic (]EYFI-OI'MENT FISCAL I.mrA(T INFRASIRU(iURE FINANCE VALUATION AND LfTICATIO^1 SUPrORT 1 os AvGcI rs CA L-9\ E IiOLLIS, II KATi'.LELV H HFAn ]ANtEs A RABE' SA,ti Df CO GERAE D M- TRINIBLr RUE;ERT I. WEIMORF PAUL C- MARRA SAN ! FANC11C0 A- JFRRY KEYSE R TEmo1HYC KELLY KATE EARLL FUNK DLKiSI F CONLEY DLBBII M. KFRN MARTIIA N. PACKARD SUBJECT: Sher Lane Apartments Acquisition and Rehabilitation Project, Warranted Assistance Analysis DATE: August 3, 1998 In accordance with your request, Keyser Marston Associates, Inc (KMA) has performed a financial analysis of the 66 unit Sher Lane Apartment acquisition and rehabilitation project (Project). Orange County Bridges America (Developer) is proposing to acquire the building and to undertake rehabilitation activities to bring the Project up to the federal Housing Quality Standards. In compliance with the Huntington Beach Redevelopment Agency (Agency) request, the Developer has agreed to set -aside 33 units for very -low income households earning less than 50% of the Orange County median income (Median) and 33 units for moderate income households earning less than 120% of the Median. The Agency and the Developer have reached agreement on the amount of rehabilitation work that must be completed to satisfy the defined quality standards. In addition, it has been determined that the acquisition price for the Project falls within current market values exhibited within the area. Based on these fundamental premises, the following KMA analysis identifies the amount of public financial assistance required to make the proposed Project financially feasible. Page 2 ANALYSIS The financial analysis compares the acquisition and rehabilitation costs to the private investment warranted given the anticipated rental income and current money market conditions. The difference between these amounts represents the warranted public assistance to the Project. Project Costs The Project cost estimates are presented in Table 1, and can be summarized as follows- 1 . The property acquisition costs total $4.87 million, or approximately $73,800 per unit. 2. The Developer does not intend to displace any residents during the rehabilitation process Thus, no tenant relocation costs are included in the Project cost estimate. 3. The Developer estimates the direct rehabilitation costs at $342,500, or approximately $5,200 per unit. The improvements include the following: a. Exterior repairs and replacements such as construction of a new roof; addition of exterior lights and security improvements, upgrade of the landscaping/sprinkler system; deck, stairs and fencing repair, and; exterior painting. b Interior improvements including installation of new counters, sinks, kitchen/bathroom floors, bathroom vanities, carpet and window coverings in each unit; installation of new ovens in 50 of the units, and; interior painting in 50 of the units. 4. The indirect costs are estimated as follows: a_ The Developer is not modifying the building structure in any way. Thus, it is assumed that no architecture or engineering services will be required. b. The Developer is not adding any square footage to the Project, and the rehabilitation work is not structural in nature. Thus, the Developer has assumed that no public permits and fees costs will be incurred. This assumption should be verified by the City of Huntington Beach staff. K v Y S T H M ARNION A S S O C i A 7 1' S I N C. Page 3 c. KMA provided a $25,000 allowance for taxes, insurance, legal and accounting expenses incurred in the purchase transaction and during the rehabilitation process_ d. KMA provided the Developer with a $15,000 allowance for general and administrative costs incurred during the rehabilitation. e. KMA provided a 3% allowance for contingencies. 5_ Project financing costs include the following: a. It is assumed that the Developer will obtain permanent financing immediately after acquiring the Project based on a 120% debt service coverage ratio. Given that the Developer does not intend to displace any residents during the rehabilitation process, KMA has assumed that the income generated by the Project during rehabilitation will be sufficient to fund the debt service obligation. b Based on the net operating income projected to be generated by the Project, KMA estimates that $3.52 million in permanent financing can be obtained. Based on loan origination fees equal to 2% of the loan amount, the Project will incur approximately $70,000 in fees. As shown in Table 1, the acquisition and rehabilitation costs are estimated to total $5 33 million. This equates to approximately $80,800 per unit_ Net Operating Income The Agency is proposing to use Property Tax Increment Housing Set -Aside funds (Set - Aside) and federal HOME Program (HOME) funds to provide financial assistance to the Project. In addition, the Agency wishes to obtain inclusionary housing credit for the Project. Thus, the Project rents must meet the standards imposed by California Health and Safety Code Sections 33413 and 50053, and the HOME Program regulations. The Project includes 66 units, of which 33 are one -bedroom units and 33 are two - bedroom units. To meet each of the standards identified above, the Developer has agreed to impose the following income and affordability restrictions over a 30-year term: 1 _ 33 units will be designated as Moderate Income Set -Aside units, with the following unit mix a 17 one -bedroom units, and; b. 16 two -bedroom units_ K F. N s &: w M w a s r 0 n A s s o r i w c E t, L v ,- Page 4 2. 22 units will be designated as Very -Low Income Set -Aside units with the following unit mix: a. 16 one -bedroom units, and; b. 6 two -bedroom units. 3. 11 units will be designated as Very -Low Income HOME units_ All of these units will be two -bedroom units. The KMA rent estimates are based on the affordability restrictions imposed by the relevant public assistance source. It is important to note, however, that as a practical matter tenants will not be willing to pay more than the prevailing market rent to obtain a unit subject to income and affordability controls. This is relevant in the case of the Moderate Income Set -Aside units where the maximum allowable rent is $1,448 per month for one -bedroom units and $1,628 per month for two -bedroom units. Comparatively, the current market rents are $740 and $895, respectively. To reflect this fact, the KMA rent estimate applies the estimated market rents to the Moderate Income Set -Aside units. The maximum allowable rents for both the Very -Low Income Set -Aside units and the Very -Low Income HOME units are significantly lower than the prevailing market rents. Thus, the statutorily imposed maximum allowable housing expenses have been used in the KMA rent analysis. In addition, it is our understanding that the Developer is proposing to pay the tenants' interior utilities costs. As such, no utilities allowance has been deducted from the housing cost allowance used to determine the maximum allowable rent. The resulting Project rent schedule follows: One- Two - Bedroom Bedroom Moderate Income Set -Aside Units $740 $895 Very -Low Income Set -Aside Units $658 $740 Very -Low Income HOME Program Units NIA $740 As shown in Table 2, when laundry and miscellaneous income equal to $18 per unit per month is added, gross income is estimated at $614,500. After deducting an allowance for vacancies, turnover and collection expenses, gross effective income is estimated at $587,900. ' The Developer's operating expense budget includes standard allowances for Project administration, including on -site management; operations, maintenance and utilities, and; licenses and insurance. In addition, the Developer and the Agency have agreed that $250 per unit per month will be set -aside as a reserve for future capital repairs Finally, the Developer has assumed that the Project will receive the property tax K t: Y s t u M w p., T [) N A S 5 0 C I n T 1 5 1 N C Page 5 abatement that is available to non-profit owners of income restricted housing, and thus no property tax expense is included in the budget. The operating expenses, including the capital reserve, are estimated at $198,100 per year, which equates to $3,000 per unit_ The gross effective income is estimated at $587,900, and the stabilized operating expenses are estimated at $198,100 per year. The resulting net operating income is $389, 800_ Warranted Agency Assistance Table 3 presents the warranted assistance calculation based on the Project costs and net operating income estimates developed in this analysis. Assuming that the Project can obtain long-term financing at an 8.5% interest rate and a 120% debt service coverage ratio, $3.52 million in debt can be supported. Assuming the Developer would require a 12% stabilized return on any equity invested in the Project, $541,000 in equity could be supported. Thus, the Project can support approximately $4 06 million in costs When the $5.33 million in Project costs are deducted from the $4.06 million in supportable investment, the warranted assistance is approximately $1.27 million Comparatively, the Developer is requesting $1.20 million in assistance. Thus, it is the KMA conclusion that the proposed assistance to the Project is justified by the Project economics. PUBLIC ASSISTANCE/AFFORDABLE UNIT ALLOCATION It is the KMA understanding that the Agency is proposing to contribute approximately $1.00 million in Set -Aside funds and $200,000 in HOME funds to the Project. To determine whether this funding mix fulfills the HOME Program unit allocation requirements, KMA performed the following calculation: HOME Program Assistance $200,000 Project Cost $5,333,000 (Less) Permanent Debt (3,520,000) Net Project Cost $1,813,000 % of Net Cost Funded with HOME Funds 11 % Total Project Units 66 Minimum Number of HOME Units 8 As can be seen in the table above, the HOME Program regulations require that at least eight units in the Project be designated as HOME units if the net Project costs are $1.81 million and $200,000 in assistance is provided. Thus, the proposed allocation of 11 K f Y y 1 R M A R S l O N A 5 S O C LAT 1. 5 I\ C. Page 6 units exceeds the basic requirements. However, if the Project ultimately obtains a larger permanent loan than estimated in the KMA analysis, the calculation will have to be updated to reflect the changed information. Section 33413 of the California Health and Safety Code allows the Agency to count deed restricted units towards the fulfillment of the inclusionary housing requirement if at least 50% of the units are set -aside for very -low income households for at least 30 years The unit mix in the proposed Project fulfills this requirement, and thus the Agency can count the units toward this obligation However, the Project is located outside of a redevelopment project area. Thus, the units must be counted on a one for two basis, which results in 33 inclusionary units for the proposed Project. RESIDUAL RECEIPTS ALLOCATION The proposed agreement between the Agency and the Developer characterizes the $1.20 million in financial assistance as a non -interest bearing loan to the Developer. However, for every year that the Developer adheres to the income and affordability restrictions imposed by the agreement, 11301h of the loan balance will be forgiven. As a separate component of the transaction, the Developer has agreed to contribute 50% of the net income after debt service to the Agency annually until an agreed upon cap to the capital reserve account has been reached Thereafter, the Developer will allocate 100% of the net income after debt service to the Agency. However, it has been KMA's experience that a capital reserve allowance in the range of $250 per unit per year will typically be expended to perform the capital repairs that will be required to maintain the Project in a decent, safe and sanitary manner. Thus, KMA has assumed that the capital reserve contributions will continue to be required throughout the term of the agreement between the Agency and the Developer. KMA has prepared a cash flow projection for the Project to estimate the net present value of the residual receipts revenues to be received by the Agency (Table 4). This projection is based on the stabilized net operating income estimate with future rent increases set an average rate of 3.5% annually for the Moderate Income Set -Aside units, and 2.5% annually for both the Very -Low Income Set -Aside units and the Very - Low Income HOME units. The future increases in expenses are set at an average of 3.5% annually. As can be seen in Table 4, using a 10% discount rate, the Agency is anticipated to receive $858,000 in net present value terms. KHH_gbd 98550.HT B 14066.001 063 K V! S ;_ Fi M A R S T 0 W A 5 5 U C I A T 1: '• 1 A C TABLE 1 ESTIMATED PROJECT COSTS SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH, CALIFORNIA I. Property Acquisition' II. Temporary Relocation' III, Direct Costs - Rehabilitation' IV. Indirect Costs Architecture & Engineering Permits & Fees Taxes, Insurance, Legal & Closing Development Management Contingency Total Indirect Costs V. Financing Costs Interest During Rehabilitation 3 Financing Fees ` Total Financing Costs 66 Units $73,790 /Unit Allowance 66 Units $5.190 /Unit Allowance Allowance 3.0% Direct Costs 8.5% Interest On $3.520.000 Loan 2.0 Points On $3,520,000 Loan $4.870.000 $0 $342.500 $0 0 25,000 15,000 10,300 $50.300 $0 70,400 $70,400 Vt. Total Project Costs $5.333,200 Per Unit $80.800 ' Per Developer Estimates. 2 Developer assumption; should be verified by City staff- 3 Assumes Protect income is sufficient to fund the debt service costs incurred during rehabilitation. Loan amount is based on an 8.5% interest rate for 30 years and debt coverage of 120%. Prepared by Keyser Marston Associates, Inc File Name SherLane. Stabilized; 8/3198 TABLE 2 ESTIMATED NET OPERATING INCOME SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH CALIFORNIA I. Income' Moderate Income Set -Aside Units One -Bedroom 17 Units @ $740 IMonth S151,000 Two -Bedroom 16 Units @ $895 /Month 171.800 Very -Low Income Set -Aside Units One -Bedroom 16 Units @ $658 /Month 126,400 Two -Bedroom 6 Units @ $740 /Month 53,300 Very -Low Income HOME Units One -Bedroom 0 Units @ $616 /Month 0 Two -Bedroom 11 Units @ $740 /Month 97,700 Laundry/Mist Income 66 Units @ $18 /Month 14,300 Gross Income $614,500 (Less) Vacancy and Collection 4 3% Gross Income (26,600) Gross Effective Income $587.900 11. Operating Expensesz Administrative Expenses 66 Unds @ $1.010 /Unit $66,700 Operations, Maintenance & Utilities 66 Units @ $1,610 (Unit 106.300 Insurance & License 66 Units @ $130 /Unit 8,600 Property Taxes 66 Units @ $0 /Unit 0 Operating & Capital Reserve 66 Units @ $250 /Unit 16,500 Total Operating Expenses 66 Units @ ($3,000) /Unit ($198,100) Ill. Net Operating Income $389,800 ' Rental income is based on the lower of the maximum amount allowed by the relevant government assistance source or the currently prevailing market rent Z Per Developer's estimates Prepared by Keyser Marston Associates, Inc - File Name- Sherl-anc; Stabilized, 813/98 TABLE 3 WARRANTED FINANCIAL ASSISTANCE CALCULATION SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS HUNTINGTON BEACH, CALIFORNIA I. Supportable Debt Net Operating Income $389,800 Threshold Return on Investment 9 6% Supportable Investment 11. Total Project Costs $4,062.000 ($5,333,200) III. Warranted Assistance ($1,271,200) Per Unit ($19,300) ' Weighted average of 8 5% interest rate on debt and 12% stabilized return on equity Prepared by Keyser Marston Associates. Inc File Name_ Shertane. Stabilized, 813l98 I ABLt 4 CASH FLOW ANALYSIS SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE INCOME UNITS I. Grm-IncottM Moderate Income Set-Astde Units ' VL Inc. Set -Aside Units @ 50%of Medi = HOME Units @ 50% of Medlan 7 LaundrylMisc Income ' Gross Income (Less) Vacancy 8 Collection Gross Effective Income II. Operating Expenses Operating Expenses s Property Taxes Operating 8 Capital Reserves Total Operating Expenses 111. Net Operating Income (Less) 1 st TO Debt Service IV. Net Income After Debt Service V. Agency Participation @ 60% of CF NPV @ 10% Disc Rate Vt. Net Cash Flow to Developer NPV @ 10% Disc Rate Year Year Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8 9 10 S322,800 $334,098 S345,791 $357,894 $370,420 S383,385 $396,804 $410.692 $425,066 S439,943 179.700 184,193 188,797 193,517 198,355 203.314 208,397 213.607 218,947 224,421 97,700 100,143 102,646 105,212 107.843 110,539 113,302 116,135 119,038 122,014 14. Wm 15.319 15-855 16.41 16.984 17.578 18A 94 18.830 19.40 $614,500 $633,234 $652.553 $672,478 $693.028 $714.222 $736.081 $758,627 $781,881 S805,867 (26,564 7 74 (28,209] 070 1!29.959 L30875) (31.8201 (32,794 (33.8W (,M n7j $587,936 S605,860 $624,344 $643.408 $663.069 $683,347 $704.261 $725.832 $748082 $771,031 ($181,50(3) ($187,853) (S194,427) ($201,232) ($208,275) ($215,565) ($223,110) ($230,919) ($239,001) ($247,366) 0 0 0 0 0 0 0 0 0 0 (115 �� M,5M 1�� 0 15�500 I6 �] 1I 6 �0) 1L16 50J 1L6,5001 1 DD iI6.5QPj ($198,000) (S204,353) ($210,927) ($217,732) ($224.775) ($232,065) ($239,610) ($247,419) ($255.501) ($263,866) $389.936 $401,507 $413.417 $425,676 $4,38.294 S451,282 $464,651 $478.414 $492,581 $507,165 (324,789 1 (VI789) 1324,7891 (324,7891 (324,789 } (,'),244-789) (324,789! 3[ 24,789] (324,789) 3 4.789 $65,147 $76,718 $88.628 $100,887 $113.505 $126,493 $139.862 $153,625 $167.792 $182,376 ($32,573) ($38,359) ($44,314) ($50,443) ($56,752) ($63,246) ($69,931) ($76,812) ($83,896) ($91,188) $858,000 $32,573 $38,359 S44,314 $50,443 $56.752 $63.246 $59,931 S76,812 $83,896 $91,i88 $858,000 ' Escalated at 3 5% annually, Escalated at 2 5% annually, Escalated at 3 5% annually. ' Developer assumes that the Project will receive the property tax abatement accorded to non -prom housing organizations Prepared by. Keyser Marston Associates. Inc File Name Shertene; CashFIaw: 85M i ABLE 4 CASH FLOW ANALYSIS SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE I. Gloss Income Moderate Income Set -Aside Units I VL Inc Set -Aside Units @ 50% of Medi 2 HOME Units C 50% of Median 2 LaundryMiisc Income ' Gross Income (Less) Vacancy & Collection Gross Effective Income It. Operating Expenses Operating Expenses Property Taxes Operating & Capital Reserves Total Operating Expenses III. Net Operating Income (Less) 1 st TD Debt Service IV, Net Income After Debt Service V. Agency Participation @ 60% of CF NPV @ 10% Disc Rate Vt. Net Cash Flow to Developer NPV @ 10% Disc Rate Year Year Year Year Year Year Year Year Year Year 11 12 13 14 15 16 17 18 19 20 $455.341 $471.278 $487,773 $504A45 $522,515 $540,803 $559.731 $579.321 $599.598 $620.583 230.031 235,782 241.677 241T718 253.911 260,259 266,766 273.435 280,271 287,277 125,064 128,191 131,396 134,681 138,048 141,499 145,036 148,662 152,379 156,188 20A72 20.078 21.608 22.3$5 23-147 23.957 L4J 5-94 26.562 27,49 $830,608 $856,129 $882,453 $909,609 $937.621 $966,518 $996,329 $1.027,082 $1,058,809 S1,091,541 (35-906) QT009) (M i4 (39,3211 (40.53 (41,781 � 4{ 3,070 (44.3Q9) (!§.771} (47,185) $794,702 S819,119 $844.306 $870,287 $897,089 $924,737 $953.259 $982,583 $1.013,038 $1,044,355 3 ($256,024) ($264,985) ($274,259) ($283,858) (S293,793) ($304,076) ($314,718) ($325,734) ($337,134) ($348,934) 4 0 0 0 0 0 0 0 0 0 0 (16-5001 116�� (I 6.5J (15.(16,500) L165M 0§.M L6.500) (16.500 (116 00 ($272,524) (S281,485) ($290,759) (M.358) ($310,293) (S320,576) ($331,218) ($342,234) ($353,634) ($365,434) $522,179 S537,635 $553.547 $569.929 $586.796 $604,161 $622,040 $640.449 $659,404 $678.921 324 (324"7891 {324-7891(324,789)3( 24.7891 (24,Z-�3) (3 42 .789) [`324-789) 3 4 789 3f 24.7891 Escalated at 3 5% annually, 2 Escalated at 2 5% annually 1 Escalated at 3 5% annually, Developer assumes that the Project Wil receive th $197,389 S212,846 S228,758 $245,140 $262,007 $279.372 $297.251 $315,660 $334,615 $354,132 ($98,695) (S106,423) ($114,379) ($122,570) ($131,003) ($139,686) ($148,626) ($157,830) ($167,307) ($177,066) $98,695 $106,423 $114.379 $122.570 $131,003 $139,686 $148,626 $157,630 $167.307 $177,066 Prepared by Keyser Marston Associates, Inc File Name Shert sne; CashFlow; 8r"8 i ABLE 4 CASH FLOW ANALYSIS SHER LANE APARTMENTS INCLUSIONARY HOUSING ALTERNATIVE 33 VERY -LOW INCOME UNITS AND 33 MODERATE I. Gross Income Moderate Income Set -Aside Units l VL Inc Sot -Aside Units @ 50% of Medi 2 HOME Units @ 50% of Median 2 LaundrylMisc Income ' Gross Income (Less) Vacancy & Collection Gross Effective Income Operating Etrnense Operating Expenses Property Taxes Operating & Capital Reserves Total Operating Expenses Ill. Net Operating Income (Less) 1st TD Debt Service IV. Net Income After Debt Service V. Agency Participation @ 60% of CIF NPV @ 10% Disc Rate VI. Net Cash Flow to Developer NPV @ 10% Disc Rate Year Year Year Year Year Year Year Year Year Year 21 22 23 24 25 26 27 28 29 30 $642.304 $664,784 $688,052 $712.134 $737.058 $762,855 $789.555 $817,190 S845,792 $875.394 294,459 301.821 309.366 317,101 325.028 333,154 341,483 350.020 358,770 367,739 160,093 164,095 168.198 172.402 176.713 181.130 185.659 190, 300 195.058 199.934 28_454 29.450 30.481 31.547 32.652 33.794 34.977 36.201 37.468 R 780 S1,125,310 $1,160.150 $1,196,096 $1,233,184 $1.271.451 $1.310,934 $1,351,674 $1.393.711 $1,437,088 $1,481,847 (48.646) (50-1521 5(_1 706) f53"309) (54 9Z3) 1 0 (58,4311 (6Q.2481 (62,123 (64,0581 $1.076.664 $1,109,999 $1,144,391 S1,179,875 $1,216,488 $1,254,264 $1,293,243 $1.333.463 $1.374.964 $1,417.789 3 ($361,147) ($373,787) ($366,869) ($400,410) ($414,424) ($428,929) ($443,941) ($459,479) ($475,561) ($492,206) 0 0 0 0 0 0 0 0 0 0 -(16.5001 116.5001 (1 SWI (I 6 �� (115,500 116-5w 06 (I 6,5w, ('1153M� ($377,647) ($390,287) ($403,369) ($416,910) ($430,924) (S445,429) ($460,441) ($475,979) ($492,061) (S508,706) $699,018 $719.712 $741,021 $762,966 $785,563 $808.835 $832,801 $857,483 $682.903 $909.083 324 7 ,21 (324,789 1 3c 24,7891 (3243891 3[ 24.7891 3 4 789 32( 4.7691 (324.789) 3( 24,7891 3 d 789 ' Escalated at 3 5% annually. 2 Escalated at 2 5% annualty. Esca!ated at 3,5% annualty. ` Developer assumes that the Project will receive th $374,229 $394,923 $416,232 $438,176 $460.774 $484.046 $508.012 $532,694 S558,114 $584,294 ($187,114) ($197,461) ($208,116) ($219,088) ($230,387) (S242,023) ($254,006) ($266,347) ($279.057) ($292,147) $187,114 $197.461 $208,116 $219,088 $230,387 $242.023 S254,006 $266,347 $279.057 $292,147 Prepared by.Xeyser Marston Associates,tnc File Nan-r•. SherLone, CashFlow, 8IMS AUGUST 3, 1998 APPROVAL ACTION ATTACHMENT #3 Councii/Agency Meeting Held: Deferred/Continued to_ ef approved O Colt n ❑ Denied LOD.&O Clerk's Signature Council Meeting Date: August 3, 1998 I Department ID Number. ED 98-30 E w CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTIOI��°�,� t� SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCinrp MEMBERS ��o�, SUBMITTED BY: RAY SILVER, Executive Director OA4 PREPARED BY: DAVID C. BIGGS, ECONOMIC DEVELOPMENT DIRECTOR SUBJECT: Bridges America Deal Point Memorandum For The Acquisition and Rehabilitation of 16122 Sher Lane Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: A deal point memorandum between the Redevelopment Agency and Bridges America is submitted for approval. The agreement provides up to $1,001,000 in redevelopment housing set aside for the acquisition and rehabilitation of a sixty-six (66) unit project at 16122 Sher Lane. Additional HOME funds in the amount of $200,122 will be committed to the project at a later date for rehabilitation costs. Funding Source: Budgeted funds in Account No. E-TX-ED-968-6-10-00 Recommended Action: Motion to: 1. Direct staff to return to the August 17, 1998, or to the next available regular meeting of the City Council -Redevelopment Agency, for consideration of a final agreement between the Redevelopment Agency and Bridges America for the acquisition and rehabilitation of 16122 Sher Lane, which reflects the Deal Point Memorandum dated July 22, 1998. Alternative Action(s): Do not approve the loan agreement, or modify the proposed terms and conditions. REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: August 3, 1998 DEPARTMENT ID NUMBER: ED 98-30 Analysis: For many months, staff and Bridges America (Bridges) have been negotiating over Agency financial assistance for the acquisition and rehabilitation of a sixty-six unit rental property located at 16122 Sher Lane. Staff and Bridges have concluded negotiations (a complete outline of deal points for both agreements is included as Attachment No. 1) and have agreed to the following terms: Redevelopment Agency Responsibilities • The Agency will provide $1,000,612 in redevelopment housing set aside funds and up to $200,122 in HOME Investment Partnership funds as a loan to Bridges America (Bridges). These funds will be used to acquire and rehabilitate a sixty- six (66) unit rental property located at 16112 Sher Lane. • The HOME funds will be used exclusively for rehabilitation costs and will be administered through a separate agreement. Developer Responsibilities • All sixty-six (66) units will be subject to income and affordability restrictions, which can be defined as follows: Sixteen (16) one bedroom and six (6) two bedroom units must be rented to households earning less than 50% of the county median income. The maximum rent can not exceed the standard established by California Health and Safety code Section 50053. Eleven (11) two -bedroom units must be rented to households earning less than 50% of the county median income. These units will be designated as HOME units and at no time will the rents for any unit exceed the "low" HOME rent as defined by HUD. Seventeen (17) one -bedroom units and sixteen (16) two -bedroom units must be rented to households eaming less than 110% of the county median income. The maximum rent can not exceed the standard established by California Health and Safety code Section 50053. • Bridges agrees to guarantee the amount of capital reserves that it shows on the final approved pro forma that is to be submitted to the Redevelopment Agency. Beginning in the third year of the agreement, and continuing annually through the thirtieth year, Bridges will forward the proceeds of a residual receipts account to the Redevelopment Agency as a means of repayment of the redevelopment set aside funds. The minimum amount of the annual repayment will be fifty percent (50%) of the available cash flow. The remaining fifty percent (50%) will be used for a Capital reserve account until said account reaches an amount equal to an amount determined by the Agency and Bridges to be appropriate. After the dlptraa -2- 07124198 8:34 AM REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: August 3, 1998 DEPARTMENT ID NUMBER: ED 98-30 Capital Account has reached the agreed balance, one hundred percent (100%) of the available net cash flow will be used for repayment. The Agency Loan Note shall not bear interest except from and after a default. That potion of the principal amount of the Agency Loan Note will be converted from a loan to a grant to Bridges in the following manner: On the first anniversary after approval of the Agency Loan Note, provided that the Note has not been accelerated and all amounts due and payable, and Bridges is not in default, approximately three and three quarter percent (3.333%) of the original loan amount shall automatically convert from principal under the Agency Loan Note to a grant to Bridges. Project Description The proposed project consists of a sixty-six unit building located on adjacent parcels. Together, the property was appraised at $4.5 million in January of 1998. The project is located south of Edinger Avenue, between Sher Lane and Parkside Lane. (see Attachment No. 2). There are 34 one bedroom and 32 two bedroom units. The units are 725 square feet and 900 square feet respectively. Rents for the units are as follows: sliaicome Level "�.Projected.Reint.-�;= One Bedroom Very Low $658 Two Bedroom $740 One Bedroom EVeryLow rate $695 Two Bedroom Moderate $825 With the income restrictions proposed by the Agency ranging from very low income (50% of median income) to moderate income (110% of median income), the project will be mixed income. Because the properties are located outside the redevelopment area, the Agency will be able to count thirty-three of the very low income units toward its production housing requirements. The balance of the units can be counted toward any replacement housing obligations the Agency will incur through the Waterfront development. A minimum of $350,000 in rehabilitation is needed, as there has been deferred maintenance on both properties. Agency staff is working with Bridges to refine the cost estimates and will continue to work closely throughout the rehab process. Bridges America Bridges America is a Houston -based nonprofit that was formed to improve the distribution of food stuffs to Third World countries, primarily Haiti. Bridges also distributes food in the diptraa -3- ON24/98 8:34 QM REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: August 3, 1998 DEPARTMENT ID NUMBER: ED 98-30 Houston area on a weekly basis to needy families. Bridges has a local affiliate in Fountain Valley. In the last few years, Bridges has expanded its mission to include the development of affordable housing. More information is included as Attachment No. 3. In 1996, Bridges acquired a troubled eighty unit apartment project in Huntington Beach. Since that time, the property has vastly improved under the ownership and management of Bridges. Forty-two of the units are restricted for affordable rents by covenant by Holly- Seacliff developers who needed to fulfill affordable housing conditions placed on single family projects approved by the Planning Commission and City Council. Bridges also has an acquisition and rehab project underway in the City of Corona. Further, Bridges has entered discussions with the City of Santa Ana over possible affordable housing projects. While the Agency has focused on assisting nonprofit developers acquire and rehab small properties in the Oakview redevelopment project subarea, this project offers an opportunity to meet Agency housing requirements on a larger scale and in more diverse areas of the city. On July 15, 1998, the Council's Economic Development Committee (EDC) heard a presentation on the project by Agency staff and Bridges America. The EDC directed staff to move forward with the project to the full Council (Agency). The Agency's involvement with this project is consistent with the City Council's established goal of providing for a diverse housing stock throughout the community (City Goal #7). Environmental Status: Exempt under the California Environmental Quality Act (CEQA) Attachments): 1. ' Proposed Deal Point Memorandum 2. I Location Map 3. Bridges America RCA Author: G. Brown dlptma -4- 07/30198 8:24 AM DEAL POINT MEMORANDUM July 20, 1998 Acquisition of 16112 Sher Lane The Redevelopment Agency of the Redevelopment Agency of Huntington Beach and Orange County Bridges America (Bridges) Deal Points: 1. The Huntington Beach Redevelopment Agency will provide $1,000,612 in redevelopment housing set aside funds and up to $200.122 in HOME Investment Partnership funds as a loan to Bridges America (Bridges). These funds will be used to acquire and rehabilitate a sixty-six (66) unit rental property located at 16112 Sher Lane. a. The HOME funds will be used exclusively for rehabilitation costs and will be administered through a separate agreement. 2. All sixty-six (66) units will be subject to income and affordability restrictions, which can be defined as follows: a. Sixteen (16) one bedroom and six (6) two bedroom units must be rented to households earning less than 50% of the county median income. The maximum rent can not exceed the standard established by California Health and Safety code Section 50053. b. Eleven (11) two -bedroom units must be rented to households earning less than 50% of the county median income. These units will be designated as HOME units and at no time will the rents for any unit exceed the "low" HOME rent as defined by HUD. c. Seventeen (17) one -bedroom units and sixteen (16) two -bedroom units must be rented to households earning less than 110% of the county median income. The maximum rent can not exceed the standard established by California Health and Safety code Section 50053. 