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HomeMy WebLinkAboutFive Points Senior Villas - 1991-08-19f City of Huntington Beach * 2000 MAIN STREET CALI FORNIA 92648 DEPARTMENT OF ECONOMIC DEVELOPMENT Office of the Director 536-5582 Housing 536-5542 Redevelopment 536-5582 Fax (714) 375-5087 January 6, 1995 David Michelson IPI 2 S. Alta Mira S. Laguna Beach, CA 92677-3302 Dear Mr. Michelson: Enclosed is a copy of the Certificate of Completion for the Construction and Development of Five Points Seniors. The County of Orange is no longer accepting such documents for recording however, you may consider that we have issued the Certificate to you as required under the Loan Agreement. The original Certificate will be retained by the City Clerk as part of the permanent file. We are very pleased with the project and wish you continuing success. Sincerely, Barbara A. Kaiser <DRUG ~USE A CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION HUNTINGTON BEACH TO: CONNIE BROCKWAY, CITY CLERK FROM: BARBARA A. KAISER, DIRECTOR OF.ECONOMICVY� DEVELOPMENT RE: FIVE POINTS SENIORS- MICHELSON DATE: OCTOBER 12, 1994 Attached is developed by Davii]�el. Please proceed to have it recorded. Also for my records, please provide me with recorded copies of the Deed of Trust ($250,000), the CC and R's document and the Memorandum of Affordable Housing. These three documents were recorded on January 10,1994 according to the title report. Thank you. /o���SY 344fa"r104 A. �- le-00 4� �4„r,� Ua�•-�-� Gam- �. �.Qc��� Tw ! k Gdc''a2 75 J- RECORDING REQUESTED BY ) AND WII(EN RECORDED MAIL TO: ) Connie Brockway, City Clerk ) Office of the City Clerk ) City of Huntington Beach ) 2000 Main Street Huntington Beach, CA 92649 pace above for recorder.] This document is exempt from recording fees pursuant to Government Code Section 6103. SERTjFICATE OF C0�4PLETI N FOR rONSTRUCTION AND DEVELOPMENT RECITAL A. An "Affordable Housing Agreement' was entered into by and between the �. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the 'Agency' and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer') dated as of November 18, 1991, a copy of which is on file with the Agency as a public record at its offices at 2000 Main Street, Huntington Beach, California (the "Agreement"), and is incorporated herein by reference. . B. As referenced in the Agreement, the Agency shall furnish the Developer with a Certificate of Completion upon completion of the 'Developer Improvements" pursuant to the Agreement, which certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. C. Such certificate shall be conclusive determination of satisfactory completion of the construction required by the Agreement. D. The Agency has conclusively determined that the construction of the Developer Improvements on the real property described in Exhibit A attached hereto and incorporated herein (the "Site") as required by the Agreement has been satisfactorily completed. NOW THEREFORE, 1. As provided in the Agreement, the Agency does hereby certify that the construction of the Developer Improvements on the Site has been fully and satisfactorily performed and completed. Sefozw w 8. 2993 PUBS:5871_1139116'_'460.55 Page 1 of 2 f 2. Nothing contained in this instrument shall modify in any other way any other provisions of the Agreement. IN WITNESS WHEREOF, the Agency has executed this certificate this40day of oc���, 1993. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic ATTEST: Agency Clerk 101,z0 5 PUBL:5871_113911 Er-460.55 Page 2 of 2 �w EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: Parcel I of Parcel Map 79-559, Recorded in Book 134, Page 22 of Parcel Maps in the Office of the County Recorder of Orange County, California. aTtcmb.1,19" YU8L:5371 113911B2460.55 Exhibit "A" State of California e..to� ss. oo"& •v9�� County of ) WM C0UNW Mil Carom. 6�r« ARAY l t. t997 On + 199�, before me, ` d (nav s tirle of officer,.g., June Doe, Norary Pu ) personally appeared `11�«+.lr� r , ti 0"'_ personally known to me —OR— E] proved to me on the basis of satisfactory evidence to be the person(s) whose name(j) Ware subscribed to the within instrument and acknowledged to me that hehhe{they executed the same in hisAi f/their authorized capacity/, and that by Ierhheir signatureU on the instrument the person(s�, or the entity upon behalf of which persono acted, executed the instrument. Witness my hand and official seal. �.'o Capacity claimed by signer: (I7dj section is 01WON w.) o Individual Corporate Ofticer(s): o Partner(s): A4ic& &4t'te , o General o Limited Q o Attorney -in -fact o Trustee(s) o Guardian/Conservator o Other: Signer is representing: Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to an unauthorized document. THUS CERTIFICATE 1%WST BE ATTACHED TO THE DOCUINJEN7 DESCRIBED AT RIGHT: Signer(s) Other than Named Above eitm& _ _ sefftob r /. 1993 PUgt:5871113911 B2460.55 RECORDING REQUESTED BY ) AND Ni7IEN RECORDED NIAIL TO: } Connie Brockway, City Cleric ) `Office of the City Clerk ) City of Huntington Beach ) 2000 Main Street I Huntington Beach, CA 92648 ) pace above for recorder.] This document is exempt from recording fees pursuant to Government Code Section 6103. CERTIFICATE QF CQMPLETION FOR CONSTRUCTION AND ,DEVELOPMENT, E ITALS A. An "Affordable Housing Agreement" was entered into by and between the REDEVELOPI� ENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency" and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer') dated as of November 18, 1991, a copy of which is on file with the Agency as a public record at its offices at 2000 Main Street, Huntington Beach, California (the "Agreement"), and is incorporated herein by reference. B. As referenced in the Agreement, the Agency shall furnish the Developer with a Certificate of Completion upon completion of the 'Developer Improvements" pursuant to the Agreement, which certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. C. Such certificate shall be conclusive determination of satisfactory completion of the construction required by the Agreement. D. The Agency has conclusively determined that the construction of the Developer Improvements on the real property describer) in Exhibit A attached hereto and incorporated herein (the "Site") as required by the Agreement has been satisfactorily completed. NOW THEREFORE, 1. As provided in the Agreement, the Agency does hereby certify that the construction of the Developer Improvements on the Site has been fully and satisfactorily performed and completed. sqdmbee 1. 19" PUBL-5871_113911824W.55 Page 1 of 2 r. 2. Nothing contained in this instrument shall modify in any other way any other provisions of the Agreement. IN WITNESS WHEREOF, _ osohY , 1993. ATTEST: Agency Clerk the Agency has executed this certificate thisc2—O— day of REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic sefembw /. 19" PUBL:597 1_1 13911 B2460.55 Page 2 of 2 lt4� EXHIBIT 'A" J.EGAL DESQRIPTIQN. OF THE PROPERTY All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: Parcel 1 of Parcel Map 79 559, Recorded in Book 134, Page 22 of Parcel Maps in the Office of the County Recorder of Orange County, California. satyr 1. 19" PUBL:5871 113911B24b0.55 Exhibit "A' State of California a j ss. � �i99106 dory pubic — callrorria I County of 00'+' �� ) ORANGE cOLM ply COMM (%Ur MAY 11.1997 On �, 199,2_q , before me, L `� (nay a title of o,QicerJame Doe, Notary L'u c'1 personally appeared `1 L 717 wp'C1' �,o n�►z�v, u' personally known to me —OR- 0 proved to me on the basis of satisfactory evidence to be the person(s) whose name(j) Ware subscribed to the within instrument and acknowledged to me that heAshefthey executed the same in MsAwWtheir authorized capacigy ies, and that by 1}i44eF their signatures on the instrument the person(s), or the entity upon behalf of which person(9 acted, executed the instrument. Witness my hand and official seal. a Capacity claimed by signer: Mi.s section is OMON,tW ❑ Individual Corporate Officer(s): ❑ Partner(s): am_� a-39 y ❑ General o Limited OO ❑ Attorney -in -fact ❑ Trustee(s) ❑ Guardian/Conservator ❑ Other: Signer is representing: prrson(j,' or Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to an unauthorized document. THIS CERTIFICATE MUST BE ATTACKED TO THE DOCUMENT DESCRIBED AT RIGHT: Signer(s) Other than Named Above ,tea J sepembw t, 1973 PUBL:5871 113911 V2460.55 t w ? lit-(,'Iffy,-,p✓' �r`yi� �t/ /� • �C�L.O �r.F' Gc ,^�7�� - - - - - - TO CITY OF RMINCrON BEACH tiernpo ' 2000 MAIN STREET HUNTINGTON BEACH, CA. 19093 Beach Boulevard • Huntington Beach. CA 92648 LATTN: STEVE3 KOHLER I (714)964-1004 (714) B43-0101 • FAX (714) 843-9949 SUBJECT. 5 POINTS SENIORS ES CRMJ No. 5784-L DATE: 12-29-93 MESSAGE Ive enclose the originals of the following: l) Original Promissoz,Note 2) Original Guaranty 91e enclose copies of the following: 1) Deed of Trust✓ 2) CC&R's 3) Request for Notices% 4) Memorandum of Agreettent./ Please advise if you need anything further. Thank you. Q &aj AN LASHER &scrow officer t', F4,4 [le� CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION Fug F/7 �. V /la, hLONT1H610H BEACH TO: Connie Brockway, City Clerk FROM: Barbara A. Kaiser, Deputy City Administrator SUBJECT: Five Points Seniors DATE: January 3, 1994 Enclosed are the original documents for the Five Points Seniors housing project (David Michelson) including: Original Promissory Note Original Guaranty (2) Copies of the following are also enclosed, and can be replaced with recorded copies when received by your office. Deed of Trust CC&R's Request for Notice Memorandum of Agreement Thank you for your assistance. If you have any other questions, please give me a call. BAK:ls' Enclosures 757 !�/►1 �'n/DLr ,D AFFORDABLE HOUSING AGREEMENT (Five Points Senior Villas) by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and FIVE POINTS SENIORS, L.P. AGENCY, DEVELOPER I. II. A. B. C. D. E. A. B. C. D. TABLE OF CONTENTS [5100] SUBJECT OF AGREEMENT [§101] Purpose of Agreement [§102] The Site [§103] Parties to the Agreement 1. [§104] The Agency 2. [§105] The Developer [§106] The Guarantors [§107] Prohibition Against Change in Ownership, Management and Control of Developer [6200] AGENCY ASSISTANCE [§201] Agency Loan [§202] Note and Deed of Trust [§203] Agency Grant [6204] Submission of Evidence of Financing Commitments and Loan Closing [§300] DEVELOPMENT OF THE SITE [§301] Development of the Site by the Developer 1. [§302] Scope of Development 2. [6303] Site Plan 3. [9304] Construction Drawings and Related Documents 4. [§305] Approval of Plans, Drawings, and Related Documents S. [§306] Cost of Construction 6. [§307] Construction Schedule 7. [008] Bodily Injury and Property Damage Insurance (i) IV. 8. [§309] City and Other Governmental Agency Permits 9. [§310] Rights of Access 10. [§311] Local, State and Federal Laws 11. [§312] Antidiscrimination During Construction B. [§313] Taxes, Assessments, Encumbrances and Liens C. [§314] Prohibition Against Transfer of the Site, the Buildings or Structures Thereon D. [§315] Certificate of Completion E. [§316] Mortgage, Deed of Trust, Sale and Lease -Back Financing; Rights of Holders 1. [§317] No Encumbrances Except Mortgages, Deeds .of Trust, or Sale and Lease -Back for Development 2. [§318] Holder Not Obligated to Construct Improvements 3. [5319) Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure 4. [§320] Right of the Agency to Cure Mortgage or Deed of Trust Default S. [§321] Environmental Matters [§400] USE OF THE SITE A. [§401] Use in Conformance with Agreement B. [§402] Affordable Rental Housing C. [§403] Operating Expenses D. [6404] Management and Maintenance E. [§405] Rights of Access F. [§406] Developer's Equity G. [§407] Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction H. [§408] Nondiscrimination V. [§500] GENERAL PROVISIONS A. [§501] Notices, Demands and Communications Between the Parties B. [§502] Conflicts of Interest C. [§503] Enforced Delay; Extension of Times of Performance D. [§504] Nonliability of Officials and Employees of the Agency VI. [§600] DEFAULTS AND REMEDIES A. [§601] Defaults -- General B. [§602] Legal Actions 1. [§603] Institution of Legal Actions 2. [§604] Applicable Law 3. [§605] Acceptance of Service of Process C. [§606] Rights and Remedies Are Cumulative D. [§607] Inaction Not a Waiver of Default E. [§608] Liquidated Damages F. [§609] Remedies and Rights of Termination Prior to Conveyance 1. [§610] Damages 2. [§611] Specific Performance 3. [§612] Termination by the Developer Prior to Completion 4. [§613] Termination by the Agency Prior to Completion G. [§614] Remedies of the Parties for Default After Completion 1. [6615] Termination and Damages 2. [§616] Action for Specific Performance VII. (6700] A. (§701] B. [§702] C. [§7031 VIII. (§800] IX. (§900] SPECIAL PROVISIONS Real Estate Commissions Successors in Interest Memorandum of Agreement ENTIRE AGREEMENT, WAIVERS TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY ATTACHMENTS Attachment No. 1 Site Map and Legal Description Attachment No. 2 Guaranty Attachment No. 3 Promissory Note Secured by Deed of Trust Attachment No. 4 Construction Deed of Trust With Assignment of Rents Attachment No. 5 Schedule of Performance Attachment No. 6 Scope of Development Attachment No. 7 Certificate of Completion for Construction and Development Attachment No. 8 Declaration of Covenants, Conditions and Restrictions Attachment No. 9 Certification of Eligibility Attachment No. 10 Certification of Continuing Program Compliance Attachment No. 11 Operating Budget Attachment No. 12 Memorandum of Affordable Housing Agreement AFFORDABLE HOUSING AGREEMENT (Five Points Senior Villas) THIS AFFORDABLE HOUSING AGREEMENT (the "Agreement") is entered into as of November 18. 1991 by and between the .REDEVELOPMENT -AGENCY GF'THE CFTY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency") and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer"). The Agency and the Developer hereby agree as follows: I. [§100j SUBJECT OF AGREEMENT A. 1§1011 Purpose of Agreement A. The Agency is required by California Health and Safety Code Section 33334.2, et spec., to expend a certain percentage of property taxes allocated to it for the purpose of increasing, improving and preserving the City of Huntington Beach's supply of Low- and Moderate -Income housing available at an Affordable Housing Cost. B. This Agreement provides for the development of a One Hundred Sixty -Four (164) unit senior citizen rental housing project (the "Project") on an approximately 1.89 acre parcel of land within the City of Huntington Beach. Forty-eight (48) of those units (the "Affordable Units") will be available pursuant to this Agreement for Very Low Income Households, Lower Income Households and Persons and Families of Low and Moderate Income at an Affordable Rent (as those terms are defined in Section 402 hereof) for a period of thirty (30) years. C. In consideration for the Developer's construction and operation of the Project and the Affordable Units, this Agreement providers that the Agency shall make available certain financial assistance in the form of a low interest loan and a series of five grants. C. [§1021 The Site The Site is that real property located in the City of Huntington Beach ("City") as depicted and more fully described in the "Site Map and Legal Description" which is attached hereto as Attachment No. 1, and incorporated herein by reference. The Site is not located in any redevelopment project area of the City, but the development of the Project will be of benefit to the Main -Pier Redevelopment Project due to the creation of affordable housing near such project area. The Agency intends that the Affordable Units shall replace certain housing in the Main -Pier Redevelopment Project occupied by persons of Low and Moderate Income which was destroyed to facilitate certain redevelopment activities within such project �j area. The Developer owns, or will own at the time of the commencement of construction hereunder, fee simple title to the entire Site. C. [§1031 Parties _to_the _Agreement 1. [§104] The A enc The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, California Health and Safety Code Section 33000, et seq. The principal office of the Agency is located at City Hall', 2000 Main Street, Huntington Beach, California 92648. "Agency", as used in this Agreement, includes the Redevelopment Agency of the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. 