1 Sher Lane Deal Points, continued 3. Bridges agrees to guarantee the amount of capital reserves that it shows on the final approved pro forma that is to be submitted to the Redevelopment Agency. Bridges will submit its audited financial statements to the Redevelopment Agency annually after acceptance and certification of such statements to Bridges' Board of Directors. The Redevelopment Agency will review the statements and may choose to require further analysis or review by an third party, but must do so at its own expense_ 4. Beginning in the third year of the agreement, and continuing annually through the thirtieth year. Bridges will forward the proceeds of a residual receipts account to the Redevelopment Agency as a means of repayment of the redevelopment set aside funds. The minimum amount of the annual repayment will be fifty percent (50%) of the available cash flow. The remaining fifty percent (50%) will be used for a Capital reserve account until said account reaches an amount equal to an amount determined by the Agency and Bridges to be appropriate. After the Capital Account has reached the agreed balance, one hundred percent (100%) of the available net cash flow will be used for repayment. Should the economics of the project not allow for the minimum repayment as described above, then Bridges will have the right to appeal to the Redevelopment Agency and request that the minimum repayment be reduced, suspended or forgiven. Bridges agrees to bear the entire burden of proving its inability to meet the minimum payment. The Redevelopment Agency will reserve the right to reduce, suspend, forgive or renegotiate the terms of repayment based on the evidence submitted by Bridges. The Redevelopment Agency further reserves the right to audit the financial statements of Bridges to determine or verify the balance of the residual receipts account at its own expense. Slier Lane Deal Points, continued a. The Agency Loan Note shall not bear interest except from and after a default. That potion of the principal amount of the Agency Loan Note will be converted from a loan to a grant to Bridges in the following manner. - On the first anniversary after approval of the Agency Loan Note, provided that the Note has not been accelerated and all amounts due and payable, and Bridges is not in default, approximately three and three quarter percent (3.333%) of the original loan amount shall automatically convert from principal under the Agency Loan Note to a grant to Bridges. Relocation 1. A relocation plan must be submitted to the Redevelopment Agency for approval rior to the relocation of any tenants from the property. Name, gender, age, ethnicity, household income, and amount of relocation payment must be furnished in the relocation plan. Further, copies of all notices required by the Uniform Relocation Act must be furnished to the tenants as part of the relocation and official copies must be given to the Redevelopment Agency for its records_ Bridges must keep original copies in its files as required by HUD. 2 Bridges must agree to indemnify the Redevelopment Agency against any relocation obligations and expenses that arise from the acquisition or rehabilitation of the subject properties beyond those obligations identified in the relocation plan, at Federal Housing Quality Standards or higher as required in the Affordable Housing Agreement; and also from any relocation and expenses that arise after the acquisition and rehabilitation activities are complete. Rehabilitation 1. Bridges will rehabilitate the subject properties to conform with (at a minimum) federal housing quality standards. Bridges agrees to maintain the properties for the duration of the affordable housing agreement and will allow the la� 3 1, Sher Lane Deal Points, continued Redevelopment Agency to inspect both the interiors and exteriors of the subject properties on an annual basis. 2. Bridges will furnish a list of proposed repairs and improvements to the Agency for informational purposes gd2cto rehabilitation. Bridges is funding the rehabilitation work with HOME Investment Partnership (HOME) funds, and the Agency will have the right to review and approve the list prior to the start of any rehabilitation work. 3. The Agency will conduct progress inspections once rehabilitation work has started. The Agency reserves the right to independently inspect the units and Bridges agrees to provide access to the Agency with forty-eight (48) hours notice. 4. Bridges will furnish copies of all building permits for all items required to be permitted under the Huntington Beach Municipal Code, with proof of inspection by the Huntington Beach Building Department, where applicable_ 5. Because the property has been cited for numerous code violations, Bridges will provide the Agency with evidence that the violation notices have been complied with and that no other violations remain outstanding. All units must, at a minimum, meet Federal Housing Quality Standards while occupied. Further, all units must be rehabilitated no later than eighteen (18) months from the close of escrow. fi. Bridges will test for the presence of asbestos and lead -based paint as required by HUD regulations. Bridges will remediate any asbestos or lead -based paint hazards where the level of those substances is found to be in excess of acceptable thresholds. Copies of all test results, tenant notifications, and remediation plans must be provided to the Redevelopment Agency, or to authorized representatives of the Redevelopment Agency. Environmental Issues 1. The Redevelopment Agency will conduct an environmental review of the site in accordance with the California Environmental Quality Act (CEQA) and HUD 4 Sher Lane Deal Points, continued regulations at 24 CFR Part 58. Using those regulations as a guide in past projects, the Redevelopment Agency will probably determine that the project is considered "categorically exempt" from CEQA and NEPA (the National Environmental Policy Act of 1969) and is not subject to further, more complicated assessment. 2. This review, while thorough, cannot be considered as exhaustive or all-inclusive as a Phase I due diligence exercise. Because of this, Bridges agrees to indemnify and hold the Redevelopment Agency harmless from all liabilities (including penalties, fines, and monetary sanctions) arising from hazardous materials storage on the subject properties, or hazardous materials contamination of the subject properties. Bridges agrees to provide any notices, orders, or reports concerning environmental matters that may affect the subject properties to the Redevelopment Agency prior to the funding of the acquisition loan_ Property Management_ Issues 1. Bridges will maintain the sites during the affordability period in accordance with a restrictive covenant that will be secured against the properties. Should Bridges fail to adequately maintain such areas, and any problems identified by the Redevelopment Agency are not corrected within sixty (60) days from the date of written notice from the Redevelopment Agency, the Redevelopment Agency may perform the necessary maintenance and Bridges will pay all reasonable costs for that maintenance. Further, if any conditions are identified as health and safety violations that pose a danger to life and limb, the violations must be corrected within three (3) days. Environmental Issues 1. Bridges agrees to the default provisions contained within the draft Redevelopment Agency loan agreement and subsequent HOME program funding agreement. To summarize, the default provisions involve the immediate repayment of the set Sher Lane Deal Points, continued aside and HOME assistance, with interest. should any default by Bridges occur during the affordability period (30 years)_ 2. Reverter clauses will also be included in the loan agreement. This language will allow the Agency to take over the ownership and management of the project in the event of a major, uncured default by Bridges_ Accepted Bridges America Title Date: G jl {r'q� V LOCATION MAP ATTACHMENT #4 .-I aj OI F T jKY%AtVWV su.vohI ll ol �j"NON oIl I , .. RETHERFORO 0,f}EELJDLLWW ?JYAN?A LALJfj . EL�QRIT !6 LAFAYE71E AURQRN LOYQLA DEFNNC I E w a am .Z4 LU S2,ELU.ESA.'1-S fi ji :STONEWOOD mwDY CANDLEk.:Kk"Tj 90(*LX T I I STARt,K,NT I ROAD I SiJNLGI-h ol ROAD I( A 8 z iPETERS ui FLK341T SANT ANDnEVV S jN&&AIDS VE ADES EWRAU QN.YK SP—ocl- LAR-A-M... V(?KAL I al ALDRICH : -VIW ) C -le L z fl� C" i ' 11 . 1. Get V) W VCLGA 0 AMAZON N41TA I I WACDONAI "Jui.'ETIFLG- tL4GLENCOE ALH—BRA ,CENTER ING" C AR!4 E G tE. C"qll Mr. r- Mm 10 F�W fy . ARK }� ; Z VILLA YOnS*,\ U.NNERSE. Sf 6 BRIDGE.VpA HEIL BONNIE �LEN{S DANUBE U.P SEINE ... f AA�IERS �VERLE & Q4 ER �EPRYAHT PA ICAR 01 SAT P u W, m! P; U: (YL LL 0 ILAMBERT uj A EARL: �ERAY w: LAMANCH MOONS H, d OW 1w i i,RPNCF.: CoRJm tj w Zi 0� APNETT E A). TOUiOUSE �ll DANIMK �6RT.HLA'KE ROR-DOUK wu WALF. KEWT I UJ J I GLAS lzI ,.TAMARU H A In'T SUBJECT 16121 Parkside LW16112 Sher Lane, Huntington Beach, 92647, Page & Grid 827 A 71 SITE ANALYSIS Plat Map FO? N 112. SCO 23, T.55. R. Il W. 'c Cg-1 Fi76E W2 -Il9 FOR FEE TITLE 45SESSMEN7' BELOW SURFACE 07 PAfiCEL MAP P. m 5-1a 189%v- MOFE - ASSESSOtS ROCK a AU Et MAIM 37 ASSE.QOXS MO MX)K K 2 PAGE It CdUART OF CWANGE i !"r 400- BRIDGES AMERICA BACKGROUND INFORMATION ATTACHMENT tt5 :1, RUM ITS MV! MMM BRIDGES distributes food weekly to needy families in Houston. Texas In what will be a truly unique program when y eveloped, this ell growing effort will help the community meet a real need, by pro,. iding w 'R food free of charge to local churches and organizations who in turn gi%'e this food to the people in their area that require this specific assistance thru their transition to self sufficiency. The donations arrive from many sources: individuals who have a fe"N. small items to corporations with large quantities. We receive food. medicine, medical supplies and equipment, clothing, toys, building supplies, etc., and occasionally the transportation to bring these items to our warehouses. Many corporations have assisted BRIDGES ANERICA FOUNDATION as reflected by the enclosed list. Many other relief organizations have benefited from BRIDGES' uniquely postured transportation and housing opportunities. BRIDGES next food distribution program will be in Orange Coun[N'. California. An area so often thought of as "above the fray" and yet is still clearly impacted by the less fortunate. BRIDGES will not merely provided "handouts" but will continue to support programs that encourage, better yet, require ultimate self sufficiency. As excited as we are at BRIDGES about our distribution programs and their success, we are equally certain that our affordable housing and related programs will be enthusiastically received by those in need as they progress to self reliance. It is with confidence that we at BRIDGES looks to new goals and even greater challenges. Obridgeslbio -fi13r-idges America undation Board of Directot� Graduated from (lie University of New Mexico. Was an aid to a United States Congressman and subsequently a Special Assistant to the Secretary of Energy of the United States. Director of the International office for an Garrett Robinson oil company in Washington D.C.. Head of land acquisition and lease development for McColluch Oil Company. Purchased, developed and leased real estate projects with the Cardinal Company prior to becoming Executive Director of Bridges_ Received his law degree from Georgetown University. Currently specializes in international business and corporate law as a partner with Williams, Mullen, Christian and Dobbins in Washington D.C.. Dejoie has Buie Dejoie been involved in the representation of international Conglomerates purchasing U.S. Companies including Pillsbury Company by Grand Metropolitan and Holiday Inns by Bass. Dejoie has been a frequent speaker on international trade and has written articles for such publications as the New York Times and Mianmi Herald. Graduated from the University of Arizona. Spent 22 years in the Navy, retired as Commander. Was a pilot in the Vietnam war and a computer All Parkin logistic designer working in development for logistic air support. Nov~ in CEO and President of Hal Inc., a computer software company which markets project materials, management software to freight forwarders, packers and the oil industry. Cabriduslboardir THE BRIDGES AMERICA ARTICLES OF INCORPORATION (AS AMENDED) 5GCF:cTARY OF STAIE SION OF COO PORATIOUr fl 09 O) An OG/09/1i94 544)(14815 - 2373530 1 MM4DED AXI) RESTATED OF THE BRIDGES AMERICA FOUNDATION The Bridges America Foundation was originally incorporated in the State of Delaware on January 13, 1994. By Unanimous approval of the Board or Directors, the corporation hereby amends and restates its certificate of incorporation, pursuant to sections 242 and 245 of the Delaware Corporation Laws. as follows. :!R2 - The nama of the corporation (hereinafter called the 'corporation") is THE BRIDGES AMERICA FOUNDATION. aBcQThe address, including street, number, city and county of the registered office of the corporation in the State cf Delaware Is 32 Loockerman Square, Suite L-100, City of Dover, Countv of Kent, Delaware 19901; and the name of the registered agent of the corporation in the State ^f Delaware at such addres9 is the Prentice -Hall Corporation System, Inc. JETE,D: The naturo of the proposed business to be conducted by the corporation is as follow: To operate an enterprise exclusively for charitable, educational and scientific purposes within the meaning of Section S01(c)(3) of the Internal Revenue Code, including the provision of huffenitarian relief of the poor and distressed or of the underprivileged. Notwithstanding any other provision of these articles, the corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tax code, or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code, or corresponding section of any future federal tax code. upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 50I(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tux code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Any such assets not so disposed of shall be disposed of by a Court of Competent Jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said Cc -art shall determine, which are organized and operated exclusively for such purposes. The corporation shall have the authority to exercise all of the powers conferred upc:i corporations organized not for profit and without authority to issue capital stock under the provisions of the General Corporation Law of the Sate of Delaware, provided, that the exercise of Any such powers ahall be in furtherance of any one or more of the aforesaid exempt purposes of the corporation. POUF — The Corporation is not to have authority to issue capital stock. P: Th3 name and the mailing address of the incorvorator are an follows: M10 tyM4► cris�9�7T' c � Louis A. pejoie Willimms, Mullen, Christian & Dobbins 1575 Eye Street, NW kasnington, DC 20005 The duration of the corporation is to be perpetual. SEVEY= : The personal liability of the directors of the corporation is hereby eliminated to the fullest extent permitted by paragraph (7) of subsection (b) of 5102 of the General corporation Law of the state of Delaware, as the oam° may be -"mended and supplemented. Tli: For the manaaement of the buoinees and for the conduct of tho affairs of the corporation, and for the creation, definition, limitation, and regulation of the powers of the corporation and of its governing body and the member or members thereof, ac the cape may be, it is hereby provided: 1. After the original or other Bylaws of the corporation have been adopted, amended, or repealed, as the case may be, by the incorporator, the power to adopt, amend or repeal the Bylaws of the corporation may be exercised by the Board of Directors of the corporation. 2. The activities and affairs of the corporation ©hall be managed by or under the direction of its governing body, which in this certificate of incorporation is referred to an a Board of Directors, although said Board may consist of only one member, and although the member or members of said governing body may be designated as a trustee or trustees, a manager or managera, a governor or governors, or otherwise under any provision of the Bylaws. 3. The number of directors constituting the initial whole Roazd of Directors shall be the number fixed in the original of initial Bylaws. Thereafter, the number of directors constituting the whole Board shall be fixed from time to time in the manner prescribed in the Bylaws. The phrase `whole Board', shall be deemed to mean the total number of directors which the corporations would have sf there were no vacancy or vacancies. 4. A director shall have such qualifications as may he prescribed in the Bylaws. The initial Board of Directors shall be elected by the incorporator. 5. Any person who is or was a director, officer, agent, or employee of the corporation or is or was serving, at the request of the corporation, as a director, officer, agent or employee of another corporation, trust, or enterprsae shall be entitled to be indemnified by the corporation upon the same harms, tinder the same conditions, and to the eame extent as though he were a present or past director, officer, agent, or employee of a corporation of any type or kind organized under the General Corporation Law of the State of Delaware; provided that hie conduct or action wac in furtherance of, or in connection witri, the exempt purposes of the corporation. UT : From time to time, and in furtherance of the purposes for which the corporation is being organized, any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the members of the Board of Directors of the corporation by this certificate of incorporation are granted subject to the proviDions of this Article NIN'Th. Sinned on tune 9, 1994. G rett Robi son P esident/Executive Director a t t e s t: outs ecretary DISTi.I�T L�_RLCTC- 2 C:+Fraala CIP.C:.r t)C:.i_FF'i FARK, C;, 11755-740E Date: TN- 8n1bCr_S P%MEP,ICn FOUNDi+TIG11 C/G BRIDGES 962 WEST OLIVE STREET S:.N DIEGO, CA 92103 DEVA.F `)t=t)T CT' THE 7p.F�5' �'✓ E^p1c}•er IdentiCaratisn ��-..=J:cr: Can. 542 072 Conzacc Ptrscn: J03EPH FAN CGntact Telephone ;Iuz)£, (BIB; 441-6641 \ Accounkin5 Period End.it-.j: 4 Decemt,�r 21 rldercu- Applies: Yea Eased on inf^rm:+tion supplied, :nd assur,.'_ri; yo;:r operaL_cn. .'_11 27.6� A9 -tared in your application for- recognit=o:: o: emempticn, -e have. detc_+„il;� yo;: are exempt from Federal incorre tay under section 501(a) c: :n= Yr.._rnr.i pe'� enuc Cooe as an Grganizattion desc,. ibed in sectiU) 5011c) f 1l . N-! Have further detcrinined t`iat, As :ndicat_o in I -our :+cc;1=.C:'rion. yeu :._t a private tc"ndac':n witl;ii; the mao.^.'_ng of 9ettion 509(ro of c-(, CLde. ".. th).6 leuter -e -ire not determininq wh6t'.:er you are an ote_•at-_:'j foun•i:,tioir a, uef-n•-a in section 4n421j) (3) . I-' yo;:= so'_— cee o: emppJ_-t. or your p•1=pc3e=. character. •�:• :!Iod -;t Vucgution change. FlP3se let Us kno., 34 :19 can ccn iaer the- etf-=z� hf th.? c!%;;ncrP on yout'-3xK+t.pt atatttr and fcundation _tatuy. =n t-- ct:(: a! i)l A,hti::d- ment to your document or bylaws. glzo wend u: a of the or Ai_o. you should inform us cf :11 chancy:-. if, ..ur or aucress . - L.5 of Jeruxry 1. i2e4 , you arc liable fcr taxes ender t.1-,2 L?r1�- ance ccntzibutlons Act (social security taxes) on remunerat'_•30 of :130 or more rcu pay to c-ach of yoki_- emp?oy ^_s during a calendar year. Vo•j 6rd not. liable fcr the tax imvesed rrt:der the Fedsrdl Uncmplo7rrer.t Tar Act 'F371.1. .4cjwever, siact y7u arc a private fa`)ndacicn, you are subiect :a exei.t'e t:. r: under Chat, tFr 42 of tfe Ccde. You also may be GUb7set to other FeL'e?: 1 ex=:s_ t.aies. i ltiu r: v? any ?gestic .s about _Mciaa, employment, or other- 'r r el- r -;t;r C1Ea�2 le_ us Donor may dCCfu: L t^ ;'ou as Dr7Yi:,e�l .I; o= the Cod Ecru_.^,Ls, leydc:L�s. de _set, transf•+:s, or y,t:: cu _I- fc.. y_ar use .1I� d duccibl-' fax' Y-;_-Jmrrztl ._tact an6 gift ta`: pu;'_-Deir ii zhey n?-2c the applicable p__;isions of n_ct_or.= 20.5, 2_GE, and 2s=, ..`. tt,- -d=. Contr_buc_cn 'eda__=Cr'9 rare a'-_o-.:able to donors crly -h� the_ Lhz__ contribuc:ans arc gif=6.-ic1i tto consideratic'I rec-_7'/-_el i__S.St ?t: char,and sirn_lar pa%-r e:nc3 cc con'tinc..o: r__h U-._-raisin-j :?.-_� n.. rot .^recea5a:._'� ovnl.fy a� aed�c'C_U1? for►r•,i^uG_o:a.-jere..�i-_ t•,� rt:. �1: 3tar.ces. $.:r] p9',c: u•_' R•alzna put'_-ahed in ,,-i pare 10t. wjii•_n `c_rh g- 3di.nes r_3ard_n3 _::r di^ilj c:,ari- c:.blC c�^C_ 1�uCl�r.�, �aV)rQllt,_ tna�e by=$::D?l� _r5 .�2 1_.:1 i:.t^n Zr GS..-. 1✓ .q Fromm : BRIDGES APEP.1 CA FOU4. FF#Dt-E I-Ia. : 7136721423 -- liar. 13 1996 12: 5gptq pd3 101-2L 1110" It-i IF.S trtiflTF.t:fi,' Ft.Gt- z ._1_:c�t��T6 Ild:c Fr]} - -2. 7Hr BRIPGtS ltMFRICA FOIXI1]ATKIN pA&L%e:pntior, in f.rndeJlallvJ activiti1s for chsrity. l'ou ate 1ac2uirekl tc [ils Form 990-PF. Rct.,trt o. rrivki voundlti�:l , - socciCn 4947(4,) (1) Trust-frenf-ad a3 a Prt'vdtO 1OUMI.Stioll. f'r.l-M af(,_pr rt,u.-t Lt filed by the 15th dry of tnt fifth tnonth titter tli# enA rrt -,o+io zrtnu[tl Lecovrlt- ing period. A penalty of S10 a day In chavejed wh(-il A ratuttl is filed lane, unless thtra ie v!mn-:,nahle enure for the delay. However, th( rnt<xlnl_m. p_1r,tlk; charged caruleL tx•::Qod tS,000 ut 5 petctnt of ytsur Szooa Fh fhh yCar. Whj cnavnr it lc.y. Thiv rannity nluy olev be charged if n return i1; not con•r•lat� , cc plraat: bt eltt-e your return is complete beforA ;(+rl [11e I.t - You are tloL racluired tr.- fil! Fedsral itmotna bA:' totut.t. ,rn?t4'a ycu A1-6 tti•.jcrt: to trio ra`: (-n t+nrelatted businooe irrcotnt'. v11JQ1 tc_t!•:t, _r,11 0: tilt If ynu 4:e sub)ect to thin tax. you rt,u9t file an itltone tax yc:ttll'G cn Form 9t%1-T- rmth,rit Org?tni.atitn SuRinona Incomo Tax i;cturn. III uric lttt_r ur are not &-t-_ln•ininq-hether arty of yc•u= prev.rnt o:- poircts_:1 A-:tivJt24-w rtr- ulivalated trelde or )jtt?ineae Ae dsiir1%td in section ;13 of the t:a3c. Ycu need an omployer identification number ev!n if f^u ha.e r.0 employ -ea. if an employer idantifiraliun number wax not entered vn your APplicaltion. a nunter will Vs munipriod to you am) you Lill be ndvited of it. Pleaa,�L trse t:hrt number en all leturmi you file and in all correspondence wa.tkl th5 Int.ernAl Fe:•cmt,_ �ert ire. This dal ormit:ation is bae_:i on evidencri that. your futtd! :Ire dejit.:Atetl to t11�- putIIstCd in section 50l (C) (3) Of the Code- To :secure ynttz contimod ey.erl+ptian, you sho%ild rnhintair. records to t~t1Gw Llo%t ftrt: -i Al'! expetict•N!i only ror those purpc+_ts. If yvu 4istrib%a-5 C odj? to ruler oi.9rinizntionc. yottr records 21+--uld show t.'hbtller t114y ttre euet,13( utldat section 501 (c) t31 . In casts where the recipient orgallitltLica, is riot 91CA'npt R under oection 5011c: 131 , there should bo evidence that th* ftolda will rtwmaili dedicated to the required yutposee and drat they .=i11 bo uaecl f6r tile.sa pulpOzea 1)), the recipiene. If dictrib.itionn are made t-z 1tldividuals, vase hlstoriett regarding the recipients ehould lit ),,opt tttovina rxnity, ndArr:saec, purpoata -A ++w;xdg, mimner of Selection, relationship (it eny) to membara, Gff]Cgt•s, l:runLeet: or dorroto of fur•dt to You, so tht+t ^ny mnrl ^11 diatributlone made t6 lnf;tvfciaa�ry Car( 1je tub7Lartt13ted upon request by the Internal Revenue Sorvitr. Ihpt-touo Puling Sc-30t. C.O. 1956-3. page 306.1 If we haze indtcatod in the heading of this letter that .1n add%-ndum ttppl ies, tht addendunt r.11oloa•_d is en integral part of 41,is 1G".Ety. Because t)if.S lCUer could Help resolve any qu'ationg ebmit your exempt status and toundati-on rmar_us. you should keep it in your p:t.•+-rntnt recc�rdo. v'� From BRIDGES Pi tEP I CA FOLTI. Pl-IOhrt-: I lo. . 7 136721 d23 y liar. 13 191pc 1 :1=f'r,?ot, F04 t1:O? IE?:IC: 179,CF. "4_-- pcj 15M TNr. q;ZTDZES :.MZRICA FOUL MTTXO f I: you hrrtve ti+ly gUS.StionA- plcare contect th- uerL7n who--jQ rinn•t and ccl:-p)jojio eev,gl>ci arr whown in the be.din, �5f this 115ttei. Sincar-ely yo+lra, . Richard P.. Droeco Diocrict Uitector Encln�ure- Ad6endum F, PP I L'GES ANER I CA FoUti. PHONE t10. : 71 3767t 142-7 Ma y. 23 1996 5: 51 PI1 P92 BY-LAWS OF THE BRIDGES AM£RICA POMMATION (a Delaware corporation not -for -profit and without capital stock) ARTICLE I Offices and Agent The Corporation may have such offices, either within or without the State of Delaware, as the Board of Directors may deeignatc or ao the bueinees of the Corporation may require from Lime to time. The registered office of the Corporation required by the Delaware Nonprofit Corporation Act but the Corporation may have Such places of business as designated by the Board of Directors. The address of the registered office or the identity of the registered agent may be changed from time to time by the Board of Directors. ARTICLE* II Board of Directors SECTION 1. General Poker. The business and affairs of the Corporation shall be managed by its Board of Directors except as the hoard of Directors shall delegate certain powers to so manage Lo the Executive Committee or other committees of the Board of Directors. SECTION 2. Number, Tenure and Oualificationg. The number of directors composing the Board of Directors shall be not less than one (1) nor more than seven (7). Upon resolution of the Board of Directors the number of directors may be increased or decreased, but no decrease shall have the effect of shortening the term of any incumbent director. The initial number of directors shall be three (3). The term of office for all directors shall be for a period of one (1) year, and each director shall serve until the election and acceptance of a duly qualified successor. The initial Board of Directors shall consist of the directors named the incorporator of the Corporation. Directors shall be nominated and elected by the majority bote of the Board of Directors at the regular annual meetings of the Board of Directors, except as provided in Sections 8 and 9 below. Each director shall be a person at least eighteen (18) years of age. A director need not be a resident of the State of Delaware. SECTION 3. RequjaL MPe i gg. The regular annual meeting of the Board of Directors shall be held each year at such time and ��, C'rcm : PR 1 D`ES Ar LER I CA FOU4. F) DN7E No. : 7135721 C23 � May. 23 1995 5 : 52=11 p93 place dek.c.'mined by thu Board of Mrpc:tors, for the purpose of electing directors and for the transaction of such other business as may come hefore the meeting. If the day fixed for the annual inaeting ehall be a legal holiday in the Statc- of Delaware, aiirh meeting shall be held oil the next succeeding business day. The Board of DixecL-ors may pxuvide, by resolution, the ti.ma and place, either within or withouL Lhe State of Delaware, for thr� holding of additional regular meetings withuuU notice of -her' than [.he noCicoP provided by such resoliition. SEJ773()N 4. sped' 1 na special meetings of the Board of Directors may be called by Us- aL the request of one-third 04) of the members of thG Board of Dircctorn. The pexdon or parsons authorized to call special meetings of the Board of Directors may fix any place, either within or without the state of Delaware, as the place for holding any special meeting called by them.. SECTION S. Notige. Notice of any special meeting shall be delivered personally or mailed to each director at his business address, or by telegram, telex, telecopy or similar means of visual data transmission. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram , telex. telecopy or similar means of visual data transmission, such notice shall be deemed to be delivered when transmitted for delivery to the Ieuipieilt- The notice of any special meeting shall set forte Lhe purpose, time and place of such meeting. Any directory may waive notice of any meeting. The attendance of a director at a meeting shall Constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because that meeting is not lawfully called or convened. Whenever any notice is required to be given to any director of the Corporation under the provisions of these By -Laws, the Articles of Incorporation or the Delaware Nonprofit Corporation laws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the Lime stated therein, shall be deemed equivalent to the giving of such notice. SECTION 6. QMgrum. A majority of the number of directors fixed in accordance with Section 2 of this Article shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if leou than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. ee A From : BRIDGES ArEER I CA FOu, r. PHONE Mo. : 7136721423 � ha y. 23 1996 5: 5GPm p01 SECTION 7. Man . (a) Agtionp at a Meetin Except as provided in Parai3 aph (b) of this section 7, the act of the majority of the diYectos-a pj*esent at a meeting at which a quorum is present shall be the act of the Board of Directors- (b) �cti without a Meeting. Any action required or peziitie_ted to be taken at a meeting of the Board of Directora or the Executive Cam-nittee or other committees, as the case may ba alld t$uuli written consent is filed with the minutes of proceedings of the Board of Directors, Executive Committeo or other committees. Such consent shall have the name force and effect ae a unanimous vote at a meeting. Such writing, which may be in counterparts, shall be manually executed if practicable; provided, however, that if circumstances so require, effect shall be given to written consent transmitted by telegraph, telex, telecopy, or similar means of visual data transmission. (c) TplephonicMeetinge. Any or all directors may participate in a meeting of the Board of Directors or a committee of she Board by means of conference telephone or by any means of communication by which all persons participating in the meeting are able to hear one another, and such participation shall constitute presence in person at the meeting. SECTION 8. Va,canciep. Any vacancy occurring in the Board of Directors for any reason other than an increase in the number of directors may be filled by the affirmative vote of a majority of the remaining directors, though lees than a quorum of the Hoard of Directors. A vacancy occurring due to'an increase in the number of directors shall be filled by unanimous consent of the remaining directors. A director elected to fill a vacancy shall be elected for the unexpire❑ term of his predecessor in office. A vacancy shall be deemed to exist by reason of the death or resignation of the person elected, or upon the failure of the existing directors to elect directors to fill the unexpired term o directors removed in accordance with the provisions of Section 9 of this Article. SECTION 9. Removal. At any meeting of the Directors called expressly for the purpose of removal, any ❑irector may be removed, with or without cause, by a vote of a majority of the remaining Board of Directors, whether or not a quorum. Removal of directors with or without cause may also be accomplished by the unanimous written consent of all members of the Hoard of Directors who are not the subject of removal. In case one or more of the directors are so removed, new directors may be elected at the same meeting, or by the same written consent, for the unexpired term of the director or directors so removed. 3 �� L From : ERIDG-S At1ER!CA FOUN. P! O1,E No. : 7136721423 � May.23 1996 5:SEPM p92 Failure to elect directors to Fill the unexpired term of the direc:Lors so removed shall be deemed to create a vacancy or vacancies in the Board nf Directors. SECTION 10. Prasump.tion of Aasent. A director of the Corporatioi, who is present at a meeting of the Board of Directors in which action on any corporate matter is taken shall be presumed to have asseiiLtd Lo the action taken unless his diaoent Shall be entered in the minutes of the meeting, or unless he shall file hits wriLL'en dissent to such action with the person actiriy as Secretary of the mecting before the adjournment tlieieof, , or shall forward ouch dissent by regiattred mail to r.