2. [§105] The Developer The Developer is Five Points Seniors, L.P., which is a California limited partnership. The principal office and mailing address of the Developer for the purposes of this Agreement is c/o Institutional Property Investors, Inc., 19800 MacArthur Boulevard, Suite 680, Irvine, California 92715. The sole general partner of the Developer is David R. Michelson, Trustee of the Michelson Family Trust, under trust dated as of December 12, 1984, as amended March 1, 1985. The Developer represents and warrants to the Agency as follows: (a) The Developer is a duly established limited partnership and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. '(b) The Developer does not have any material contingent obligations or any material contractual agreements which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. (c) There are no material pending or, so far as is known to the Developer, threatened, legal proceedings to which the Developer is or may be made a party or to which any 12/04/91 7100u/2460/050 -2- LIE `) of its property is or may become subject, which has not been fully disclosed in the documentation submitted to the Agency which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. (d) There is no action or proceeding pending or, to the Developer's best knowledge, threatened, relating to the dissolution or liquidation of the Developer, and there is no action or proceeding pending or, to the Developer's best knowledge, threatened by or against the Developer which could affect the validity and enforceability of the terms of this Agreement, or materially and adversely affect the ability of the Developer to carry out its obligations hereunder. (e) The Developer has performed all of its obligations to be performed at or prior to this date in accordance with the "Schedule of Performance", which is attached hereto as Attachment No. 5 and incorporated herein, and is not in default hereunder. Each of the foregoing items (a) to (e), inclusive, shall be deemed to be an ongoing representation and warranty. The Developer shall advise the Agency in writing if there is any material change pertaining to any matters set forth or referenced in the foregoing items (a) to (e), inclusive. D. [§106] The Guarantors The "Guarantors" are David Michelson, Kathleen M. Michelson, Norman D. Ward and Bunnie L. Ward. As beneficiaries of the trusts which are partners of the Developer, the Guarantors will benefit materially by the execution of this Agreement. Concurrently with the execution of this Agreement the Guarantors shall execute and deliver to the Agency a guaranty of the Developer's obligations pursuant to this Agreement in the form of the "Guaranty" which is attached hereto as Attachments No. 2-A and 2-B and incorporated herein by reference. The parties agree and acknowledge that the delivery of the Guaranty by the Guarantors is a material inducement for the Agency to approve the Agreement, and that but for the provision of such Guaranty, the Agency would not approve this Agreement. E. [§107] Prohibition Against Change in Ownership, Management and Control of Developer The qualifications and identities of the Developer and its general partners are of particular interest and concern to the City and the Agency. It is because of these qualifications and identities that the Agency has entered into this Agreement with the Developer. Consequently, except as 12/04/91 7100u/2460/050 -3- expressly set forth in this Section 107 and Section 319 hereof, no person, whether a voluntary or involuntary successor in interest of the Developer, shall acquire any rights or powers under this Agreement nor shall the'Developer assign or transfer all or any part of this Agreement or any rights hereunder without the prior written approval of the Agency. The Agency shall approve such a transfer upon receipt by the Developer of (i) reasonable evidence satisfactory to the Agency that the transferee has assumed in writing, and in full, the Developer's duties and obligations under thiE Agreement and the attachments hereto, (ii)'an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Developer under this Agreement and that such obligations and this . Agreement are binding on the transferee, and (iii) the Agency receives evidence acceptable to the Agency that either (a) the transferee has experience in the ownership, operation and management of rental housing developments such as the Developer Improvements without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such developments, or (b) the transferee agrees to retain a property management firm with the experience and record described in Section (a) above. Written approval of the Agency shall also be required prior to any and all changes whatsoever in the identity of the person in control of the Developer, including any change in, or addition of, general partners of the Developer. The voluntary or involuntary sale or transfer of any general partnership interest of the Developer shall be deemed to constitute an assignment for the purposes of this Section 107 and the written approval of the Agency shall be required prior to effecting such a transfer. Any purported transfer, voluntary, involuntary, or by operation of law, except with the prior written consent of the Agency in accordance with this Section 107, shall constitute a default of Developer and shall confer no rights whatsoever upon any purported assignee or transferee. Notwithstanding any other provision of this Section 107 to the contrary, Agency approval of an assignment of this Agreement, or any interest therein, or an assignment of a general partnership interest or limited partnership interest in the Developer, shall not be required in connection with any transfer of an interest in the Developer so long as the existing general partner of the Developer retains operational and managerial control over development of the Site, provided that such transfer does not affect more than forty-nine percent (497.) of the existing general partnership interest in the Developer and the Developer shall remain responsible for the obligations of the Developer hereunder. All of the terms, covenants and conditions of this F►greenent shall be binding upon and shall inure to the 12/04/91 7100u/2460/050 -4- t k herb pfe,Tf k Acr�k f S a6 ss n n�hf to oof fentcA CY ��{�kd in y����•�„$ "lei��cL'7Er' S ra�vr rr� �� ► �' � �`'`.�} .6cc L, ass;5n ixrrf, benefit of the Developer and the permitted successors and assigns of the Developer. Whenerer the term "Developer" is used herein, such term shall include any other permitted successors and assigns as here p ovided. II. [§2001 AGENCY ASSISTANCE A. [§201) Agency Loan Upon the issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, and subject to the applicable terms and conditions of this Agreement, the Agency agrees to loan to the Developer the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "Agency Loan"). B. [§2021 Note and Deed of Trust The Agency Loan shall be evidenced by the Developer's execution of a "Promissory Note," in the form of Attachment No. 3 hereto, which is incorporated herein. The Promissory Note shall bear simple interest at the rate of five percent (5%) per annum for term of the loan. The Developer shall make monthly payments of principal and interest during the third (3rd) through tenth (loth) years of the Agency Loan, with payments amortized over the eight (8) year repayment period and with the loan balance due in full upon the tenth (loth) anniversary -of the Agency Loan. The full amount of the Promissory Note, with all interest accrued thereon, shall be immediately due and payable upon the Developer's uncured default of this Agreement and/or the Promissory Note. The Developer's obligations pursuant to the Promissory Note shall be secured by the Developer's execution of a "Deed of Trust" in the form of Attachment No. 4 hereto, which is incorporated herein. The Deed of Trust shall be made subordinate to the obligations pursuant to any multifamily housing revenue bond issuance which provides funds for the construction of the Project. The Agency may, in its reasonable discretion, subordinate the Deed of Trust to any mortgage or deed of trust encumbering the Site which secures other financing obtained by the Developer necessary to undertake the development of the Site in accordance with this Agreement, provided that the Agency determines that such subordination is necessary to enable the Developer to develop the Developer Improvements. The Developer shall execute and deliver a copy of the Promissory Note and the Deed of Trust to the Agency as a condition precedent to the disbursement of the Agency Loan Proceeds. In connection with the Deed of Trust, the Agency may obtain, at the expense of the Developer, an ALTA lender's policy or policies of title insurance, together with such endorsements as are reasonably requested by the Agency. 12/04/91 7100u/2460/050 -5- jk_ p" lwfe c, p��c�c's t �.tk �'st,sh•ct=f� f,,/C••�� 1,tj►h �,�J he G17 1 �s e�rf �hr ire $ e Jq,,, c! �. 7e.3 Aerarf) 0 7!e i,c! r G� !�[[rc� �•r /rx �C e,l zfecd e 1✓e:/�/CC �� fi�Cl*t7 �lCCc f D ^e-� -six ��nirtr�t, benefit of the Developer and the permitted successors and �y- assigns of the Developer. Whenever the term "Developer" is used herein, such term shall include any other permitted successors and assigns as herein-_p ovided. A II. [§200] AGENCY ASSISTANCE A. [§201] Agency Loan Upon the issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, and subject to the applicable terms and conditions of this Agreement, the Agency agrees to loan to the Developer the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "Agency Loan"). B. [§202) Note and Deed of Trust The Agency Loan shall be evidenced by the Developer's execution of a "Promissory Note," in the form of Attachment No. 3 hereto, which is incorporated herein. The Promissory Note shall bear simple interest at the rate of five percent (5%) per annum for term of the lean. The Developer shall make monthly payments of principal and interest during the third (3rd) through tenth (loth) years of the Agency Loan, with payments amortized over the eight (8) year repayment period and with the loan balance due in full upon the.tenth (loth) anniversary of the Agency Loan. The.full amount of the Promissory Note, with all interest accrued thereon, shall be immediately due and payable upon the Developer's uncured default of this Agreement and/or the Promissory Note. The Developer's obligations pursuant to the Promissory Note shall -be secured by the Developer's execution of a "Deed of Trust" in the form of Attachment No. 4 hereto, which is incorporated herein. The Deed of Trust shall be made subordinate to the obligations pursuant to any multifamily housing revenue bond issuance which provides funds fer the construction of the Project. The Agency may, in its reasonable discretion, subordinate the Deed of Trust tc any mortgage or deed of trust encumbering the Site which secures other financing obtained by the Developer necessary to undertake the development of the Site in accordance with this Agreement, provided that the Agency determines that such subordination is necessary to enable the Developer to develop the Developer Improvements. The Developer shall execute and deliver a copy of the Promissory Note and the Deed of Trust to the Agency as a condition precedent to the disbursement of the Agency Loan Proceeds. In connection with the Deed of Trust, the Agency may obtain, at the expense of the Developer, an ALTA lender's policy or policies of title insurance, together with such endorsements as are reasonably requested by the Agency. 12/04/91 7100u/2460/050 -5- This duplicate Page #5 includes Developers Original initialling kw-4 �.d C. 1§203) Agency Grant Upon each of the first (lst) through fifth (5th) anniversaries of the issuance of a certificate of occupancy for the Developer Improvements, and provided the Developer is not in default of this Agreement, the Agency shall grant to the Developer the sum of One Hundred Thousand Dollars ($100,000) (for a total of Five Hundred Thousand Dollars ($500,000)). Such payments shall be in consideration for the Developer's agreement to provide housing to Very Low, Lower, and Low- and Moderate -Income Households at an Affordable Rent (as those terms are defined in Section 402 hereof), and to provide a high quality level of construction materials and amenities in the development and operation of the Developer Improvements, as set forth in this Agreement and the attachments hereto. D. (§204) Submission of Evidence of Financing Commitments and Loan Closing As required in this Agreement and within the time established therefor in the Schedule of Performance (Attachment No. 5), the Developer shall submit to the Agency evidence that the Developer has obtained sufficient equity capital and firm and binding commitments for financing necessary to undertake the development of the Site in accordance with this Agreement. The Agency shall approve or disapprove such evidence of financing commitments within the time set forth in the Schedule of Performance. Approval shall not be unreascnably withheld or conditioned. If the Agency shall reasonably disapprove any such evidence of financing, the Agency shall do so by written notice to the Developer stating the reasons for such disapproval and the Developer shall diligently pursue and shall within ninety (90) days of such notice submit to the Agency new evidence of financing. The Agency shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 204 for the approval or disapproval of the evidence of financing as initially submitted to the Agency. Such evidence of financing shall include the following: 1. A copy of the commitment obtained by the Developer for the mortgage loan or loans for financing to fund the construction of the applicable Developer Improvements. The commitment for financing shall be in such form and content acceptable to the Agency as reasonably evidences a legally binding, firm and enforceable commitment subject to the construction lender's customary and normal conditions and terms. That commitment letter from Wells Fargo National Bank dated September 23, 1991 which has been submitted to the Agency is hereby approved as meeting the requirements of this Section 1; and 12/04/91 7100u/2460/050 -6- 2. A copy of the contract between the Developer and one or more general contractors for the construction of the applicable Developer Improvements, certified by the Developer to be a true and correct copy thereof; and 3. A financial statement and/or other documentation satisfactory to the Agency as evidence of other sources of capital sufficient to demonstrate that the Developer has adequate funds to cover the equity requirements of construction of the Improvements and the requirements of Section 406 hereof. Such funds shall be in the amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) from the commencement of construction through the second (2nd) anniversary of the date a certificate of occupancy for the Developer Improvements is issued by the City. III. [§300] DEVELOPMENT OF THE SITE A. [§301] Development of the Site by the Developer At its option, the Agency shall have the right to review and approve the plans and specifications for the Developer Improvements as set forth in Sections 302 through 305 hereof. 1. [§302) Scope of Development The Site shall be developed as provided in the Scope of Development (Attachment No. 6). The Developer shall commence and complete construction of such improvements (the "Developer Improvements") by the respective times established therefor in the Schedule of Performance (Attachment No. 5) subject to Section 503 of this Agreement. The development shall include any plans and specifications submitted to City and/or Agency for approval, and shall incorporate or show compliance with all applicable mitigation measures. 2. [§303) Site Plan The Developer has prepared and submitted to the Agency for its approval Design D-rawings and a Site Plan and related documents containing the overall plan for development of the Site in sufficient detail to enable the Agency to effectively evaluate the proposal for relationship of structures to landscape, physical and environmental considerations and conformity to the requirements of this Agreement. The Agency has approved such submissions. The Site shall be developed as established in this Agreement and such documents except as changes may be mutually agreed upon between the Developer and the Agency. Any such changes shall be within the limitations of the Scope of Development which is attached to this Agreement as Attachment No. 6 and incorporated herein. 12/04/91 7100u/2460/050 -7- NI.d 3. (§304] Construction Drawings and Related DocumentE By the time set forth therefor in the Schedule of Performance (Attachment No. 5), the Developer shall prepare and submit to the City construction drawings, landscape plans, and related documents for development of the Site for building permit(s). During the preparation of all drawings and plans, staff of the Agency, City, and the Developer shall hold regular progress meetings to coordinate the preparation of, submission to, and review of drawings, plans and related documents by the Agency. The staff of Agency, City, and the Developer shall communicate and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the Agency can receive prompt and speedy consideration. The Developer shall be obligated to obtain all City approvals required for the construction of the Developer Improvements. 4. (§305] Approval of Plans Drawings, and Related Documents The Agency and the City shall have the right of planning review, including plan check, of all plans and submissions, including any changes therein. The Agency shall approve or disapprove such plans and submissions within the same time periods established by the City for its review of construction and architectural plans and submissions. During each stage of the processing for Developer Improvements, the Agency and the City shall have the right to require additional information and shall advise the Developer if any submittal of plans or drawings is not complete or not in accordance with City/Agency procedures. If the Agency or the City determines that such a submittal is not complete or not in accordance with procedures, such tender shall not be deemed to constitute a submittal for purposes of satisfying the Schedule of Performance (Attachment No. 5). If the Developer desires to make any substantial changes in the construction plans after their approval by the Agency and the City, the Developer shall submit the proposed change to the Agency and the City for their approval. If the construction plans, as modified by the proposed change, conform to the requirements of Section 304 of this Agreement and the Scope of Development (Attachment No. 6) the Agency and the City shall approve or reject the proposed change and notify the Developer in wresting within such periods as are established by the City for its review of such changes to construction and architectural plans and specifications. Such change in construction plans shall, in no event, be deemed approved by the Agency or the City without such an actual approval. 12/04/91 7100u/2450/050 -8- t,J �.i 5. [§306] Cost of Construction All the costs of site preparation, planning, designing and constructing the Developer Improvements and developing the Site -and constructing all improvements thereon shall be borne solely by the Developer. As more fully set forth in the Scope of Development (Attachment No. 6), the Developer Improvements shall be constructed to the same or better standard of quality as the apartment project constructed by the Developer at 12200 Valley View, Garden'Grove, California. The Developer shall also bear all costs related to discharging the duties of the Developer set forth in this Agreement. The Developer assumes the responsibility to construct and shall let contracts for or cause to be constructed all off -site improvements developed pursuant to this Agreement. The Developer shall be responsible for all fees associated with development of the Developer Improvements, including, without limitation, school facilities fees and impact fees ("School Fees"). Upon completion of the Developer Improvements, the Developer shall submit to the Agency a detailed and itemized report of its -costs of development. The Agency agrees, upon request therefor by the Developer, to consider, but in no way is obligated, to issue or participate in the issuance of multi -family housing bonds ("Bonds") to assist in financing of the Project. For any such financing to proceed, it is understood that: (i) the entire cost of such financing, including without limitation costs of issuance, debt service, and financial advisement of the Agency, shall be borne by the Developer; (ii) the bonds shall have a rating of "A" or better from Moody's or Standard and Poor's; and (iii) neither the Agency nor the City shall have any liability, contingent or otherwise, concerning or with respect to such bonds. 6. [§307] Construction Schedule The Developer shall promptly begin and thereafter diligently prosecute to completion the construction of the Developer Improvements, with all construction commencing and being completed within the times specified therefor in the Schedule of Performance (Attachment No. 5), subject to Section 503 of this Agreement. 7. [§30$] Bodily Injury and Property Damage Insurance The Developer shall defend, indemnify, assume all responsibility for and hold the Agency, its officers, agents, representatives and employees harmless from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including reasonable attorneys' 12/04/91 7100u/2460/050 -9- fees and costs), which may be caused by any of,the Developer's acts, omissions or failures to act under this Agreement, whether such activities or performance thereof be by the Developer or anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement. The Developer shall take out and maintain during the life of this Agreement a comprehensive liability policy in the amount of One Million Dollars ($1,000,000) coirbined single limit policy, Including contractual liability, or such other higher amount as the Developer's construction lender may require, as shall protect the Developer, City and Agency from claims for such damages. The Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form of the insurance carrier setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and the Agency (and their respective officers, agents, and employees) as additional insureds under the policy. The certificate by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City and the Agency of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by the Developer shall be primary insurance and not contributing with any insurance maintained by the Agency or City, and the policy shall contain such an endorsement. The insurance policy or the certificate of insurance shall contain a waiver of subrogation for the benefit of the City and the Agency. The required certificate shall be furnished by the Developer at the time set forth therefor in the Schedule of Performance (Attachment No. 5). The Developer shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. S. [§309] City and Other Governmental Agency Permits Before commencement- of construction or development of any buildings, structures or other works of improvement upon the Site or related offsite improvements, the Developer shall, at its own expense, take all actions necessary and proper to secure or cause to be secured any and all permits which may be required by the City or any other governmental agency affected by such construction, development or work. It 12/04/91 7100u/2460/050 -10- is understood that the Developer's obligation is to pay all necessary fees and to timely submit to the City final drawings with final corrections necessary to obtain a building permit; the Agency will, without obligation to incur liability or expense therefor, use its best efforts to expedite issuance of building permits and certificates of occupancy for construction that meets the requirements of the City Code. The Developer agrees and acknowledges that it shall be responsible for the cost of such environmental review and clearance as may be deemed necessary or appropriate in connection with the processing of land use entitlements with respect to the Site. 9. [§3101 Rights of Access For the purpose of assuring compliance with this Agreement, representatives of the Agency and the City shall have the right of access to all portions of the Site without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the Developer Improvements, so long as they comply with all safety rules. Such representatives of the Agency or the City shall be those who are so identified in writing by the Executive Director of the Agency. The Agency shall indemnify and hold the Developer and its partners, employees and agents harmless from any bodily injury or related damages arising out of the activities of the Agency and the City as referred to in this Section 310. The Developer agrees to place and maintain on the Site during construction of the Developer Improvements one (1) sign indicating the respective roles of the Developer and the Agency in the Developer Improvements. The cost of the sign shall be borne solely by the Developer. 10. [§311; Local, State and Federal Laws The Developer shall carry out the construction of the Developer Improvements in conformity with all applicable laws, including all applicable federal and state labor standards; provided, however, Developer and its contractors, successors, assigns, transferees, and lessees do not waive their rights to contest any such laws, rules or standards. 11. [§312] Antidiscrimination During Construction The Developer, for itself and its successors and assigns, agrees that in the construction of the Developer Improvements provided for in this Agreement, the Developer will not discrininate against any employee or applicant for employment because of race, color, creed, religion, age, sex, marital status, handicap, national origin or ancestry. 12/04/91 7100u/2450/050 -11- OR �.1 B. (63131 Taxes, Assessments, Encumbrances and Liens The Developer shall pay prior to delinquency all ad valorem taxes and assessments on the Site. Prior to issuance of a Certificate of Completion pursuant to Section 315, except for encumbrances allowed pursuant to this Agreement, including the lien of any multifamily housing revenue bond issuance which provides funds for the construction of the Project, the Developer shall not place on the Site or any part thereof any mortgage, trust deed, encumbrance or lien. Prior to issuance of a Certificate of Completion pursuant to Section 315, the Developer shall remove or have removed any levy or attachment made on any of the Site or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. After the issuance of a Certificate of Completion, the restrictions set forth in the prior two sentences shall terminate and be of no further force or effect. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. C. (6314) Prohibition Against Transfer of the Site, the Buildings or Structures Thereon Prior to the Developer's prepayment of the Agency Loan, the Developer shall not, except as permitted by this Agreement (including without limitation Section 107), without prior written approval of the Agency, which approval shall not be unreasonably withheld, make any total or partial sale, transfer, conveyance, assignment or lease of the whole or any part of the Site or of the buildings or structures on the Site. The Agency shall approve such a transfer upon receipt by the Developer of (i) reasonable evidence satisfactory to the Agency that the transferee has assumed in writing, and in full, the Developer's duties and obligations under this Agreement and the attachments hereto, (ii) an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Developer under this Agreement and that such obligations and this Agreement are binding on the transferee, and (iii) the Agency receives evidence acceptable to the Agency that either (a) the transferee has experience in the ownership, operation and management of rental housing developments such as the Developer Improvements without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such developments, or (b) the transferee agrees to retain a property management firm with the experience and record described in Section (a) above. This prohibition shall not be deemed to prevent construction loans allowable pursuant to this Agreement, the granting of temporary or permanent easements or permits to facilitate the development of the Site or to prohibit or restrict the leasing of any part or parts of a building or structure for occupancy for a term commencing upon completion. This prohibition shall 12/04/91 7100u/2460/050 -12- not be deemed to prevent a transfer of a general or limited partnership interest in the Developer, provided that a general or limited partner of the Developer does not convey more than forty-nine percent (49%) of its partnership interest, and each partner of the Developer shall retain at least fifty-one percent (51%) of its original ownership of the Partnership. D. 1§3151 Certificate of Completion Within thirty (30) days after completion of all construction and development required by this Agreement to be completed by the Developer upon the Site in conformity with this Agreement, submission of a detailed and itemized report of its costs of development, and request for a Certificate of Completion, the Agency shall furnish the Developer with a "Certificate of Completion." Such Certificate shall be substantially in the form of Attachment No. 7 attached hereto and incorporated herein. The Agency shall not unreasonably withhold any -such Certificate of Completion. Such Certificate of Completion shall be a conclusive determination of satisfactory completion of the construction required by this Agreement upon the Site and the Certificate of Completion shall so state. After recordation of such Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest therein shall not (because of such ownership, purchase, lease or acquisition), incur any obligation or liability under this Agreement except that such party shall.be bound by the covenants contained in the "Declaration of Covenants, Conditions and Restrictions" (Attachment No. 8), Section 402 of this Agreement, and other documents establishing covenants on the Site in accordance with the provisions of this Agreement. The Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. If the Agency refuses or fails to furnish a Certificate of Completion for the Developer Improvements after written request from the Developer, the Agency shall, within thirty (30) days of written request therefor, provide the Developer with a written statement of the reasons the Agency has refused or failed to furnish a Certificate of Completion. The statement shall also contain Agency's opinion of the actions that the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate availability of specific items of materials for landscaping, the Agency may in its discretion issue its Certificate of Completion upon the posting of a bond or an unconditional letter of credit (in form and substance acceptable to the Agency and its legal counsel) by the Developer with the Agency in an amount representing a fair value of the work not yet completed, or upon withholding from funds otherwise payable pursuant to Section 201 an amount estimated in good faith by the Agency to represent one and one-half (1-1/2) times the cost of such work not yet completed. 12/04/91 7100u/2460/050 -13- Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the improvements, or any part thereof. Such Certificate of Completion is not a notice of completion as referred to in the California Civil Code, Section 3093. E. [63161 Mortgage, Deed of Trust, _Sale and Lease -Back Financing; Rights of Holders 1. [§317] No Encumbrances Except_ Mortgages, Deeds of Trust, or Sale and Lease -Sack for Development Mortgages, deeds of trust and sales and lease -backs are to be permitted before completion of the construction of the Developer Improvements, but only for the purpose of securing loans of funds to be used for the construction of the Developer Improvements, and any other purposes necessary and appropriate in connection with the construction required under this Agreement. The Developer shall notify the Agency in advance of any mortgage, deed of trust or sale and leaseback financing, if the Developer proposes to enter into the same before completion of the Developer Improvements. The words "mortgage" and "trust deed" as used hereinafter shall include sale and leaseback. The Developer shall not enter into any such conveyance for financing or refinancing without the prior written approval of the Agency, which approval Agency agrees to give if any such conveyance for financing is given to a responsible financial or lending institution or other acceptable person or entity. 2. [§318] Holder Not Obligated to Construct Im rovements The holder of any mortgage or deed of trust authorized by this Agreement shall not be obligated by the provisions of this Agreement to construct or complete the Developer Improvements or to guarantee such construction or completion; nor shall any covenant be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 12/04/91 7100u/2460/050 -14- 3. [5319] Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure With respect to any mortgage or deed of trust granted by Developer as provided herein, whenever the Agency shall deliver any notice or demand to Developer with respect to any breach or default by the Developer in completion of the Developer Improvements, the Agency shall at the same time deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights of the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice (or if such default cannot reasonably be cured by such holder within sixty days, within such time period as is reasonably necessary to cure such default), to cure or remedy or commence to cure or remedy any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction, rehabilitation or completion of the Developer Improvements (beyond the extent necessary to conserve or protect the construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement satisfactory to the Agency. The holder (or the holder's successor in interest), in that event, must agree to complete, in the manner provided in this Agreement, the Developer Improvements to which the lien or title of such holder relates, and submit evidence reasonably satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder (or the holder's successor in interest) properly completing such construction shall be entitled, upon compliance with the requirements of Section 315 of this Agreement, to a Certificate of Completion, and shall be entitled to payment of the Agency Loan and Agency Grant upon compliance with all applicable covenants and the occurrence of all applicable conditions. 4. [5320] Right of the Agency to Cure Mortgage or Deed of Trust Default In the event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the Developer Improvements or any part thereof and the holder of any first mortgage or first deed of trust has not exercised its option to construct, the Agency shall have the right, within sixty (60) days after receipt of notice of such default, to cure the default. In such event, the Agency shall be entitled to reimbursement from the Developer of all proper costs and expenses associated with and attributable to the curing of the first mortgage or first deed of trust default or breach of this Agreement by the Developer and incurred by the Agency in curing such default. The Agency shall also be 12/04/91 7100u/2460/050 -15- L„J entitled to a lien upon the Site to the extent of such incurred costs and disbursements. Any such lien shall be subject to the prior construction financing mortgages or deeds of trust. F. [§321] Environmental Matters 1. Definitions For the purposes of this Section 321, the following terms shall have the meanings herein specified: (a) The term "Hazardous Materials" shall mean (i) any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seg.), as amended from time to time, and regulations promulgated thereunder; (ii) any "hazardous substance" as defined by the Carpenter -Presley -Tanner Hazardous Substance Account Act (California. Health and Safety Code Sections 25300 et seg.), as amended from time to time, and regulations promulgated thereunder; (iii) asbestos; (iv) polychlorinated biphenyls; (v) petroleum, oil, gasoline (refined and unrefined) and their respective by-products and constituents; and (vi) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any "Governmental Requirements" (as defined in Subparagraph (c) of Paragraph 1 of this Section 321) either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to the environment. (b) The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, -or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time (whether before or after the date of this Agreement) emanating from the Site. (c) The term "Governmental Requirements" shall mean all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Agency, the Developer or the Site. 2. Obligation of Developer to Remediate the Site Notwithstanding the obligation of Developer to indemnify Agency pursuant to Paragraph 4 of this Section 321 or any other obligations of the Developer pursuant to this Agreement, Developer shall, at its sole cost and expense, 12/04/91 7100u/2460/050 -16- promptly take (i) all actions required by any federal, state or local governmental agency or political subdivision or any Governmental Requirements with respect to the entire Site, and (ii) all actions necessary to make full economic use of the Site for the purposes described in this Agreement, which actions, requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous materials or Hazardous Materials Contamination regardless of when such Hazardous Materials or Hazardous Materials Contamination were introduced to the Site and regardless of who is responsible for introducing such Hazardous Materials or Hazardous Materials Contamination to the Site (the "Site Remediation"). The Site Remediation shall include, but not be limited to, investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work required. The Developer shall take all actions necessary to promptly restore the Site to an environmentally sound condition for uses contemplated by this Agreement, notwithstanding any lesser standard of remediation allowable under applicable Governmental Requirements. The Developer's obligations under this Paragraph 2 of this Section 321 shall be referred to as the "Site Remediation" and shall survive the issuance of the Certificate of Completion. 3. Developer's Representations and Warranties Developer hereby represents and warrants to the Agency that, to the best of its knowledge: (a) No Hazardous Materials or Hazardous Contamination exist or are located on, in or under the Site. (b) No portion of the Site is being used or, to Developer's best knowledge after diligent inquiry, has ever been used prior to Developer's ownership or occupancy thereof, for the disposal, storage, treatnent, processing or other handling of Hazardous Materials and the Site is not affected by any Hazardous Materials Contamination. (c) No asbestos or asbestos -containing materials have been installed, used, incorporated into, or disposed of on the Site. (d) No polychlorinated biphenyls are located on or in the Site, in the form of electrical transformers, fluorescent light fixtures with ballasts, cooling oils, or any other device or form. (e) No underground storage tanks are located on the Site or were located on the Site and subsequently removed or filled. 