}ye secretary of the cu pora.tion immediately after the adjournment of the meeting. Such right to dissent Shall not apply to a director who voted in favor of such action. SECTION 11. Exe ive and Other Co 'des. There may be established an Executive Committee, and one or more other committees, composed of two or more directors designated by resolution adopted by a majority of the full number of directors of the Board of Directors as fixed in accordance with Section 2 of this Article. The Executive Committee or such other committees may meet at stated times, or on notice to all members by any one member. vacancies in the membership of the Executive Committee or such other committees shall be filled by a majority vote of the full number of directors on the Board of Directors at a regular meeting or at a special meeting called for that purpose. During the interval between meetiriys of the Board, the Executive Committee, if it shall have been established, may advise and aid the officers of the Corporation in all matters concerning its interest an the management of !Ls business, and shall generally perform ouch duties and exercise such powers as may be directed or delegated by the Hoard of Directors from time to time. The Board of Directors may delegate to the ExecUti.ve Committee or such other committees the authority to exercise all the powers of the Hoard of Directors, The desiynaLion of and delegation of power to the Executive Committee shall not operate to relieve the Board of Directors, or any members thereof, of any responsibility imposed upon it or him by law. ARTICLE YXI Board of Advisors The Board of Directors may appoint a Board of Advisors of the Corporation. The purpose of the Board of Advisors shall be to provide guidance and assistance to the Board of Directors in conducting the activities of the CorporaUi,on; however, the Board of Advisors shall not have any authority to manage the business and affairs of the Corporation nor to engage in other acts on behalf of the Corporation unless so authorized by the Board of Frcm = BR I DEES PINE21 CR FOUN. PHONE No. : 7136721423 Mau. 23 1996 5: S7PIl p03 Directors. The members of the Board of Advisore chall serve for terms as prescribed by resolution of the Board of Directors. ARTXCLR IV Officers SECTION I. The officers of the Corporation shall be a. rrcoidcnt, a Secretary, and a Treasurer, each of whom shall be elected by the Hoard of Directors. Such other officers and aeeietant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Such other officers and as3i3tant officoro as may be dcamed neccaaary may be elected or appointed by the Board of Directors, including a Chairman and one or more Vice -Chairmen of the Board and one or more Vice Presidents. Any two or more offices may be held by the same person except the offices of President and Secretary. SECTION 2. Election and Term of Office. The officers of the Corporation shall be elected at the first regular meeting of the Board of Directors preceding the expiration of such officer's terms of office. SECTION 3. Removal. Any officer may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. SECTION 4. Va anc es. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. SECTION 5. Pre iden,. The President shall be the principal executive officer of the corporation and, subject to the control of the Hoard of Directors, shall generally supervise and control the management of the business and affairs of the Corporation. He shall perform all duties incident to the position of chief executive officer of a corporation and such other duties as may be prescribed from time to time by the Board of Directors. At the Board's determination, the President may instead be given the title of "Executive Director," which title shall not in any way diminish his power as President. SECTION b. Vice Prea3dent. In the absence of the President or in the event of his death, inability or willful refusal to act, the Vice President (or should there be more than one Vice President, the Vice Presidents in the order designated at the time of their election, or in the absence of any designation then in the order of their election) shall perform the duties of V �� J From : BRIDGES A.iERICA FOUN. _ Ph-O - No. : 7135721423 v May.23 1996 S:seprh Poo President, and when so meting, shall have all tho powers of an be uub'ject to all the restrictions upon the President. The Vice Pres idetjt shall , in general, perform all duties incident to the office uE Vice President and ouch other duties as from time to time may be aaaigticd to him by the Preeident or the Board of Directors. SECTION 7. The Secr©tary,. Tha Secretary shall have the responsibility and authority to: (a) keep the minutes of the meetings of the Board of Directors in books provided for that purpose; (b) give, or cauDe to be given, all notices that are required by law and by these Bylaws; (c) be custodian of the corporate recorde and of the peal of the Corporation, and see that the seal of the Corporation is affixed to all documents as my be necessary or appropriate; and (d) in general, perform all duties incident to the office of Secretary, and such other duties as from time to time may be designated to him by the President or the Board of Directors. SECTION 8. The Trea ur r. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of hie duties in such eum, and with such surety or sureties, as the Board of Directors shall determine. The Treasurer shall: (a) have charge and custody of, and be responsible for, all funds of the Corporation from any source whatsoever, and deposit all such moneys in the name of the Corporation in such banks, trust companies, or other depositories as shall be selected by the Board of Directors; (b) shall disburse the funds of the Corporation, as may be ordered by the Hoard of Directors, taking proper vouchers for such disbursements, and shall render to the President and the directors an account of all his transactions as Treaeurer and of the financial condition of the Corporation; and (c) in general perform all of the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the President or by the Board of Directors. SECTION 9. ssistant SecrPtpEi E&tant Treas,� r� ers. The Assistant Secretaries and Assistant Treasurers, in general, shall pertorm such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors. The Assistant Treasurers shall, respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. G Bp I DG65 AM---P I CA FOUN. PHONE No. : 7136721423 may- 23 199G 5: 55p+-1 p95 ARTICLE V Deeds and Contrasts All deeds and contracts of the Corporation shall be signed by Lhe President, unless the Board of Directors shall otherwise provide by duly adopted resolution. ARTICLE VI Checks All checks or dcmando for money and notes of the Corporation shall be oigned by such offi.ccr or officcra of the corporation, and in ouch ria.nner, as shall from time to time be determined by resolution of the Board of Directors. ARTICLE V11 Fiscal Year The Hoard of Directors shall, by resolution, fix the fiscal year of the Corporation. ARTICLt V111 Seal The Board of Directors shall provide a corporate seal, which shall be circular in form and shall have inscribed thereon the name of the Corporation and the designation of the State of Delaware as the place of incorporation of the Corporation. ARTICLE IX Books and R000rds The Corporation shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of the Board of Directors and committees having any of the authority of the Board of Directors. - 7 - F'ro(n BRIDGES AVER 3 CA FouN. P1,N= No. : 7136721 a23 Na v 23 NO 5: sgyl F05 ARTICLE X Participation of Directors and officers iu R©latod Businsag Unless vtheiwise provided by contract, offinnre and directors of this Corpuration may hold pu&Liona as of f lcwr p and airectors of Mush colpotaL.ions, whether for profit or not for profit, irrespective of thQ business purposen ana business operatiunw of such uLher corporations, and their &Lort0 to idvance the interest vt those other corpoxaziona will noL. create a breach of fiduciary duly to this Corporation in the absence of bad faith. ARTI,:LE XI Gender Men required by Lhe context, each Fender shall include all genders. ARTICLE XI1 Amendments The power to alter, amend, or repeal the By -Laws of I•pt new By -Laws shall be vested in the hoard of Directors. I HEREBY CERTIFY that the foregoing in a full, true, and correct copy of the Bylaws of The Bridges America f'oundatiou, a nonprofit corporation of the State of Delaware, as in effect on the date hereof. WITNESS my hand and seal of the Corporation. Dated: February 15, 1994 x�j c 5�amcdli`a\Sc�.iaAry'011 ] [9G.01 1� {o KZ... is .,nd Dejoie, '_ Se eBel alit - STATE OF DELAUAA E SECRETARY OF STATE _DIVISION OF CORPORATIOfIS FILEO MOO An 07/03/1996 960196079 - 2373S90 STATE OF DELAWARE CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF I TjIR DRIDQES AiiMRJCA FOUNoATION a corporation organized and existing under and by virtue of the General. Corporation Law of the State of Delaware: DOES aBRRBY CERTIFYT i FIRST! That at a meeting of the Board of Directors of Tbeh Bridgesi America Foundation, a non -membership, not -for -profit corporation, revolutions Were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of T�aid corporation, declaring -said amendment to be unanimcuuly adopted. The reljolutiou netting forth the amendment is as follows: i RROOLVTM, that the Certificate of tncorporatiort of thin corporation be amended by changing the fourth paragraph of section "Third" so that, aka amended, said paragraph shall be and read as followat f ^The property of this corporation iu irrevocably dedicated to charitable or religious purposes, and upon liquidation, dissolution or abandonment of the owner• a;ter providing for the debts and obligations thereof, the remaining nssets will not inure to the benefit of any private person but will be distributed to 6 non-profit fund, foundation or corporation which i9 organized and operated exclusively for charitable or religious purposes and Which has established its tax exempt hEAtura under Section S01(c)0) of the Intarnal Revenue Code:" 9ECOtM 'That said amendment was duly adopted in accordAnce with the provisions of Section 242 of the General Corporation Law of the State of Delaware. THIRD I That the capital of said corporation shall not be reduced under or by reason of said Amendment, rN pPIT rr-S NFiSRaO!', said corporation ha-q chUsed thi.d cerbificAte to be sigped by Louis A. Dejoie, an Authorized Officarf this 3rd day of July, 1996. %"WrL#rW__ nam PAP 2Qitb'd b9Gtl tt rLt CO-GL7.9GG[ Mcs LEZ L1L )'n1L"4 37t1Z?!r1 S33N =:L.,1 t4OU-4 Dom 4tz L T L 6 �34 TAX EXEMPTION LETTERS FROM THE STATES OF DELAWARE AND TEXAS - 4ii• 'T'!r,!•A ta ' "i 4 -I SECRETARY OF STATE 19'78403 CERTIFICATE OF QUALIFICATION 1, BILL JONES, Secretary of State of the State of California, hereby certify: Thal on the 3RD day of SEPTEM,BER .19 96 THE BRIDGES AMERICA FOUNDATION a a corporation organised and existing under the laws of DELAWARE complied with the requirements of California lmv in effect an that date for the purpose of qualifying to transact intrastate business in the State of California, and that as of said date said corporation became and now is qualified and authorized to transact intrastate business in the State of California, suhject however, to any licensing requirements othentise imposed by the lmvs of this State - IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California this 6TH day of SEPTEMBER, Secretary, of St State of Delaware _ Office of the Secretary of State PAGE 1 1, EDWARD J_ FREEL, SECRETART OF STATE OF THE STATE OF DELAWARE, DO HEREBT CERTIFI TIM ATTACHED is A TRUE AND CORRECT COPT OF THF- CERTIFICATE OF AMENDMENT OF "THE BRIDGES AMERICA FOUNDATION", FILED IN THIS OFFICE ON THE THIRD DAY OF JULT; A.D. 1996, AT 9 O'CLOCK A-M. A CERTIFIED COPT OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTT RECORDER OF DEEDS FOR RECORDING_ 1 t 4 ' r i Edward J. Fred, Secretary of State AUTHENTICATION: ^ 2373590 5100 8016804 - DATE: � 960196078 07--05--96 rj 'LSY—CA Ql�e ,$fnfr of Tans �4ect�fut� 06 �iuie MT I i CIl ���tiIIHI)R��Y m BR �D� S'dH EAte A'VlialulIU-AjrQIt GIRT EP :NUtiBR'rtl0i0g4$j THE UNDERSIGNEOs AS SECRETARY OF STATE OF THE STATE OF TEXAS# HEREBY CERTIFIES THAT THE ATTACHED APPLICkTIOH OF THE ABOVE ENTITY FOP. A CERTIFICATE OF AUTHORITY TO TRANSACT BUSINESS IN THIS STATE HAS tlEGll RECEIVED IN THIS OFFICE AND iS FOUND TO CONFORM TO LAX. ACCOROIHGLY THE UNOERSIGNED, AS SUCH SE.CRCTARY OF STATE, Arco BY YIRTUC OF THE AUTHORITY VESTED IN THE SECRETARY BY LAiit HEREBY I55UC5 THIS CERTIFICATE OF AUTHORITY Tn TRANSACT BUSINESS IN THIS STATE FROM AND AFTER THIS OATF, FOR THOSE PURPOSES SET FORTH IN THE APPLICATIOHo UNDER THE NAME OF OATED JUNE 159 199Ji BRIDGES AMERICA FOUNDATION Secretlkry 01 St21g PURCHASE ESCROW INSTRUCTIONS 1 2 3 5 s B 4 1a 11. 12 13 1. IS 16 17 18 19 n 21 22 23 24 25 26 27 28 n 3; 11 32 33 34 35 3% 3a 3; 40 41 42 43 44 45 46 47 4A 49 5a 51 52 53 54 55 56 51 SB 59 6a 61 62 63 6• GS 67 6e ORANGE COAST TITLE COMPANY ESCROW DIVISION 640 N. Tustin Ave-, Suite 208 Santa Ana, CA 92705 (714) 5513-0222 - (800) 4164622 - FAX (714) 285-0506 SALE ESCROW INSTRUCTIOIIS Eacrcw Officer: TERRI AUSBROOKS Escrow No.: 10251E-TA Date: October 11, 1997 ESCROW GUmmARY Initial Deposit •55,000.00 Deposit prior to COE •$695,000.00 *TOTAL CASH THRU ESCROW •$700,000.00 New Encumbrance - let TD $3,300,000.00 flew encumbrance - 2nd TD 5800,000.00 TOTAL CONSIDERATION 54,800,000.00 Buyer(s) will hand you prior to close of escrow the sum of 100,000.00 of which 5,000.00 HAS BEEN depoolted herein. Buyer(a) shall also deposit sufficient funds and/or documents necessary to comply with instructions herein, prior to the close of escrow. Buyer shall deliver to you any instruments and/or funds required from Buyor to enable you to comply with these inatructione, all of which you are authorized to use and/or deliver on or before (an more fully set forth herein), and when you are in a position to obtain a standard Policy of Title Insurance through Orange Coast Title Company, provided that said policy has a liability of at least the amount of the above total consideration. covering the following described property in the city of HU11TINGTON BEACH, County of Orange, State of California: SEE ATTACHED EXHIBIT -A- MADE A PART HEREOF AND INCORPORATED HEREIN. Property Address: 16112 SHER I.At:E, 11Ul1TINGT071 BEACH, CA (N07 VERIFIED BY ESCROW HOLDER) SHOWING TITLE VESTED IN: BRIDGES AHERICA FOUND,,TIOII, L.F., A CALIFORNIA LIMITED PARTNERSHIP AND/OR ASSIGNEE FREE FROM ENCUMBRANCES EXCEPT: (1) All 1997-98 installments of the General and Special County, and city (if any) taxes, including any special district levies, payments which are included therein and collected therewith, for current fiscal year, not delinquent, including taxes for ensuing year, if any, a lien not yet due and payable. (2) Covenants, conditions, restrictions, reservations, rights, rights of way, easements and exceptions of minerals, oil, gas, water, carbons and hydrocarbons on or under said land, now of record, and in deed to file, if any, affecting the use and occupancy of said property. (3) Assessments and bonds of record, if any, not delinquent. (4) New First Deed of Trust, to record, shall be in favor of I,EHDER OF BUYER'S CHOICE, in the amount of $3,300,000.00, at prevailing rates and terms. Borrowers execution of said loan documents shall deem their approval of the terms and conditLons contained therein and your instructions to comply with same. (53 A New Purchase Money Second Deed of Trust to record, on your company's usual G110rt form. executed by Buyer's named herein, to secure a note in the amount of $800,000.00, in favor of CO D.L. PHAM AND THUY S.L. BUI PHAH, TRUSTEES OF THE PItAN TRUST DATED MAY 20, 1907. or order, payable at a place dea[9nated by beneficiary with interest from the close of escrow on the unpaid principal at the rate of 7.0% per annum payable as more fully act forth in the Addendum to Real Estate Purchase Contract and Receipt for Deposit attached hereto as Exhibit -C'. ESCROW NO: 10251E-TA PAGE NO.: 2 DATE: 10/11/97 ESCROW INSTRUCTIONS (CONTINUED) TO. Orange Coast Title Company - 1 2 3 4 5 CONTINGENCY REMOVAL: 6- All parties herein agree that the date of acceptance of the Purchase Agreement Offer is I October 3, 1997. A. 9 1. Buyer shall have the right, at Buyer's expense, to select a licensed contractor and/or 10 other qualified profeseional(B), to make -Inspections- (including teats, surveys, other 11 studies, Inspections, and investigations) of the subject property, including but not 12 limited to structural, plumbing, acwer/eeptir oyster.+, well, heating, electrical, built-in 13 appliances, roof, soils, foundation, mechanical systems, pool, pool heater, pool filter, 14 air conditioner, if any, possible environmental haLardB ouch as asbestos, formaldehyde, 15 radon gas and other substances/products, and geologic conditions. Buyer shall keep the 16 subject property free and clear of any liens, Indemnify and hold Seller harmless from all Ir, liability, claims, demands, damages, or coats, and repair all damages to the property Is. ariaing from the 'Inapectlono.- All clalmed defects concerning the condition of the 19 property that adversely affect the continued use of the property for the purposeo for 20 which it is presently being used shall be in writing, supported by written reports, if 21- any, and delivered to Seller withLn 30 calendar days FOR 'INSPECTIONS` OTHER THI.r. 22 GEOLOGICAL, and/or within 15 calendar days FOR GEOLOGICAL -INSPECTIONS.- OF ACCEPTANCE OF 23 THE OFFER. Buyer shall furnish Seller copies, at no coat, of all reports concerning the 24. property obtained by Buyer. When such reporto disclose conditions or information 25 unsatisfactory to the Buyer, which the Seller is unwilling or unable to correct, Buyer may 26 canCCl this agreement. Seller shall make the premises available for all Inspections_ 27 BUYER'S FAILURE TO NOTIFY SELLER 111 WRITING SHALL CONCLUSIVELY BE CONSIDERED APPROVAL. 25 29 30 31 2. PERSONAL PROPERTY: A complete inventory of all personal property of Seller currently 32 used in the operation of property and included in the purchase price shall be deiiverd to 33 Buyer within 15 calendar days of acceptance of the offer. Buyer is allowed 15 calendar 34 days after receipt to notify Seller in writing of disapproval. Seller shall deliver title 35 to the personal property by Bill of Sale, free of all liens and encumbrances, and without J6 warranty of condition. V 38 3. PEST CONTROL: 39 Within 60 calendar days of acceptance of the offer. Seller shall furnish Buyer at the do expense of Seller a current written report of an inspection by a Licensed Structural Pest 41 Control Operator showing property to be free and clear of all wood -destroying insects. 12. dry -rot, and/or fungus in visible, accessible areas (Section I and II). Said report and 43 work completed, if any, is to be paid iron Sellers funds at close of escrow, upon 44. presentation of bill. 45 46 4. RENTAL/SERVICE AGREEMENTS: 47. Within 15 calendar days of acceptance of the offer, Seller shall make available to Buyer 48 for inspection and review: All current leases, rental agreements, service contracts and 49 other agreements as more fully set forth in the Purchase Contract item 117K. Buyer ohall 50 be allowed 10 calendar days after receipt to notify Seller in writing of disapproval. 51 52. 53 5. INCOME/EXPENSE STATEMENTS: 54 Within 15 calendar days of acceptance of the Offer, Seller shall make available to Buyer 55- for Inspection and review original books and records of Income and expense as more fully 56 set forth in the Purchase Contract, Stem / 17I.. Buyer shall have 25 calendar days after 51 acceptance of the offer. Seller shall send to all tenants written regaeeto for estoppel 50 certificates. 59 60 6. GOVERNMENT APPROVALS - See the Addendum to Real Estate Purchase Contract and Receipt 61 for Deposit is attached hereto as Exhibit -C" and made a part hereof. 62 63 Upon the Government Approvala and waiver by the Buyer or satisfaction of the conditions 4(� 64 described above the increased deposit of 20,000.00 shall be deposited into escrow 65 immediately. At ouch time ao the Increased deposit is deposited into escrow then Escrow 66 Holder is instructed to immediately release all funds on deposit including the initial S/ 67. deposit of S5,000.00 to seller without further approval from the Buyer. L 68 ESCROW NO: 102518—TA PACE NO.: 3 DATE: 10/11/97 ESCROW INSTRUCTIONS (CONTINUI`D) TO: Orange Coast Title Company 2 3 4 CLOSE OF ESCROW DATE: 5 Upon the renoval of all Contingencies As got forth above said closing shall occur 30 days 6- thereafter and Eocrow Holder will notify All parties in writing as to the exact close of 7- escrow date. a 9 OUTSIDE CLOSING DATE: See the Addendum to Real Estate Purchase Contract and Receipt for t0 Deposit attached hereto as Exhibit 'C-. t: t3 Prior to close of escrow, Seller will hand you for delivery to Buyer at close of escrow t5 unrecorded, a Bill of Sale executed by CO D.L. PRAM, TRUSTEE and THUY T.L. BUI PRAM. 16 TRUSTEE in favor of BRIDGES OF AMERICA FOUNDATION, covering inventory of furniture and 17 furnishings as approved by Buyer and Seller, situated on the promises known as 16112 SI4ER 16 LANE, HUNTINGTON BEACH, CA. The consideration for the personal property being conveyed tg is included in the total consideration set out herein. No report as to the condition of 20 title to the aforesaid personal property is to be procured from either the County 21- Recorder's records or the Secretary of State's records. 22 23 Z4 IF BUYER FAILS TO COMPLETE SAID PURCHASE AS HEREIN PROVIDED BY REASON OF ANY DEFAULT OF 25 BUYER. SELLER SHALL BE RELEASED FROH OBLIGATION TO SELL THE PROPERTY TO BUYER AND HAY 26 PROCEED AGAINST BUYER UPON Ali'( CLAM OR REMEDY WHICH HE/SHE HAY HAVE IN LAN OR ?� EQUITY;PROVIDED, HOWEVER, THAT BY PLACING THEIR INITIALS HERE, BUYER:( ?8 SELLER:(_ _ ) AGREE THAT SELLER SHALL RETAIN ALL DEPOSITS AS LIQUIDATED 29 DAMAGES. IF TIfE DESCRIBED PROPERTY I5 A DWELLING WITH 140 MORE THAN FOUR UNITS, ONE Or 30 WHICH THE BUYER INTENDS TO OCCUPY AS HIS/HER RESIDENCE, SELLER SHALL RETAIN AS LIQUIDATED 3' DAMAGES THE DEPOSIT ACTUALLY PAID, OR AN AHOUI:T THEREFROM, NOT MORE THAN 3% OF TIIE 32 PURCHASE PRICE AND PROMPTLY RETURN ANY EXCESS TO BUYER. BUYER AND SELLER AGREE TO EXECUTE 33 A SIMILAR LIQUIDATED DAMAGES PROVISION, SUCH AS CALIFORNIA ASSOCIATION OF REALTORS RECEIPT 3' FOR INCREASED DEPOSIT (RID-11), FOR ANY INCREASED DEPOSITS. (FUNDS DEPOSITED IN TRUST 35 ACCOUNTS OR IN ESCROW ARE NOT RELEASED AUTOMATICALLY Ill THE EVENT OF A DISPUTE. RELEASE 35 OF FUNDS REQUIRES WRITTEN AGREEMENT OF THE PARTIES, JUDICIAL DECISION OR ARBITRATION). 37 3a 39 The parties hereto fully understand the total responsibility and agency authority of do. Escrow Holder is limited to those actions requiring the performance and compliance by the 41 Principals that are identified as conditions precedent to the recording of the documents 42 and delivery of the instruments to the respective parties entitled thereto, and the 43 disbursement of funds in escrow as a consequence of said closing. The parties hereto, by 44 execution Of these instructions acknowledge that Escrow Holder assumes NO responsibility 45 or liability for the supervision of any act or the performance of any condition which is 45 a condition subsequent to the closing of this transaction. 47- 4B All partieo are aware that Escrow Holder will NOT be required to determine the default of 49 any party hereto. Therefore, in the event of any termination of thin escrow, Escrow Holder S0 will require mutually signed instructions from all parties, or will terminate this by 5' following the guidelines listed in the General Instructions attached hereto. $2. 53 Buyer will obtain new fire insurance with mortgagee claueen in favor of applicable Trust 54 Deed holdece. In the event Buyers have not deposited a paid receipt for the insurance 55 premium into escrow, Escrow Holder is hereby instructed to pay the premium from funds 56 deposited by Buyer. 57 se 59 Make the following prorations and adjustments as of CLOSE OF ESCROW. 60 ,v 6' 62 X Prorate taxes on real property, based on information furnished by seller/Title Company. 63 X Prorate rents based on statement to be furnished by seller and approved by huver. G 64 X Security Depoolto if any 65 66 67 BUYER AND SELLER HAVE READ AND AGREE TO THE GENERAL PROVISIONS ATTACHED HERETO AND MADE ESCROW NO: 102518-TA PAGE 110.: 4 DATE: 10/11/91 ESCROW INSTRUCTIONS (CONTINUED) 10: Orange Coast Title Company 1 2 3 4. Buyer and Seller agree to the foregoing instructions and prior to the said date will hand S you any funds and instruments necessary for me to comply therewith provided you hold the 6 funda and instruments deliverable to me. Pay any encumbrances necessary to place title 7- in the condition called for. e g All parties signing this agreement hereby acknowledge receipt of a copy of these 10 instructions. 11 12 BVYER'S SIGNATURE: 13 14 15 BRIDGES AMERICA FOUNDATION, L.P., 16 A CALIFORNIA LIMITED PARTuERSHIP 17 BY: BRIDGES AMERICA FOUNDATIONI, INC. 1B a Dcla ,6 Corporation g J// BY: 21 Garrett Robinnon, Exec. Director 22 23 24 HAILING ADDRESS: 18837 BROOKHURST ST / 303. FOUNTAII: VALLEY, CA 92708 25 26 27. SELLER'S SIGNATURE. 28 29 30 _ 31 CO D.L. PHAH, TRUSTEE THUY T.L. BU1 PHA!t, TRUSTEE 32 J3 HAILING ADDRESS: C/O Bolsa Medical Group 34 10362 Bol©a Avenue, Nest Minister, CA. 92663 35 36 37 3e END OF INSTRUCTIONS. 39 40 41 42 43 44 45 46 47. 4e 4g S0 S1 52 S3 54 SS 56- 57_ 5!. 59 60 61 62 63 64 65. 66 I 6? 68 F_acrow No.- 102518-TA GENERAL PROVIStOrrS 1) All panles are aware that AB 512. which became effective January 1. 1990. mandates that all funds with respect to an escrow MOST be collected and aval!able for withdrawal PRIOR TO DISBURSEMENT OR RECORDATION. I.e-. close of escrow. Delays In closing this escrow WILL occur If deposit of funds by either party or tender are by other than bank wire, cashier's check or teller check. 2) All parties are aware that effective July 1. 1985. pursuant 10 a Stale Law. Section 490.3. Revenue and Taxation Code. all deeds and other documents that reflect a change of ownership In real property when presented for recording, must be accompanied by a 'Preliminary Change of Ownership Report'. Escrow Holder will lurnlsh the parties with Such forms for their completion prior to close of escrow, and/or In the event that the form Is nor returned to Escrow Holder and/or the County Recorder should reject said form for any reason, all Parties are aware that the dosing of the escrow will NOT be affected: however, an additional recording fee of $20 00 as charged by the County Recorder, as required by said law, wal be assessed to the account of the Pally not returning or complel)ng said form AD panles hereby release, relieve, and Indemnify and agree to hold harmless Escrow Holder From any and all liability and/or responsibility In connection with said law, other than to hand said 'Preliminary Change of Ownership form to the Parties for completion prior to dose of escrow and other than Escrow Holder's responsibility to transmit said completed Iorm to the County Recorder's office together with other documents as called for In these Inslrlrctlons. (A) INFORMATION PURPOSES ONLY: After close of escrow, new owner may receive an additional request for the 'Change of Ownership' Information which must be returned to the Assessor's Office 11 not completed as required, you may be Charged a penalty. as required by this law. Escrow Holder has no Involvement In this fling and Is provlding this lot Inlortnatlon purpose$ Only. 3) Seller represents and warrants to Buyer and you that It Is not, and as of the dale of close of escrow, will not be a foreign person within the meaning of Internal Revenue Code Section 1445 and that It will execute and deriver to you prior to closing. a Non -Foreign Affidavit on your standard form- The principals are advised to seek an attorneys, accountant's or other tax specialist's opinion regarding conformity with the Foreign Investment In Real Property Tax Act of 1990. as amended by the Tax Relorm Act of 1984- 4) Purchaser is aware that the recording of the Deed In consummation of this escrow may result In a re -assessment of the real property taxes and/or supplemental tax bill pursuant to the provisions of Chapter 498. Statutes of 1983. State of California - Alt assessments not shown on the Tax nolls are to be adjusted oulstde of escrow Supplemental Taxes will NOT be prorated unless otherwise stated herein. The title policy will contain an exception for the lien of any assessment of Supplemental Taxes assessed pursuant to Chapter 498. Statutes Of 1963. 5) SELLER Is aware that on January 1, 19B7, Internal Revenue Code Section 6045(e) became effective, which mandates au proceeds hom the sale of property shall be reported to the Federal Government- Seller is responsible to Escrow Holder who in turn Is responsible for the processing of the form to be supplied to Financial Processing Systems. 1815 E. Wilshire Avenue Suite 910. Santa Ana. Catilornla 92705- Seller acknoWedges receiving said form to be completed by Seller and submitted Into escrow prior to the close of said escrow- Escrow Holder Is authorized and Instructed to Insert the amount of Seller's proceeds. over Seller's signature_ if there are any factual Inaccuracies. or missing factual Information In the Form 1099. Seller shall notify Orange Coast Title Company In writing Immedlately of the changes required in the Form 1099 Upon Its receipt of such notice. Orange Coast Title shall promptly prepare and forward to Seller a revised Form 1099. containing the changes specified by Seller- a Is the responsibility of Orange Coast Title, utilizing Financial Processing Systems. to report this transaction to the Federal Government and Issue to the Seller a Form 1099 for reporting same to the Internal Revenue for Income tax purposes - ALL INFORMATIO.N CONTAINED IN THIS REPORT SHALL REMAIN CONFIDENTIAL OTHER THAN THE REPORTING OF THE INFOnMATIOM TO THE INTERNAL REVENUE SERVICE ITIS UNDERSTOOD ESCROW HOLDER CANNOT CLOSE THIS ESCROW WITHOUT THE PROPER DOCUMENTATION BEING PROVIDED BY THE SELLER. LIMITATION OF LIABILITY- Orange Coast Title Company, as Escrow Holder, Is held harmless from any liability In as much as the law has not yet been defined and shall report the sale of the property proceeds as set forth above - ACKNOWLEDGED AND AGREED. SELLER'S I111TIAL(S)r BUYER'S INITIAL(S):� t:ecro. Vo.. 102516-TA GENERAL INSTRUCTIONS Buyer, Seller and/at First end Second Pont*, (hereamer fomallmes (alerted to callocl"ty as the 'Principals' end each separ@foty me the prnncipal'), jointly and Severally. hereby Appoint and designate you, at escrow hOldsr. to Perf Ofm erbOw AS rw+Car In ConNe Clion with the transaction which Is the subject of Ihlt sic ow In Secordonte with w Ilisn "Itutnont accepted by you In this escrow. As used herein. the term'instruction$' shall moon and color 10 the lnstruCl:oni cot forth an page 1 herool and InowporVoO by reference herelft, any wilttan amendments and supplements thereto @s many heroo[ter be gl.,en to you and the terms. Conditions and prov[slon$ Mtern below sat forth. THE PRINCIPALS ME-REBY AGREE. JOINTLY AND SEVERALLY. AND HEREBY AUTHORIZE. EMPOWER AND DIRECT YOU. AS ESCROW HOLDER AS FOLLOWS: t_ Principals acim"1 dgo that asaow companies era not aulhott=ed to give legal advice and undowand that it a Principal desires legal advice such principal should consutl an anomey- 2- A Principal's otgnalwo on any document Of Gtstfuctlon which aria$$. totaled to or results from this ssuow shall Indicate and evidence such Plln6pa[s unconditional approval of same. 3- M theta Is no action taken on this •fcrOw, Mthln a1■ (6) months ener !h• 1Im• ri of date' of ssl forth In tea escrow artbe inetryclbto h r a tle • ep s ti l some your agency Ob11gerlon shall terminate at yaw option and sill documents, Mania or other tuna held by you Shari be relumad +o tr+• pantos depositing aem• In the event Of C&nCe11e11041 01 this eeCtOw, whalher It be at the request OI any of the principals at Otherwise, the feel and Charges due Orange Coast Mrs Compgny FndudlnQ expendllures I neurred and/of $ulhottted shall be borne equally by the psnles h$reto (unless otherwise agreed to specifically) t. All Funds recorved In this *"raw shall be deposited with other esceOw funds In an escrow trust account in any Stale Of National Bank and may be banslerred to any other *mow trust account. Aft disbursements shag be made by your check. S- Your duties In this sscrw Shan be Ilmlled to the safekeeping of such funds and documents as may be racefved by you as escrow holder and for the d;sposrilon 01 same In accordance with thaw tntuvetionns- You shall not be liable to the Printlpels or any 9u0t62e0r OF assign 01 wither Prkitipal for or On SCoount of any Claim, demand, loss at damages whlClh MAY olio, totaled fO Of nsultlflg from your acts a faawe 10 act In any manner of for any reason accept for vAnrui misconduct or gross Mg1acl- Wthovl dmdtfig the generality of the foregoing you Shan nor be responsible at liable In any manner whalsver Ile any at the following maltsM (e) wdth respect to arty writing or Instrument deposited In escrow and any document of reocid, the sumUenCy, corrsc$nes$. genufMnas+. validly. torm- content Of Manner of •rCclsliOn of any such writing, Instrument of documenL Or the Identify, authority or tight of any person sAsculing same-, (b) to nosily of disclose 10 any person, MCtvdlr+g, without "istion, stiller PdnWpal, any tact a ckcumotemce Nu mey come to your attemian $nee Is outside the SCOpe of these InS1ruCtian2, Indudrng, without nmrtatlon, any Intormalbn regarding any so[e, loan. exchange or Cthef rcontoction Concerning the real property ktvoh.ed In this sat70er (Cl to glvo any discfosus required by State 0, Federal law. Including. wllhout PJmllstlon- we federal Trvih In Lending Ay end Reg�lslbn Z. (d) e=amtnation as to the apot"blAty. amount, validity at payment of any Ilx. Indvding. without IlrmlialiOn, any vanSfer lax knposed by *my local, cry cr county ordinance. any personal property lee end business of peons$ tax; and (a) to perform any duty or sonlcd as escrow holder, that as not axptessly required Or you and spscifiurty set tomb 1n The Instructions. 