12/04/91 7100u/2460/050 -17- (f) No investigation, administrative order or notice, consent order and agreement, litigation or settlement with respect to Hazardous Materials or Hazardous Materials Contamination is pending or, to Developer's best knowledge after diligent inquiry, threatened, with respect to the Site or the existing operations thereon. (g) The Site and its existing uses comply and, to Developer's best knowledge after diligent inquiry, their prior uses at all times have complied with all applicable Governmental Requirements relating to environmental matters or Hazardous Materials. There is no condition on the Site which is in violation of any applicable Governmental Requirements relating to Hazardous Materials, and Developer has received no communication from or on behalf of any federal, state or local governmental authority or agency that any such condition exists. The Site is not currently on and, to Developer's best knowledge after diligent inquiry, have never been on any federal or state "Superfund" list, and Developer is not aware that the Site is anticipated or threatened to be placed on such list. (h) True and correct copies of all (i) Developer's internal inspection reports with respect to the Site (ii) environmental audits, reports and studies received by Developer which concern the Site, and (iii) inspection reports conducted during the last two years from each applicable regulatory authority with respect to the Site in the possession or control of Developer, have been delivered to Agency. Developer shall deliver to Agency within five (5) days of Developer's receipt thereof all environmental reports, audits or studies, internal inspection reports and regulatory inspection reports, which concern the Site generated or received by Developer prior to the repayment in full of the Promissory Note. 4. Indemnification Developer shall save, protect, defend, indemnify and hold harmless Agency from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency by reason of, resulting from, in connection with or arising in any manner whatsoever as a direct or indirect result of (i) the ownership of all or any part of the Site, (ii) any act or omission on the part of either Agency or Developer, or their agents, employees, contractors or 12/04/91 7100u/2460/050 -18- invitees, (iii) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination, (iv) the environmental condition of the Site, and (v) any Liabilities incurred under any Goverm.ental Requirements relating to Hazardous Materials. Developer's obligations under this Section 321 shall survive after the issuance of the Certificate of Completion, and shall be a covenant running with the land in perpetuity, binding on all successors and assigns of Developer's interest in either this Agreement or the Site. S. Duty to Prevent Hazardous Material Contamination. The Developer shall take all necessary precautions to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the highest standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 6. Environmental Inquiries. The Developer shall notify the Agency, and provide to the Agency a copy or copies, of the following environmental permits, disclosures, applications, entitlements or inquiries relating to the Site: Notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and the Developer shall report to the Agency, as soon as possible after each incident, any unusual, potentially important incidents, including but not limited to, the following: (a) All required reports of releases of hazardous Materials, including notices of any release of Hazardous Materials as required by any Governmental Requirement; (b) All fires; (c) All instances where asbestos has been or may be disturbed by repair work, tenant improvements or other activities in buildings containing asbestos; (d) All notices of suspension of any permits; 12/04/91 7100u/2460/050 -19- 1 (e) All notices of violation from Federal, State or local environ.:nental authorities; (f) All orders under the State Hazardous Waste Control Act and the State Hazardous Substance Account Act and corresponding federal statutes, concerning investigation, compliance schedules, clear up, or other remedial actions; (g) All orders under the Porter -Cologne Act, including corrective action orders, cease and desist orders, and clean-up and abatement orders; (h) Any notices of violation from OSHA or Cal -OSHA concerning employees' exposure to Hazardous Materials; (i) All complaints and other pleadings filed against the Developer and/or the Agency relating to the Developer's storage, use, transportation, handling or disposal of Hazardous Materials on the Site. In the event of a release of any Hazardous Materials into the environment, the Developer shall, as soon as possible after the release, furnish to the Agency a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the Agency, the Developer shall furnish to the Agency a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. IV. [§400] USE OF THE SITE A. [§401] Use in Conformance with Agreement The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof that, during construction and thereafter, the Developer, such such successors and such assignees, shall use, operate and maintain the Site in conformity with this Agreement and shall devote the Site to uses specified in this Agreement for the periods of time specified therein. B. 16402] Affordable Rental Housing 1. Number of Units. The Developer covenants and agrees to develop a total of one hundred sixty-four (164) multifamily housing units on the Site in conformance with the 12/04/91 7100u/2460/050 -20- Scope of Development (Attachment No. 6). The Developer agrees to make available, restrict occupancy to, and rent thirty-two (32) of the units to "Very Low Income Households" and sixteen (16) additional units to "Persons and Families of Low- and Moderate Income" (for a total of forty-eight (48) restricted units), all at an "Affordable Rent" (the "Affordable Units"). However, the Developer shall be obligated to make available, restrict occupancy to, and rent sixteen (16) of the units to "Very Low Income Households," sixteen (16) additional units to "Lower Income Households," and sixteen (16) additional units to "persons and families of Low- and Moderate Income," in lieu of the requirements of the preceding sentence, for the duration of the "Affordability Period" (as defined in paragraph 2 of this Section 402), upon the occurrence of all three of the following events: (a) the "Qualified Develcpment Period" (as defined in the Regulatory Agreement and Declaration of Restrictive Covenants by and among the City, Developer and Dai-Ichi Kangyo Bank of California, dated as of December 1, 1991) shall have elapsed; and (b) the "Section 8 Program" (as defined in paragraph 8 of this Section 402) or a reasonably similar successor or replacement federal rental subsidy or voucher program no longer exists; and (c) neither the City nor the Agency has instituted a rental subsidy or voucher program designed to subsidize the rents of Very Low Income Households at levels equivalent to the Section 8 Program. The location of the Affordable Units shall be dispersed throughout the Developer Improvements and shall be reasonably acceptable to the Agency. The distribution of sizes (in terms of number of bedrooms) of the Affordable Units shall be in the same proportion as the distribution of sizes of all units within the Developer Improvements. There shall be not less than six (6) and not pore'than ten (10) Affordable Units on each floor of the Developer Improvements. Those Affordable Units located on the first floor of the Developer Improvements shall each be not less than Five Hundred Seventy (570) square feet. "Very Low Income Household" shall mean a household earning not greater than fifty percent (50%) of Orange County median income, as determined by the United States Department of Hcusing and Urban Development, as set forth in Health and Safety Code Section 50105. "Lower Income Household" shall mean a household earning not greater than eighty percent (80%) of Orange County median income, as determined by the United States Department of Housing and Urban development, as set forth in Health and Safety Code Section 50079.5. "Persons and Families of Low and Moderate Income" shall mean households earning not greater than one hundred twenty percent (12001) of Orange County median income, as determined by the United States Department of Hou:.ing and Urban Development, as set forth in Health and Safety Code Section 50093. 12/04/91 7100u/2460/050 -21- "Affordable Rent" shall have the meaning set forth in Health and Safety Code Section 50053, as further defined in subparagraph 5 of this Section 402. 2. Duration of Affordability Requirements. The Affordable Units shall be subject to the requirements of this Section 402 for thirty (30) years, beginning on the date of the City's issuance of a certificate of occupancy for the Developer Improvements (the "Commencement Date"). The duration of this requirement shall be known as the "Affordability Period." All tenants residing in the Affordable Units during the last two (2) years of the Affordability Period shall be given notice at least once every six (6) months of the expiration date of this requirement, and that the rent payable on the Affordable Unit may be raised to a market rate rent at the end of the Affordability Period. The Developer shall execute, acknowledge and deliver to the Agency a "Declaration of Covenants, Conditions and Restrictions," in the form of Attachment No. 8 hereto and incorporated herein (the "Declaration"), which sets forth all of the requirements of this Section 402 of the Agreement in recordable form. The Developer consents to the recording of the Declaration in the official records of Orange County, California. 3. Selection of Tenants. The Developer shall give notice to the Agency of the City s issuance of the certificate of occupancy for the Developer Improvements and the Affordable Units, and shall give notice of the vacancy of each and any Affordable Unit thereafter. The Agency shall have five (5) working days from the receipt of such notice to deliver to the Developer a list of prospective tenants for such vacancy. The Developer shall send written notice of such vacancy to each person on such list. Such notice shall notify the recipient that he or she crust directly contact the Developer or its designated leasing agent within fifteen (15) working days to apply for tenancy of such vacant Affordable Unit. The Developer shall not rent or lease such Affordable Unit during such fifteen (15) day period to any tenant not notified of such vacancy by the Agency. In the event that no tenant which is reasonably acceptable to the Developer applies for tenancy of the vacant unit within such time period, the Affordable Unit may be leased to another tenant selected by the Developer who meets all of the other requirements provided herein. 4. Income of Tenants. Prior to the rental or lease of any Affordable Unit to a tenant, and annually thereafter within thirty (30) days of the anniversary date of the tenant's occupancy of the Affordable Unit, the Developer shall submit to the Agency a completed income computation and certification _ form, in the form of Attachment No. 9 hereto or such other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant leasing an 12/04/91 7100u/2460/050 -22- Affordable Unit is a Very Low Income Household, or a Person or Family of Low- and Moderate -Income, whichever is applicable, and meets the eligibility requirements established for,the Affordable Unit. The Developer :hall obtain an income certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency: (1) obtain two (2) paycheck stubs from the tenant's two (2) most recent pay periods. (2) obtain a true copy of an income tax return from the tenant for the most recent tax year in which a return was filed. (3) obtain an income verification certification from the employer of the tenant. (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Very Low Income Household or Person or Family of Low- and Moderate -Income shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no longer qualified as a Very Low Income Household or Person or Family of Low- and Moderate -Income, the next available unit of comparable size must be rented to (or held vacant and available for immediate occupancy by) a Very Low Income Household or Person or Family of Low- and Moderate -Income, whichever is applicable. Such new tenant shall then constitute a Very Low Income Household or Person or Family of Low- and Moderate -Income for the purposes of this Section 402, and until such next available unit is rented to such tenant, the former Very Low Income Household or Person or Family of Low- and Moderate -Income who has ceased to qualify as such shall be deemed to continue to be a Very Low Income Household or Person or Family of Low- and Moderate -Income for the purposes of this Section 402. In 12/04/91 7100u/2450/050 -23- addition, the Developer shall annually submit to the Agency a certified statement of the rental rate, income, ages and family size of each of the tenants of the Affordable Units in a form of Attachment No. 10 hereto or such other form as may be provided by the Agency. S. Determination of Affordable Rent for the Affordable Units. Each Affordable Unit shall be rented at an Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the thirty-two (32) Affordable Units required to be rented to Very Low Income . Households shall be established at one -twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of Orange County median income, as determined by the United States Department of Housing and Urban Development. The maximum monthly rental amount for the Affordable Units required to be rented to Lower Income Households, if any, shall be established at one -twelfth (1/12th) of thirty percent (30%) of sixty percent (60%) of Orange County median income for tenants earning more than fifty percent (50%) and not more than sixty percent (60%) of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) of such tenant's annual income for tenants earning more than sixty percent (60%) and not more than eighty percent (60%) of Orange County median income. The maximum monthly rental amount for the Affordable Units required to be rented to Persons of Low- and Moderate Income shall be established at one -twelfth (1/12th) of thirty percent (30%) of one hundred ten percent (110%) of Orange County median income for tenants earning more than eighty percent (80%) and not more than one hundred ten percent (110%) of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) of such tenant's annual income for tenants earning more than one hundred ten percent (110%) but not more than one hundred twenty percent (120J) of Orange County median income. The maximum monthly rental amount for each Affordable Unit rented to Persons of Low- and Moderate- Income shall be based upon the actual household size of the persons occupying the Affordable Unit. The maximum monthly rental amount for each Affordable Unit to be rented to Very Low Income Households and Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Very Low Income Household which is a "Section 8 Recipient", as defined in Section 402(8) hereof ("Section 8 Unit"), the maximum monthly rental amount for the next Affordable Unit rented to a Very Low Income Household which is not a Section 8 Recipient shall be based upon the actual household size of the person or persons occupying such Affordable Unit ("Actual Household Size Unit"). In the event any such Section 8 Unit is vacated and rerented to a Very Low Income Household which is not a Section 8 Recipient, then upon 12/04/91 7100u/2460/050 -24- � L.J the next vacation of an Actual Hcusehold Size Unit, such vacated Actual Household Size Unit shall no longer be an Actual Household Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two (2) persons if it is a one (1) bedroom unit and three (3) persons if it is a two bedroom unit. In no event, however, shall the rerenting of a Section 8 Unit to a Very Low Income Household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Furthermore, the maximum number of Actual Household Size Units required at any one time shall be sixteen (16). THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THE MAXIMUM RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT. Developer Initials: .Ut' 1 The maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building permits and not later than the Commencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth above upon the publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. 6. Senior Citizen Units. All of the units in the Developer Improvements, including without limitation the Affordable Units, shall be independent living apartments specially designed for the physical and social needs of "Senior Citizens" (persons fifty-five (55) years or older, subject to applicable law) in accordance with the requirements set forth in the Scope of Development (Attachment No. 6). The units shall be comprised of one and two bedroom units, each with a private balcony or patio. The Developer shall state, in a prominent location in all advertising and marketing materials, that the Developer Improvements are designed for use and occupancy by Senior Citizens. Furthermore, the Developer shall restrict occupancy to Senior Citizens and "Qualified Permanent Residents" (as that term is defined in California Civil Code Section 51.3), in the rental of both the Affordable Units and the other units in the Developer Improvements. Except as otherwise provided herein, at least one person in residence in each dwelling unit must must be a Senior Citizen, and other residents in the same 12/04/91 7100u/2460/050 -25- dwelling unit who are not Senior Citizens must be Qualified Permanent Residents. Temporary guests of a Senior Citizen or Qualified Permanent Resident shall be allowed for a period of not more than sixty (60) days in any twelve (12) month period. Upon the death, dissolution of marriage, hospitalization or other prolonged absence of the Senior Citizen in a dwelling unit, any Qualified Permanent Resident who has continuously resided in the dwelling unit with such Senior Citizen shall be permitted to continue as a resident of that dwelling unit. "Permitted Health Care Residents" (as that term is defined in California Civil Code Section 51.3) shall be permitted to occupy any dwelling unit during any period that such person is actually providing live-in, long-term or hospice health care to a Senior Citizen tenant or Qualified Permanent Resident tenant for compensation. 