6 You Shan make all adjustments erW prpralions In this escrow On the basis of a 30 day month and In accordance with the following provisions unless otherwise stated herein: (a) pro.sre real propsely taxes for current nsegl floc year on the bash of the most recent 011ldal Information furnished Ie you by the 1I14 company. (b) prorate premiums on transferable Insurance policies as handed to you: 1c) p,otala kiterest on trust deeds of record on the basis of airy banefictsry 1+814mem fecsbfd In escrow Of Impounded lands ere held by the lender Buyer Shall be charged and Senor credited with me full amovm all disclosed by amid BoneliWaty statement): and (d) prorate cant and Charge Satter and credit Buyer with any deposits paid In advance on the bests of a statement Iwnishod by Seller (Strict rspresgwrs end you than be fully protected In assuming that Seller has Collected air rents which fag Out Prior 10 the Cross of escrow. Moke no adjuslmsnl against Buyer on uncOLIeVed cents) T. Senor represents and you Shall be iufly protected In assuming that as 10 any Insurance policy handed to you, each policy Is In force. has not been hypothtColed and an premiums have been paid In fun. The Principals hereby appoint and dosignsia you as agent and a+lokney-in fact to assign any fire linurence polity handed to you In this asuaw- a Any assignments Of funds In asaow short be In writing signed by the Principal to be charged and short be Irrevocable end Unchangeable without tht -6lien consent of the assignee_ IF the Sonar uniratgialry assigns or orders the procteda of this ascro-. 10 be paid to any person other then a Principal Such Assignment shall be subOrdrneled to the ecpon,s of this escrow, encumbrances end lions of record on the subject ptaputy. end payment$ directed to be mods by the funds to Close, than you arm rrwected 10 Close this escrow and 10 psi such assignments. In the order In which they sit received by you 9. You are hereby arpressly authorized and empowered to do each Of the foray -I ng acts in Connection with INS •$Cron. jai to complete. fill In end among* for extmLiOn at any note of writing or acknov.ledgement of *my document Or Inttruriienl as requited herein: (b) It either Principal Obh&Ink a ban on the subject property during the pendency Of this escrow. to tamtlsh the lender or person acting On behar[ of ais lender any Inlarmatlon concerning this escow. Including. without nmrtatlon, a esmibed copy of Instructions: icj to deposit any funds of documents tote"d in escrow, with any duly authorized sub-osctw agent subject 10 your order ai or prior IQ the Grose of etclow; (d) +o record any instrument de[rvered through this escrow if necessary of propel In the issuance of a policy of the title Insurance end to pay an required fees and costs of documentary transfer tax: and lei to tegUl.e any Pdmdpel, sa a COnd;tlon precsdont to your doting this escrow. 10 deposit funds and mOnleo you doom requfs;to 10 pay f') an eneumbroneos. claims. demands or astessmenry at r.Card noesssery Ia pisca 9110 10 the subject prOp$ny In the earwdll:on tailed rot 1n inets inslvuc[Ions and (.i) any Costs at Charges Of this @SUOw Or lees so whtCh you ace entlfed_ 10 Limits% otherwise agreed In+.tning the following 01"gian$ shall appty 10 Payment or charges In esCvow: jai Buyer than pay one hall Of the esrYw 160. your customary charges to Buyer lor docvmentErafUng_ iscading. and miscqusnsovs charges and the litle Insurance premium to the action, that It o■coods the promfum for standard Cowelege: (0) Senor Shan pay one hall of the e100w Sae. you CUSIOM97 Merges to Senor roc documtnt4rahi q. retarding. and misceriant"i charges(including documentary sumps required by the internal Revenue Cride In the amount you determine to be iequlrod)snd the tide Insurance premlUm la the extern that i1 does not exceed the prgmlVm la the standard Covuag$; (c) each Principal veld pay reasonable col3ponsalion to you for a■trdordletary of unusust services wandered to of for that Principal. plus costs and asptnsts Inev.eed In connection wilh those Services: (d) each P.rnWpel agrees to pay an your demand all CIOSIN costs property anAbutable to such Pllndpd u lur+ds to such Principal's credit In your hands Nis not fufficlont lot Thal purpose: Is) you are hereby given a from by each Pitndpat upon OFF the tights. title and interest of each Principe! In &A eScrowsd documents. fund,. mhonle1 or. property lot ony and so Chsrgss, expenses. stomey's tees. losses "other Mblrides caused you In trots asaow., and (1) No island wig be given for under 15-00- each Principal (g) In the event of failure to pay foes of chelpes due you In tits atertaw le agrees la pay t$asonabfa anorney'a Ices paid or lncwrtd by you In connection wflh the Conget[on of Such foes Or Charges, vrhether OF not sult Is Iliad. I t- If by the date Specified herein. this 16=0- Is rat In a position 10 Craig you Man nevertheless doss as soon as possible theitarier unrest Neer principal khslIUCIS you to cancel this saC aw. You shall ImAthin two (2) working days theioaftar mall, by eerWled mail, one e>opy Of such hotiCS to each pt[neipal at the address stated In IN% escrow, AT ESCADW HOLDERS OPTION UNLESS WRIITEN OWECTION TO CANCELLATIONS IS FILED tN YOUR OFFICE BY A PRINCIPAL w1TWN TEN (10) CALENDAR DAYS AFTER DATE OF SUCH MkTLM. AS EVIDENCED BY A CERTUXD MAIL RETURN RECEIPT FORM, YOU ARE ALIM01141ZED TO COMPLY WITH SUCH NOTICE AND DEMAND PAYMENT OF YOUR CANCELLATION CMARGES- If wdtlem objection h tiled. you art suthorlred to hold an money and bnstrtxnants In the swow and take no furthot action until otherwise d-ireded. dither by the principals' mutual wnillen Instryctions, of final order of a coon of COrrlpelent f t 0diction. (a) IN THE EVENT ESCROW HOLDER RECErVES DISAPPROVAL OF CANCELLATION AND PRtNWALS CANNOT RESOLVE THE MATTER WITHIN THIRTY DAYS. ESCROW HOLDER MAY VAVE A HOLDOVER FEE OF $20t)0 pet month Until such matters have been tesofved and mutual tristn,atons 10 Escrow Holder- 12 All rtottef,, demands dod instructions must be in wmlling- A Conflicting demands are made at notice served on you or any dispute ce controversy arises between Inc Principals Or vAlh any thud parson Caroling $0 this escrow. you shag have the abso4rtg right. at your 6100101%, to wllfthald and atop eg Further proceedings In [hit Wrow without flabrlity, and wflhoul delermWng flit ene4111 of the demands, notice$ or 1hlgafion; Of eve In lnlotpTeader ter both. The Principals. jointly and severally. hereby promise and agree to pay pto+mpay on demand. sip wall as b Indemnify you end hold you hatmies$ against and In ietpoCT Of any and an dtlgation and Interpteader On% Claims. Iafsat. damages. reeooerit , jtrdgmorlts, and eeptnesi. Including_ without Ilmtution- rtssonabta ■ttorney s loss that you may Ir-our 01 Out,*,. which adse, result from CC(elte al0 The @spow- 13- Dose of escrow means [he lime wean Nstrumemis We molded As sow- &list dose of escrow as Is cocApls A to you, degvsr funds and documents Including without Itmiling. $SswanCIS Cr Rd■ and Insuranct Pollee,, II ley, to the ponies taspeeovsly entitled 10 sees" them- 1n the ctol" statemtnt you may adjust estimated amounts 14 Yov are hereby aulhorllsd to destroy Or When.Ase dispose of these IwsuuctlOmS And all olhw wrtlt4igs and aocounW+g or d.sbursomen, tecotds In this *snow aI any lima char five yeses from do,* of these *wow ktsvuc4Ons- 15. These Instructions Shan be binding on. and shay inure to the b$nefil of each Prindpar &lid his respective hails. legal teprSSOMIS"as. Successes and assigns 16 As used In [hose Inst.ucliaml. the mascuiino, feminine or neuter gemdsf, @rid the skfgviar Or plural nncnber shag be dNm$d to Iiclude the others r.ti4 near the conic xl so Indicates- +1- those lnstruclions maybe executed In tiny number Of cO%"Slpens. Coach Of which shall be deemed lobe an ofigktd. Encrow No.: 102516-TA NOTICE TO BUYER ON DISPOSITION OF CALIFORNIA REAL PROPERTY Buyer Is hereby notified of withholding provisions of California Revenue and Taxation Code sections 18805. 18815. and 26131, applicable to certain sales of California real estate by nonresident sellers_ Where applicable, the buyer Is required to withhold 3 1 /3°% of the sales price of California real property obtained from nonresident setters. Buyer understands that In no event will escrow holder undertake to advise buyer and/or buyer's representative(s) on the possible' application of the above code sections to this specific transaction. Buyer understands that, unless expressly Instructed by the seller and buyer herein, escrow holder will not assist In the wlthholding of seller's funds and remittance of saine to the Franchise Tax Board. Buyer understands that penalties may be Imposed by the Stale of California for failure to comply with withholding laws. In the event that the parties request escrow holder to withhold funds due the seller, the parties hereto shall submit to escrow the completed and necessary tax forms In addition to Instructions as to the proper disbursing of funds_ At that time, the buyer and seller shall agree to cooperate fully in providing necessary Information and to Indemnify escrow holder and hold escrow holder harmless In the event of noncompliance resulting from Information supplied by the undersigned_ A fee of $25.00 for this service will be charged. For additional information concerning the withholding provisions referenced above. please contact the Franchis© Tax Board Withholding at Source Unit at 916-3694900 or write to them at P.O. Box 641, Sacramento. California 95812.0651. Receipt acknovil edged October 16, 1997 Seller's Signature(e): Buyer'a Signature(B): CO D.L. PHAM, TRUSTEE THUY T.L. BUI PHAM, TRUSTEE BRIDGES AMERICA BRIDGES AMERICA FOUNDATION, L.P., A CALIFORNIA LIMITED PARTNERSHIP BY: BRIDGES AMERICA FOUNDATION, INC. a De3.awa�e Corporation B Y .:: Garrett Robinson, Exec. Director EXEl I B I T "A" Tiva PORTION OF TETE NORTHEAST QUARTER OF SECTIOPJ 23, TCAINSHIP 5 SOUTH, RAmm-- 11 WEST, PARTLY IN THE RANCHO LA BOLSA C T ICA AND PARTLY IN THE RANG D LAS BOLSAS , IId THE CITY OF HLJ TTINGTON BEACH, AS PER 1-9%P RECORDED IN BOOK 51, PAGE 13 OF MISCEIIANEOUS MAPS, IN THE" OFFICE OF THE COUNTY RECORDER OF SAID COUNIY. DESCRIBED AS FOLLCWS: BEGINNING AT THE INTERSECTION OF =- SOUTH LINE OF THE NORT14 50.00 FEET OF THE SOUIHEAST QUARTER OF THE NORT14vlE.ST QUARTER OF SAID NORTHEAST QUARTER WITH THc. EAST LINE OF SHER LANE AS DESCR I BED IN THE DEED TO 'ME CITY OF HU TT INGION BEACH, RECORDED DECMBER 7, 1961 IN BOOK 5937 PACE 35, OFFICIAL RECORDS; TlEENCE NORTH 180.00 FEET ALONG SAID EAST LINE; 11-[IINCE EAST 346.00 FEET PARALLEL WITH 'nE NORTH LINE OF SAID SanHEAS'T QUARTER OF 114E NORTRIWESI QUARTER OF THE NORTHEAST QUARTER; TUi CE SOUTTI 100.00 FEET PARALLEL WITH SAID FAST LINE; 1i-T-NCE EAST 90.00 FEET PARALLEL, W I'IH • SAID NORTH LINE; THENCE -9=1 L 80.00 FEET PARA= 1'I I71I SAID EAST LINE TO THE; SOUTH LINE OF THE NORTH 50.00 FEET OF THE Sam-5- -rS'T UJPJRT'ER OF TIE NORTITAST QUARTER OF SAID NORTIEAST QUART'E7Z; 7H010E WEST 436.00 FEET 'IU TI-E POINT OF BEGINNING. SAID LAND IS INCLUDED WITHIN THE AREA S C('+'N ON A MAP FILM) IN BOOK 23 PAGI; 17 OF RECORD OF SURVEYS, IN TEE OF ICE OF TIE COU[Trf RECO'2D:R OF SAID i . EXCEPT 'ITEREFRCM ALL OIL, GAS, MINERALS AND OTI-OZ HYDROCARB'NIS, BELCw A DEPITI O: 500 FEET, WITHOUT THE RIGII' OF SURFACE EtvTRY, AS RESERVED IN DES OF RECORD. PARCEL, 2: THAT PORTIaN OF 'ME QUAR71M OF SECTION] 23,-rct-INSHIP 5 SCUM, RAN,;E 11 WEST, IN THE RANQ40 LA BOLSAS, IN TIE CITY OF N-WFIN':"ION BEACH, AS PER tV�.P RECORDED IN BOOK 51, PAGE 13 OF MIS=-Alv=- S H---SS, IN THE OFFICE OF THE CO LTY RECORDER OF SAID COUNTY, DESCRIBED AS FOL L .S : BEGINNING AT THE INIFR.SECTION OF THE SOUK LINE OF THE NORTH 50.00 FC.r.T' OF THE SOUIIEAST WARIER OF THE NORTHWEST' QUARTER OF SAID NORTHEAST QUARTER WITH 'THE EAST LINE OF SHER LANE AS DESCRIBED IN THE DBED TO 111E CITY OF IUTrI%—MN BEACH, RECORDED DEC24BER 7, 1961 IN BOOK 5937 PAGE 35, OFFICIAL RECORDS; THENCE NORTH 180.00 FEET ALONG SAID FAST LINE; VEN E EAST 346.00 FEEL' PARALLEL WITH THE NORTH LINE OF SAID SOL)THFAST QI..IA= OF THE NORMVEESr QUARTIRR OF 71-E NORTHEAST QUARTER; THENCE SOUTIL 100.00 FEET PARALLEL WITH SAID = LINE; THENICE FAST 90.00 FEET PARALLEL WITH SAID NORTH LINE TO A POINT W6 I I Ci POINT IS THE TRUE POINT AND PLACE OF' BEGINNING; 71ENCE SOUTH 80.00 FEET PARALLEL WITH SAID FAST LINE TO THE SOUTH LINE OF T1iE NORTH 50.00 FEET OF T1E SOUTHWEST QUARTER OF THE NORTHEAST QUAI= OF SAID NORTHEAST OUAR'TER; 7TUXE 408.96 FEET EAST PARALLEL, WITH THE NORTH LINE OF SAID SOCTIT-iFAST QUARTER OF THE NOIZIHWEST QMRTER OF THE NOR'I1-EAST QUARTER 10 THE WEST LINE OF PARKSIDE LANE AS DESCRIBED IN TIM D® TO 71M CITY OF IRWINGION BEACH, RECORDED SEPTDSE3R 20, 1968 IN BOOK 8727 PAGE 541 OF OFFICIAL RECORDS; THENCE NORTH 80.00 FEET ALONG SAID WEST LINE TO A LINE THAT IS PARALLEL WITH THE NORTH LINE OF SAID SOCmTFAST QUARTER OF THE NORTHWEST QUARTER OF TI-E NORTHEAST QUARTER, AND WHICH PASSES THROUGH AND TRUE POTNT FIND PLACE OF BMINNING; THENCE WEST 408.96 FEET, AIaNG SAID LAST MENi'IOIED PARALLEL LINE, TO T1-CE TRUE POINT AND PLACE OF BEGIMlNG. (L=V, DCSQUPTTC N MTI-jNUID) . (18CAL DUSCRI Prrav ClONT HUED) E)CCEPT 110REFR011 ALL OIL, GAS, !•iWu?ALS AND MHER FfDROCARBCNS, BELGW A DEPTH OF S00 FEET, wITHOUr THE RIGHT OF SURFACE ENIRY, AS RESERVE IN DEEDS OF RECORD. SAID LAND is TNC LUDE D WITHIN TI {E AREA SHC ;,N ON A MAP FILED IN BOOK 23 PACE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF THE CAW? RECORDER OF SAID COUNTY. EXT11BIT "B" TO ESCROW INSTRUCTIONS xldlBIT -I- FORM OF NOTE ATTACIIEU TO ADDENDUM TO REAL ESTATE PUf1CIlASE AGREEMENT Heat PrQucrty Suor .S) Note S Huntington Beach, California 1997 FOR VALUE RECEIVED, )oln(ly and severally Icollectivefy, 'Maker') promise to pay to ilia order of ('Payee'), or his or tier assigns, at or at such other place as the holder or holders hereof may from time to time designate In writing, Ilia principal sum of Dollars (S ), or so much thereof as remains unpaid from time to time (tire 'Principal Balance'), together wiih Interest on the Principal Balance at the rate hereinafter specified, In legal tender for payment of public and private debts In the United Slates of America, all in accordance with the terms hereinafter set forth. From and after the date hereof, and until this note is Fully paid, interest on the Principal Balance shall bo computed at a rate, compounded monthly, equal to the lesser of the highest rate of interest pormitted under applicable law or ilia rate of percent (_%) per annum. Any Interest which is duo and payablo but unpaid from time to time shall be deemod added to the Principal Balance and shall bear interest at ilia Default hate, as delined below. A partial payment of interest only shall be made on the date hereof In advance for Interest accruing on the Principal Balance from tyre date of this Note through the ninth (9th) day of the second full calendar month after the date or this Note. Therealter, commencing on the tenth (101hl day of ilia third (31d) full calendar month after the date of this Note and continuing on Ilia tenth 110) day of each full calendar month thereafter, interest only on the Principal Balance shall be payable in arrears for the period commencing on the tenth (10th) day of the procoding calendar month through the ninth (901) day of the calendar month in which such payment Is duo, and all unpaid Interest, principal, and other amounts due and payable hereunder but not then paid shall be paid on or before , 20_. All payments received hereunder shall be applied first to any laic charge duo hereunder, second to any interest accruing hereunder at the Default hate, as deflned below, third to any amounts due hereunder other titan penalties, Interest (including Default Rate Interestl, and the principal balance, fourth to Interest accruing hereunder at the interest rate described heroin above, and fifth to any principal balance owing hereunder. It at any time any of the payments required hereunder are not made when due, or any other default under this Note or under any deed of trust or other security Instrument securing this Note occurs, without any grace period or notice, the interest rate applicable under ilia terms of this Note automatically shall be Increased six 161 percentage points per annum over ilia above -stated interest rate or tiro maximum lawful rate, if any, whichever Is less (the 'Default Rato'I, from tlta date of such event until payment In full of all sums duo under this Note. All Interest payable hereunder shall bo computed on tiro basis of a 360-day year and a 30-day month, but shall be charged for the actual number of days principal Is unpaid. In tho event that any required payment of principal, Interest, or other amount payable hereunder Is not made when due Maker shall pay, without notice or grace period, a late charge of live cents tS.05) for each dollar ($1.00) so overdue for the purpose of defraying a portion of the expense incidental to handling such overdue payment. Notwithstanding any provision herein which may be construed to provide to the contrary, the total liability of Maker for payments in ills naturti of interest hereunder shall not exceed Interest at the maximum rate permitted by the laws of Ilse State of California, if any, and any amount paid as interest In excess of said maximum rate shall not be deemed to be a payment of Interest and slialt bo refunded to the Maker. Time Is of the essence hereof. Notwithstanding any provision heroin which may be construed to provide to Ilia contrary, in the event of any default In Ilia payment of any principal or interest hereunder whert due, or In the event of any default in the performance of or compliance with any other covenant or condition of this Note or any deed of trust or other security Instrument securing this Note. than, In any such case. the entire principal balance, with all accrued Interest. any late charges and other amounts payable hereunder shall automatically and without notice or cure period. become immediately due and payable. Except as hereinafter expressly provided. no modification or amendment of the terms of this Note shall be effecilve unless made in a writing signed by the parties hereto. Maker hereby waives demand, presentment. notice of nonpayment, protest, notice of protest, dishonor, notice of dishonor, diligence in collection, and non-payment of this Note. Maker agrees to pay all costs of collection. Including, but not limited to, collection agency costs, fees, and expenses, and court costs and reasonable attorneys' tees {including, but not limited to, court costs and attorneys tees on appeal) In case any payment shall not be made when due hereunder, and all costs. tees, and expenses, Including, but not limited lo, court costs and reasonable attorneys' fees (including, but not limited to. court costs and reasonable attorneys' fees on appeall, incurred in Interpreting this Note, or In exercising or defending. or In obtaining the right to exercise, any of the rights and remedies of Payee hereunder, whether suit be bought or not, and wtiather In probate, bankruptcy, Insolvency, arrangement, reorganization, receivership, or other judicial, noh-judicial, aditrdicative, or arbitration process. whether or not the holder hereof prevails therein, together with Interest thereon at the Default Rate train and after the date of on which said holder hereof Incurs any such costs, fees, or expenses through tho data of payment of such costs, expenses, or fees by ilia Maker. This Note is made with reference to and shall be construed in accordance with and governed by the laws of the Slate of California. This Note 1s secured by that certain deed of trust of and assignment of rents even data hereof by in favor of and recorded In the Official Records of the County of Orange, State of California on as Instrument No. 'Maker` i r-ORM OF RIDPI ATTACKED TO ADDENDUM TO REAL ESTATE PURCHASE AGREE-KIENT EXHIBIT 'A' X�—Wsfflno WWI G EXHIBIT 'B' (Additional Property Secured BY Deed of Trust] (a) 5lreets. etc. All the right, title, and Interest of Trustor In and to all streets, roads, and public places. opened or proposed. adjoining the land described in Exhibit "A" attached to the Form Deed of Trust, as defined in ilia attached Addendum to Deed of Trust With Assignment of Rents (tile 'Land`!, and all easements and rights of way, public or private, now or hereafter created or used In connection with the Land. (b) Imor v "menJs. 91. All Improvements (the 'Improvements') of every kind and description now or hereafter erected or placed upon or made to the Land. (cl Fixtures and f grsonai Progeny. All materials. supplies, fixtures, fittings. appliances, apparatus, equipment, machinery, furnishings, furniture, carpets, drapes, inventory, chattels, and other articles of personal property of any description, and replacements of any thereof, now or at any time )tereaftor owned by Trustor and affixed to or attached to or used in construction upon or used in any other way In connection with or located upon, Under or within said Land and Improvements [such items as are affixed to and deemed a part or the Land or Improvements being hereinafter collectively referred to as the 'Fixtures" isuch portion of the Fixtures as can be removed without damage thereto or structural darnage to the Improvements being hereinafter referred to as the "Removable Fixtures'), the romalreder of (tie foregoing property being the "Personal Property'. (d) Reversions. Rents. elg. Ali reversions, remainders, rents, security deposits. issues, profits, and other benelits arising or issuing from. and all leases of, all or any portion of said Land, Improvements, Personal Proporty end Fixtures. (e) Award5,glc. All awards, damages, payments. and other compensation (including but not limited to insurance and condemnation proceeds) received by or payable to Trustor, and all claims of Trustor therefor and rights of Trustor thereto, which may result M from any condemnation of all or any of (tie Properly, (it) from any damage. Injury, or destruction In any manner caused to (lie Land, Improvements, Personal Property or Fixtures, or (iii) from any change of grade or vacation of any street abutting the Land. All of ilia foregoing are to be deemed to be part of llie real estate, such that all right, title, and Interest of the Trustor thereto s11311 pass absolutely to the purchaser at any trustee's sale or foreclosure sale. (f) Certificates. stc. All Certificates of Occupancy, other governmental permits. and all water stock appurtenant to the Land or any portion thereof. (g) )nsurpnce. etc. All of Truslor's right, title and interest In and to all insurance policies required to be maintained under the terms of tills deed of Trust, or otherwise carried by Trustor covering the Property or any portion thereof, together with all unearned premiums paid thereon and all other benefits received or to be reco(ved therefrom. (h) Tax Ftefunds.gic. Ali refunds of taxes, assessments, levies. and other charges. whether governmental or nongovernmental, and including but not firmled to water and sewer rents and assessments on appurtenant water stock (collectively, the 'Tax Ctefunds'). ADDENDUM TO DEED OF TRUST WiTH ASSIGNMENT OF RENTS t . The Note. This Deed of Trust secures, In addition to the other obligations stated to be secured hereby, all obligations under the terms of all of the note of even data herewith in the aggregate original principal amount of S by Truslor (as maker) In favor or Beneficiary (as payee), and all amendments, modifications, extensions, and renewals from time to time thereof (the 'Note"I. Anything to the contrary In the Note or In any other Instrument, document, or agreement notwitlislanding. any default or event of default under the Note shall be deemed to be an event of default hereunder. 2. Prohibition on Other Financinas and T►anslers- (A) Without the prior written consent or the Beneficiary, which consent may be withhold for any reason or no reason in the Beneficiary's sole and absolute discretion (i) Trustor shall not at any time, self, assign, transfer, convey, lease with option of safe or for other than actual occupancy by a residential tenant, or dispose of (each, a "Transfer'I all or any part of any Interest In ilia Property, (il) Trustor shall not at any time suffer or permit any Transfer by operation of law or othorwiso of all or any part of any interest In the Property, (iii) No person or entity shall at any time Transfer or suffer or permit any Transfer (including, without limitation, a Transfer by operation of law or otherwise), mortgage, pledge. or encumber all or any part of any direct or indirect legal or beneficial Interest In Trustor of any nature whatsoever or in any entity owning any direct or Indirect Interest In Trustor of any nature whatsoever, (iv) no person or eritity shall at any time assign or delegate. or accept the assignment or assumption of, any right or obligation hereunder or Under the Note, and Trustor shall not suffer or permit any such assignment or assumption (each, an 'Assumption'), and Iv) Trustor shall not at any time encumber the property or any part thereof or any interest therein with any mortgage, deed of trust, security interest, pledge, lien, or other encumbrance other than this Deed of Trust or suffer or permit by operation of law or otherwise any of the foregoing. Without limiting the generality of the provisions of this Section 2, the Beneficiary shall not be obligated to subordinate the lien hereor to the lien or charge of any other person or entity, except for (insert reference to first lien loan at ilia close of escrow). 3. Ajuionabi!�Ly. All of the Beneficiary's rights and obligations under any Note and this Deed of Trust shall be assignable to any other person or entity without the consent of Trustor. 4. in,jLjrangg. Repair. Use, and -FiefaLed_Matters. Truslor at all times shall keep in effect with respect to the Property policies of Insurance IA) against loss or damage by fire and such other perils as are included In a standard "all-risk' extended policy, (B) comprehensive public liability insurance, (C) worker's compensation Insurance with respect to any employees of Trustor from time to time on the Property. and IDI and any other Insurance or endorsement thereto reasonably required from time to time by the Beneficiary. Each of the foregoing Insurance and policies shall be for the benefit of Trustor and the Beneficiaries with a lender's loss payable endorsement in favor of the Beneficiaries and an endorsement requiring written notification to be delivered to the Beneficiary no later than thirty (30) days prior to the effect of any modification, reduction, or cancellation of ilia policy, and each shall be otherwise In form, amount, and substance end with policy limits end deductibles reasonably acceptable to the Beneficiaries. Truslor shalt not demolish, destroy, or remove, or suffer substantial damage, destruction, or removal of, any of the Property without the prior written approval of the Beneficiary, which approval shall not be unreasonably withheld, and Trustor shall keep, maintain, and restore the Property in good condition and repair, ordinary wear and tear excepted. Trustor shall not do, and shall not suffer or permit, any of the following: (1) change the use of the Properly from ilia use In effect as of the date of recording of this Deed of Trust in tiie official records of ilia county In which the land Is located (the -Recording pate"I. (II) abandon or vacate substantially all of the Property, or (ill) lease any space within (tie Property except in the ordinary course of business and at fair market rents. 0 ,(3 lu 5- Definitions and Interaretation. The term 'Beneficiary" as used In this Rider shall mean each person or entity Identified in this Deed of Trust as a Beneficiary, jointly and severally with the other Beneficiaries. Any reference to any party under the Note or this Deed of Trust shall be deemed to mean such party and all of Its successors and assigns from time to time. Tho term 'Form Deed of Trust" as used herein shalt mean the printed torm Deed of Trust Whh Assignment of Rents to which this Rider is attached. The term `Dead of Trust" es used herein, in the Form Deed of Trust, and in the Note shall mean the Form heed of Trust and all exhibits and riders attached thereto. The term 'property, 'said property," and "Property" as used In the Deed of Trust shall mean all of the property described Exhibits 'A' and 'i3" attached to the Form Deed of Trust. The terms of the Notes are hereby Incorporated herein. The terms of the Form Deed of Trust and all exhibits and riders thereto shall be interpreted as complimentary and cumulative, however, to the extent that tiie terms of the Form Deed of Trust and any exhibit or rider thereto conflict, the terms of the exhibit or rider, as applicable, shall control. 6. Indgmnificatian. Trustor hereby agrees to Indemnify, defend, and hold the Beneficiarles harmless with respect to all damages, lines, penalties, losses, costs, and expenses, including, without limitation, reasonable attorney's fees and court costs, arising directly or Indirectly from the Property or any violation of any of the terms of this Deed of Trust or any Note. Without limiting the generality of the foregoing, lire terms of this Section 6 shall be deemed to be on 'environmental provision' for the purposes of California Code of Civil Procedure Sections 726.5 and 736 and otherwise governed thereby, to the extent that this Section 6 deals with environmental matters. 7. Cross -Default. 5eQUrIly. and Advances- Any breach or default under any prior or subordinate lien or encumbrance from time to time encumbering part or all of the Property leach, an 'Other Loan'}, without Implying any obligation on the part of the Beneficiary to approve or consent to such lien or encumbrance, after the giving of any notice and the passing of any cure period required in such lien or encumbrance, shall be a derault hereunder and under the Note. This Deed of Trust shall secure repayment of all amounts advanced by the Beneficiary to lho lender or secured party with respect to any such Other Loan or otherwise paid to any party which may be required, in the Beneficiary's sole and absolute discretion. In order to protect the security of this Deed of Trust or the Beneficiary's interest In any or the collateral encumbered by this Deed of Trust (each, an 'Advance'), which Advances the Beneficiary Is entitled to make by the terms hereof. Ail Advances shall be due and payable by the Trustor within ten (101 days of notice to the Trustor, si,all be added to tiie Principal Balance of the Note, and shall bear interest until paid at the Deltault Pule, as defined in titre Note. Any failure of the Trustor to repay any stich Advance when due shall be a default hereunder and under the Note. EXIIIBIT "C" ADDENDUM TO REAL ESTATE PURCHASE CONTRACT AND TIECEIPT FOrI DEPOSIT THIS ADDENDUM TO REAL ESTATE PUnCt-IASE CONTRACT AND RECEIPT FOR DEPOSIT Is dated for reference purposes only as or September 23. 1997 and Is made with reference to that certain Real Estate Purchase Contract and Receipt for Deposit dated as of September 15. 1997 (the 'Agreement.) by and between Bridges America Foundation, L.P. (the 'Buyer') and Co Dang Long Pham and Thuy T. L. Bui Pham (collectively, the 'Seller"). The Agreement Is hereby amended as follows: 1. Tile Buyer. The Buyer shall be Bridges Arnerica Foundation, L.P. ('BAF"), subject to the following qualification. Anything to tite contrary in the Agreement notwithstanding, BAF shall have the right prior to the close or escrow, one time only, to assign Its interests in the Agreement, hereunder, and under all related documents, Instruments, and agreements (the 'Sale Documents') to an entity (tile 'Assignee) In which BAF serves as and shall remain as the sole managing general partner, managing member, or controlling shareholder, If the Assignee has assumed In writing all of the obligations under the Sale Documents, has presented to lire Seller certified financial statements, business references, evidence of creditworthiness, a litigation search, and an operating history of the Assignee and each of its principals satisfactory to (fie Seller In its sole and absolute discretion, and if BAF shall remain liable for all obligations of the Buyer under the Sale Documents. Anything to the contrary In the Agreement notwithstanding, the vesting upon closing shall only be In the name of BAF or the Assignee. 