7. Bonds. In the event the Bonds (as defined in Section 306 hereof) are issued in connection with the acquisition, development or use of the Site, the Developer shall strictly comply with all covenants, conditions and requirements relating to the duties of the Developer pursuant to such Bonds and such agreements as are entered into in connection therewith. S. Federal Housing Subsidies. The Agency shall use ,its best reasonable efforts to assist the Developer to secure as tenants of the Affordable Units dedicated to Very Low Income Households persons who are recipients ("Section 8 Recipients") of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937, or its successor ("Section 8 Program"). For purposes of calculating the rent payable by the tenant pursuant to Paragraph 5 of this Section, the amount paid to the Developer as a result of such certificates or vouchers shall not be deemed the payment of rent by the tenant. C. [§403] Operating Expenses For a period of thirty (30) years beginning on the date of the City's issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall provide a full-time activities director, an on -site apartment manager and a van shuttle service which are available exclusively to and for the benefit of the tenants of the Developer Improvements. Such activities director shall be employed on the Site at least 12/04/91 7100u/2460/050 -26- the next vacation of an Actual Household Size Unit, such vacated Actual Household Size Unit shall no longer be an Actual Household Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two (2) persons if it is a one (1) bedroom unit and three (3) persons if it is a two bedroom unit. In no event, however, shall the resenting of a Section 8 Unit to a Very Low Income Household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Furthermore, the maximum number of Actual Household Size Units required at any one time shall be sixteen (16). THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THE MAXIMM RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT. Developer Initials:. W\ om The maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building permits and not later than the Commencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth -above upon the publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. 6. Senior Citizen Units. All of the units in the Developer Improvements, including without limitation the Affordable Units, shall be independent living apartments specially designed for the physical and social needs of "Senior Citizens" (persons fifty-five (55) years or older, subject to applicable law) in accordance with the requirements set forth in the Scope of Development (Attachment No. 6). The units shall be comprised of one and two bedroom units, each with a private balcony or patio. The Developer shall state, in a prominent location in all advertising and marketing materials, that the Developer Improvements are designed for use and occupancy by Senior Citizens. Furthermore, the Developer shall restrict occupancy to Senior Citizens and "Qualified Permanent Residents" (as that term is defined in California Civil Code Section 51.3), in the rental of both the Affordable Units and the other units in the Developer Improvements. Except as otherwise provided herein, at least one person in residence in each dwelling unit must must be a Senior Citizen, and other residents in the same 12/04/91 7100u/2460/050 -25- This Duplicate Page #25 includes Developer's Original initialling. u forty (40) hour: per week, and such van shuttle service shall be available for the use of the residents of the Developer Improvements at least thirty (30) hours per week. For a period of ten (10) years beginning on'the date of the City's issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall annually expend not less than the amounts set forth in each category of the "Operating Budget" attached hereto as Attachment No. 11 and incorporated herein. The amount in each category of the Operating Budget shall be adjusted annually by the percentage change in the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles -Anaheim -Riverside Average, Subgroup "All Items" (19B2/84=100). The Developer shall annually submit to the Agency a detailed report of its Operating Budget expenditures, with such costs itemized in the categories contained in the Operating Budget, not less than thirty (30) days prior to the anniversary of the issuance of the certificate of occupancy for the Developer Improvements. In accounting for such costs, the Developer shall use generally accepted accounting principles (GAAP), including applicable Financial Accounting Standards Board (FASB) Pronouncements. In the event any of the payments in any category or the Operating Budget is made to the Developer or a party which owns or is owned by the Developer or any of the partners of the Developer or the Guarantors or is otherwise affiliated with the Developer, such payment shall be deemed not to exceed a payment commensurate with industry standards for the service or product provided. The Executive Director of the Agency may, in his or her sole discretion, cause the audit of the Operating Budget expenses not more often than once each year by a public accounting firm of the Agency's choice. The parties agree to accept the results of such audit as the conclusive and final determination of actual Operating Budget expenditures. The Developer shall make available to the auditor all books and records pertaining to the Operating Expenses. The cost of the audit shall be borne by the Agency; provided, however, that the cost shall be borne solely by the Developer if the audit determines that actually incurred Operating Budget expenditures are at least five percent (5%) less than the expenditures reported by the Developer to the Agency. In addition, the Agency shall have the right at any time during normal business hours upon not less than two business days' prior notice, but not more than two times each year during this Agreement, to examine and inspect all books and records pertaining to the Operating Expenses. 12/04/91 7100u/2460/050 -27- �l D. [§404] Management and Maintenance The Developer shall hire a management company to manage the Project and to maintain the improvements on the Site in accordance with the CC&Rs (Attachment No. 8). If at any time said management company fails to adequately maintain such areas, and such condition is not corrected after expiration of ninety (90) days from the date of written notice from the Agency, the Agency may (but shall not be obligated to) perform the necessary maintenance and Developer shall pay such costs as are reasonably incurred for such maintenance. Issuance of a Certificate of Completion by the Agency shall not affect Developer's obligations under this section. E. (§405] Rights of Access The Agency, for itself and for the City and other public agencies, at their sole risk and expense, shall have the right to enter the Site or any part thereof which is owned or controlled by the Developer, at all reasonable times, for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site. Any such entry shall be made only after reasonable notice to Developer. Upon receipt of such notice, the Developer agrees to cooperate with the Agency in making the Site available for inspection by the Agency and/or City. Developer acknowledges and agrees that in the event that if for any reason the Developer fails to consent to such entry or inspection, the Agency may obtain an administrative inspection warrant or take such other legal actions as may be necessary to gain entry to and inspect the Site. The Agency shall indemnify and hold the Developer harmless from any costs, claims, damages or liabilities pertaining to any entry. F. [9406] Developer's EguitY At all times from the commencement of construction until the second (2nd) anniversary of the issuance of a certificate of occupancy (or temporary certificate of occupancy) for the Developer Improvements, the -"Developer's Equity" (as defined below) shall be not less than One Million Five Hundred Thousand Dollars ($1,500,000). Thereafter, the Developer's Equity may be reduced to not less than One Million Two Hundred Fifty Thousand Dollars ($1,250,000) upon the second (2nd) anniversary of the certificate of occupancy, to One Million Dollars ($1,000,000) upon the third (3rd) anniversary of the certificate of occupancy, to Five Hundred Thousand Dollars ($500,000) upon the fourth (4th) anniversary of the certificate of occupancy and until the fifth (5th) anniversary of the certificate of occupancy. For the purposes of this Section 406, "Developer's Equity" shall mean the difference 12/04/91 7100u/2460/050 -26- between the actually incurred costs of acquiring the Site and constructing and developing the Developer Improvements (including cost overruns), less the sum of the actually disbursed amount of loans obtained by the Developer for such acquisition, development and construction. Developer's Equity shall include any cash or government securities held by a construction lender on behalf of the Developer or its.partners. 0. 1§4071 Effect of Violation of the Terris and Provisions_ of this Agreement_ After Completion of Construction T� The covenants established in this Agreement shall, without regard to technical classification and designation, be binding upon and for the benefit and in favor of the Developer and the Agency, their respective successors and assigns, as to those covenants which are for their benefit. The covenants contained in this Agreement and the Declaration (Attachment No. 9) shall remain in effect until the expiration of the Affordability Period defined in Section 402 of this Agreement). The covenants against racial discrimination shall remain in perpetuity. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site or in the Project Area. The Agency shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. After issuance of a Certificate of Completion for all of the Developer Improvements, all of the terms, covenants, agreements and conditions set forth in this Agreement relating to the Site shall cease and terminate as to that portion of the Site for which the Certificate of Completion is issued, excepting only the provisions listed below which shall survive as follows: (a) Sections 310, 401 to 405, inclusive, relating to uses, maintenance and access. (b) Section 308 (relating to indemnification and insurance) shall remain in effect in accordance with the terms and conditions set forth therein. 12/04/91 7100u/2460/050 -29- (c) Sections 600 to 607 (relating to rights and remedies) shall remain in effect to the extent necessary to enforce other provisions of this Agreement. (d) The Promissory Note (Attachment No. 3), and all provisions contained in or referred to in documents to be recorded pursuant to this Agreement, including without limitation the Deed of Trust (Attachment No. 4), and the Declarations of Covenants, Conditions and Restrictions (Attachment No. 9). H. [§4081 Nondiscrimination The Developer covenants by and for itself and any successors in interest 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 Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, religion, sex, marital status, national origin or ancestry 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 or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, 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 herself or any person claiming under or through him or her, 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 or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or 12/04/91 7100u/2460/050 -30- M through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, Greed, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, 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 premises 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, creed, religion, sex, marital status, ancestry or national origin; in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, 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 premises." The covenants established in this Agreement and the deeds of conveyance for the Site shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Site, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against discrimination shall remain in effect in perpetuity. V. [§5001 GENERAL PROVISIONS A. [65011 Notices, Demands and Communications Between the Parties Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if delivered by hand (and a receipt therefor is obtained or is refused to be given) or dispatched by registered or certified mail, postage prepaid, return receipt requested, or sent by telecopy or overnight delivery service, to the principal offices of the Agency and the Developer. Such written notices, demands and communications may be sent in the same manner to the Agency and the Developer at the addresses provided pursuant to Sections 204 and 105, with a copy of any notices to the 12/04/91 7100u/2450/050 -31- ti.) Developer to be sent to Bret H. Reed, Jr., a law corporation, 1300 Dove Street, Suite 200, Newport Beach, California 92660-2416 (which copy shall not constitute notice to the Developer), and to such other addresses as either party may from, time to time designate by mail as provided in this Section 501. Any written notice, demand or communication shall be deemed received immediately if delivered by hand or sent by telecopy, shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail, and shall be deemed received on the next business day after it is sent if delivered by overnight delivery service. B. [§5021 Conflicts of Interest No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. C. [§503) Enforced Dela Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of the Agency or the City other than in respect to the zoning of the Site to allow development of the Developer Improvements); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Any 12/04/91 7100u/2460/050 -32- requests for extension shall be in writing. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Developer. D. [§504] Nonliabi_lity of Officials and Employees of the Agency No member, official or employee of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency (or the City) or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. VI. [§600] DEFAULTS AND REMEDIES A. [§601] Defaults -- General Subject to the extensions of time set forth in Section 503, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings for damages or specific performance against the party in default until thirty (30) days after giving such notice in the case of monetary defaults or defaults reasonably capable of being cured in thirty (30) days, or such longer time as may be necessary to cure other defaults not reasonably capable of being cured within thirty (30) days, provided that such party immediately commences to cure, correct or remedy such failure or delay and completes such cure, correction or remedy with diligence. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. B. [§602] Legal Actions 1. -[§603] Institution of -Legal -Actions In addition to any other rights or remedies and subject to the restrictions in Section 601, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Legal 12/04/91 7100u/2460/050 -33- actions must be instituted in the Superior Court of the County of Orange, State of California, in an appropriate municipal court in that county, or in the Federal District Court in the Central District of California. 2. [§604] Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 3. [6605] Acceptance of Service of Process In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on a general partner of the Developer shall be made by personal service upon a trustee of such partner or in such other manner as may be provided by law. C. [§606] Ri hts and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies 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 the other party. D. [§607] Inaction Not a Waiver of Default Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. E. [5608] Liquidated Damages IN THE EVENT THAT THE DEVELOPER IS IN DEFAULT OF ITS OBLIGATIONS PURSUANT TO SECTION 402 OF THIS AGREEMENT, AND HAS NOT CURED SUCH DEFAULT WITHIN THE TIME REQUIRED BY SECTION 601 OF THIS AGREEMENT, THE AGENCY SHALL BE ENTITLED TO OBTAIN PAYMENT IN THE AMOUNT OF THE AGENCY GRANT WHICH HAS BEEN DISBURSED PURSUANT TO SECTION 203 OF THIS AGREEMENT, LESS THE PRODUCT OF SIXTEEN THOUSAND SIX HUNDRED SIXTY-SEVEN DOLLARS 12/04/91 7100u/2460/050 -34- ($16,667) TIMES THE NUMBER OF FULL YEARS WHICH HAVE ELAPSED BETWEEN THE ISSUANCE OF THE CERTIFICATE OF OCCUPANCY FOR THE PROJECT AND THE DATE OF THE DEFAULT. IN THE EVENT OF SUCH DEFAULT PURSUANT TO SECTION 402 OF THIS AGREEMENT, THE AGENCY WOULD SUSTAIN DAMAGES BY REASON THEREOF WHICH WOULD BE UNCERTAIN. SUCH DAMAGES WOULD INVOLVE SUCH VARIABLE FACTORS AS THE DELAY OR FAILURE OF THE AGENCY AND THE CITY TO PROVIDE AFFORDABLE HOUSING AS REQUIRED BY THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW AND THE CITY GENERAL PLAN, AND THE LOSS OF OPPORTUNITY TO ENGAGE IN OTHER POTENTIAL AFFORDABLE HOUSING TRANSACTIONS, RESULTING IN DAMAGE AND LOSS TO THE AGENCY. IT IS IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX THE AMOUNT OF SUCH DAMAGES TO THE AGENCY, BUT THE PARTIES ARE OF THE OPINION THAT SUCH DAMAGES WOULD APPROXII4Jr ELY EQUAL THE SUM DERIVED BY THE FORMULA SET FORTH HEREIN, AND THE AGENCY SHALL BE ENTITLED TO SUCH AMOUNT AS A TOTAL OF ALL LIQUIDATED DAMAGES FOR SUCH DEFAULT AND NOT AS A PENALTY. IN THE EVENT THAT THE DEVELOPER SHOULD CHALLENGE THE APPLICABILITY OR EFFICACY OF THIS PARAGRAPH OR IF THIS PARAGRAPH SHOULD BE HELD VOID FOR ANY REASON, THE AGENCY SHALL BE ENTITLED TO THE FULL EXTENT OF DAMAGES OTHERWISE PROVIDED BY LAIV1. THE DEVELOPER AND THE AGENCY SPECIFICALLY ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY THEIR INITIALS BELOW: Developer s Initials Agency l nitials- By : .2.aV l�1L�}l��4�1� By: - F. [§609] Remedies and Flights of Termination Prior to Completion 1. [§610] Damages If either party defaults with regard to any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured within the applicable period after service of the notice of default as set forth in Section 601, the defaulting party shall be liable to the other party for any damages caused by such default, except as provided in Sections 612 or 613 herein. 2. [§611] Specific Performance Subject to the applicable cure provisions contained in Section 601 herein, if either party defaults under any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the applicable cure period as set forth 12/04/91 7100u/2460/050 -35- in Section 601, the non -defaulting party at its option may thereafter (but not before) seek specific performance of terms of this Agreement. 3. [§612] Termination by the Developer Prior to Completion In the event that prior to the Issuance of a Certificate of Completion the Developer is not in default of the Agreement and: (a) The Developer is unable to obtain financing necessary for the construction of the Improvements, provided that the Developer has used its best efforts to obtain such financing; or (b) The Agency is in default of the Agreement and has not cured or commenced to cure such default within the time period set forth in Section 601 hereof, then, subject to the applicable cure provisions contained in Section 601 herein, at the option of the Developer, thirty (30) days after written notice thereof is delivered to the Agency all provisions of this Agreement shall terminate and be of no further force and effect; thereafter, neither the Agency nor the Developer shall have any further rights against or liability to the other with respect to this Agreement. 