2. Government Anorovals. Tile Buyer shall, In good faith, use Its best efforts to obtain from the City of Huntington Beach (the 'City`) all approvals of the City, Its departments, the City's city counsel, and all other applicable governmental agencies or an Investment In the Property (the 'Government Approvals) in the amount not less than $700.000 (the 'City Investment`) through the City's affordable housing program (the 'Program"). Within 45 days of the acceptance of the offer, the Buyer shall obtain and deliver to the Seller a letter from the City In form and substance acceptable to the Seiler stating that the Buyer has completed Its application for the City Investment and has provided all information required by the Program, and that the City Is considering the City Investment for the Program. If at the end of such period the Guyer shall not have received the City Letter, then the Seller or, if the Buyer has sought the City Letter and tree Government Approvals diligently and In good laith, the Buyer, may by written notice to the other terminate the Agreement and this {addendum (the 'Termination Notice'). If the Government Approvals have not been obtained prior to tite Outside Closing Date, as defined below, the Seller or, if the Buyer has sought the Government Approvals diligently and In good faith, the Buyer. may by a Termination Notice to the other terminate the Agreement and this Addendum. It any party delivers to the other a Termination Notice In accordance with this Section 3 above, then the deposits (including, without limitation, the Deposit and the Increased Deposit, the 'Deposits') shall be returned to the Buyer (except to the extent that the Buyer is In breach under the terms of the Agreement or this Addendum, In which case the stem of "the Deposits shall be deemed liquidated damages and shall be paid to or retained by the Seller); thereafter, the Agreement and this Addendum shall automatically terminate, and the parties shall [lave no further obligation to each other under the Agreement or this Addendum. In no event shall the Seller be required to undertake or subject the Property to any obligation associated with the Government Approval, the Program, or tite City Letter. The Guyer shall deliver to tho Seller copies of all applications, correspondence, agreements, and other documents related to the Government Approvals, the City Investment, or the Program substantially concurrently with its receipt or dispatch of such. r 3. D-Ct2454, CVniinoency_FZernoval and Q sinn Dat4. Anything to the contrary in the Agreement notwithstanding (a) the fncreased Deposit described In Section 1.8 shalt be paid into escrow upon Y: issuance of ilia Government Approvals and waiver by the Buyer or satisfaction of the conditions described in Sections 13, 17. A. E, F, K, and L of ilia Agreement (collectively, the 'Contingency Removal"(, (b) upon ilia occurrence of the Contingency Removal, the Deposits shall be released by escrow to lire Seller, and (c) (tin sale of ilia Property shall be consummated and the escrow shall close on or before thirty (30) days niter ilia Contingency Removal. 4. Outside Closing Date. If for any reason, ilia escrow does not close on or before 120 days after the date of acceptance of ilia offer (ilia 'Outside Closing Data'), then any party not then in default Of its obligations under the Agreement or this Addendum shall be entitled to terminate the Agreement and this Addendum by a Termination Notice to ilia other, and, upon such notice. Erie Deposits shall be returned to the Buyer (except to the extent that the Buyer Is In breach under the terms of the Agreement or this Addendum, In which case the sum of the Doposlts shalt bo deemed liquidated damages and shall be paid to or retalned by the Seller); and, thereafter, the Agreement and this Addendum shall automatically terminate, and tine parties shall have no further obligation to each other under the Agreement or this Addendum. 5. Financinq anda5ellgr Carry -Back. Anything to the contrary in the Agreement notwithstanding, (a) the note to be carried back by the Seller shall be in the original principai amount of S800,000 with Interest only payable monthly in arrears at the rate of 7% per annum (the 'Interest Rate'), with all principal due and payable on the fifth 15th) anniversary of ilia closing of Iha escrow (;lie "Maturity Date') and otherwise in the form attached hereto as Exhibit 'I' (ilia 'Seller )dote') and shalt be secured by a deed of trust with assignment of rents encumbering the Property substantially In the standard long form issued by First American Title Insurance Company with a Rider substantially in ilia form attached hereto as Exhibit 'll,- (b) lire Seller shall, In good faith. use Its bast efforts to ensure that the financing to be secured by the new first deed of trust described on page one of Ilia Agreement (the 'First Loan'; Is in an amount exceeding $3,300.000, (c) for every full Increment of $ 1000 by which the original principal amount of the Seller Note may be reduced from S800.000 at the close of escrow (whether by the increase of ilia First Loan or by Ilia payment of cash to ilia Seller et the closing). the Maturity Date of ilia Seller Note shall be extended by 3.65 days (the final product of which shall be rounded up to (lie nearest whole number). not to exceed a total of 730 days, (d) In addition, for every full increment of $25.000 by which the original principal amount of the Seller Note may be reduced from $800,000 at the close of escrow (whether by ilia Increase of the First loan or by the payment of cash to the Seller at the closing), the Interest (late shall reduced by one eighth (.118) of a percent, not to exceed a maximum reduction in ilia Interest Rate of one percent (1%), and (e) none of Ilse foregoing shall reduce or otherwise affect tite purchase price of the Property as stated In the Agreement. 6. 6_gceI2jjjnco and Buyer's Sianature. Anything to ilia contrary In the Agreement notwiills landing. the Agreement and this Addendum shall be deemed accepted and binding if this Addendum and the Agreement are fully executed on or before October 6, 1997. and, upon such execution, (lie offer shall be deemed to have been accepted. The party signing t)re Agreement and this Addendum ('Robinson') sliall be deemed to have signed the Agreement and this Addendum as president of BRIDGES AMERICA FOUNDATION, INC., a Delaware corporation (the 'CorporaVon'), the general partner of the Buyer, and on behalf of the Buyer. Each of ilia Buyer, the Corporation, and Robinson represent and warrant trial Robinson's signature alone Is sufficient to bind the Buyer, the Corporation, and Robinson to the Sale E� 00 2 _ 1 r f1 11 Documents, that cacti has the appropriate power and aulhorlty to enter into lire Sale Documents, and that all authorizations and other matters have been obtained to allow the Buyer, the Corporatlon, and Robinson to enter Into the Sale Documents. IN WITNESS WHEREOt=, the parties hereto have executed ihis Addendum on the dates described below. 'Seller' Co Dario Long Plum lh y T. 13ui Piiartii 'Buyer' BnIDGES AMERICA FOUNDATION, L.P., a California Grniled partnership Dated: October �, 1997 Dated: October �L, 1997 t3y: BRIDGES AMERICA FOUNDATION, INC., a Delaware corporation BY: � ��� Dated: October 3, 1997 Garrett Robinson, is pf-"ident fK. 01R 3 If,ll2,ilIER LAN IF, HUNTINGTON BEACH Current (Annualized) Gross Scheduled Income $ 582,600 (1) Other Income 14,400 Vacancy (31/2%) (2U,895 ) Effective Income 516,105 Expenses 181,500(2) Reserves for Replacement 16,500(3) Net Operating Income S 378,105 S 3,300,000 1" @ 7'/2% S 276,891 @ 30 yrs. ( USC = 1.36) S 3,30000 1" @ 8 % S 290,573 @ 3U yrs. ( USC = 1.3U) S 3,30U,000 1" @ 8'�=% S 303,700 30 ym. ( USC = 1.24) $ 8Uo,000 2nd @ 7% S 56,000 Total USC @ 7'/,% 1.13 (V' & 2") Total DSC �a) 8% 1.09 (I" & 2"d) Total USC 8 Y2% 1.U5 (I" & 2" } Notes: Market S 634,500 (4) 3,900 ( XMA 606,537 178,591 (5) 18.401 S 409,545 S 276,891 ( USC = 1.50) S 290,573 ( USC = 1.43) S 303,700 ( USC = 1.37) S 56,000 1.25 1.20 1.15 (1) 1 & 1@$675. 2&2@S800. (2) Expenses @ S 2,750/Unit (3) Reserves @ S 250/Unit (4) 1 & 1 @ S 750. 2&2(,S 950. (5) Expenses include $55,550 In property taxes which will not he an expense of the project. 0 16112 Sher Lane Relocation We have reviewed potential relocation costs and we are responding to your January 9,1998 letter as follows: a. The issue of overcrowded units is an on -going management issue. All overcrowded units are given notice to abide by the number of listed tenants in the monthly rental agreement. If there is a lack of compliance, than a 30 day notice to vacate is issued. This policy is followed at the time of acquisition and during ownership. b. Of the 53 existing tenant applications on file, there are not any tenants earning over 80% of the medium income. c. The interior rehabilitation is designed to eliminate the displacement of any tenant. Some tenants may be inconvenienced for a few days, but in the recent rehab of The Bridges Apartments, no tenants were relocated. Rehabilitation Budget Our proposed rehab budget is designed to give us a property that could compete as a strong B Class apartment building at below market rental rates. The Bridges development team has built or developed over 2000 residential units. Bridges has attempted to spend City dollars prudently and feels that is reflected by the current budget. If the City requests a higher budget, Bridges can do additional rehab, but feels it is not a necessity for a successful project. The miscellaneous category will cover either pool repairs or new pool equipment. The project will have working secured entry gates and ample lighting. The budget also allows for video entrance cameras which may not be necessary to install. Management Bridges feels the proposed project is uniquely located to support the renovation and expansion of Huntington Center. Quality affordable housing within walking distance of Huntington Center will serve the community well and also help keep the property occupied. Management which currently operates the 80 Unit project on Nichols Street will also monitor, manage, and meet compliance requirements on the Sher Lane Project. r i' t - � •-•i,.•r .tea._! ^„ - '�� �„�' • -, -� � •� :+ • ._. •bi t~ , x - r •.c' fa rAr, it iRww - Pay^k Prace .ram -='! •' �L-:11 c.i;'• '- 1 � - f ? ,-- --'- r: V. �41 LI lit 935-950 West 5th Street Corona, California Income and Expense Schedule 1998 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Stabilized Gross Scheduled Income: S230.400 $237.312 S244,431 $251,764 $259.317 $267.097 $275.109 $283.353 $291,864 S300.619 Less Vacancy & Collection Loss (15%): $34.560 $35,596 $36.665 $37.765 $38.898 S40,065 $41.266 $42.504 $43,780 545,093 Gross Operating Income: $195,840 $201.716 $207.766 $213,999 5220,419 5227,032 $233,843 5240,859 5248,084 $255.526 Expenses: Resident Manager S18,000 S 18,540 $19,095 $19,569 $20,259 $20.867 $21.493 $22.138 $22.802 $23.486 (Includes landscaping and some repairs,) Water $8.500 $8.755 S9.018 $9.289 $9.568 $9,855 S10.150 $10.455 St0,769 S11,092 Electric $12.375 $12.746 S8.128 $8.372 $8,623 $8,882 $9.148 $9,423 $9,705 $9.996 Gas $4,132 $4,256 $4.384 S4,516 S4,651 $4.791 $4.935 S5,083 $5,235 $5.392 Trash $3.205 S3,302 $3.401 $3.503 $3.608 $3,716 $3.828 S3,943 $4.061 $4.183 Repairs and Maintenance S32,500 $33,475 S34,479 $35,513 $36.578 $37.676 $38.806 $39,970 S41,169 $42,404 Insurance S5,200 $5.356 S5.517 $5.683 $5,853 $6,029 $6.210 $6.396 $6,588 S6,786 Taxes $10.680 S11,000 $11.330 $1 %670 S12,020 $12.381 $12.752 $13.529 $13.935 $14.353 Asset Management Fee $6,912 $7,119 S7,333 S7,553 $7,780 $8.013 $8.253 $8.501 $8.756 $9.019 Management Fee $9.800 $10.094 $10.397 $10.709 S11,030 $11.361 $11,702 $12.053 $12,41S S12.787 Miscellaneous S4.200 S4.326 $4.456 $4,590 $4,728 $4.870 $5.016 $5.166 $5.321 S5.481 Reserves for Replacements $14.400 $14.832 $15.277 S15,735 S16,207 $16.693 S17,194 $17,710 S18,241 $18.788 ($3001Unit) Total Expenses: $129,905 $133.801 $132.816 $136,802 S140,905 $145,134 $149.487 $154.367 S158,997 $163,767 Net Operating Income: $65.935 $67.915 S74,950 $77.197 S79,514 $81,898 S84.356 586,492 $89,087 $91.759 Less Debt Servlca-1st T.D.: $50,456 S50.456 $50.456 S50,456 $50.456 $50.456 $50.456 W 456 $50.456 $50.456 Net To Project: $15,479 $17,459 524,494 526,741 529,058 531,442 333,900 536.036 538.631 $41.303 FOOTNOTE: 1. The Rent/Expenses was increased 3% annually for the 20 year period, 2. 3. 1st Trust Deed will be refinanced after the 5th year for the same terms, 4, Expenses are approximately 56%. $2,700 UnitlYear. 5. Gross Schedured income consists of rents from Studios Q S350/each and ISR/18A @ S4301eacn JPKA JocvmenMtoanS0QWe Citadel National Management L Page 4 December 1997 Summary Cash Flow Statement 16811-16889 Nichols Street Huntington Beach. CA 92647 the Bridges Apartments I Steve Perry (3DOR-0713 Bridges.1) JAN FEB MAR APR MAY Jlty JUL AUG 5£P OCT Nov DEC .97 .97 97 97 .97 -97 _ .97 97 -97 -97 -97 .97_ Total RECEIPTS Rents 53051 51493 53533 49201 53670 52188 52640 46551 51315 54863 52255 54960 631720 Lawdry Income 1127 1307 1197 1160 1277 1326 1304 1217 1285 1360 1245 1138 14942 Other Income 935 210 519 200 81-D 1159 350 997 399 890 631 500 1590 Reimbursement Recetpts 121 169 134 -180 350 524 -385 _ 849 500 500 2581 TOTAL RECEIPTS 55234 53179 55383 50381 55748 55023 54817 48380 59848 57612 54630 56598 656833 P A Y M E N T S Management 6 Admin_ 5164 5752 7178 5172 5102 5431 12097 4887 6281 ( 9296 5179 53N 76933 Advertising b Promot-n 60 179 379 299 120 179 239 60 )20 304 123 123 2184 Maint- - Building 1049 4036 10994 2931 4095 3018 4238 3597 1963 2986 2622 2869 44398 Maint Grounds 2045 1897 1916 1828 1833 1833 1940 1830 1820 1892 1952 1950 22736 Utilities 3272 3362 2950 2690 2928 3180 3099 3062 3404 3472 3490 4064 38915 Property Taxes 25475 28022 53497 Property Insurance 1652 910 711 1582 772 772 6358 Payroll - Office 1500 1500 1500 1500 1570 1500 1500 750 1450 1500 2200 2350 1B750 Payroll - Maintenance 3500 3500 3500 3500 3500 3500 3500 2443 3173 4732 4172 6262 45282 Non -Recurring Expenses 1500 1500 Other Expenses 504 1835 2459 269 728 2400 700 174 1455 1845 1645 14033 Iota] Oper Expenses 17094 22061 32377 43683 195D5 50716 2B123 17574 18111 17219 _ 22356 25428 3246-46 NET OPLRATING INCOME 38140 31118 23007 6698 35943 4307 26694 30806 41637 30393 32274 31171 332187 Capital Replacements 214 214 Mortgage Int7Pymt 33027 33027 33027 32283 32283 31783 31283 31283 31263 31283 31283 34083 385926 Security Dep Refund _ —_ 250 •60 - 190 TOTAL PAYMENTS 50121 55088 65404 75966 520B8 82498 59621 48857 49493 58502 538M 59450 710976 C A S H F L 0 W 5113 -1909 -10020 -2S585 3660 -27476 -4803 -476 10354 -889 742 -2852 •54143 r Management Page 1 December 1997 The Bridges Aoartments I Steve Perry (300R-0713 Bridges-1) Detailed hash Floe. Statement (cont'd) 16811-16889 Nichols Street Huntington Beach. CA 92647 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC '97 '97 '97 '91 '91 .97 .97 '97 '97 .97 '97 '97 Total TOW- 1127 1307 1197 1160 1277 1326 1304 1217 1285 1360 1245 113E 14942 Other 1ncaee Bank Interest/Charge -6 -3 -9 Rent late Charge 100 200 100 400 Repay NSF Check/Charge 25 25 Sec Dep Forfeit 200 200 800 300 399 S00 51 2450 Supplpaental Rents 735 210 400 959 250 700 390 580 S00 4724 Total; 935 210 519 200 800 1159 350 997 399 890 631 500 7590 Reimbursement Receipts Misc- Reimb/Adv 174 174 Security Deposit 4D 100 -200 -50 350 350 -385 836 500 500 2041 Tenant Damage 50 50 Utility Refund (OvrPy) 81 169 34 20 r 13 317 Total: 121 169 134 -180 350 524 -385 B49 500 500 2581 Total Receipts 55234 53179 55393 50381 55748 55023 54817 48380 59848 57612 54630 56598 656M (Continued on next Page) Citadel National Ranagermt December 1997 PAYMENIS: Management 6 Admin Page 8 The Bridges Apartments / Steve Perry (300R-0713 Bridges.1) Detailed Cash Flow Statement (cont'd) 16811-16889 Nichols Street Huntington Beach. CA 92647 JAN FEB W APR PAY JUN JUL AUG SEP OCT NOV DEC .97 .97 .97 '97 .97 .97 '97 -97 '97 -97 .97 '97 Total Accounting Fees 600 600 600 600 600 600 4006 600 600 600 600 600 10606 Administrative Exp 1280 49 300 1629 Bank Service Charge 34 7 3 44 Check Printing 78 78 Consulting Fee 829 798 flak 756 836 825 822 726 898 858 819 849 9847 Credit Report 65 146 123 358 195 163 98 65 1211 Delivery/Courier Servi 20 30 30 20 30 60 60 39 30 30 349 Dues S Subscriptions 98 98 Equipment Rental/Rpr 40 369 408 Food 27 8 35 HOA Mnthly Dues 200 200 Init/Add-tt Petty Cash 1000 3500 4500 Legal Fees 219 657 1364 150 on 189 219 219 3817 License7Permit 648 800 1448 Office Sapp 6 Exp 46 232 32 91 131 1 131 29 92 29 78 899 Postage 50 50 Printing 9 111 51 172 Professional Mgmt. 3314 3191 3323 3023 3345 3301 3289 2903 3591 3433 3278 3396 39387 Telephone 69 98 112 _80 87 64 1179 97 84 88 90 106 2155 Iota] 5164 5752 7178 5172 5102 5431 12097 4887 6281 9296 $179 5394 76933 Advertising S Promot'n Other Publication Ads 60 179 174 299 120 179 239 60 120 304 123 123 1979 Signs d Banners 206 206 Total 60 179 379 299 120 )79 239 60 120 304 123 123 2184 Maint- - Building A!C Heater Repairs 266 266 Alarm Rpr_ Fire/5ecuri 321 321 Apt. Cleaning 90 45 135 Auto Allowance b Exp 5 385 35 45 5 18 493 Carpentry S Woodwork 400 400 Carpet Cleaning 210 55 270 205 780 45 160 46 1271 Decking (Exterior) 9200 9700 Drape Repairs 35 49 84 Draperies/Blinds 248 206 328 783 Electrical Repairs 395 152 237 784 Electrical Supplies 72 72 Floor/Tile Repair/lnst 281 202 63 546 Garage Door Rpr/Rpl 1250 86 1336 Gbg Oisp Repairs 50 5o (Continued on next Page) National Management .10 10 Page 9 r 1997 The Bridges Apartments 1 Steve Perry GDIN -0713 Bridges-1) Oetailed Cash Flow Statement (cont'd) 16811.16BB9 Nichols Street Huntington Beach, CA 92647 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC '97 '97 .97 -97 '97 97 -97 .97 '97 '97 -97 '97 Total Glass Repairs 51 98 45 286 109 120 109 Gnrl Maint (Building) 109 30 1190 700 80 2109 Janitorial Supplies 1 23 23 17 64 Maintenance Supplies 477 1959 1298 1062 1518 1633 2576 1745 1127 2438 989 1524 18405 Other Appliance Phse 278 278 Painting (Unit) 795 315 500 625 225 250 390 965 720 4785 Painting Supplies 73 45 41 90 176 200 625 Pest Control 13 13 76 13 22 137 Plumbing Repairs 129 18 365 433 945 Plumbing Supplies 11 77 31 44 3 129 177 473 Stoveloven Repairs 126 _ 126 Total: 1049 4036 10994 2931 4095 3018 4238 3597 1963 2986 2622 2869 44398 Maint - Grounds Flowers a Materials 26 69 88 5 5 125 14 5 37 92 134 $99 Trash Reiroval 2019 1828 1828 18H 1828 1828 1815 _ 1815 1815 1855 1860 1815 22137 Total- 2045 1897 1916 1828 1833 1833 1940 1830 1820 1892 1952 1950 22736 Utilities Electric-NwHouse4leter 184 299 18 54 75 88 120 80 122 257 284 568 2147 Electricity-HouSeMeter 323 323 286 270 249 295 2.60 285 308 271 269 510 3649 Gas 288 264 281 193 273 251 269 239 277 326 2661 water 2477 2476 2366 2366 2605 2605 2446 2446 2705 2705 2660 2660 30519 Total: 3272 3362 2950 2690 292E 3180 3099 3062 3404 3472 3490 4064 38975 Property Taxes Property Taxes Total- Property insurance 25475 28022 25475 28027. 53497 53491 Property Insurance 1652 810 772 1582 772 772 6358 local: 1652 B10 772 1562 772 772 6358 Payroll - Office Contracted Office Temp 150 150 Employee Bonus Off 700 700 Lodging Allow - Office 700 700 1400 Salaries - Office 1500 1500 1500 1500 1500 1500 1500 750 750 1500 1500 1500 16500 Total: 1500 1500 1500 1500 1500 1500 1500 750 1450 1500 2200 2350 18750 Payroll - Maintenance Contracted Maint Temp 693 1423 1232 672 2762 6782 Salaries - Maintenance 3500 3500 3500 3500 3500 3500 3500 1750 1750 3500 3500 3500 38500 (Continued on next Page) Citadel National Management Page 10 December 1997 The Bridges Apartments / Steve Perry (3D0R-0713 Bridges -I) Detalled Cash Flog Statement (font-d) 16811-16889 Nichols Street Huntington Beach. CA 92647 JAN FEB MAR APR FAY AN JUL AUG SEP OCT NOV DEC '97 97 97 97 97 -97 '97 '97 -97 -97 '97 '97 Total Total 3500 3500 3500 3500 3500 3500 3500 2443 3173 4732 4112 6262 45282 Non -Recurring Expenses Non -Recurring M-Bldq _1500 _ 1500 total 1500 1500 Other Expenses Carpet Replacement 1835 1986 726 2400 700 174 1455 1845 1067 12190 Stove 504 289 289 578 1659 Water Heater Replacemc _184 184 Total 504 1835 2459 289 728 2400 700 174 1455 1845 1645 14033 Capital Replacements Mail Equip Acgstn 214 214 Total 214 214 Mortgage Int/Py-,nt Ist TO lnt/Pymt 29293 29293 29293 26548 28W 28548 28548 28548 28548 28548 28W 78548 344814 2nd 10 Int/Pymt _3734 3734 3734 3734 3734 3234 2734 2734 2734 2734 2734 5534 41112 Total: 33027 33027 33027 32283 32283 31783 31263 31283 31283 31283 31283 34M 385926 Security Oep Refund Sec Dep Refund Z50 -60 190 Iota] 250 -60 190 Total Payments 50121 55088 65404 75966 52088 82498 59621 48857 49493 58502 53888 59450 710976 C A S H F L 0 W 5113 -1909 -10020 -25585 3660 -27476 -4803 -476 10354 -889 742 -2852 -54143 RECEIVED FROM •4/+rQ AND MADE A PART OF THE RECO COUNCIL MEETING OF OFFICE OF THE CITY CLERK CONNIE BROCKWAY, CITY CLERK Huntington Beach Redevelopment Agency Sher Lane & Parkside Lane Acquisition & Rehabilitation: The Bridges America Foundation Sher. -Lane • Bridges Orange County is requesting financial assistance'to acquire and rehab a 66 unit apartment complex • Location: 16121 Sher Lane and 12112 Parkside Lane • Cost: $4,870,000 en 1194 2 k Sher Lane - Project consists of 34 one bedroom and two bedroom units • Approximately 616 and 888 square feet 96 on -site parking spaces • Project requires at least $350,000 in rehab ($5300 per unit) 8131/98 • Agency Provides: — $1,001,000 in Set Aside funds — $200,000 in HOME funds — $18,000 per unit 8131198 3 Sher: La e - Bridges Provides• — 33 Very Low Income Units — 33 Moderate Income Units — Thirty Year Covenants — Guaranteed Reserves & 50% of cash flow (100% when reserves reached) 4 PA i Sher Lane Finance Summa • Assume Redlands Savings 1 st Trust Deed: $3.3 Million • Agency Down Payment: $775,000 + $350,000 Rehab • Seller Carry -Back: $800,000 8rs1198 3-W.00 ■ Redlands ■ Agency ■ serer 5 Sher Lane Unit Size income Level Rent • 1 Bedroom Very Low $658 • 2 Bedroom Very Low $740 • 1 Bedroom Moderate $695 • 2 Bedroom Moderate $825 Wif" 6 :7 i Sher -Lane • Bridges owns an 88 unit apartment projec on 7611 Nichols Street • Purchased without City or Agency assistance in 1995 • Project was a neighborhood problem prior to Bridges W3110 Sher Lane W • Redevelopment Agency will count 33-`units toward inclusionary housing obligation • Other 33 units counted toward any moderate replacement obligations • Opportunity to meet Agency obligations on a larger scale • Meets Council goal of diverse housing stock 8131198 8 4 r-lr.a• • 7. AN ENrI= "REGMATCRY AGZM4ENT • !r MIAMMON OF COVEMNM • it • a. r,• • ••N =l- T7ERMS AND COMMONS TEE7ZEINPROVIDED Ear BY • it as THE BRIDMS • >a- r• SHER.• i - CALIFORNIA e ar PARTNERSHIP • !r REDEVELORVlEW AGENlCY OF r OF RNMUIM BEACH, A PUBLIC BODY, CORPORATE AND POLITIC RECORDED: OCTIOBERr : is NO. 98-669841, OFFICIAL RECORDS. 8. A DEED OF TRUST TO SECURE AN INDEMEDNE S . Am10La1TT: $800, 000.00 TRUSTOR: BRIDGES M,,=ICA SHER LANE, L.P., A CALIFORNIA LIMITED PARMIERSHI P TRUSTEE: ORA.Nt � CCA.ST TITLE COMPANY, A CALIFORNIA CORPORATION B�'E: I CLARY : CO ak-gG LONG Vj M AND TIM THI LAM = PRAM, AS TRUST MS OF THE PHAM TRUST UNDER A TRUST ACTT DA= MAY 20, 1987 CAT ED: OCMBER 1, 1998 RE -CORDED: OCICBER 2, 1998 AS IIZMUME�Tr NO. 98-669843 OF OFFICIAL RECORDS 9. A SUBORDDEI AT D DEED OF TRUST WITH ASSIC24,1ETT OF RENTS TO SECURE AN INDE BTEU ESS OF ANCUNr: $1,200,734.00 TRUSTOR : THE BRI=-- AMUU CA SHER LANE, L.P., A CALIFORNIA LIMITED PARINTE - P TRUSTEE: RE DEVE1DIETwENi ' AGENCY OF HLMMMCN BEACH, A CALIFORNIA CIORFORATION BEIN%:rICIARY: REDEVELOPM�T AGENCY OF THE CITY OF BEACH, A PUBLIC BODY, CORPORATE AND POLITIC DATI ED: AUG= 31, 1996 RECORDED: OCTOBER 2, 1998 AS INSTRU!+MN NO. 98-669844, OFFICIAL RE7CURDS SAID DEW OF TRUST BY ITS TERMS IS MADE SUBJECT TO RE DEED OF TRUST H�EDqBEFORE MENTIONED. 10. A FIlQNCIsVG 9MT`EZ,= RECORDED OCTOBER 2, 1998 AS INSTRUM= NO. 98-669845, OFFICIAL RECORDS. DATED: OCIOBER 1, 1998 D=TOR: THEE BRIDGES XIERICA SHM LANE, L.P. SECURED PARTY : CO DANG LjJNG PRAM AND IVW THI LAM BUT PRAM 1-. A FINA�'CT�TG STATII�`T RRDID OCTOBER 2, 1998 AS INSTRLA-fENT No. 19980669846, OFFICIAL RECORDS. DATED: NOT SHOW DE:= IOR : THE BRI DMS AMETtI CA SHER LANE, L.P. SECURED PARTY: CO DA. G I.I. M PHAM AND THUY THI LAM BUI PRAM 12. A FINANCIl1G STAM01-1 PECORDED OCTOBER 2, 1998 AS INSTRUMENT' NO. 19-080669847, OFFIC_T.AL RECORDS. PAT- : NOT S7ro N DE3IOR: Tim YRIDGES AMERICA SHER LANE, L.P. C- r? a?T;n DW&' J • (> 1 ' tijtC`LL.0 AM AND -M lY 'Li-iT LAM Pi TT PRAM Council/Agency Meeting Held: 2 ,11 ^ Oo Deferred/Continued to: A-- App;oved ❑ Conditional) Approved ❑ Denied tp.1-d4yjtler nature Council Meeting Date: 7/17/00 Department ID Number. 00-31 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION - SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS Cy- - SUBMITTED BY: RAY SILVER, Executive Director Q,y , PREPARED BY: DAVID BIGGS, Director of Economic Development � n SUBJECT: Approve Appropriation of HOME Funds in the Amount of $199,734 for Sher Lane/Parkside Lane Affordable Housing Projecl Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: The Redevelopment Agency adopted Resolution Number 290 on August 31, 1998 and concurrently entered into an Owner Participation Agreement (OPA) with Bridges America Sher Lane, L P. for the acquisition and rehabilitation of a 66 unit apartment complex at 16112 Sher Lane and 16121 Parkside Lane. This project was approved at a total cost of $1,200,734 to be paid from Redevelopment Agency Housing Set Aside funds and HOME Investment Partnership Program funds. The Agency action authorizing this project noted that HOME funds would be committed at an appropriate date in the future in an amount not to exceed $199,734. Bridges America Sher Lane, L P. is ready to commence rehabilitation work to be paid with HOME funds_ This request seeks approval to appropriate up to $199,734 of HOME funds for this purpose. Funding Source: Federal HOME Investment Partnership Program Funds from existing annual grant. Recommended Action: 1. Appropriate $199,734 of federal HOME Investment Partnership Program funds as per the Agency's OPA with Bridges America Sher Lane, L.P. for the rehabilitation of 16112 Sher Lane and 16121 Parkside Lane_ Alternative Actions): Do not approve the expenditure of HOME funds and modify the terms of the Agency's agreement with Bridges America Sher Lane, L.P. Analysis: On August 31, 2000, the Redevelopment Agency and Bridges America Sher Lane, L.P. entered into an Owner Participation Agreement (OPA) for the acquisition and rehabilitation of a 66 unit apartment complex at 16112 Sher Lane and 16121 Parkside Lane. REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 7117/00 DEPARTMENT ID NUMBER: 00-31 The total cost for this project was approved at $1,200,734, of which $1,001,000 would come from Redevelopment Agency Housing Set Aside funds, and $199,734 would come from HOME Investment Partnership Program funds. The Agency directed staff to use Set Aside funds for property acquisition and the first phase of rehabilitation. After Set Aside funds were fully expended, HOME funds were to be appropriated to pay for remaining rehabilitation work. As of this date, the following has been spent for acquisition and rehabilitation using Set Aside funds- $844,531.10 Set Aside funds spent for site acquisition $155,081.55 Set Aside funds spent to date for rehabilitation $999,612.62 TOTAL SPENT AS OF 7/17/00 There is currently $1,387.35 of remaining Set Aside funds and $199,734 of unappropriated HOME funds required to complete this project_ This request seeks approval to appropriate up to $199,734 of HOME funds for this purpose. HOME funds are provided to the City as a grant on an annual basis. After the above HOME funds are appropriated and all rehabilitation work is completed, the final project budget will be as follows: $844,531.10 Set Aside funds spent for site acquisition $156,468.90 Set Aside funds spent for rehabilitation $1,001,000.00 Subtotal of Set Aside funds spent $199,734.00 HOME funds spent for rehabilitation 1,2,00 734.00 TOTAL EXPENDITURES In return for the above Agency assistance, Bridges America Sher Lane, L.P. agreed to maintain income and affordability restrictions on the property for 30 years. According to the agreement, 33 units will be restricted to and maintained affordable for very low-income households (those earning less than 50% of the area median income). The remaining 33 units will be restricted to and maintained affordable for moderate -income households (those earning less than 110% of the area median income). Because this site is located outside of the Agency's Project Area, 33 affordable units may be counted towards fulfilling the Agency's affordable housing production requirements. All 66 units are eligible to be counted toward the Agency's replacement housing obligations. Environmental Status: Not Applicable RCA for HOME funds -2- 7/6/00 8:19 AM REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 7/17/00 DEPARTMENT ID NUMBER: 00-31 Attachment(s): 1 RAA from August 31, 1998 approving the OPA and Agency Resolution No. 290 for the Sher LanelParkside Lane affordable housing project 2. OPA between the Agency and Bridges America Sher Lane, L-P_ for the Sher LanelParkside Lane affordable housing project 3. Agency Resolution No_ 290 authorzing the Sher LanelParkside Lane affordable housing project RCA Author- HOLTZ (5901) RCA for HOME funds -3- 716100 8:19 AM RAA from August 31, 1998 Approving the Owner Participation Agreement and Agency Resolution Number 290 for the Sher Lane/Parkside Lane Affordable Housing Project ATTACHMENT # 1 .i nArl Aeulx Council/Agency Meeting Held: �/ `7 6 erred/Continued to= Approved, ` O Con (y ApKovgd, 14 Denied Clju� &f�) Z4 cn/ City Clerk's Signature Council Meeting Date: August 31, 1998 I Department ID Number- ED 98-38 1 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY - MEMBERS c SUBMITTED BY: RAY SILVER, City Administrator/Executive Director6l4z� • 0 ---cC PREPARED BY: DAVID C. BIGGS, Economic Development Director > SUBJECT: Approve Loan Agreement With Bridges America For The - Acquisition and Rehabilitation of 16112 Sher Lane & 1612-1 Parkside Lane �e,, A , o2 y0 Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: On August 3, 1998, the Agency approved conceptual deal points for the acquisition of Sher Lane and directed that a loan agreement be drafted. A loan agreement between the Redevelopment Agency and Bridges America is submitted for approval. The agreement provides up to $1,001,000 in redevelopment housing set aside for the acquisition and rehabilitation of a sixty-six (66) unit project at 16112 Sher Lane & 16121 Parkside Lane. Additional HOME funds in the amount of $200,122 will be committed to the project at a later date for rehabilitation costs. Funding Source: Budgeted funds in Account No. E-TX-ED-968-6-10-00 and Unbudgeted Housing Set Aside Funds. Recommended Action: Motion to: 1. Adopt Redevelopment Agency Resolution No. between the Redevelopment Agency and Bridges America for the acquisition and rehabilitation of 16112 Sher Lane and 16121 Parkside Lane. 2. Approve an Owner Participation Agreement between the Redevelopment Agency and Bridges America and authorize execution of the agreement and all attachments by the Chairperson and Agency Clerk. 3 Waive the City's insurance requirements for purposes of approving the Agency loan agreement only. Direct staff to ensure that the minimum insurance requirements are met by Bridges America by the start of rehabilitation activities. Z% REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 4. Authorize the transfer of Agency housing funds in the amount necessary to Orange Coast Title Company (Escrow #102518-TA) to effect the closing of the acquisition escrow. Alternative Actions : Do not approve the loan agreement, or modify the proposed terms and conditions. Analysis: For many months, staff and Bridges America (Bridges) have been negotiating over Agency financial assistance for the acquisition and rehabilitation of a sixty-six unit rental property located at 16112 Sher Lane and 16121 Parkside Lane. Staff and Bridges have concluded negotiations (a complete outline of deal points for both agreements is included as Attachment No. 1) and have agreed to the following terms: Redevelopment Agency Responsibilities The Agency will provide $1,000,612 in redevelopment housing set aside funds and up to S200,122 in HOME Investment Partnership funds as a loan to Bridges America (Bridges). These funds will be used to acquire and rehabilitate a sixty- six (66) unit rental property located at 16112 Sher Lane and 16121 Parkside Lane_ • The HOME funds will be used exclusively for rehabilitation costs and will be administered through a separate agreement. Developer Responsibilities • All sixty-six (66) units will be subject to income and affordability restrictions, which can be defined as follows: Thirty three (33) units must be rented to median income tenants. The maximum rent can not exceed the standard established by California Health and Safety code Section 50053, and the required unit mix is as follows: • Seventeen (17) one bedroom units, and; • Sixteen (16) two bedroom units. Twenty-two (22) units must be rented to very low income tenants. The maximum rent can not exceed the standard established by California Health and Safety code Section 50053, and the required unit mix is as follows: • Sixteen (16) one bedroom units, and; • Six (6) two bedroom units. Eleven (11) units must be rented to very low income tenants based on HOME program regulations and at no time will the rents for any unit exceed the "low" HOME rent as defined by HUD. All eleven units will be two bedroom units. RAASHER1 -2- 08128198 3:52 PM REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 • Bridges agrees to guarantee the amount of capital reserves that it shows on the final approved pro forma that is to be submitted to the Redevelopment Agency. • Beginning in the third year of the agreement, and continuing annually through the thirtieth year, Bridges will forward the proceeds of a residual receipts account to the Redevelopment Agency as a means of repayment of the redevelopment set aside funds. The minimum amount of the annual repayment will be fifty percent (50%) of the available cash flow. The remaining fifty percent (50%) will be used for a Capital reserve account until said account reaches an amount equal to an amount determined by the Agency and Bridges to be appropriate. After the Capital Account has reached the agreed balance, one hundred percent (100%) of the available net cash flow will be used for repayment. • The Agency Loan Note shall not bear interest except from and after a default. That potion of the principal amount of the Agency Loan Note will be converted from a loan to a grant to Bridges in the following manner: On the first anniversary after approval of the Agency Loan Note, provided that the Note has not been accelerated and all amounts due and payable, and Bridges is not in default, approximately three and three quarter percent (3.333%) of the original loan amount shall automatically convert from principal under the Agency Loan Note to a grant to Bridges. Project Description The proposed project consists of a sixty-six unit building located on adjacent parcels Together, the property was appraised at $4.5 million in January of 1998. The project is located south of Edinger Avenue, between Sher Lane and Parkside Lane. (see Attachment No. 2). There are 34 one bedroom and 32 two bedroom units. The units are 725 square feet and 900 square feet respectively. Rents for the units are as follows: �. -Unit'Sizea"'' 1 `= : - Incom Projected Rent . One Bedroom Very Low $658 Two Bedroom Very Low $740 One Bedroom Moderate $695 Two Bedroom Moderate $825 With the income restrictions proposed by the Agency ranging from very low income (50% of median income) to moderate income (110% of median income), the project will be mixed income_ Because the properties are located outside the redevelopment area, the Agency will be able to count thirty-three of the very low income units toward its production RAA5HER1 -3- 08128198 3.52 PM REQUEST FOR CITY COUNCILIREDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 housing requirements. The balance of the units can be counted toward any replacement housing obligations the Agency will incur through the Waterfront development. Redevelopment Agencies are permitted to assist affordable housing projects outside of project areas if proper legislative findings are made. City Council Resolution No 6026 and Agency Resolution 174, adopted on June 26, 1989, give the required authorization. A minimum of $350,000 in rehabilitation is needed, as there has been deferred maintenance on both properties. Agency staff is working with Bridges to refine the cost estimates and will continue to work closely throughout the rehab process. Bridges America Bridges America is a Houston -based nonprofit that was formed to improve the distribution of food stuffs to Third World countries, primarily Haiti. Bridges also distributes food in the Houston area on a weekly basis to needy families. Bridges has a local affiliate in Fountain Valley. In the last few years, Bridges has expanded its mission to include the development of affordable housing. More information is included as Attachment No. 3_ In 1996, Bridges acquired a troubled eighty unit apartment project in Huntington Beach. Since that time, the property has vastly improved under the ownership and management of Bridges. Forty-two of the units are restricted for affordable rents by covenant by Holly- Seacliff developers who needed to fulfill affordable housing conditions placed on single family projects approved by the Planning Commission and City Council Bridges also has an acquisition and rehab project underway in the City of Corona. Further, Bridges has entered discussions with the City of Santa Ana over possible affordable housing projects. While the Agency has focused on assisting nonprofit developers acquire and rehab small properties in the Oakview redevelopment project subarea, this project offers an opportunity to meet Agency housing requirements on a larger scale and in more diverse areas of the city. On July 15, 1998, the Council's Economic Development Committee (EDC) heard a presentation on the project by Agency staff and Bridges America. The EDC directed staff to move forward with the project to the full Council (Agency). On August 3, 1998, the Agency directed staff to move forward with the project based on the conceptual dealpoints and to return to the next available meeting with a loan agreement. The Agency's involvement with this project is consistent with the City Council's established goal of providing for a diverse housing stock throughout the community (City Goal #7). RAASHERI -4- 08128/98 3-52 PM IV REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: August 31, 1998 DEPARTMENT ID NUMBER: ED 98-38 Environmental Status: Exempt under the California Environmental Quality Act (CEQA) Attach ment(-%- 1. Agency Resolu�� Loan Agreement No 2. Keyser Marston Associates Report 3. August 3, 1998 Approval Action 4. Location Map 5. Bridges America Backqround Information RCA Author= G. Brown, ext. 8831 RAASHERI -5- 08128198 3:52 PM Owner Participation Agreement Between the Agency and Bridges America Sher Lane L.P. for the Sher Lane/Parkside Lane Affordable Housing Project ATTACHMENT #2 OWNER PARTICIPA"I'ION AGREEMENT By and BetNiveen REDEVELOPMENT AGENCY OF THE CITY OF HUN'FPgGTON BEACH, a public body, corporate and politic and THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership OWNER PARTICIPATION AGREEMENT By and Between REDEVELOPI% ENT AGENCY OF THE CITY OF HUNT[NGTON BEACH, a public body, corporate and politic and THE BRIDGES AMERICA SHER LANE, L .P., a California limited partnership TABLE OF CONTENTS Page SECTION I. DEFINITIONS SECTION 2. SUBJECT OF THIS AGREEMENT .... . ..... .. .. ... .......... . . ............. 4 2.1 . . ................. Purpose of the Agreement .................. ..... . . .....____.................4 4 2.2 The Redevelopment Plan 5 23 Participant ............. .............................................. . ..... .. . .......... 5 24 Prohibition Against Transfers --------------------------------- ------ .._._......5 SECTION 3. F][NANCING AND ACQUISITION OF THE SITE .................... .. .. 6 3.1 Ownership of the Site ............................................................... 6 3.2 Agency Financial Assistance .................................................. .. . 7 3-3 Form of Agency Financial Assistance-, Purpose of Note and Security....- ... ... .............................................................. .. .... 7 3.4 Escrow ..... ... .... . ............................................................... .. . . 7 3.5 Agency's Conditions to Closing .......................................... .. .. . 8 3 6 Participant's Conditions to Closing ..... .. .. . .. . ...... ... . . . .......... 9 3.7 Broker's Fees ................................. .... .. . . . . ........ ... .......... 10 3.8 Subordination Agreements ............................ 10 3.9 Agency Rehabilitation Assistance .. .. ... . . ...... . . ............. 11 SECTION 4. DEVELOPMENT OF TITE SITE .... .... . .. .. .. .. ...... . .... . ....... 12 4.1 General . .... ........ . ............................................................. 12 4.2 Construction of the Project ................................... .............. .. .. 12 4.3 Insurance ............................................................ ------------ - -- — 14 44 Indemnification ...... ....... --- - --- ------ - - ------------ 14 4-5 Hazardous Substances ................... . .. . ... . . .......... .............. 15 4.6 Security Financing; Right of Holders ................................ . .. ... 15 4.7 Release of Construction Covenants .................. .................. .. ... 16 4.8 Mechanics Liens, Stop Notices, and Notices of Completion._ - - 16 SECTION 5. USE OF THE SITE ........................................ .. . .... . ......................... 17 5.1 No Inconsistent Uses .. .................. . .. _ ............................. .... 17 5.2 Regulatory Agreement ...................... .. .. . .. ............ . . ............ 17 5.3 Relocation ...................................................................... . .. . ... 17 5.4 Maintenance of the Site .................................................. . .... .. 18 5.5 Nondiscrimination . ......... .. ..... ...... .. .. ....... ......... ............... 18 5.6 Form of Nondiscrimination and Nonsegregation Clauses......,_.__ 18 5.7 Effect and Duration of Covenants ................ . . . ......... - --------- 19 5.8 Capital Reserves .................. .. .... . .. . ... ... .. . ......................... 19 5.9 Payment of Portion of Residual Receipts ............. . ............ .. .... 19 5.10 Financial Statements— .................................. 20 SF-98Agree.Sher-3 8a5M - #2 SECTION 6. DEFAULTS AND REMEDIES .... . .... .................................... .. ..... 20 6.1 Participant Defaults ......... ..... ...... .. . .......................... ............. 20 62 Agency Defaults.-------- •- • .. . .... .............................. .............. 20 6.3 Notice of Default -------------------------------- --------- ................... .... 21 6.4 Agency's Remedies ............................ ......... ..... ................... 21 6.5 Participant's Remedies .. ..... ........................... • .. .................. 21 66 Rights and Remedies are Cumulative ........................................ 21 SECTION 7. GENERAL PROVISIONS ........................ ........ .... ..... ................... 21 7.1 Governing Law .................... . ....... ................. .. .. ................... 21 72 Attorneys' Fees ............. .. ..... . ................................................ 21 7.3 Notices, Demands, and Communications Between the Parties.......... — .. ..... ........................................ .. ................. 21 7-4 Acceptance of Service of Process ....................... .. .................... 22 7.5 Conflicts of Interest .... .............................................. .. ............ 22 7.6 Titles and Captions ..... .. .............................................. .. .......... 22 7.7 Gender ............................................. .. .................................... . 22 7-8 Modifications .................................................................. ..... .... 22 79 Merger of Prior Agreements and Understandings .................. .... 23 7 10 No Third Parties Benefited ... ............. .. .. .... .. . .................... 23 7.11 Assurances to Act in Good Faith ....... ................ ...................... 23 7.12 Warranty Against Payment of Consideration for Agreement ...... 23 713 Nonliability of Agency Officials and Employees ............ .. .. .. ... 23 7.14 Interpretation .................................. . .................................. . 23 7.15 Counterparts ..................................................... ............... .. ..... 23 7.16 Severability ............................................................................... . 23 7.17 Extension of Times of Performance ... .. .. ....... ..... .. .. ............ 23 7.18 Inspection of Books and Records .... ... .. .. .... .. .. ...................... 24 7.19 Waivers ...................................................................................... 24 SECTION 8. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE................................................................. .................. 24 ATTACHMENTS EXHIBIT "A" LEGAL DESCRIPTION OF SITE EXHIBIT "B" SITE MAP EXHIBIT "C" SCOPE OF DEVELOPMENT EXHIBIT "D" SCHEDULE OF PERFORMANCE EXHIBIT "E" RELEASE OF CONSTRUCTION COVENANTS SF-99A&rcc Sher-3 82 5." - ff2 EXHIBIT "F" PROMISSORY NOTE EXHIBIT "G" SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED EXHIBIT "H" FORM OF SUBORDINATION AGREEMENT EXHIBIT "I" REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS EXHIBIT "J" PROJECT BUDGET/PRO FORMA SF-99AV cc_Sha.3 sn_ 519N - k2 WO OWNER PARTICIPATION AGREEMENT THIS OWNER PARTICIPATION AGREEMENT ("Agreement") is entered into as of the 31' day of August, 1998 ("Effective Date"), by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and THE BRIDGES AMERICA SHER LANE, L.P., a California limited partnership ("Participant"). RECITALS A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (California Health and Safety Code Section 33000 et sett B_ Participant has opened an escrow to acquire the "Site" (as such term is defined herein) from the Pham Trust ("Pham Trust") and intends to develop the "Project" (as such term is defined herein) on the Site in accordance with the terms of this Agreement- C. Agency desires to meet its affordable housing goals pursuant to the California Community Redevelopment Law by assisting Participant in the acquisition of the Site to facilitate Participant's rehabilitation -in -place of an existing apartment complex on the Site with the units, after rehabilitation, subject to the terms of this Agreement, rented to tenants whose household incomes do not exceed very low income, low income, and median income as defined by California law. Agency's assistance shall be in the form of a self-liquidating loan in the amount of ONE MILLION SIX HUNDRED TWELVE- DOLLARS ($1,000,612) to assist Participant in meeting the cost of acquisition of the Site and rehabilitation of the apartment complex, and additional assistance in the form of a self-liquidating Ioan of Two Hundred Thousand One Hundred Twenty-two Dollars ($200,122.00) through the HOME Investment Partnership Program, or if such HOME Funds are not timely provided as set forth herein, with additional Agency assistance in that same amount as provided herein. The total assistance shall be One Million Two Hundred Thousand Seven Hundred Thirty-four Dollars ($1,200,734.00). 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 SECTION 1. DEFINITIONS The following terms, as used in this Agreement, shall have the meanings given unless expressly provided to the contrary: SF•98 gec Shcr-1 0301198 - y3 The term "Agency" shall mean the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to, the rights, powers, and responsibilities of Agency_ The term "Agency Deed of Trust" shall mean the Subordinated Deed of Trust with attached hereto as Exhibit "G" The term "Agency Loan" shall mean collectively, (i) the Agency's self-liquidating loan to Participant in the amount of One Million Six Hundred Twelve Dollars ($1,000,612.00), and (ii) the additional assistance from either HOME Funds or additional Agency Low and Moderate Income Housing Funds in the amount of Two Hundred Thousand One Hundred Twenty -Two Dollars ($200,122.00), as evidenced by the Note in the total amount of One Million Two Hundred Thousand Seven Hundred Thirty -Four Dollars (S1,200,734.00), and secured by the Agency Deed of Trust. The term "Agreement" or any reference to this "Agreement" shall mean this Owner Participation Agreement executed by and between Agency and Participant, including all exhibits attached hereto, which exhibits are incorporated herein by this reference and all other documents incorporated herein by reference. The term "Approved Project Plans and Permits" shall mean all of the plans, permits, and approvals required for the Project, as approved by the Agency and/or the City including, but not limited to, preliminary and final drawings (final drawings shall be in sufficient detail to obtain a building permit), site plans, building plans and elevations, grading plans, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications that City and Agency customarily require for such a Project, and including all required approvals and findings pursuant the California Environmental Quality Act of 1970, as amended, and regulations promulgated thereunder ("CEQA"), and, if applicable, the National Environmental Policy Act of 1969, as amended, and regulations promulgated thereunder. The term "City" shall mean the City of Huntington Beach, a municipal corporation, having its offices at 2000 Main Street, Huntington Beach, CA 92648. The term "Construction/Permanent Lender" shall mean one or more lenders of Participant's choice providing funds for the Participant's rehabilitation of the Units, including any replacement or permanent lender that replaces the construction Iender in an amount not to exceed Thirty-five Thousand Dollars ($35,000.00)_ The term "Days" shall mean calendar days and the statement of any time period herein shall be calendar days and not working days, unless otherwise specified. The term "Effective Date" shall mean the date the Agency approves this Agreement, which date shall be inserted into the preamble of this Agreement Sl-•9SAg,:,• Shcr-3-1 2 09131,98 -3 The term "Eligible "Tenant" shall mean any person entitled to rent a Unit as set forth in the Regulatory Agreemerit- The term "Escrow" shall mean that certain escrow with Orange Coast Title Company, Escrow Division, which has been established to convey the Site from the Pham Trust to Participant, and into which Agency shall deposit the portion of the Agency Loan funds described in Section 3.2 in accordance with the terms of this Agreement_ The term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of the Agency, or authorized designee_ Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or an authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved under California law wholly for Agency Board determination_ The term "First Deed of Trust" shall mean the deed of trust recorded in first position at close of escrow as security for the loan obtained by Participant from a lender of Participant's choice in an amount not to exceed Three Million Four Hundred Thousand Dollars ($3,400,000). The term "Force Majeure" shall mean any war; insurrection, strike; lock -out; labor dispute; riot; flood, earthquake; fire- casualty; Act of God; act of the public enemy; epidemic; quarantine; restriction; freight embargo; unavoidable lack` of transportation, governmental restriction; unusually severe weather, inability to secure necessary labor, materials. or tools; delay of any contractor, subcontractor or supplier, economic or market conditions; lack of tenant commitments or tenant changes; inability to secure satisfactory financing; act of the other party including act or failure to act of City or any other public or governmental agency or entity (except that any act or failure to act of City or Agency shall not excuse performance by Agency); or any other cause beyond the control or without the fault of the party claiming an extension of time to perform. The term "Grant Deed" shall mean that certain Grant Deed that conveys the Site from the current owner, the Pham Trust, to Participant. The term "Note" shall mean that certain Promissory Note Secured by Subordinated Deed of Trust attached hereto as Exhibit "F". The term "Participant" shall mean THE BRIDGES AMERICA SHE-R LANE, L.P., a California limited partnership, whose address is 18837 Brookhurst Street, Suite 303, Fountain Valley, CA 92708. The Term "Project" shall mean generally the rehabilitation of the existing apartment complex on the Site and the subsequent rental of the Units therein to Eligible Tenants, pursuant to the procedures set forth herein and more particularlyy-described in the Scope of Development. The term "Project BudgetlPro Forma" shall mean the sources and uses of funds for acquisition of the Site and the development of the Project as set forth in Exhibit " 3". SF-9s;Agce si,.r-l-I ON131r9R.3 The term "Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions attached hereto as Exhibit 1 The term "Rehabilitation Account" shall have the meaning ascribed in Section 3.9 The term "Release of Construction Covenants" shall mean that release attached hereto as Exhibit "E" issued by Agency to Participant pursuant to the provisions of Section 4.7 below. The term "Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit "D" setting forth the times upon which performance by the parties under this Agreement is due The term "Scope of Development" shall mean that certain exhibit attached hereto as Exhibit "C". The term "Second Deed of Trust" shall mean the deed of trust recorded in second position at close of escrow as security for the loan obtained by Participant from the Pham Trust as seller financing in an amount not to exceed Light Hundred Thousand Dollars ($800,000). The term "Site" shall mean that certain real property located in the City of Huntington Beach, County of Orange, State of California commonly known as 16112 Sher Lane, Huntington Beach, California, and legally described in Exhibit "A" and depicted on the Site Map The term "Site Map" shall mean the map attached hereto as Exhibit "B" depicting the location of the Site. The term "Subordination Agreement" shall mean the form of Subordination Agreement attached hereto as Exhibit "H" The term "Units" shall mean the sixty-six (66) dwelling units comprising the Project and subject to rent restrictions as set forth in the Regulatory Agreement_ SECTION 2. SUBJECT.' OF THIS AGREEMENT. 2.1 Purpose of the Agreement (a) The purpose of this Agreement is to implement the Community Redevelopment Law by providing a loan (the "Agency Loan") to assist Participant to pay a portion of the Project costs, in an amount not to exceed One Million Two Hundred Thousand Seven Hundred Thirty -Four Dollars ($1,200,734.00), as evidenced by the Note secured by the Agency Deed of Trust, which Agency Loan is composed of (i) One Million Six Hundred Twelve Dollars ($1,000,612) in funds from the Agency's Low and .Moderate Income Housing Fund, which funds are not federal funds or the proceeds of a tax-exempt bond issue, and "Two Hundred Thousand One Hundred Twenty-two Dollars ($200,122 00) [pursuant to a separate contract with City] in HOME SF-9S.aarc Sher-3A 4 OS/31-9S .3 Program rehabilitation funds or that same amount in additional Agency Low and Moderate Income Housing Funds as provided in Section 3.9. (b) This Agreement is intended to facilitate Participant's acquisition of the Site and rehabilitation of the existing apartment complex located thereon for rental to very low and low income tenants_ 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 has been undertaken and is being assisted- (c) The Project will be used and operated for not less than thirty (30) years as mixed income rental housing, with not less than fifty percent (50%) of the apartments restricted to occupancy to Eligible Very Low Income Tenants at an Affordable Rent, and the remainder restricted to occupancy to Eligible Special Median Income Tenants (as those terms are defined in the Regulatory Agreement)_ 2 2 The Redevelopment Plan_ This Agreement is made in accordance with the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project") which was approved by adoption of Ordinance No 3343 on December 16, 1996, and which merged together four different, previously approved project areas. The Site is located outside of the Merged Redevelopment Project_ Agency intends this Agreement to meet its obligations pursuant to Health and Safety Code Sections 33413, 33334 2 and 33413(b)(2)(A)(1i). 2.3 Participant The Participant is The Bridges America Sher Lane, L.P., a California limited partnership, whose address is 18837 Brookhurst Street, Suite 303, Fountain Valley, CA 92708. 2.4 Prohibition Against Transfers. (a) The qualifications and identity of the Participant are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Participant_ No voluntary or involuntary successor in interest of the Participant shall acquire any rights or powers under this Agreement except as expressly set forth herein (b) The Participant shall not assign all or any part of this Agreement without the prior written approval of the Agency. The Agency agrees to reasonably give such approval if (1) the change is to a limited partnership formed for financing the Project, in which the original Participant or its general partner is the managing general partner, or possesses not less than a 50% interest in the managing general partner, and has control over the management of the partnership; and (2) if in the reasonable determination of the Agency, the proposed reconstituted Participant is comparable in all material respects (including experience, character and financial capability) to the Participant. Any such change (or assignment of this Agreement in connection therewith) shall be by instruments satisfactory to the Executive Director (or his designee), and be subject to the approval by the Executive Director (or his designee) of evidence of the proposed assignee's qualifications to meet the obligations of the Participant under this Agreement SF•98Agee Shcr-3-1 5 08131-`9X •3 (c) For the reasons cited above, the Participant represents and agrees for itself and any successor in interest that without the prior written approval of the Agency, there shall be no significant change in -the ownership of the Participant or in the relative proportions thereof, or with respect to the identity of the parties in control of the Participant or the degree thereof, by any method or means. (d) The Participant shall promptly notify the Agency of any and all changes whatsoever in the identity of the parties in control of the Participant or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information_ This Agreement may be terminated by the Agency and the Agency may exercise its remedies pursuant to the Agency Note and Agency Deed of Trust, if there is any significant change (voluntary or involuntary) in membership, management or control, of the Participant (other than such changes occasioned by the death or incapacity of any individual) (e) Participant shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Site (referred to hereinafter as a "Transfer"), without prior written approval of the Agency, except as expressly permitted by this Agreement. Consent to a Transfer shall not result in acceleration of the Agency Note Consent to one such Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Agency, to fulfill the obligations undertaken in this Agreement by the Participant. Any such proposed transferee, by instrument in writing satisfactory to the Agency and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Participant under this Agreement and agree to be subject to all conditions and restrictions applicable to the Participant in this Agreement. There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such Transfer, and if approved by the Agency its approval shall be indicated to the Participant in writing- (f) In the absence of specific written agreement by the Agency, no unauthorized Transfer, or approval thereof by the Agency, shall be deemed to relieve the Participant or any other party from any obligations under this Agreement (g) The provisions of this Section 2.4 shall be of no force or effect as of the expiration of the Regulatory Agreement. SECTION 3. FLNANCING AND ACQUISITION OF THE SITE. 3.1 Ownership of the Site. As of the Effective Date of this Agreement, Participant is in escrow to acquire the Site from the Pham 1-rust and as such Participant qualifies as an "owner - participant" within the meaning of the Community Redevelopment Law (Health & Safety Code §33000_et .wq.) Participant's financing of the acquisition of the Site includes Participant's equity, financing secured by the First Deed of Trust, seller financing secured by the Second Deed of Trust, and use of a portion of the Agency Loan. SF-98Agree Sher-3-1 6 Q801/98 -3 3.2 Agency Financial Assistance. "rhe Agency, in accordance with the terms of this Agreement, shall provide to Participant the Agency Loan. Upon satisfaction of all conditions precedent (or waiver by Agency) to Agency's obligation to disburse the Agency Loan under this Agreement, Agency shall deposit approximately Seven Hundred Thirty -Five Thousand Dollars ($735,000.00) bf the Agency Loan funds into Escrow for disbursement to Participant at Close of Escrow (Participant shall provide Agency's Executive Director with notice of the exact amount Agency is to deposit), with the remainder to be disbursed to pay for the costs of rehabilitation of the Site- 3-3 Form of Agency Financial Assistance, Purpose of Note and -Security. The parties hereto expressly acknowledge that the Agency Loan funds to be provided to Participant under this Agreement is intended to be a self-liquidating loan, assuming Participant's performance of its obligations hereunder_ In the event Participant is in material default of any of its obligations hereunder, including its obligations under the Regulatory Agreement, Agency's sole and exclusive remedy shall be to foreclose under the Agency Deed of Trust. 