4. [§613) Termination by the Agency Prior to Completion In the event that prior to the issuance of a Certificate of Completion the Agency is not in default of this Agreement and: (a) The Developer (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Site in violation of this Agreement; or (b) There is a change in the ownership of the Developer contrary to the provisions of Section 107 hereof; or (c) The Developer does not submit certificates of insurance, construction plans, drawings and related documents as required by this Agreement, in the manner and by the dates respectively provided in this Agreement therefor and such default or failure shall not be cured within the applicable cure period as set forth in Section 601 hereof; (d) The Developer is otherwise in default under this Agreement and has not cured or commenced to cure such default within the applicable time period set forth in Section 601 herein; 12/04/91 7100u/2460/060 -36- then, at the option of the Agency, within the applicable cure period as set forth in Section 601 hereof, and subject to the rights of the mortgagee or deed of trust holder to cure as set forth in Section 319 hereof, after written notice thereof is delivered to the Developer, this Agreement shall be terminated, and thereafter neither party shall have any further rights against the other under this Agreement. G. 1§6141 Remedies of the Parties for Default After Completion 1. [g615] Termination and Damages After the issuance of a Certificate of Completion, if the Developer or the Agency defaults with regard to any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the time set forth in Section 601 hereof, the defaulting party shall be liable to the other party for any damages caused by such default. 2. (§6161 Action for Specific Performance After the issuance of a Certificate of Completion, if either the Developer or the Agency defaults under any of the provisions of this Agreement the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the time set forth in Section 601 hereof, the nondefaulting party at its option may institute an action for Specific performance of the terms of this Agreement. VII. [67001 SPECIAL PROVISIONS A. [§701] Real Estate Commissions The Developer acknowledges and represents to the Agency that it has engaged the services of a broker and that it is liable for certain real estate commissions, broker's fees, or finder's fees which may accrue by means of the Developer's acquisition of the Site, and agrees to hold harmless the Agency from such commissions or fees as are alleged to be due from the party making such representations. B. [§702) Successors In Interest The terms, covenants, conditions and restrictions of this Agreement shall extend to and shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the Developer. 12/04/91 7100u/2460/050 -37- C. [§703] Memorandum of Agreement The Agency and the Developer agree to execute, acknowledge and cause to be recorded in the Official Records of Orange County, California, a short form memorandum of this - . Agreement in the form of the "Memorandum of Agreement" attached hereto as Attachment No. 12 and incorporated herein. The Memorandum of Agreement shall be for recording purposes only and shall not modify any of the terms of this Agreement. The Agency may cause the Memorandum of Agreement to be recorded upon the earlier to occur of the Developer's acquisition of the site or the execution of this Agreement. VIII. [§800] ENTIRE AGREEMENT, WAIVERS This Agreement may be signed in counterparts, and is executed in five (5) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through 39 and Attachments 1 through 12, which constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Agency and the Developer, and all amendments hereto must be in writing by the appropriate authorities of the Agency and the Developer. In any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. IX. [§900] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before thirty (30) days after signing and delivery of this Agreement by Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been signed by the Agency. 12/04/91 7100u/2460/050 -38- IN WITNESS WHEREOF, the Agency and the Developer have signed this Agreement on the respective dates set forth below. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic Dated: 1991 By: 1,4 Chairman Dated: 1991 By: � • Executa,ve Director -- ATTEST: L` •' -�-�_ APPROVED AS T�_c QRN:: _ Strad+ng,N-,Yk,cVa, Carlson & Rauth, Agency Special -Counsel City Attorney 1.7--X - f/ Agency General Counsel FIVE POINTS SENIORS, L.P., a California limited partnership By: MICHELSON FAMILY TRUST, dated as of December 12, 1984, as amended March 1, 1985, its g neral partner Dated: i 1991 By: David Michelson, Trustee 12/05/91 7100u/2460/050 -39- V ATTACM4ENT NO. 1 SITE MAP AND LEGAL DESCRIPTION [To Be Inserted] 12/04/91 7100u/2460/050 ATTACHMENT NO. 1 a • g3�53gC�-�o FE=G 1 3'rr.D lx FMit 0MICI'+t1nuC."SLf11_cokOPON 94 08: pp fii`i Rfcorderj in Official RECORDING REQUESTED BY ) of Oraasa Cou'` , � r,is AND WIZEN RECORDED IIIAIL TO: ) Lee A, E. ��,, �' Californiaf Pam I cf 2 a ,"., Ce..^ty Re;or ar I Fees, $ 0.00 Tax: f O.Co Redevelopment Agency of the City of ) Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: 61-1 elow& ) pace above for recor er. This Agreement is recorded at the request and for the benefit of the Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH DECLARATION OF COVENANTS. CONDITIQNS, AND RESTRICTIONS vp'% THIS DECLARATION OF COVENANTS, CONDITIONS, .AND RESTRICTIONS (the 'Declaration") is entered into this-g day of 4ti hx-, 1993, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency% and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer"). E ITAU A. The Developer is fee owner of record of that certain real property (the "Site") located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit W. -The Site is the subject of an Affordable Housing Agreement (the "Agreement") for the development, operation and maintenance of a senior citizen housing project. B. The Agreement provides for the execution and recordation of this document. Except as otherwise expressly provided in this Declaration, all terms shall have the same meanings as set forth in the Agreement. seltmbW g. 19" rosL:san t I3st I W460.55 Page I of 16 NOW, THEREFORE, THE AGENCY AND THE DEVELOPER AGREE AS FOLLOWS: 1. Affordable Housing A. Number of -Units. The Developer covenants and agrees to develop a total of one hundred sixty-four (164) multifamily housing units on the Site in conformance with the Scope of Development (Attachment No. 6 to the Agreement). The Developer agrees to make available, restrict occupancy to, and rent thirty-two (32) of the units to "Very Low Income Households" and sixteen (16) additional units to "Persons and Families of Low and Moderate Income," all at an "Affordable Rent' (the 'Affordable Units"). However, the Developer shall be obligated to make available, restrict occupancy to, and rent sixteen (16) of the units to "Very Low Income Households," sixteen (16) additional units to "Lower Income Households," and sixteen (16) additional units to "persons and families of Low and Moderate Income," in lieu of the requirements of the preceding sentence, for the duration of the "Affordability Period" (as defined in paragraph B of this Section 1), upon the occurrence of all three of the following events: (a) the "Qualified Development Period" (as defined in the Regulatory Agreement and Declaration of Restrictive Covenants by and among the City, Developer and Dai-Ichi Kangyo Bank of California, dated as of December 1, I991) shall have elapsed; and (b) the "Section 8 Program" (as defined in paragraph G of this Section. 1) or a reasonably similar successor or replacement federal rental subsidy or voucher program no longer exists; and (c) neither the City nor the Agency has instituted a rental subsidy or voucher program designed to subsidize the rents of Very Low Income Households. The location of tke Affordable Units shall be dispersed throughout the Developer Improvements and shall be reasonably acceptable to the Agency. The distribution of sizes (in terms of Number of bedrooms) of the Affordable Units shall be in the same proportion as the distribution of sizes of all units within the Developer Improvements. There shall be not less than six (6) and not more than ten (10) Affordable Units on each floor of the Developer Improvements. Those Affordable Units located on the first floor of the Developer Improvements shall each be not less than Five Hundred Seventy (570) square feet. "Vey Low Income Household" shall mean a household earning not greater than fifty percent (50%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety Code Section 50105. "Lower Income Household" shall mean a household ea.-ning not greater than eighty percent (80%) of Orange County median income, as determined by the United States Department of Housing and Urban development, as set forth in Health and Safety Code Section 50079.5. "Persons and Families of Love and Moderate Income" shall mean a household earning not greater than one hundred twenty percent (120%) of Orange County median income, as determined by the United States Departm:nt of Housing and Urban Development, as set forth in Health and Safety Code Section 50093. "Affordable Rent" shall have tre meaning set forth in Health and Safety Code Section 50053, as further defined in subparagraph E of this Section 1. PUBL:sar_t I391 i8-460.ss Page 2 of 16 i,� %,..) B. Duration pf AffordabilityReglairements. The Affordable Units shall be subject to the requirements of this Section 1 for thirty (30) years, beginning on the date of the City's issuance of a certificate of occupancy for the Developer Improvements, July 30, 1993 (the "Commencement Date"). The duration of this requirement shall be known as the "Affordability Period.' All tenants residing in the Affordable Units during the last two (2) years of the Affordability Period shall be given notice at least once every six (6) months of the expiration date of this requirement, and that the rent payable on the Affordable Unit may be raised to a market rate rent at the end of the Affordability Period. The Developer consents to the recording of this Declaration in the official records of Orange County, California. C. &1qction of TenantS. The Developer shall give notice to the Agency of the City's issuance of the certificate of occupancy for the Developer Improvements and the Affordable Units, and shall give notice of the vacancy of each and any Affordable Unit thereafter. The Agency shall have five (5) working days from the receipt of such notice to deliver to the Developer a list of prospective tenants for such vacancy. The Developer shall send written notice of such vacancy to each person on such list. Such notice shall notify the recipient that he or she must directly contact the Developer or its designated leasing agent within fifteen (15) working days to apply for tenancy of such vacant Affordable Unit. The Developer shall not rent or lease such Affordable Unit during such fifteen (15) day period to any tenant not notified of such vacancy by the Agency. In the event that no tenant which is reasonably acceptable to the Developer applies for tenancy of the vacant unit within such time period, the Affordable Unit may be [eased to another tenant selected by the Developer who meets all of the other requirements provided herein. D. Incom"f Tenants. Prior to the rental or lease of any Affordable Unit to a tenant, and annually thereafter within thirty (30) days of the anniversary date of the tenant's occupancy of the Affordable Unit, the Developer shall submit to the Agency a completed income computation and certification form, in the form of Attachment No. 9 to the Agreement or such other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant leasing an Affordable Unit is a Very Low Income Household, bower Income Household, or a Person or Family of Low and Moderate -Income, whichever is applicable, and meets the eligibility requirements established for the Affordable Unit. The Developer shall obtain an income certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency: (1) obtain two (2) paycheck stubs from the tenant's two (2) most recent pay periods. (2) obtain a true copy of an income tax return from the tenant for the most recent tax year in which a return was filed. (3) obtain an income verification certification from the employer of the tenant. 00106Q 1. IM puRL:39721134t182460.ss Page 3 of 16 (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Very Low Income Household, Lower Income Household, or Person or Family of Low and Moderate -Income or shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no longer qualified as a Very Low Income Household, Lower Income Household, or Person or Family of Low and Moderate -Income, the next available unit of comparable size must be rented to (or held vacant and available for immediate occupancy by) a Very Low Income Household, Lower Income Household, or Person or Family of Low and Moderate -Income, whichever is applicable. Such new tenant shall then constitute a Very Low Income Household, Lower Income Household or Person or Family of Low and Moderate -Income for the purposes of this Section 1, and until such next available unit is rented to such tenant, the former Very Low Income Household, Lower Income Household, or Person or Family of Low and Moderate -Income who has ceased to qualify as such shall be deemed to continue to be a Very Low Income Household, Lower Income Household, or Person or Family of Low and Moderate -Income for the purposes of this Section 1. In addition, the Developer shall annually submit to the Agency a certification of the number of Affordable Units actually occupied by Very Low Income Households, Lower Income Households, and Persons or Families of Low and Moderate -Income, and the ages of all tenants residing in the Developer Improvements, in the form of Attachment No. 10 to the Agreement or such other form as may be provided by the Agency. E. Determination of Affordable Rent fgr the Affordable Units. Each Affordable Unit shall be rented at an "Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the Affordable Units required to be rented to Very Low Income Households shall be established at one -twelfth (1112) of thirty percent (30%) of fifty percent (50%) of Orange County median income. The maximum monthly rental amount for the Affordable Units required to be rented to Lower Income Households, if any, shall be established at one -twelfth (1/12th) of thirty percent (30%) of sixty percent (60%) of Orange County median income for tenants earning more than fifty percent (50%) and not more than sixty percent (60%) of Orange County median income, and one -twelfth (1112th) of thirty percent (30%) of such tenant's annual income for tenant earning more than sixty percent (60%) and not more than eighty percent (80%) of the Orange County median income. The maximum monthly rental amount for the sixteen (16) Affordable Units required to be rented to Persons of Low and Moderate Income shall be established at one -twelfth (I/12) of thirty percent (30%) of one hundred ten percent (110%) of Orange County median income for tenants earning more than eighty percent (80%) and not more than one hundred ten percent (110%) of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) of such tenants' annual income for tenants earning more than one hundred ten percent (110%) and not more than one hundred twenty percent (120%) of Orange County median income. PUBL:5$72_11341 I B2460.55 Page 4 of 16 The maximum monthly rental amount for each Affordable Unit rented to Persons of Low - and Moderate -Income shall be based upon the actual household size of the persons occupying the Affordable Unit. The maximum monthly rental amount for each Affordable Unit to be rented to Very Low Income Households and Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Very Low income Household which is a 'Section 8 Recipient", as defined in Paragraph G hereof ("Section 8 Unit"), the maximum monthly rental amount for the next Affordable Unit rented to a Very Low Income Household which is not a Section 8 Recipient shall be based upon the actual household size of the person or persons occupying such Affordable Unit ('Actual Household Size Unit"). In the event any such Section 8 Unit is vacated and rerented to a Very Low Income Household %%hick is not a Section 8 Recipient, then upon the next vacation of an Actual Household Size Unit, such vacated Actual Household Size Unit shall no longer be an Actual Household Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two (2) persons if it is a one (1) bedroom unit and three (3) persons if it is a two bedroom unit. In no event, however, shall the rerenting of a Section 8 Unit to a Very Low Income Household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Furthermore, the maximum number of Actual Household Size Units required at any one time shall be limited to sixteen (16). THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THE MAXIMUM RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT. Developer Initials: Op J__A The maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building permits and not later than the Commencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth above upon the publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. F. Senior Citizen Units. All of the units in the Developer Improvements, including without limitation the Affordable Units, shall be independent living apartments specially designed for the physical and social needs of 'Senior Citizens' (persons fifty-five (55) years or older, subject to applicable law) in accordance with the requirements set forth in the Scope of Development (Attachment No. 6 to the Agreement). The units shall be comprised of one and two bedroom units, each with a private balcony or patio. The Developer shall state, in a prominent location in all advertising and marketing materials, that the Developer Improvements are designed for use and occupancy by Senior Citizens. Furthermore, the Developer shall restrict occupancy to Senior Citizens and 'Qualified Permanent Residents" (as that term is defined in California Civil Code Section 51.3), in the sgeembw 1. 19" a,sc.:sar t 1391 J B2460.55 Page 5 of 16 rental of both the Affordable Units and the other units in the Developer Improvements. Except as otherwise provided herein, at least one person in residence in each dwelling unit must be a Senior Citizen, and other residents in the same dwelling unit who are not Senior Citizens must be Qualified Permanent Residents. Temporary guests of a Senior Citizen or Qualified Permanent Resident shall be allowed for a period of not more than sixty (60) days in any twelve (12) month period. Upon the death, dissolution of marriage, hospitalization or other prolonged absence of the Senior Citizen in a dwelling unit, any Qualified Permanent Resident who has continuously resided in the dwelling unit with such Senior Citizen shall be permitted to continue as a resident of that dwelling unit. "Permitted Health Care Residents" (as that term is defined in California Civil Code Section 51.3) shall be permitted to occupy any dwelling unit during any period that such person is actually providing live-in, long-term or hospice health care to a Senior Citizen tenant or Qualified Permanent Resident tenant for compensation. G. Federal Housing Subsidies. The Agency shall use its best reasonable efforts to assist the Developer to secure as tenants of the Affordable Units dedicated to Very Low Income Households persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937, or its successor ("Section 8 Recipients'). For purposes of calculating the rent payable by the tenant pursuant to Paragraph E of this Section, the amount paid to the Developer as a result of such certificates or vouchers shall not be deemed the payment of rent by the tenant. H. _Qpsrations. For a period of thirty (30) years beginninb on the date of the City's issuance of certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall provide a full-time activities director, an on -site apartment manager and a van shuttle service which are available exclusively to and for the benefit of the tenants of the Developer Improvements. Such activities director shall be employed on the Site at least forty (40) hours per week, and such van shuttle service shall be available for the use of the residents of the Developer Improvements at least thirty (30) hours per week. For a period of ten (10) years beginning on the date of the City's issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall annually expend not less than the amounts set forth in each category of the 'Operating Budget" attached to the Agreement as Attachment No. 11 and incorporated herein. The amount in each category of the Operating Budget shall be adjusted annually by the percentage change in the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles -Anaheim -Riverside Average, Subgroup 'All Items' (1982/84=100). The Developer shalt annually submit to the Agency a detailed report of its Operating Budget expenditures, with such costs itemized in the categories contained in the Operating Budget, not less than thirty (30) days prior to the anniversary of the issuance of the certificate of occupancy for the Developer Improvements. In accounting for such costs, the Developer shall use generally accepted accounting principles (GAAP), including applicable Financial Accounting Standards Board (FASB) Pronouncements. In the event any of the payments in any category or the Operating Budget is made to the Developer or a party which owns or is owned by the Developer or any of the partners of the Developer or the Guarantors or is otherwise affiliated with the Developer, such payment shall be deetr_ed not to exceed a payment commensurate with industry standards for the service or product provided. russ,:5M 113911624W.S5 Page 6 of I6 The Executive Director of the Agency may, in his or her sole discretion, cause the audit of the Operating Budget expenses not more often than once each year by a public accounting firm reasonably satisfactory to the Agency. The parties agree to accept the results of such audit as the conclusive and final determination of actual Operating Budget expenditures. The Developer shall make available to the auditor all books and records pertaining to the Operating Expenses. The cost of the audit shall be borne by the Agency; provided, however, that the cost shall be borne solely by the Developer if the audit determines that actually incurred Operating Budget expenditures are at least five percent (5%) less than the expenditures reported by the Developer to the Agency. In addition, the Agency shall have the right at any time during normal business hours upon not less than two business days prior notice, but not more than two times each year during the period of this Declaration to examine and inspect all books and records pertaining to the Operating Expenses. 2. Non -Discrimination The Developer, on behalf of itself and its successors, assigns, and each successor in interest to the Site or any part thereof, hereby covenants and agrees: (a) To use, devote, operate and maintain the Site and each part thereof, for the purposes and the residential uses specified in the Agreement. (b) Not to discriminate upon the basis of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer or rental, or in the use, occupancy, tenure, or enjoyment of the Site or any improvements thereon, or of any part thereof. Each and every deed, lease, and contract entered into with respect to the Site shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (1) In deeds: "The grantee herein covenants by and for itself, it successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (2) In leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: " bw 1. 19" PU13L:5872-11391 I B2W.55 Page 7 of 16 M That there shall be no discrimination against or segregation of any person or group of persons, on account of sex, marital status, race, color, creed, religion, national origin, or ancestry, in the leasing, renting, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit 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." (3) In contracts: "There shall be no discrimination against or segregation of, any persons, or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 3. Mae--RgstrictiQns. The Site shall be occupied, used and maintained as follows: a. Each dwelling unit shall be used only for private apartment dwelling purposes, with appurtenant facilities, and for no other purposes. b. No sign of any kind shall be displayed to the public view on or from any unit without the approval of the Agency. All signs otherwise permitted under this section shall conform with all ordinances and other regulations of the City. C. The Developer and the occupants shall not permit or suffer anything to be done or kept upon said premises which will increase the rate of insurance on any building, or on the contents thereof, or impair the structural integrity thereof or which will obstruct or interfere with the rights of other occupants, or annoy them by unreasonable noises or otherwise, nor shall any occupant commit or permit any nuisance on the premises or fail to keep the premises free of rubbish, clippings and trash or commit or suffer any illegal act to be committed thereon. The Developer shall comply with all of the requirements of all governmental authorities with respect to the premises. If by reason of the occupancy or uses of the premises the rate of insurance on the Site shall be increased, the Developer shall become personally liable for the additional insurance premiums. d. There shall be no structural alteration, construction or removal of any building, fence or other structure on the Site (other than repairs or rebuilding permitted herein) without the approval of the City or the Agency and in accordance with the City Code. sFtember e. M ML:5872 11341 I B24M.55 Page 8 of 16 e. The Developer shall not permit the parking, storing or keeping of any vehicle except wholly within the parking areas designated therefor. The Developer shall not permit the parking, storing or keeping of any large commercial type vehicle (dump truck, cement mixer truck, oil or gas truck, etc.), or any recreational vehicle (camper unit, camper shell detached from a private passenger vehicle, motor home, trailer, boat trailer, mobilehome or other similar vehicle, except when parked within an enclosed parking space), boats over twenty (20) feet in length or any vehicle other than a private passenger vehicle or the passenger van required by Section I(G) hereof upon any portion of the Site, including parking spaces. The Developer shall not permit major repairs or major restorations of any motor vehicle, boat, trailer, aircraft or other vehicle to be conducted upon any portion of the Site, including parking spaces, except for emergency repairs thereto and then only to the extent necessary to enable movement thereof to a proper repair facility. No inoperable vehicle shall be stored or kept anywhere on the Site. The Developer shall have the right to remove, at the tenant's expense, any vehicle parked, stored or kept in violation of the provisions of this Declaration. In addition, all provisions of the Huntington Beach Municipal Code, including amendments thereto, shall apply. 5. c11 anc . Occupancy of each dwelling unit shall be restricted to occupancy standards set forth in the Huntington Beach Municipal Code or state standards, as are effective or as may be effective or amended. The Developer shall not be permitted to lease or rent any dwelling unit thereon for transient or hotel purposes. Any lease or rental agreement covering an apartment shall provide that the terms of the lease or rental agreement shall be subject in all respects to the provisions of this Declaration of Conditions, Covenants and Restrictions and that any failure by the lessee to comply with the terms of such documents shall be a default under the lease or rental agreement. All leases and rental agreements shall be in writing. All prospective tenants/ occupants of the Site shall make application through the Developer. 6. JnSPPction. To the extetlt permitted by law, the City of Huntington Beach and the Agency shall have the right of entry, at reasonable business hours and upon no less than twenty-four (24) hours advance notice, onto the Site to inspect for the need for repairs or maintenance. Entry onto the Site or into any unit for other than emergency repairs may be made only after such advance notice and request for entry. If request for entry is denied or the Site or any applicable unit is unoccupied, the City or Agency may apply for an appropriate warrant or other order from a court of appropriate jurisdiction. 7. Subdivision. No part of the Site shall at any time be owned by a cooperative housing corporation, nor shall the Developer take any steps in connection with a conversion to such ownership or uses. Other than obtaining a final subdivision map on the Site and a final subdivision public report from the California Department of Real Estate, the Developer shall not take any steps in connection with a conversion of the Site to a condominium ownership, or with a conversion of the Site to "timeshare" ownership. PUBL:5972_1139116'r360.55 Page 9 of 16 8. Exterior Maintenance. The exterior areas of the Site shall be kept free of rubbish, debris and other unsightly or unsanitary materials. a. Protect _Imnprovgment, Llaintenancgjand Repair (1) Land Use Areas and Improvements deterioration, including: (a) Exterior yard areas and parking areas shall be kept free of (i) Potholes (ii) Cracks in asphalt so as to become uneven, unsightly surface conditions (iii) Weeds growing through asphalt. (b) Perimeter fencing, landscaping and irrigation system shall be routinely inspected and maintained in good condition. b. Each occupant of the Site shall have the affirmative obligation to prevent what might be considered a fire hazard or a condition, dangerous to the public health, safety and general welfare; or constitute an unsightly appearance or otherwise detract from the aesthetic and property values of neighboring dwelling units and properties. The following minimum performance standards for the maintenance of buildings, yards, and landscaping shall be adhered to by the Developer: (1) Landscaping on the Site shall be absent of the following: (a) Lawns with grasses in excess of six (6) inches in height. (b) Untrimmed hedges. (c) Trees, shrubbery, lawns and other plant life dying from lack of water or other necessary maintenance. (d) Trees and shrubbery grown uncontrolled without proper pruning. (e) Vegetation so overgrown as to be likely to harbor rats or vermin. (f) Dead, decayed or diseased trees, weeds and other vegetation. Sgtcmbcr t. M PVBL:58r 113911 s:aao.ss Page 10 of 16 M (g) Inoperative irrigation system(s). (2) Yard areas shall be maintained so as to be absent of the following: (a) Broken or discarded furniture, appliances and other household equipment stored in yard areas for periods exceeding one (1) week. (b) Packing boxes, lumber, trash, dirt and other debris stored in yards for unreasonable periods in areas visible from public property or neighboring properties. (c) Unscreened trash cans, bins or containers stored for unreasonable periods in areas visible from public streets and common areas. (3) No building, wall or fence may be left in an unmaintained condition so that any of the following exist: (a) Buildings abandoned, boarded up, partially destroyed or left unreasonably in a state of partial construction. (b) Unpainted buildings or buildings with peeling paint in such a condition as to: L Cause dry rot, warping and termite infestation; or ii. Constitute an unsightly appearance that detracts from the aesthetic or property values of neighboring properties. (c) Broken windows, constituting hazardous conditions and/or inviting trespassers and malicious mischief. (d) Damaged garage doors that may become inoperative or unsafe to operate. (e) Graffiti remaining on any portion of the property for a period exceeding fifteen (15) days. (f) Building interiors and exteriors shall be maintained to meet standards of similar residential property in the City of Huntington Beach. September t. Ives PUBUSS7r_1 13911 EC-M.ss Page 11 of 16 9. n n��tv_Right_of Reviewijnd _Enforcement The City of Huntington Beach ("City") and the Agency shall be made parties to this Declaration for the limited purpose as specified herein as follows: a. Changes or amendments to this Declaration must be submitted for City and Agency review and approval. b. In the event of inaction by the Developer, the City and Agency are hereby granted expedient power to enforce all provisions of this Declaration including, but not limited to, the maintenance of the Improvements and all yards, buildings and landscaping areas within the Site. C. The City and Agency are hereby granted the express power to enforce all laws and ordinances of the State of California and/or the City on yards, structures, and private parking areas within the Site. Nothing within this Declaration, however, shall be construed as imposing an obligation or requiring the City or Agency to enforce any provision thereof. d. The City and the Agency shall be given prior written notice of any proposed amendment to this Declaration. Such notice shall be given by mailing a copy of the precise language of the proposed amendment to the City of Huntington Beach, c/o City Clerk, together with a letter of transmittal explaining the proposed change in general terms. The City and the Agency shall have an opportunity to review and comment upon the proposed amendment for a period of not less than forty-five (45) days prior to the effective date of any such proposed amendment. If the City or Agency fail to respond within forty-five (45) days, the proposed change(s) and amendments) shall be deemed approved, unless that time period is extended by mutual agreement of all parties. 10. Q11sf Hurtington Be. Right f_Ent-forCode_ nforCCmenl, Repair and Traffic Regulation (a) Right of_Enla. To the extent permitted by law. Developer hereby acknowledges and intends and thus grants to the City, through the City's duly authorized agents or employees, the right to enter upon the Site for the following purposes: (1) Inspection, maintenance and repair of the Site. (2) Enforcement of local traffic and/or parking regulations. (b) Reimbursements of City Expenditures. All costs and expenses incurred by the City arising out of its inspection, maintenance and repair of the Site, as provided hereinabove ("City Maintenance Costs"), shall be charged as an expense of the Developer and shall be paid within ten (10) days of receipt of an invoice for same. (c) Assessments and Lien Rights of the (Z4. If City Maintenance Costs are not paid within thirty (30) days from the date due, said unpaid costs and expenses shall become a special assessment against the Site and, upon confirmation by the City Council, shall be sqtember t. t W3 PURL:5872-11391112450.55 Page 12 of 16 collected in the same manner as real property taxes and shall be subject to the same penalties, procedures and sale in case of delinquency as is provided for real property taxes. 11. Mortgage Protection Notwithstanding any and all provisions elsewhere in this Declaration to the contrary, in order to induce lenders and investors to participate in the financing of the Improvements, the following provisions are added hereto, and to the extent these added provisions conflict with ar.y other provisions of this Declaration, these added provisions shall control: (a) Any first mortgagee or third party foreclosure purchaser who comes into possession or who obtains title to the Site pursuant to the remedies provided in the mortgage or foreclosure of the mortgage, or by deed or assignment in lieu of foreclosure, will not be liable for such Site's unpaid charges which accrue prior to such possession or acquisition of title. The assessment liens provided for herein shall be subordinate to the lien or equivalent security interest of any first mortgage recorded prior to the date any such charges become due, and no violation of this Declaration shall invalidate such lien or security interest. Such subordination shall apply only to assessments which accrue prior to a sale or transfer of such Site pursuant to a decree of foreclosure or trustees sale. Such sale or transfer shall not relieve such Site from liability for any assessments thereafter becoming due or from the lien of any such subsequent assessment. (b) First mortgagees shall have the right to examine the books and records of the Developer during normal business hours. (c) In the event of substantial dar:lage to or destruction of the Site or any portion thereof, the mortgagee of any first mortgage on the Site shall be entitled to timely written notice of any such damage or destruction, and no provision in this Declaration shall be interpreted to entitle the Developer or any other party to priority over any rights of the first mortgagee of the Site pursuant to its mortgage in the case of a distribution to such Developer of insurance proceeds or condemnation awards for losses to or a taking of the Site. (d) If the Site or portion thereof is made the subject matter of any condemnation or eminent domain proceeding or is otherwise sought to be acquired by a condemning authority, then the mortgagee of any first mortgage will be entitled to timely written notice of any such proceeding or proposed acquisition, and no provision in this Declaration shall be interpreted to entitle the Developer or any other party to priority over such mortgagee with respect to the distribution to such lot of the proceeds of any award or settlement. (e) As used in this Section 11, 'first mortgagee' means any mortgagee under a mortgage which is a first lien of record made in good faith and for value, or a junior lien of record made in good faith and for value by the City, the Agency or an institutional tender in order to assist in the financing of the construction of the Improvements. sib.3. 1"3 PUBL:5872_1139116'.460.55 Page 13 of 16 12. Miscellaneous Provisions a. If any provision of this Declaration or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Declaration, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Declaration; and each provision of this Declaration shall be valid and enforceable to the fullest extent permitted by law. b. Thu3 Declaration shall be construed in accordance with the laws of the State of California. C. In the event action is instituted to enforce any of the provisions of this Declaration, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorney's fees and costs. d. The Developer shall be required to take all reasonable steps necessary to insure that each tenant and all assignees, and transferors have knowledge of all terms and conditions of this Declaration. 13. Runs with the Land The covenants and agreements established in this Agreement shall, without regard to technical classification and designation, be binding on the Developer and any successor in interest to the Site, or any part thereof, for the benefit of and in favor of the Agency, its successor and assigns, and the City of Huntington Beach. The covenants contained in paragraphs 2(a) and 4 through 12 of this Agreement shall remain in effect for the Affordability Period, and shall automatically terminate and be of no further force or effect after such time. The covenants against discrimination contained in paragraphs 2b and 3 shall remain in effect in perpetuity. 3"UM6er i, W3 KML:ssri_t 139 t I e7460.55 Page 14 of 16 IN WITNFSS WHEREOF, the Agency and the Developer have executed this Declaration of Conditions, Covenants and Restrictions. Dated: I a 42 Dated: l0 -..o - 93 Dated: /0 -23 , 1913 ATTEST: Agency Clerk `022 3 AP OVED Af-Sr TO FORM: M! �v Stra ing, 1%ccJjCarlson & Rauth, Age cy S ecial Counsel Ci16 Attorney, 93 aAgency General Counsel 'per REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By Executive Director Deputy Executive Director "AGENCY" Sc%cmbw 1. I m PLIBU58T2_113911124M.55 Page 15 of 16 State of California ) WY&%XLX ss. �elk ooMw+1.; 091b�fi County of ) Co0RA1� COMY mm. Ei0a MAY 11,19V On M , 199,a, before me, (rumuVrale of off , e.g., lane 1Notary tsc n' . � �r n• A w A • n personally appeared a"' personally known to me —OR— o proved to me on the basis of satisfactory evidence to be the person(sl whose name( Mare subscribed to the within instrument and acknowledged to me that hefsWthey executed the same in NsAter/their authorized capacity/its, and that by hisAteHtheir signatureW on the instrument the person(s), or the entity upon behalf of which person(E) acted, executed the instrument. Witness my hand and official seal. Capacity claimed by signer: ❑ Individual Corporate Officer(s): r 0 Partner(s): ❑ General ❑ Limited ❑ Attorney -in -fact ❑ Trustee(s) 11 Guardian/Conservator o Other: Signer is representing: spo Mdj section is OP770NAL.) Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to an unauthorized document. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED AT RIGHT: Seyaembm S. twn ruau5872_11391 I B2460.55 or Tvne of Document .,, Number of Pales _2Q— Date of Signer(s) Other than Named Above ; State of California County of r� On personally appeared ) ss. } 199 3 , before me, personally known to me —OR— proved to me on the basis of satisfactory evidence SEAL Notary Aw c-omc ORANGE CCK M1r W C*Tn trdon Evp c. A LOAt 21. 1995 to be the person whose ttam0 i9re subscribed to the within instrument and acknowledged to me that hqshphhey executed the same in hi�hcsltheir authorized capacityAcy, and that by hisP,rexecuted eir signature on the instrument the person'f, or the entity upon behalf of which perso#� act the instrument. Witness my rand and official seat. (&gnarurt of Notary) Capacity claimed by signer: ❑ �dividual a/Corporate Officer(s): o Partner(s): ❑ General 0 Limited ❑ Attorney -in -fact • Trustee(s) LA-,, ❑ Guardian/Conservator o Other: (This section is 0P7I01VAL) Signer is representing: . Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to an unauthorized document. THIS CERTIFICATE Title or Type of Document MUST BE ATTACHED TO ME DOCUIN EI'T Number of Pages Z6 Date of Document /n s6 9.3 DESCRIBED AT RIGHT: Signer(s) Other than Named Above Sc"bm 1.:90 PuavM72_11391IB2460.55 FIVE POINTS SENIORS, L.P., a -California limited partnership By: Michelson Family Trust, dated as of December 12, 1984, as amended March 1, 1935, its general partner Dated: l 4 -1� By David Michelson, Trustee "DEVELOPER' Squmher t. IM PUBU5872_113911 Er-W.ss Page 16 of 16 . -- COOKIE CA °TER = _ , , r�� CO'NVI-t. 9 m = NOTARY PUBLIC - CALFORN1A ORAINGE COUNTY —A W Comm. Empims DUNE 14. 19W State of California County of MMGE On DECE9BER 6 r- COOKIE CARTER = ss. COMI41.9967719 co X NOTARY PUBLIC • CALFORNfA f ` ORANGE COUNTY � W Comm. Expprgj JUIvt . 14,19W 199 3, before me, COOKIE CARTER (Warne, title of officer, e.g., Jane Doe, Notary Public") personally appeared DAVID MICHELSON {narne(a) of aig►rer(a)) 0 personally known to me —OR— M 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 capacitylies, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. Witness my hand and official seal. (Stkmiture of Notary) Capacity claimed by signer: Midi section is OMONAL) 0 Individual o Corporate Officer(s): Partner(s): H General ❑ ❑ Attorney -in -fact M Trustee(s) o Guardian/Conservator o Other: Limited FIVE POINTS SENIORS, L.P., A CALIFORNIA LIMITED PARTNERSHIP BY: Signer is representing: MICHELSON FAMILY TRUST DATED AS OF DECE".BER 12 1984 AS AMENDED MARCH1, 1985, ITS GENERAL fmivie o persons or entity wes PARTNER Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to an unauthorized document. TIIIS CERTIFICATE Title or Type of Document DECLARATION OF COMMITS MUST BE ATTACHED CONDITIONS, A%.M RESTRICTICNS TO THE DOMIEN7 Number of Pages 16 Date of Document ,L H 20, 1993 DESCRIBED AT RIGHT: Signer(s) Other than Named Above &-}.amber t. 1993 PUBL:5872_11391IB2460.55 �..A ALTA LOAN POLICY OR-9345386 EXHIBIT "A" ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, DESCRIBED AS FOLLOWS: PARCELS 1 AND 2, AS SHOWN ON A MAP FILED IN BOOK 134, PAGE 22 OF PARCEL MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING FROM THAT PORTION (HEREINAFTER CALLED THE "SUB-500 PORTION") OF SAID REAL PROPERTY LYING BELOW A DEPTH OF 500 FEET BENEATH THE SURFACE THEREOF, ALL OIL, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, AND INCLUDING ALL FISSIONABLE MATERIALS WITHIN OR THAT MAY BE PRODUCED FROM OR EXTRACTED OR TAKEN FROM THE SUB-500 PORTION OF THE SAID REAL PROPERTY, WHICH SAID OIL, GAS, ASPHALTUM, HYDROCARBONS AND MINERALS SHALL BE HEREINAFTER COLLECTIVELY CALLED THE "SUB-500 MINERALS", AS RESERVED IN DEED FROM HUNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUNE 21, 1979 IN BOOK 13195, PAGE 1898 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM THAT PORTION (HEREINAFTER CALLED THE "SUB-200 PORTION") OF SAID REAL PROPERTY LYING BELOW A DEPTH OF 200 FEET BENEATH THE SURFACE THEREOF, THE FOLLOWING: (A) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO LOCATE AND TO MAINTAIN SUBSURFACE PORTIONS OF OIL AND GAS WELLS IN THE SUB-200 PORTION OF SAID REAL PROPERTY, AND THE RIGHT TO DRILL FOR, PRODUCE, EXTRACT AND TAKE THE SUB-500 MINERALS FROM THE SUB-500 PORTION OF SAID REAL PROPERTY, AND THE RIGHT TO EXERCISE ALL OF THE RIGHTS AND PRIVILEGES NECESSARY FOR SUCH DRILLING, PRODUCING, EXTRACTING AND TAKING; AND, (B) THE SOLE AND EXCLUSIVE RIGHT TO USE THE SUB-200 PORTION OF SAID REAL PROPERTY TO CONDUCT OPERATIONS, FROM TIME TO TIME, BY METHODS NOW KNOWN OR U.IUMOWN, WHICH, IN THE OPINION OF THE HUNTINGTON BEACH COMPANY, ARE REASONABLY DESIGNED TO BENEFIT OR FACILITATE THE DRILLING FOR, OR PRODUCTION, EXTRACTION OR TAKING OF THE SUB-500 MINERALS FROM THE SUB-500 PORTION OF SAID REAL PROPERTY, OR ANY MINERALS FROM OTHER LANDS OTHER THAN SAID REAL PROPERTY (HEREIN CALLED THE "OTHER LANDS"), TOGETHER WITH THE RIGHT TO DRILL A WELL OR WELLS OR USE ANY EXISTING WELLS IN, INTO OR THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY, FOR THE PURPOSE OF INJECTING INTO THE SUS-500 PORTION OF SAID REAL PROPERTY OR INTO OTHER LANDS, OIL, GAS, AIR, WATER OR OTHER LIQUID OR GASEOUS SUBSTANCES, INCLUDING THE RIGHT, FROM TIME TO TIME, TO IGNITE OR OTHERWISE ACTIVATE ANY PAGE 8 ALTA LOAN POLICY OR-9345386 OR ALL OF SUCH SUBSTANCES SO INJECTED, OR ANY OR ALL OF THE SUB-500 MINERALS WITHIN THE SUB-500 PORTION OF SAID REAL PROPERTY, OR ANY MINERALS FROM OTHER LANDS; AND, (C) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO DRILL INTO AND THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY FROM OTHER LANDS, BY MEANS OF A WELL OR WELLS DRILLED FROM THE SURFACE OF OTHER LANDS, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO REPAIR, REDRILL, DEEPEN, MAINTAIN, REWORK AND OPERATE SUCH WELLS AND PRODUCE ANY MINERALS FROM OTHER LANDS BY MEANS OF SUCH WELLS, OR PRODUCE ANY MINERALS FROM OTHER LANDS BY MEANS OF SUCH WELL OR WELLS, THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY; AND, (D) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO LOCATE, OPERATE AND MAINTAIN SUBSURFACE PORTIONS OF WELLS IN, ItTTO OR THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY, AND THE RIGHT, FROM TIME TO TIME, TO INJECT, STORE, PRESSURIZE AND REMOVE THE SUB-500 MINERALS OR ANY MINERALS FROM OTHER LANDS FOR THE PURPOSE OF STORING THE SAME IN THE SUB-500 PORTION OF SAID REAL PROPERTY, OR IN OTHER LAND. NOTHING HEREINABOVE SET FORTH SHALL BE DEEMED TO RESERVE ANY INTEREST IN THE SURFACE OR IN ANY PORTION OF SAID REAL PROPERTY LYING WITHIN 200 FEET MEASURED VERTICALLY DOWNWARD FROM THE SURFACE OF SAID REAL PROPERTY, ALL AS RESERVED IN DEED FROM HUNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUKE 21, 1979 IN BOOK 13195, PAGE 1898 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM, ALL WATER RIGHTS OF, OR RELATED TO, OR APPURTENANT TO SAID REAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, ALL RIGHT TO PERCOLATING WATER, ARTESIAN WATERS AND UNDERGROUND STREAMS, BUT EXCLUDING THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEED FROM VR]NTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUKE 21, 1979 IN BOOK 13195, PAGE 1898 OF OFFICIAL RECORDS. RO:MS PAGE 9 I;ECC=wc FECLEVMD UT F�,rT J�AtJW zmf 4�AT!CG C:X'�ATtY RECORDING REQUESTED BY AND } WHEN RECORDED RETURN TO: } Redevelopment Agency of the ) City of Huntington Beach ) 2000 Main Street } Huntington Beach, CA 92648 ) Attention: Z..�')—JAN-1994 08:00 Alf Pecordc-d in efficial Records of Orange Cca:,ty, Calif Lee A. Ara.1d, �1ntRecorder Fpornia Page I of B Fees: f Tax: 1 C. oa 0.00 MEMORANDUM OF AFFORDABLE HOUSING AGREEMEN-F This MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT ("Memorandum"), dated for identification purposes as of , 1993, is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON ar BEACH, a public body corporate and politic ("Agency') and FIVE POINTS SENIORS, L.P., a California limited partnership ("Developer Asic owrvenj, 1. Affor able_Hottsing_Agr ement. Agency and Developer have executed an Affordable Housing Agreement (the "Agreement') dated for identification purposes as of November 18, 1991, which concerns and is binding upon the current and future owners of that certain real property located in the City of Huntington Beach, County of Orange, State of California, more fully described in the Exhibit "A" attached hereto and incorporated herein by this reference. All of the terms, conditions, provisions and covenants of the Agreement arc incorporated in this Memorandum by reference as though written out at length herein, and the Agreement and this Memorandum shall be deemed to constitute a single instrument or document. 2. Purpose -of -Memorandum. This Memorandum is prepared for recordation purposes only, and in no way modifies the terms, conditions, provisions and covenants of the Agreement. In the event of any inconsistency between the terms, conditions, provisions and covenants of this Memorandum and the Agreement, the terms, conditions, provisions and covenants of the Agreement shall prevail. The parties have executed this Memorandum on the dates specified immediately adjacent to their respective signatures. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic Dated: /o , 1993 Dated: Zo —Lo -1993 By: xecutive Director Dated: _b�-._z� 1993 By: Deputy Executive Director ATTEST: Clerk /v G I ff� APPROVED AS TOFORM: Stradling, Yocca, Carlson uth, Agency Special Counsel i� City Attorney ,Y�Agency General Counsel 1 PVBL:7160_11319182460.50 2 � LJ FIVE POINT SENIORS, L.P., a California limited partnership By: MICHELSON FAMILY TRUST, dated as of December 12, 1984, as amended March 1, 1985, its general partner Dated: J By: I - (L � wi, David Michelson, Trustee rusu7160—11319iU-1460.5o 3 ALTA LOAN POLICY OR-9345386 EXHIBIT "A" ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, DESCRIBED AS FOLLOWS: PARCELS 1 AND 2, AS SHOWN ON A MAP FILED IN BOOK 134, PAGE 22 OF PARCEL MAPS, RECORDS OF ORANGE COMM, CALIFORNIA. EXCEPTING FROM THAT PORTION (HEREINAFTER CALLED THE "SUB-500 PORTION") OF SAID REAL PROPERTY LYING BELOW A DEPTH OF 500 FEET BENEATH THE SURFACE THEREOF, ALL OIL, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, AND INCLUDING ALL FISSIONABLE MATERIALS WITHIN OR THAT MAY BE PRODUCED FROM OR EXTRACTED OR TAKEN FROM THE SUB-500 PORTION OF THE SAID REAL PROPERTY, WHICH SAID OIL, GAS, ASPHALTUM, HYDROCARBONS AND MINERALS SHALL BE HEREINAFTER COLLECTIVELY CALLED THE "SUB-500 MINERALS", AS RESERVED IN DEED FROM HUNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUNE 21, 1979 IN BOOK 13195, PAGE 1698 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM THAT PORTION (HEREINAFTER CALLED THE "SUB-200 PORTION") OF SAID REAL PROPERTY LYING BELOW A DEPTH OF 200 FEET BENEATH THE SURFACE THEREOF, THE FOLLOWING: (A) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO LOCATE AND TO MAINTAIN SUBSURFACE PORTIONS OF OIL AND GAS WELLS IN THE SUB-200 PORTION OF SAID REAL PROPERTY, AND THE RIGHT TO DRILL FOR, PRODUCE, EXTRACT AND TAKE THE SUB-500 MINERALS FROM THE SUB-500 PORTION OF SAID REAL PROPERTY, AND THE RIGHT TO EXERCISE ALL OF THE RIGHTS AND PRIVILEGES NEECESSARY FOR SUCH DRILLING, PRODUCING, EXTRACTING AND TAKING; AND, (B) THE SOLE AND EXCLUSIVE RIGHT TO USE THE SUB-200 PORTION OF SAID REAL PROPERTY TO CONDUCT OPERATIONS, FROM TIME TO TIME, BY METHODS NOW KNOWN OR UNKNOWN, WHICH, IN THE OPINION OF THE HUNTINGTON BEACH COMPANY, ARE REASONABLY DESIGNED TO BENEFIT OR FACILITATE THE DRILLING FOR, OR PRODUCTION, EXTRACTION OR TAKING OF THE SUB-500 MINERALS FROM THE SUB-500 PORTION OF SAID REAL PROPERTY, OR ANY MINERALS FROM OTHER LANDS OTHER THAN SAID REAL PROPERTY (HEREIN CALLED THE "OTHER LANDS"), TOGETHER WITH THE RIGHT TO DRILL A WELL OR WELLS OR USE ANY EXISTING WELLS IN, INTO OR THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY, FOR THE PURPOSE OF INJECTING INTO THE SUB-500 PORTION OF SAID REAL PROPERTY OR INTO OTHER LANDS, OIL, GAS, AIR, WATER OR OTHER LIQUID OR GASEOUS SUBSTANCES, INCLUDING THE RIGHT, FRO14 TIME TO TIME, TO IGNITE OR OTHERWISE ACTIVATE ANY PAGE 8 ALTA LCAN POLICY OR-9345386 OR ALL OF SUCH SUBSTANCES SO INJECTED, OR ANY OR ALL OF THE SUB- 5 0 0 MINERALS WITHIN THE SUB-500 PORTION OF SAID REAL PROPERTY, OR ANY MINERALS FROM OTHER LANDS; AND, (C) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO DRILL INTO AND THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY FROM OTHER LANDS, BY MEANS OF A WELL OR WELD DRILLED FROM THE SURFACE OF OTHER LANDS, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO REPAIR, REDRILL, DEEPEN, MAINTAIN, REWORK AND OPERATE SUCH WELLS AND PRODUCE ANY MINERALS FROM OTHER LANDS BY MEANS OF SUCH WELLS, OR PRODUCE ANY MINERALS FROM OTHER LANDS BY I!EANS OF SUCH WELL OR WELLS, THROUGH THE SUB-200 PORTION OF SAID PEAL PROPERTY; AND, (D) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO LOCATE, OPERATE AND MAINTAIN SUBSURFACE PORTIONS OF WELLS IN, INTO OR THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY, AND THE RIGHT, FROM TIME TO TIME, TO INJECT, STORE, PRESSURIZE AND REMOVE THE SUB-500 MINERALS OR ANY MINERALS FROM OTHER LANDS FOR THE PURPOSE OF STORING THE SAME IN THE SUB-500 PORTION OF SAID REAL PROPERTY, OR IN OTHER LAND. NOTHING HEREINABOVE SET FORTH SHALL BE DEEMED TO RESERVE ANY INTEREST IN THE SURFACE OR IN ANY PORTION OF SAID REAL PROPERTY LYING WITHIN 200 FEET MEASURED VERTICALLY DOWNWARD FROM THE SURFACE OF SAID REAL PROPERTY, ALL AS RESERVED IN DEED FROM HUNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUNE 21, 1979 IN BOOK 13195, PAGE 1898 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM, ALL WATER RIGHTS OF, OR RELATED TO, OR APPURTENANT TO SAID REAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, ALL RIGHT TO PERCOLATING WATER, ARTESIAN WATERS AND UNDERGROUND STREAMS, BUT EXCLUDING THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEED FROM HUNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUNE 21, 1979 IN BOOK 13195; PAGE 1898 OF OFFICIAL RECORDS. F-0 : MS PAGE 9 `i MAYN CE L JOWaON COWA i 991 S35 MANGE COUNT omw go&* Comm. E9*08 MAY 11.1997 1,681'i l AVW ��9'w�'JO7 � State of California ) wW1033ON ) ss. °1"iwS0 7V= County of On 199,,,3 , before me, S!22 � X Utaar.; fn&na title of o ce r.g., Jane Dot, Notary P ee ) personally appeared ram personally known to me —OR- 0 proved to me on the basis of satisfactory evidence to be the person(s) whose name( +3We subscribed to the within instrument and acknowledged to me that heAheAhey executed the same in bisA=Jtheir authorized capacit) , , and that by hWher4their signature(s) on the instrument the persor.(s), or the entity upon behalf of which person(D acted, executed the instrument. Witness my hand and official seal. Capacity claimed by signer: O Individual e Corporate Officer(s): o Partner(s):� o General o Limited o Attorney -in -fact o Trustee(s) o Guardian/Conservator o Other: Signer is representing: or -- (ll,is section is OPT70NAL.) Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to an unauthorized document. THIS CERTIFICATE Title or Type of Document MUST BE ATTACHED TO THE DOM, TENT 'tuber of Pages 5 ate of Document ! DESCRIBED AT RIGHT: Signer(s) Other than Named Above �.% State of California ) t t5UE s SEAL ) ss. Notary PUMC-Coa'ar:O of ORANGE COUNTY Count y } My COmvMon Exp: c. Au" 21. 1995 4"'� CP On Cie. 199 3 , before me (name. fide o 'officer, e.g., Jane Doe, Notary Public) personally appeared 15 a 'f -.f / _.! _ (name(s) of slgner(s)) personally known to me —OR— o proved to me on the basis of satisfactory evidence to be the peZhe n whose name 4i are subscribed to the within instrument and acknowledged to