3.4 Escrow. This Agreement, once deposited in Escrow, shall constitute joint escrow instructions of Agency and Participant The Escrow agent is hereby empowered to act under the Agreement and upon indicating its acceptance in writing to Agency and Participant within five (5) days after receipt of this Agreement, provided, however, that any undertaking by the Escrow agent of any of the acts or services set forth in this Agreement shall constitute acceptance of the obligation to perform as Escrow agent under this Agreement. Any amendment to the Escrow instructions contained herein shall be in writing and signed by both Agency and Participant_ (a) Qlosing Date. On or before the date established in the Schedule of Performance, the parties shall satisfy the conditions described in Sections 3 5 and 3.6 and complete the Close of Escrow. If, for any reason, the Close of Escrow has not occurred by the date provided therefor in the Schedule of Performance, either party may terminate this Agreement, by providing notice of termination to the other party. (b) Delivery -of Documents and Funds by Participant On or before twelve noon on the last business day prior to the scheduled Closing Date, Participant shall deposit or cause to be deposited with the Escrow agent the following: (i) the Grant Deed executed and acknowledged by the Pham Trust; 00 the Note, executed by Participant; the Agency Deed of Trust, including the Rider thereto, executed and acknowledged by Participant; (iv) the Regulatory Agreement, executed and acknowledged by Participant; and S17-98Aegee Sher-3-1 7 09,31"98 •3 (v) All funds, documents, and deposits Participant is required to deposit with Escrow agent in order to close the Escrow conveying the Site to Participant. (c) Delivery of Documents and Funds by Agency. On or before twelve noon on the last business day prior to the scheduled Closing Date, Agency shall deposit or cause to be deposited with the Escrow agent the following-. {i) the Agency Deed of Trust including the Rider thereto, executed and acknowledged by Agency; the Regulatory Agreement, executed and acknowledged by Participant-, and (iii) the portion of the Agency Loan funds described in Section 3.2_ (d) Recordation_ Escrow agent is directed, on the Closing Date, to record against the Site the following documents in the following order of priority: (i) the Grant Deed, (ii) the First Deed of Trust; (ill) the Second Deed of Trust; (iii) any deed of trust from the Construction/Permanent Lender, and (iv) the Agency Deed of Trust; (v) the Regulatory Agreement One or more Subordination Agreements, if required to effect the proper priority of the Agency Deed of Trust and Regulatory Agreement, shall be recorded at the direction of Participant in accordance with the terms of this Agreement- (e) Escrow A ent Duties_ The Escrow agent shall (i) record the documents as provided in subparagraph (d), and (ii) at Closing, deliver the original promissory note to Agency and a conformed copy of same to Participant, and upon recordation deliver to Agency the original of the Agency Deed of Trust and the Regulatory Agreement and a conformed copy of same to Participant (0 Interest Bearing Accounts. Escrow agent shall hold all funds received in an interest bearing account with the interest accrued paid at Closing to the party depositing such funds (g) Title Insurance. Escrow agent shall deliver to Agency at Closing a CLTA standard form owner's policy of title insurance in an amount not to exceed $1,200,734.00, issued by a title insurer acceptable to Agency, insuring in favor of Agency the priority of the Agency Deed of Trust and Regulatory Agreement in accordance with the priority established by this Agreement_ The cost of said policy shall be shared equally between the parties 3.5 - A.Rency s Conditions to Closin. Agency's obligations to deposit the portion of Agency Loan funds described in Section 3.2 in Escrow for disbursement to Participant at Closing shall be conditioned and contingent upon satisfaction, or Agency's waiver of each of the following conditions precedent (collectively, the "Agency's Conditions to Closing")- Sr-J$AVrr Si,rr-)-1 0S.91,99 .3 (a) Participant has deposited in escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow; (b) Escrow agent, at Closing, holds and will deliver to Agency the Note, Deed of Trust, Regulatory Agreement, and Title Insurance Policy. (c) Participant shall deliver evidence acceptable to the Agency Executive Director that Participant has obtained the insurance policies as required by Section 4.3 of this Agreement. (d) Participant shall deliver to the Agency a good standing certificate issued by the California Secretary of State's office indicating that Participant exists in good standing at the time of the proposed Close of Escrow. (e) The Agency shall determine that Participant is in full compliance with the terms and conditions of this Agreement and all documents and instruments referred to herein or executed by Participant in furtherance of this Agreement In the event any of the Agency's Conditions to Closing are not satisfied (or waived by Agency), Agency may cancel the Escrow and terminate this Agreement by delivering thirty (30) days prior written notice to Participant and the Escrow agent. Participant may nullify Agency's notice to terminate if, within such thirty (30),day period Participant (at no cost to Agency) cures any unsatisfied Agency's Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds deposited by Agency shall be returned to it with any accrued interest earned on such funds; (ii) Participant shall be responsible for any escrow canceilation fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder_ 3 5 Participant's Conditions to Closing Participant's obligations to close Escrow shall be conditioned and contingent upon satisfaction, or Participant's waiver of each of the following conditions precedent (collectively, the "Participant's Conditions to Closing"): (a) The Pham Trust have signed and acknowledged the Grant Deed and have deposited same in Escrow; (b) Participant has obtained the financing secured by the First Deed of Trust, the Second Deed of Trust, any such deed(s) of trust securing any financing from the Construction/Permanent Lender, and all documents and instruments related to same have been deposited in Escrow as required by the agreements and documents pertaining thereto, (c) Agency has deposited in escrow all df the funds and instruments required of it by this Agreement in order to close the Escrow, including but not limited to the portion of the Agency Loan funds described in Section 3 2, the Agency Deed of Trust, Regulatory Agreement, and such Subordination Agreements as may be required to effect the priority required by this Agreement; SF 98:\3« Sher-3-1 9 O XII 1198 -3 (d) All conditions to Closing set forth in (i) the agreements and any amendments thereto between Participant and the Pham Trust for conveyance of the Site, including as pertaining to the Second Deed of Trust; and (ii) agreements and financing documents pertaining to Participant's- financing of the acquisition of the Site, including as pertaining to the First Deed of Trust, financing by the Construction/Permanent Lender, have been satisfied (or waived by the appropriate party). In the event any of the Participant's Conditions to Closing are not satisfied (or waived by Participant), and provided Participant has fully performed its obligations hereunder, Participant may cancel the Escrow and terminate this Agreement by delivering thirty (30) days prior written notice to Agency and the Escrow agent_ Agency may nullify Participant's notice to terminate if, within such thirty (30) day period Agency (at no cost to Participant) cures any unsatisfied Participant's Conditions to Closing and notifies the Escrow agent of such cure In the event of termination pursuant to this Section, (1) the Escrow shall be cancelled and any funds deposited by Participant shall be returned to it with any accrued interest earned on such funds; (ii) Participant shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (ill) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder 3.7 Broker's Fees Participant and Agency shall 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. 3.8 Subordination Agreements- Pursuant to Section 33334.14 of the Health and Safety Code, Agency is permitted to subordinate the Agency Deed of Trust and the Regulatory Agreement to superior deed of trust and regulatory agreements, including but not limited to the First Deed of Trust, the Second Deed of Trust, and Construction/Permanent Lender's deed of trust, and such other and related documents as such lender(s) may require, if certain findings are made and certain written commitments are obtained_ In accordance with said Section, the Agency hereby finds that no economically feasible alternative method of financing the Project on substantially comparable terms and conditions .vithout subordination is reasonably available and the Agency has obtained written commitments to protect the Agency's investment in the event of a default. Therefore, the Agency hereby agrees to subordinate the Agency Deed of Trust and the Regulatory Agreement to the First Deed of Trust, Second Deed of Trust, the Deed(s) of Trust of the Construction/Permanent Lender, and such other and related documents as such lender(s) may require, not to exceed a total indebtedness of Four Million Two Hundred Thirty -Five Thousand Dollars ($4,235,000.00). Participant may apply to Agency to increase said indebtedness, which approval the Agency shall not unreasonably withhold. The priority of such deeds of trust shall be effected through the order of recordation of documents as set forth in Section 3 4(d). Such subordination agreement shall provide for: (i) A right of the Agency to cure a default on the First Deed of Trust, Second Deed of Trust, and Deed(s) of Trust of the Construction/Permanent Lender, (ii) A right of the Agency to negotiate with any lenders after notice of default from the lender, (iii) An agreement that if prior to foreclosure of any sr-99Agrce Sher-3-1 10 of said loans, the Agency takes title to the Site and cures the default on the loan, the tender will not exercise any right it may have to accelerate the loan by reason of the transfer of title to the Agency; and (iv) A right of the Agency to purchase the Site from the Participant at any time after a default on the loan. If a Subordination Agreement is required to effect the foregoing order of priority, such subordination agreement shall be generally in the form set forth as Exhibit "H If, from time to time and at one or more times, Participant chooses to refinance any loan secured by a deed of trust which is superior to the Agency Deed of Trust and Regulatory Agreement, Agency agrees to subordinate the lien of the Agency Deed of Trust to the refinancing lender's deed of trust under the same terms and conditions as set forth in the Subordination Agreement, on the condition that Participant's total indebtedness pursuant to the liens of the First Deed of Trust, Second Deed of Trust, and Construct ion/Permanent Deed of Trust shall not exceed, in the aggregate, the sum of Four Million Two Hundred Thirty -Five Thousand Dollars (S4,235,000.00). 3.9 Agency Rehabilitation Assistance. (a) Immediately upon the Close of Escrow, Agency shall set aside into a separately identifiable Agency account to be used exclusively for the rehabilitation of the Site pursuant to this Agreement (the "Rehabilitation Account") a portion of the Agency Loan equal to (i) One Million Six Hundred Twelve Dollars ($1,000,612.00), less (ii) the portion of such One Million Six Hundred Twelve Dollars (S 1,000612.00) that Agency deposited into Escrow pursuant to Section 3.2 [Agency and Participant anticipate the foregoing deposit into the Rehabilitation Account will be Two Hundred Sixty -Five Thousand Six Hundred Twelve Dollars ($265,612.00)]. Pursuant to subparagraph (c) below, Agency later shall deposit the HOME Program funds of Two Hundred Thousand One Hundred Twenty -Two Dollars ($200,122.00) into the Rehabilitation Account when City and Participant execute a HOME Program agreement. (b) Participant shall invoice Agency Executive Director the costs of rehabilitation as they are incurred, which invoices the Executive Director shall pay within ten (10) days of receipt_ In no event shall Agency pay rehabilitation costs in excess of Four Hundred Sixty- five Thousand Seven Hundred Thirty-four Dollars ($165,734.00) (c) City and Participant shall enter into an agreement for the provision of City assistance to the Project in the amount of Two Hundred Thousand One Hundred Twenty -Two Dollars ($200,122.00) from the United States Department of Housing and Urban Development ("HUD") HOME Investment Partnerships Program ("HOME Program") (42 U.S.0 §12741 er seq.) ("HOME Funds") by no later than October 31, 1998. City shall transfer such funds to Agency and Agency shall then deposit the HOME Funds into the Rehabilitation Account. Such HOME Funds shall be part of, and repaid through, the self-liquidating Agengy Loan. If such HOME Funds agreement is not timely executed, Agency shall deposit the same amount into the rehabilitation account from the Agency's Low and Moderate Income Housing Fund, and in such an instance the parties shall cause the eleven (11) HOME Units described in the Regulatory Agreement to be redesignated as Units for Eligible Very Low Income Tenants. (d) Within 90 days after the Agency issues the Release of Construction Covenants, Participant shall cause to be prepared and shall submit to the Agency for reasonable approval a cost certification (the "Cost Certification"), setting forth all Project Costs, certified by the .4.9X:%wee Sher-3-1 ] 1 0913]r98 -3 Chief Financial Officer of Participant In the event the actual total Project Costs, as certified by Participant and approved by Agency, are less than Five Million Three Hundred Thirty-five Thousand Seven Hundred Thirty-four Dollars ($5,335,734.00), the balance of the Agency Loan shall be reduced by the same amount, and the Agency and Participant will cause a reduced Agency Note, Deed of Trust and related instruments to be executed and recorded. SECTION 4. DEVELOPMENT OF T11E SITE. 4.1 General The Project shall consist of rehabilitation of an existing 66-unit apartment complex on the Site and the use of the Site as an affordable rental apartment complex in accordance with this Agreement and the Regulatory Agreement. 4.2 Construction of the Project. (a) Development. in Accordance with Approved Project Plans and Permits. Participant shall undertake the Project and rehabilitate the Site in accordance with this Agreement, the Scope of Development, and the Approved Project Plans and Permits and any changes thereto as may be subsequently approved in writing by both Participant and Agency and, if necessary, City_ As completed, the Project (a) shall comply with all applicable laws and ordinances of all governmental authorities, including, without limitation, all Federal Housing Quality Standards as set forth at Section 982.401 of Title 24 of the Code of Federal Regulations. All Units must be rehabilitated no later than eighteen (18) months from the close of escrow. (b) Agencx Approvals Participant will furnish to the Agency a list of proposed repairs and improvements to the Site prior to submittal of plans to the City The Agency will have the right to review and approve the list prior to the start of any rehabilitation work_ Participant shall provide to Agency an executed construction contract with a contract price that is consistent with the Project Budget. Upon request, the construction contract, together with all other contracts for services necessary to construct the Project shall be submitted to the Agcncy for approval The Agency shall approve the contracts if they are consistent with the Project Budget. Participant will furnish copies of all building permits for all items required to be permitted under the Huntington Beach Municipal Code, with proof of inspection by the Huntington Beach Building Department, where applicable. (c) Evolution of Project Plans_ On or before the date set forth in the Schedule of Performance, Participant shall submit to City, and shall use reasonable efforts to obtain approval of, the Approved Project Plans as may be required for the rehabilitation work, and Permits_ including City approval of, preliminary, and thereafter final drawings and specifications for development of the Site in accordance with the Scope of Development, and all in accordance with the City's requirements The term preliminary and final drawings shall be deemed to include site plans, building plans and elevations, grading plans, if applicable, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications as City and Agency customarily require for such a Project. Final SF-98,%gec Sher-3-1 12 08/3 f /99 -3 drawings will be in sufficient detail to obtain a building permit. Said plans, drawings and specifications shall be consistent with the Scope of Development and the various development approvals referenced hereinabove, except as such items may be amended by City (if applicable) and by mutual consent of Agency and Participant. Participant shall not be in default of this Agreement due to any delay of Agency or City processing any plans or permit applications submitted by Participant- (d) Other Governmental Permits. Participant shall, at its own expense and before commencement of construction or rehabilitation of any buildings, structures, or other work of improvement upon the Site, secure or cause to be secured any and all permits and approvals which may be required by any governmental agency affected by such construction, development, or work to be performed by Participant pursuant to the Scope of Development, including but not limited to, necessary building permits and all approvals required under the California Environmental Quality Act ("CEQA") In constructing and developing the Project, Participant shall comply with all applicable development standards in City's Municipal Code and shall comply with all building code, landscaping, signage, and parking requirements (except as may be permitted through approved variances and modifications)_ (e) Approyal_y Ageqa. The Agency shall approve or disapprove any submittal made by the Participant pursuant to this Agreement within ten (10) days after such submittal_ Any disapproval shall state in writing the reason for the disapproval and the changes which the Agency requests to be made_ After Participant resubmits the corrected submittal, Agency shall have an additional seven (7) days for the review of the resubmittal but if the Agency disapproves the resubmittal, then the cycle shall repeat, until the Agency's approval has been obtained_ (f) Agency Assistance_ So long as Participant is not in material default of any term or provision of this Agreement, Agency agrees to provide reasonable assistance to Participant, at no cost to Agency, in the processing of Participant's submittals required under this Agreement in order that Participant may obtain a final City action on such matters on or before the date set forth in the Schedule of Performance; provided that Agency does not warrant or represent that such approval shall be obtained- (g) Cost of Rehabilitation. Participant (with the assistance of the Agency Loan) shall bear all costs for the Project, including, but not limited to any and all costs for preparing or obtaining the Approved Plans and Permits, environmental rernediation, interim and permanent financing, broker's and leasing commissions, and fees or charges for development and building, except as specifically provided herein. (h) Project Budget. Participant shall develop the Project in accordance with the Project Budget/Pro Forma attached hereto as Exhibit "J"_ 0) Project Schedule. Participant shall commence and complete the construction of the Project within the times set forth in the Schedule of Performance. SJ'-98Ag1,:r Sher-3-1 1 j 0Sr31%9S -3 4.3 Insurance Participant shall procure and maintain, at its sole cost and expense, until the date that Agency issues or is required to issue the Release of Construction Covenants, the following policies of insurance - (a) Worker's Compensation Insurance. Pursuant to California Labor Code Section 1861, Participant acknowledges awareness of Section 3700 et seq of said code which requires every employer to be insured against liability for workers' compensation. Participant covenants that it will comply with such laws and provisions prior to commencing any work of construction or rehabilitation on the Site. Participant shall maintain such Workers' Compensation Insurance in an amount not less than One Hundred Thousand Dollars ($100,000) bodily injury, each occurrence, One Hundred Thousand Dollars ($100,000) bodily injury by disease, each employee, and Two Hundred Fifty Thousand Dollars ($250,000) bodily injury by disease, policy limit, at all times incident thereto, in forms and underwritten by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Participant shall require all subcontractors to provide such Workers' Compensation Insurance for all of the subcontractor's employees. Participant shall furnish Agency with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Participant shall similarly require all subcontractors to .naive subrogation, (b) General Liability Insurance Participant shall 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 One Million Dollars (SI,000,000), combined single limit Such insurance shall also include automotive bodily injury and property damage liability insurance_ All such insurance shall be provided by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency Such insurance shall name the City and Agency and their officers, agents, and employees acting in their official capacity, as additional insureds pursuant to a pre-1990 CG 20 10 11 85 endorsement form. In the event of aggregate coverage, -such limit shall be no less than One Million Dollars ($1,000,000.00). Participant shall require its insurer to waive its subrogation rights against Agency and shall provide certificates of insurance evidencing same- (c) Certificates of Insurance, Additional Insured Endorsements. Prior to performance of any work upon the Site, Participant shall furnish to Agency certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement_ Such certificates and endorsements shall be subject to the reasonable approval of the City Attorney and shall provide the name and policy number of each carrier and policy and shall state that the policy is currently in force and shall promise to provide that such policies will not be cancelled without thirty (30) days prior written notice to Agency. 44 Indemnification During any period of construction of any of the Project pursuant to this Agreement and until such time Agency issues or is required to issue the Release of Construction Covenants, Participant agrees to and shall protect, defend, indemnify and hold the Agency and City harmless 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) Participant'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 Sr-98Agree Sher-3-1 14 08(31/98-3 to any person or to the property of any person which shall occur on the Site and which shall be directly or indirectly caused by the acts of, or any errors or omissions of, the Participant or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Participant shall not be responsible for, and the Agency shall protect, defend, hold harmless and indemnify Participant against any liability, loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result of the active concurrent negligence, sole negligence or sole willful misconduct of the Agency or the City or their respective members, officers, officials, employees, agents, representatives, servants, or contractors. 4.5 Hazardous Substances. Participant, frorn and alter the Close of Escrow, and until a transfer, sale, or assignment of the Site upon which the following covenant shall then be the obligation of the transferee, purchaser, or assignee, shall indemnify, defend, and hold harmless Agency 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 Site or (ii) contamination of the Site by a release of hazardous materials_ Participant, prior to the Closing Date, shall provide to Agency a copy of any notices, orders, or reports concerning the presence of any hazardous materials on or affecting the Site that is in Participant's possession. For the purposes of the foregoing, the term "hazardous materials" shall mean any hazardous or tonic substance, material or waste which, as of the date of Close of Escrow, is regulated by the State of California, or the United States Government, and including asbestos and any material containing asbestos- 4-6 Security inancing: Right of Holders. (a) Permitted Encumbrances. Participant, prior to the date Agency issues or is required to issue the Release of Construction Covenants, shall be permitted to enter into mortgages, deeds of trust, conveyances, and leases -back or any other form of conveyance in which the Site is used as security for the purpose of securing loans of funds to be used for the acquisition of the Site and construction of the Project thereon without the consent of the Agency provided such conveyance (i) is for the purposes permitted herein and (ii) is given to a financial or lending institution or other acceptable person or entity capable of performing or causing to be performed Participant's obligations under this Agreement, including without limitation a pension fund, insurance company, or real estate investment trust Conveyances for financing purposes not meeting the foregoing requirements shall be subject to the prior approval of the Agency's Executive Director, which approval shall not be unreasonably withheld. (b) Holder Not Obligated to Construct Improvements. The holder of any mortgage or deed of trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to construct or complete the improvements or to guarantee such construction or completion, nor shall any covenant or any provision in the Regulatory Agreement be construed to so obligate such holder- (c) Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders Right to Cure. Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or default by Participant in completion of construction of the improvements, SF -99AU ec Sher-3.1 is OM I M -3 Agency shall at the same time deliver a copy of such notice or demand to each approved holder of record of any mortgage, deed of trust, or other security interest which has previously requested such notice in writing. Each such holder shall (insofar as the rights of Agency are concerned) have the right, at its option within ninety (90) days after the receipt of the notice, to commence and thereafter to diligently proceed to cure or remedy such default and add the cost thereof to the security interest debt and the lien on its security interest. Any holder completing the improvements in accordance with this Agreement shall be entitled to a Release of Construction Covenants upon written request made to Agency. 4.7 Release of Construction Covenants. Upon satisfactory completion of the Project, Agency shall issue to Participant a Release of Construction Covenants_ The Release of Construction Covenants shall be, and shall so state, a conclusive determination of satisfactory completion of the Project required by this Agreement, and of full compliance with the terms of this Agreement relating to commencement and completion of the Project The Release of Construction Covenants is not a notice of completion as referred to in California Civil Code Section 3093. If Agency refuses or fails to furnish a Release of Construction Covenants upon completion of the Project, Agency, after written request from Participant, shall, within fifteen (15) days of Participant's written request, provide Participant a written statement of the reasons Agency refused or failed to furnish a Release of Construction Covenants. The statement shall also contain a detailed description of the specific actions Participant must take to obtain a Release of Construction Covenants. If the Agency shall have failed to provide such written statement within fifteen (15) days Participant shall be deemed entitled to the Release of Construction Covenants. If Agency refuses or fails to furnish the Release of Construction Covenants for the reason that specific items or materials are not available or landscaping is not complete, Agency shall issue the Release of Construction Covenants upon the posting by Participant with Agency of a cash deposit, bond or irrevocable letter of credit (in a form acceptable to Agency) in an amount representing the fair value of the work not yet completed. 4.8 Mechanics Liens, Stop Notices. and Notices of Completion (a) If any claim of lien is filed against the Site or the Project, or a stop notice is served on any lender or other third party in connection with the Project, then the Participant shall, within twenty (20) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the party entitled thereto a surety bond in sufficient form and amount, or provide other assurances satisfactory to the Agency that the claim of lien or stop notice will be paid or discharged- (b) If the Participant fails to discharge any lien, encumbrance, charge, or claim in the manner required in subsection (a) of this Section 4.8, then in addition to any other right or remedy, the Agency may (but shall be under no obligation to) require the Participant to immediately deposit with the Agency the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The Agency may use such deposit to satisfy any claim or lien that is adversely determined against the Participant_ SF-98AV;ceSher-3.1 16 08,3IM -3 (c) The Participant shall file a valid notice of cessation or notice of completion upon cessation of construction on the Project for a continuous period of thirty (30) days or more, and take all other reasonable steps to forestall the assertion of claims or liens against the Project. The Agency may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that the Agency deems necessary or desirable to protect its interest in the Project. SECTION 5. USE OF THE SITE. 5.1 No Inconsistent Uses. Participant covenants and agrees, for itself, its successors, its assigns, and every successor in interest to the Site, or any part thereof, that for the period beginning on the Close of Escrow and ending on the expiration date of the Regulatory Agreement, Participant and such successors shall not devote the Site to uses inconsistent with the applicable zoning restrictions, this Agreement, and the Regulatory Agreement; provided that, in the event of any inconsistency, the provisions of the provisions of the Regulatory Agreement shall prevail over this Agreement. 5.2 Regulatory Agreement_ At the Close of Escrow the Regulatory Agreement shall be recorded against the Site in the priority set forth in the Section 3.4(d)_ 5.3 Relocation_ (a) Relocation Plan. As the Project is a "rehabilitation -in -place," no relocation of tenants living on the Site as of the Effective Date of this Agreement is contemplated by the parties hereto or is required to occur as a result of this Agreement. In the event, however, that off -Site relocation of existing tenants becomes necessary as a result of the Project, Participant, prior to such off -Site relocation, shall submit a relocation plan to Agency for review and approval ("Relocation Plan"). The Relocation Plan shall include the name, gender, age, ethnicity, household income, and amount of relocation payment to be paid, pro%lded, however, that Participant shall not be obligated to provide any of the foregoing referenced personal information about relocatees if such relocatees refuse to provide such information or the gathering or provision of such information is contrary to applicable law. Participant shall be obligated to meet the notice requirements of applicable relocation law and shall provide the Agency with true and correct copies of such notices. Participant shall also retain all required records and copies of notices in its files as mandated by applicable law- (b) Relocation Cost. Participant shall be obligated for the payment of all relocation benefits and costs identified in the Relocation Plan, as well as relocation benefits and costs that arise from the acquisition or rehabilitation of the Site beyond those obligations identified in the Relocation Plan. Participant shall indemnify, defend, and hold harmless the Agency from and against any claims for relocation and the payment of relocation benefits that are the obligations of Participant under this Agreement_ Notwithstanding the above, Agency shall provide relocated tenants Section 8 HUD housing certificates, which Participant may use to offset its relocation obligations_ Sr-)8Agrcc:Shcr-3-1 17 09/31/99 -3 5A Maintenance of the Site. All Units must meet Federal Housing Quality Standards (24 CFRS 982.401)"while occupied Further, Participant shall maintain the Site in accordance with the terms of the Regulatory Agreement. 5.5 Nondiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Participant, 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 Site, or any part thereof 5.6 Form of Nondiscrimination and Nonse gation Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, religion, ancestry, national origin, sex or marital status of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In Deeds- "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, rational origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed- 'rhe foregoing covenants shall run with the land- (b) In Leases- "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions, That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, ancestry, national origin, sex, or marital status in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." (c) In Contracts- "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, religion, ancestry, national origin, sex, or marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of the land." SF-9S.-%pec Shtn3-1 18 0'.7 1r9s -3 5.7 Effect and Duration of Covenants The Participant has, concurrently with the execution of this Agreement, executed in recordable form the Regulatory Agreement. Every covenant and condition and restriction contained in the Regulatory Agreement shall remain in effect thirty (30) years, except that the covenants against discrimination set forth in Sections 5.5 and 5.6 shall remain in effect in perpetuity. 5.8 vital Reserves. Participant, commencing with the fiscal year starting on the July I that follows the third (3`d) anniversary date of the Effective Date of this Agreement, shall deposit from Project revenues at least Two Hundred Fifty Dollars ($250.00) per unit per year into a reserve for capital repairs Should Project revenues be insufficient to permit Participant to make such a full deposit in any year, the shortfall shall be repaid into the Capital Reserve as soon as economically feasible_ 5.9 Payment of Portion of Residual Receipts. (a) Percentage Payment to Agency_ Commencing with the fiscal year starting on the July I that follows the third anniversary date of the Effective Date of this Agreement, and continuing annually through expiration of the Regulatory Agreement. Participant shall pay to Agency an amount equal to fifty percent (50%) of the Net Operating Income of the Project, with the other fifty percent (50%) of the Net Operating Income or Two Hundred Fifty Dollars per unit, whichever is more (subject to the terms of Section 5.$) to be deposited into the Capital Reserve Account as described in Section 5.9, provided, however, that once the Capital Reserve Account reaches the cumulative total shown on the Project Budget/Pro Forma (Exhibit "J"), Participant shall pay to Agency one hundred percent (1001/o) of the Net Operating Income. If a payment is required by Participant pursuant to the terms hereof, Participant shall make such payment no later than ninety (90) days following the end of the reporting year (calendar year or fiscal year) If the first or final payment is based on a portion of a year, the payment shall be pro rata based on a 360 day year- (b) Definition of Net Operating- Income. As used herein, the term "Net Operating Income of the Project" shall mean for any reporting period (calendar year or fiscal year), (a) all income derived by Participant from the Site, including without limitation all tenant rent, but excluding such income to Participant or the Project as may be derived from the acquisition of further income restriction of Units as authorized by Section 3 2 of the Regulatory Agreement, (b) less (i) payments of principal and interest, if any, required to be paid in such year by Lessee with respect to any note, mortgage, or deed of trust with respect to the Site or Project, (ii) all expenses actually incurred (or to be incurred if accounted for on an accrual basis) by Participant in leasing, managing, operating, maintaining, and repairing the Site, (iii) all capital expenses incurred pertaining to the Site, (iv) the deposits into the Capital Reserve Account; (v) property management fees, administrative costs, salaries, benefits, overhead costs, and such other and further operating and management expenses incurred in operating the Site. Depreciation expenses shall not be a reduction against income. (c) Adjustment of Payment to Agency. In the event Participant determines that it cannot make the Agency payment as described in subparagraph (a) of this Section and at the same time retain the economic viability of the Project, Participant shall notify the Agency and SE-•98ApCC Sher-3-] 19 08!31199 .3 request postponement, cancellation, forgiveness, or adjustment of the Agency payment. Participant shall provide financial and other evidence supporting its request. Agency may, in the exercise of its reasonable discretion and in light of its desire to see the Site used as an affordable rental apartment complex and maintained at the level required by the Regulatory Agreement, reduce, suspend, postpone, forgive, cancel, or renegotiate the terms of the Agency payment. 5.10 Financial Statements Participant shall submit to Agency, on an annual basis, a true and correct copy of Participant's audited financial statement for the Project. After receipt of Participant's audited financial statements for the Project, Agency may, at its cost, request additional financial analyses or obtain a third party review of Participant's financial statement for the Project to verify the accuracy of Participant's payments made to the Agency pursuant to Section 5.9 or the deposits by Participant into the Capital Reserve Account pursuant to Section 5.8_ SECTION 6. DEFAULTS AND REMEDIES. 6.1 Participant Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Participant hereunder if, after receiving written notice from Agency as provided in Section 6.3 below identifying such event, Participant fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within) thirty (30) days, Participant commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default: (a) Participant has failed to Close Escrow to acquire fee title to the Site within sixty (60) days after the time set forth in the Schedule of Performance-, (b) Participant fails to observe or perform any material term of this Agreement or any agreement incorporated hereunder by reference including, but not limited to, the Regulatory Agreement, the Note, the Deed of Trust, or the Subordination Agreement (if applicable), within the time set forth in this Agreement or any of the documents referred to herein, or (c) Participant knowingly and intentionally makes or delivers to Agency any statement, report, or certificate that is not true or correct in any material respect 6.2 Agency Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Agency hereunder if, after receiving written notice from Participant as provided in Section 6.3 below identifying such event, Agency fails to cure said event within thirty (30) days, provided that if such default is not reasonably capable of being cured within thirty (30) days, Agency commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default: (a) Agency fails to observe or perform any material term of this Agreement within the time set forth in this Agreement, including but not limited to timely deposit into Escrow of the required portion of Agency Loan funds-, or SF-98Agrec Sher-3-1 20 08r31l98 -3 (b) Agency knowingly and intentionally makes or delivers to Participant any statement, report, or certificate that is not true or correct in any material respect. 6.3 Notice of Default_ The non -defaulting party shall give written notice of any default under this Section to the defaulting party, clearly specifying the default. Copies of any notice of default given to the defaulting party shall also be given to any permitted lender requesting such notice. Any failure or delay in giving such notice or in asserting any of either party's rights and remedies as to any default shall not constitute a waiver of any default, nor shall it change the time of default, nor shall it deprive either party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 6.4 Agtnc 's Remedies (a) The Agency, at its option, may terminate this Agreement prior to the Close of Escrow in the event of any material default that the Participant fails to cure within the time set forth in Section 6.1 (subject to the right of notice and expiration of applicable cure periods)_ (b) Following the Close of Escrow, in the event of any material default that the Participant fails to cure within the time set forth in Section 6. l (subject to the right of notice and expiration of applicable cure periods), the Agency's sole remedy shall be to foreclose on the Agency Deed of Trust pursuant to Agency's right and remedies thereunder 65 Participant's Remedies. Subject to any applicable cure periods and the general right to notice provided for in this Agreement, upon a default or breach of this Agreement by Agency, Participant may bring an action for specific performance of this Agreement or any term or provision hereof, or may terminate this Agreement. Participant may not sue for monetary damages. 6.6 RiQhts and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties hereto 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 SECTtON 7. GENERAL PROVISIONS. 7.1 Governing Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 7.2 Attorneys' Fees In the event of litigation between the parties arising out of this Agreement each party shall bear its own attorneys' fees, and other costs. 7.3 Notices Demands and Communications Between the Parties. Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if. (1) personally delivered, (ii) delivered by same day or overnight courier (acknowledged by receipt %F-9t lgce Sl)cr-3-1 21 09/11:98 -3 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 Participant. The Bridges America Sher Lane, L P- 18837 Brookhurst Street Suite 303 Fountain, Valley, CA 92708 Attn- JoAnn Ulvan With a copy to- Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626 Atm Jeffrey M_ Oderman If to Agency Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648, Attn: Executive Director Notices personally delivered or delivered by courier shall be effective 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) ;Boon on the second business day following deposit in the United States mail_ 7-4 Acceptance of Service of Process- In the event that any legal action is commenced by Participant against Agency, service of process on Agency shall be made by personal service upon Executive Director or the Secretary of :'Agency, or in such other manner as may be provided by law In the event that any legal action is commenced by Agency against Participant, service of process on Participant shall be made by in any manner provided by law, and shall be valid whether made within or without the State of California 75 Conflicts of Interest No member, official, or employee of Agency shall 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 76 Titles and Ca tp ions Titles and captions are for convenience only and shall not be construed to limit or extend the meaning of this Agreement 7-7 Gender- As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. 7.8 Modifications Any amendment, alteration, change, or modification of or to this Agreement, in order to become effective, shah be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. SI-9'VA9rcc-Sher-3.1 22 08r,l:98 -3 7.9 Merger of Prior A eements 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, including but not limited to that certain "Deal Point Memorandum" approved by Participant and the Agency and/or City Council of the City of Huntington Beach, are merged herein and shall be of no further force or effect. 7.10 No Third Parties Benefited. Other than the general and limited partners of Participant, this Agreement shall 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. 7.11 Assurances to Act in Good Faith_ Participant and Agency each agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to accomplish the redevelopment of the Site in accordance with the provisions hereof, 7.12 Warranty Against Payment of Consideration for Agreement Except as provided in this Agreement, Participant 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. 7.13 Nonliability of Agency Officials and Employees_ No member, official, or employee of the Agency shall be personally liable to the Participant or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Participant or to its successor, or on any obligations under the terms of this Agreement. 7.14 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the Ianguage used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 7.15 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 7.16 Severability Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 7 17 Extension of Times of Performance_ Notwithstanding the foregoing, in addition to the specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default during an event of Force Majeure_ An extension of time for an event of S -98 .gcc Sher-3-1 23 02/31/98 -3 Force Majeure shall be limited to the period of such event, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause. in the event of such delay, the party delayed shall continue to exercise reasonable diligence to minimize the period of delay. Times of performance Under this Agreement may also be extended by mutual written agreement by Agency and Participant_ In addition, the Executive Director shall have the authority on behalf of Agency to approve extensions of time not to exceed a cumulative total of one (1) year_ 7.18 Inspection of Books and Records_ The Agency or its designee has the right at all reasonable times to inspect the books, records, and/or other documents of the Participant pertaining to the Site and/or the Project as pertinent to the purposes of this Agreement 7.19 Waiver . The waiver by Agency or Participant of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. SECTION S. EXECUTION OF AGREEMENT; TTNfE FOR ACCEPTANCE This Agreement shall be executed in five duplicate originals, each of which is deemed to be an original_ This Agreement consists of /u cN yF,,e (25) pages and ten (10) attachments which constitute the entire understanding and agreement of the parties. This Agreement does not take effect until executed by the Participant and Agency. This Ag7eement, �;hen executed by the Participant and delivered to the Agency, must be authorized, executed and delivered by the Agency within thirty (30) days after the date of signature by the Participant, or this Agreement may be terminated by the Participant on written notice to the Agency_ The Agency Executive Director 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 Agency as may be necessary or proper to effect the terms of the Owner Participation Agreement on behalf of the Agency. [end - signature page follows] SF•9SACrcc Sh r-3.1 24 08•71,99 -3 IN WITNESS WHEREOF, the parties hereto have execrated this Agreement as of the Effective Date. ATTEST: 6EC cJ( Cam' t A -genev Clerk APPROVED AS TO FORM - By: Agency Counsel SF �lilq � "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic �1 By hatrman "Pt%,RTTCIPANTr THE -BRIDGES AMERICA SHER LAtLTL, L P., a California limited partnership By Its General Partner. THE BRIDGES AMERICA FOUNDATION, a Delaware Nonprofit Corporation By. �%�--V4 1,, - Narne S"TE,vb*rj '1� 4,Art'fU (T)pe or print) + Its (circle one) (i) Chairman of the Board (ii) President (iii) Any Vice President Name: (T)pe or print) Its (circle one) (i) Secretary (ii) Any Assistant Secretary (iii) Chief Financial Officer (iv) Any Assistant Treasurer SF-98��ec Sher-3-1 0!s/31 '98 .3 25 FROM : '1111 111111111111 11111 1111 P1DhE NO. : SeP. 01 19S� 04:44PM PI RESOLUTION OF THE nOARD OF DIRECTORS OF THE BRIDGES AMERICA FOUNRATION. INC. "l:be `allowing resolutions were adopted by the Aoard of Directors of the Bridges Arnerica foundation (the "Corporation") effective as of September 1, 1998. RESOLVED, that Garrctt Robinson. President of the Corporation, and or Steve Harrison, a member of the board of directom be and hereby each are severally authorized to excetre and deliver such agreements, documents and instruments. and to undertake such acts as they shall deem necessary or advisable to consummate the purchase by the Bridges Sher Lane LP.. (a California limited partnership of which the Corporation -is the General Partner), of the low-income housing project and real property located at 16112 Sher laze Hwitington Beach, Ca. Dared as of Septer bcr 1. 1998. anine Robinson, ecretary CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of 4,44 o + A County of FJr On Z l fr; f q al g before me, tiD -�"� J-� • ijt✓ S�YI N c� Dale Name and T.:re u` C"•cer fe a. ',lane Doe. . ^• ry Pudic-) personalty appeared _ STEV&U V. h 2-cSD� IL N,imc{s) C:5gner{s) fly ki y -K proved to me on the basis of satisfactory evidence to be the personN whose name(s) ®are subscribed to the within instrument and acknowledged to me that/6#e4hey executed the same in(li p&f.414" authorized capacityK-!�), and that by hi /heotmeir signature( on the instrument the person* LAURA A_ NELSON or the entity upon behalf of which the person(} acted, Comrnwion 9 1t W63 � executed the instrument. Notory PWM — caxomra Orange County tity Corms Eg*as A/ 23. 1999 WITNESS row-Vand and official seal. Sig-vu,e M NC:a-, -Nut c — OPTIONAL Though the rrforrrabon below is rot required by law, it may prove valuable to persons re!ying on the document and could prevent fraudulent removal and reattachment of Phis form :o another document r' Description of Attached Document ?S Title or Type of Document: One4- �. fz ear r Document Date- 3! L,? Signer(s) Other Than Named Above= _ Q t Dr�IcS Qndry Capacity(ies) Claimed by Signer(s) Signer's Name: ST-EV&.-J V. 147'?'SoYIf -7� �S Individual r Corporate Officer Title(s): �s C Partner — Limited r ;General Attorney -in -Fact Trustee el Guardian or Conservator Other. Dl / GTa•2 r �5 Signer Is Representing: 26 e5 f �VA)PI DN) T O 1 P95 Na:,:)nal rroi a.ry Assoc.ar-Cn Too of ihi,mu here t �\ Y 0� r_z —Number of Pages: -'�5 Signer's Name: L I1 Individual Corporate Officer Title(s): _ Partner — Limited _ General Attorney -in -Fact Trustee Guardian or Conservator Other. Signer Is Representing 0236 9e- 1e: Ave.. P 0 Boer 7:84 - Canoga Park. CA 91309-7184 PrDC No 5907 Too of :numb Here Reorder Gall TOII-Fre. I-BOO-876-6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of �'�/�►'� County of On 1, %ffd' before me, UttrQ,4. /✓erS N�i�.n{ �[�s%rLcc�, bare Name and Title or OYKee (e 9 .' dne Doe. Nxa -5tti-) personalty appeared ' ee _G+~ �'L+� ndrrM;Sl ;,� Sane•{5) T personally known to me -- " e to be the person(') whose name& isf re subscribed to the within instrument and acknowledged to me that 4ef� executed the same in ht� authorized capacit le ), and that by AURA A. Nta.90N iwsrtt a slgnaturej:�) on the instrument the persor4 , corrrnwon0 1066263 or the entity upor,. behalf of which the persorCs acted. trotorjr PutAC — caetomio Oemge c«mtr executed the instrument - NM Corrm Lgxes Jr123, 1999 WITNESS my hand and official seal. Z2 S.g,a'.no oil:clary Put*c OPTIONAL Though the inlormat;on below is not required by law• it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: OWMe-I' Aehe,./JL2. 0_A Document Date- b (3, l of Signer(s) Other Than Named Above: P&,/ bft'I, Capacity(ies) Claimed by Signer(s) Signer's Name- ftlojc_ _ _J 1Z Individual Corporate Officer Partner — C Limited Ll General Attorney -in -Fact Trustee Guardian or Conservator Other- CinO-[iVV1d_w% _ Signer is Representing I Too of 'iumb here 1 I _ _ _. Number of Pages: Ta�IS Ste ven Signer's Name: COnh le Z -vC�_ G Individual Corporate Officer Titles)- * Partner — L Limited El Attorney -in -Fact F:1 Trustee J Guardian rp ery `F Other: t449mr1e-iC Signer Is Representing: Ll General L�e-LLJqev,--— A g o` thurb here 0 :9�5 Na:•mai tiu:ary AssohabOn - 8236 Remmr' Ave . PO Sc: 7784 • Canoga Park. CA 9;309 7.84 Prod No 5907 R"Cler Cal Toa-Free 1-800-e?Ci 6WIr EXHIBIT A EXHIBIT "A" THAT PORTION OF THE NORTHEAST 9501EI OF SECTION 23, TOWNSHIP 5 SCUM, RANGE 11 WEST, PARTLY IN THE RANCHO LA BOLSA CHICA AND PARTLY IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGION BEACH, AS PER NDP REC(NE D IN SCOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF !ME CUGi'TIY RECCWDiE2 OF SAID )CUMN, DESCRIBED AS FOLLOWS: BEGINNING AT VIC INTERSECT ION OF 711C SCUM LINE OF THE NORT14 50.00 FEET OF THE SOUIHFAST QUARTER OF THE NORTi NT'S'T CATOT t OF CA.I D NORTY��SI' QUARTER WITH THE FAST LINE OF S rtRm LANE AS DESCRIBED IN TPE 1✓TED TO THE CIII OF HUPTTINGION BEACH, RECOLtDED V01aZER 7, 1961 I33 wDOK S937 P� ram'. 35, OFFICIAL RECORDS; THENCE NORTH 180-00 FAT ALEAG SAID FAST LINE; THENCE EAST 346.00 FEET PARALLEL WITH THE NORTTi LINE OF SAID SOUTHEAST QUARTER OF THE Inc I1-.' --- T CU ARTFR OF THE NORTHEAST QUAR IER ; TWEPCE SCUM 100.00 FEET PATUTEL WITH SAID FAST LINE; 71 VICF EMT 90.00 FEEETT PAR)vij , WITH m SAID NORTH LINE; T AT E 9T H 80.00 FEET FARR -T •T .FT, WITH SAID FAST LINE TO Tim SCUM LINE OF `I1{E NORTH 50.00 FEE OF T1-C SCUir{V+ESI' QUARTER OF `IH_, NGRITVEEA T QUARTER OF SAID NORTHEAST QUARTER: T f {EN. =- VIA T 436,00 FEET TO THE PoiNT OF BEGINNING. SAI D IAIvID IS I N=ED WITHIN TT-F- AREA SPD-3 ON A PnP F I L.ED IN BOOK 23 PAGE 17 OF RECORD OF SURVEYS. IN 7.2 OF~IC✓ 0' 7VE CCij:,r?': 12CO M OF SnID COUNTY. EXCE`F'T n=-—FRCt-1 ALL, OIL. CAS, T1:D O7.:, ? trfDROCARECIJS, 13ELCA-4 A DEPTTI OF 500 FEET, WITYK JF 'ME RIC-Lrr OF SURFACE: EM?Y AS RESERVED IN DEC S OF RECCID. PARCEL 2 : TkAT PORTION OF Ti-[F. 1,O2T 11LST (JAMT ER OF SECT I C,.-J 23. TLS -'CIS-1 I P 5 SCcJI; { , RAN-jE 11 WEST, IN TI-E ?:==•'C!O LA BOLSAS, IN' 11-:E CITY C- FF'u'Ti-1 SM--- BEAC-?, AS PER MkD F ECORDE'1) IN BOO 51, PAGE 13 OF M lS0LLr"NAtT--iJS 1-A-PS , IN THE OFFICE OF THE COUNTY RECORDER OF SAID CIDUAFY, DESCRIBED AS F`OLUM: SET uN iNs AT THE III TERSECTIC'N OF Ti-IE S"j-ri r LD--Z OF T.�E NORTR 50.00 FEET OF TrF SOUIlEAST U317=1 OF THE NORT1TEST UE7'AW Or SkID 11DRTi-Z:�9-1 QLA.RI13Z WITH TIC EAST LING. OF S}'=R I tVS AS DESCRIBED IN ME DEED TO T1w CITY OF FsUNrZR-3MN BEACH, RECORDED DECQ -2ER 7, 1961 LN &DOK 5937 PAC' 35, OFFICIAL VON= THENCE NORT13 180.00 FEET ALCOS, SAID EAST LINE; 710NCE FAST 346.00 FEET PrRALLEb WITH 71E NORTH LINE OF SAID SOUTHEAST QUARTER OF THE DOMIT--AT T QUARTER OF TZE NORTHEAST QUARTER; THLh� SOUTH 100.00 FEET PARALLEL WITH SAID EAST LINE; T ENCE EAST 90.00 F1,T PARALLEL WITR SAID NCIMI LINE TO A POINT WHICi POINT IS THE TRUE POINT AND PLAN OF BEG I W I NG ; 11 INi CE SCUM 80.00 FEET PARALL�F'.., WITH SAID FAST LIME TO THE SOUMT LINE OF THE NORTH SO.00 FEET OF THE SOUIrf'+r_SI' QUARTS OF TI-E NORTHEAST QUARTER OF SAID NORTHEAST QUARTER; 'THENCE 406.96 FEET FAST PARALLEL WI"IH THE NORTH LINE OF SAID SOUTFEEAAS5T QUARTER OF THE NORTHWEST QUARTER OF THE NORi11 ASI' QUARTER TO THE wgr LINE OF PAIDSIDE LANE AS DESCRIBED Ltd THE DEED TO T11 CITY OF HUNTINCTWD BEACH, RECORDED SEPTDTBER 20, 1968 IN ECOK 8727 ME 541 OF OFFICIAL RECORDS; THENCE NORTH 80.00 FEET ALONG SAID WEST LINE TO A LINE TTIAT IS PARALLEL WITH THE NORTH LINE OF SAID BSI' QUARTER OF THE NORT1 rWEEST QUARTER OF TW NORTHFAST QUARTER, AND INHICH PASSES THROUa4 AND TRUE POINT AND PLACE OF BEGINNING; THENCE WEST 408.96 FEET, PIENG SAID LAST" ME TTIONTED PAS LINE, TO THE TRUE POINT AND PLACE Or BEGII.OINS. Q.DY3N, DESOZIPTICTJ CLIJI INULID) i.I.MIM, DL''CPJMCH CCNrlNUL3a} iXCTPT -114EREFRCM ALL OIL, GAS, MU40RALS AND OIHFR HYDROCARBONS, BQCW A DF.Pni OF 5Q0 FEET, WI" I-? 'ME RIGHT OF SURFACE ENMY, AS RESERVED IN DEEDS 05 RECORD. SAID LAND IS INCLUDED WITHIN 7VE AREA SIADWN ON A MAP F I LID IN BOOK 23 PACE 17 OF RECORD OF SURVEYS, IN THE OFFICE OF -ME COUNTY RECORDER OF SAID COUNTY. EXHIBIT B . FI G d ' KYVI �li F w EIiO.11:LA R � y'. MAi'LEYE ]iJ �• � I � � .— DEIFUY ,a: s•� 0 4uNVEW WA O' y w cLEN:uoayE JVt UNr R nnlc vEgaEs �V,'P F QI. Lr i 5 S,iANs�ots o f d >rm tk - rp L, wt;slf ' nCN,fsEG,E � nE+.HEnFORa W -, Is aqffLAI J, 4 4 1 '.1..�. ;e.r1.{iMf�d coot loom, III Rn) ! T I I d', n�DsssC11 0cLJ z h SUBJECTI o g � ! NYA+JIJ1 I J ❑ II �.STONEwOCO; ' AIUn DY i Z O LAUgEUluJl i MsNpN N°,. f to 'A \ f O J� CANDLE1. iCrIOL7 ,.Tl 130VOLIET I' I hLL!�YDRpi�� I ' I II LAFAYETT� I j i, 4 1, ,IjNNERSE r ►.' STAPLI(',fIT Y I l �y�4 — — I w ,' / + 6 0.1 AUOyRN I ' I ANITA i MAC DONAL y}�{ I 3 ^ LOYQLA IRUAaE I i ,'JUUL'T1E 1.{)YY � !�+ DEFIAHs I (+ E� iE a SVNLIG>fi -- `'�` � I FIEJL i Jl I ErONr.iE �.. t>nrsuflT;. . , �`: WN i !,1Anu �x 'C �' WI �I mI SEW(; _. .,:r 20A j5w _ Ensj _ vERt.e _ I I I Dom _ �° ER I-.. I F'AU al VI'iA'Ufl W, I � il,/1A"DERj-_. ' Yl tyAn J >� , 4 '�', '�! �I.. 3F 4l s ;tu Z 1 W I EARL I ' � i, .. y} rEIMY n W 'w'S .1t -• . �-- I 7 LAMANG,{ y Ii I ".1._ tC� U .-.--,( hfOW _ D CA EL ... � l �a+`PG£ r �f.1t70N5�ti w Zj � = r +, I C017S11 s'RINCtd: 1 }$f (u�� r S: J. a i u71II v'I i AriNLT7 Sel'EM 71 w I.annu�sx �' (I KErfr I i .. I �Qj, ��ys NCRTIiI/V(E ROD+PDUx ! SgF2U I �... I I .c + u tOU CUS[ ' L• i o I MpRLK r 1 O ttir„ iLv( �prN f fVWOCDLIKe r a TAMMU y } SSS SITE ANALYSIS Plat Map FCR 1v LIZ SEZA 23. T.5S, R 11 W 'cCI,41 r1 GE /-q2-119 FOR F-E T-ITLE .45SESSU61wr BELOW SU17rdCE 07 nlr+ fi — i-iTl 4t Z e ` ro a9 6r-- 1 L U AC fsO ].fix 2 8ff AC�i.0 0 aws..c- 1 33 4 29 ; W l� 28 3 I ac. 0 MIN PARR -Ft AUP PM. J-.5Ct /69�V- HOYE - ASMSSCIrS &CCK a >ARCU Up4eCrS SHOWN nl CAtCgs im 0 ASSESS S 1C—F I eC)CKF42 r�tGf f f COUNTY Q' C7RRMG r 37 EXHIBIT °C` SCOPE OF DEVELOPMENT Participant's rehabilitation of the existing 66-unit apartment complex located at 16112 Sher Lane in the City of Huntington Beach shall be undertaken as follows: 1. The rehabilitation shall be in substantial conformance with the Approved Plans and Permits In the event of any conflict between the description of the Project and rehabilitation work described in this Agreement and in the Approved Plans and Permits, the Approved Plans and Permits shall control. Notwithstanding the above, the rehabilitation of the Units shall result in Units meeting, at a minimum, federal housing quality standards as existing on the Effective Date of this Agreement; said standards are set forth at Title 24 of the Code of Federal Regulations, Section 982.401. Participant shall provide Agency with copies of all required permits under the City Municipal Code and proofs of City inspections. ?. Participant, prior to undertaking any work of rehabilitation on the Site (other than repairs immediately needed for habitability or removal of waste, debris, and general clean-up) shall submit to Agency for review a rehabilitation work list that describes the nature and order of the rehabilitation work 3. The parries hereto acknowledge that the Site, as of the Effective Date, has received City code violation notices. Participant shall have a reasonable period to effect corrections of those conditions to which the code violation notices relate. Participant shall provide Agency with confirmation that the conditions to which the code violation notices relate have been corrected 4_ Participant shall be responsible for remediating any asbestos and any lead -based paint where the levels of those substances are found to be in violation of applicable Iaw. Copies of all test results, tenant notifications, and remediation plans shall be provided to the Agency or its authorized representatives or consultants. 5. Agency shall have the right to inspect the progress of the rehabilitation work, including both interiors and exteriors of the Units, upon forty-eight (48) hours prior notice to Participant; provided that such inspections shall not interfere with Participant's rehabilitation work 6 Subject to Section 4 2(a) and Exhibit D of the OPA, Participant shall complete the rehabilitation work within eighteen (18) months after the Closing Date. SF-AgrerSher-3.F xh•C 0813 ]/98 - ;;3 IE,Nbit "C" — Scope of Development — Page 1 of 1 I] Xf Is, I10*11 i SCITEDULE OF PERFORMANCE iTEM OF PERFOR 1ANCE TBIE FOR PERFORLNtANCE: REFERENCE 1. Participant and Agency each execute all documents Not later than twelve noon on the §3 4(b); §3.4(c). and deposit all documents and funds into Escrow as business day immediately prior to the required by this Agreement. schedulers Closing Date_ 2. Closing Date_ Not later than September 15, 1998 §3.4(a)_ 3_ Participant obtains the Approved Plans and Permits Within sixty (60) days after the §4.2(a)-(e). for the Project and commences the rehabilitation Closing Date - work on the Size_ 4. Participant submits a Management Plan to the Within sixty (60) days after the §-3.4 of Exhibit Agency. Closing Date_ 5. Participants completes the rehabilitation of the Site. Within eighteen (18) months after y4.2(1) commencement of the work. 6. Agenc}• issues Release of Construcuon Covenants Upon completion by Participant of the §4 7 rehabilitation %vork on the Site 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 performance 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 tivritten agreement signed by both the Participant and the Agency. The Executive Director of Agency shall have the authority to approve extensions of time without action of the Board of Directors of Agency not to exceed a cumulative total of one (1) year_ The foregoing instrument is a correct copy of the original on file in this office. .Attest �� 19 —J4Q CAMNIE BROCKWAY City Clerk and Ex-rfiscio Clerk of the City Couneii of the Csty of i W iingt n Beach, California. SI`.vBAf;rcc_ Shca-3 Leh-D-I By Deputy awl u9x [EX1II131-1- "D- - SCHEDULE OF PERFORMANCE - PAGE 1 11 Agency Resolution Number 290 Authorizing the Sher Lane/Parkside Lane Affordable Housing Project ATTACHMENT #3 RESOLUTION NO. 290 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF IfUNTINGTON BEACH APPROVING AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF IIUNTINGTON BEACH AND BRIDGES AMERICA SHER LANE., L.P. WHEREAS, California Health and Safety Code Section 33334.2 and the Redevelopment Plan for the Huntington Beach Redevelopment Project (`-Project Area'-) authorize and direct the Redevelopment Agency of the City of Huntington Beach (`.Agency") to expend not less than twenty percent (20%) of all taxes which are allocated to the Agency pursuant to California I lealth and Safety Code Section 33670 (all section references herein are to the Health and Safety Code unless otherwise specified) for the purpose of increasing, improving and preserving the community's supply of low and moderate income housing available at affordable housing cost to persons and families of lour and moderate income, lover income, and very low income-, and Pursuant to applicable law, the Agency has established a Low and Moderate Income Housing Fund ("Housing Fund"),- and Pursuant to Section 33334.2(e), in carrying out its affordablc housing activities, the Agency is authorized to provide subsidies to or for the benefit of very low income and lower income households, or persons and families of low and moderate income to the extent those households cannot obtain housing at affordable costs on the open market; and Pursuant to Section 33334.2(g), City Council Resolution No. 6026 dated June 26, 1989, and Agency Resolution No. 174 dated June 26, 1989, the Agency is authorized to make expenditures from the Housing Fund outside redevelopment project areas if such use will be of benefit to one or more of the project areas; and SF-Mcso! Bridgcs RLS 98.519 08128198 - ft3 Resolution 290 The Agency is required pursuant to Section 33413 to rehabilitate, develop or construct replacement dwelling units for those units housing persons and families of lower income which have been destroyed or removed from the lower income housing market as part of a redevelopment project; and The Agency has destroyed and removed certain units which housed persons of lower income within the Project Area; and In order to carry out and implement the redevelopment plan for the Project and the affordable housing requirements thereof, the Agency proposes to enter into an Oxner Participation Agreement ("OPA") with Bridges America Sher Lane, L.P., a California limited partnership ("lleveloper"), for the rehabilitation of affordable housing on a site located outside the Project Area ("Site"), as described in the OPA; and The Agency has duly considered all terms and conditions of the proposed OPA and believes that the rehabilitation of the Site pursuant to the OPA is in the best interests of the City and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable State and local law requirements; and Pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act, the rehabilitation project is categorically exempt under CEQA; and The Agency has considered the report of Agency staff on the proposed rehabilitation project to be carried out pursuant to the OPA; NOW, THEREFORE, the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: The Agency finds that the Agreement is categorically exempt under CEQA, pursuant to Section 15326 of the Guidelines to the California Environmental Quality Act. 2 SF-9811csol:Fisidacs Rt.S 98-519 Resolution 290 2. The Agency finds and determines that expenditures from the Ilousing Fund as contemplated by the Agreement will directly and specifically benefit, improve, and preserve the community's supply of lower income housing within the meaning of Section 33334.2. 3. The Agency finds and determines that expenditures from the Housing Fund as contemplated by the Agreement are of benefit to the Project Area. 4. The Agency finds and determines that the housing units to be rehabilitated by the Agreement which are restricted to persons and families of lower income qualify as replacement dwelling units for those dwelling units in the Project Area which were destroyed and removed pursuant to the Redevelopment Project. 5. The Chairman of the Agency is hereby- authorized to execute the UPA on behalf of the Agency. A copy of the OPA when executed by the Agency shall be placed on file in the office of the Secretary of the Agency. G. The Executive Director ofthe Agency (or his or her designee) is hereby authorized, on behalf of the Agency, to sign all documents necessary- and appropriate to carry out and implement the 4PA and to administer the Agency's obligations, responsibilities and duties to be performed under the OPA and related documents_ a SF-98Rcsol.Rrfdges RLS 9R-519 08/28/99 - X3 0. Resolution 290 PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at an adjourned regular meeting thereot'held on this 31stda.' of August , 1998. ATTEST: — A�, 0�� Agency Clerk REVIEWED AND APPROVED: City Ad inistrator Sr-Mc-%ol-Bridges RLS 98-5 f 9 08r28l98 - #3 4 - — — �&� Zx--� Chairman APPROVED AS TO FORM: Agency Attorney 63n L� i INITIATED AND APPROVED: A/C ew Director of Economic Development 1011000- . . Iles. No. 290 STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF HUNTINGTON BEACH 1, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, Califomia, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at an adjourned regular meeting of said Redevelopment Agency held on the 31st day of August, 1998 and that it was so adopted by the following vote: AYES: Julien, Harman, Green, Dettloff, Bauer, Garofalo NOES: None ABSENT.': Sullivan ABSTAIN: None G/reseluti/resbkpg2/Res_281 Clerk of the Redevelopment Agency of the City of Huntington Beach, Ca. The foregoing instrument is a correct Copy of the original tin ;ilr, in this office. Attest .lL_ 2.9dr City CIeiK 2nd Ex-ct110fc Clef'.: of t.,e Council of the C!ty of humingtoa Beach, �Calit ` By� _.__�QePut}+ RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Approve Appropriation of HOME Funds in the Amount of $199,734 for Bridges Sher Lane Project COUNCIL MEETING DATE: July 17, 2000 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (wlexhibits & legislative draft if applicable) Attached Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (wlexhibits if applicable) (Signed in full by the City Attome) Attached Subleases, Third Party Agreements, etc. (Approved as to form by City Attome) Not Applicable Certificates of Insurance (Approved by the City Attome) Not Applicable Financial Impact Statement (Unbud et, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff Z1 Assistant City Administrator Ini al City Administrator Initial City Clerk EXPLANATION FOR RETURN OF ITEM: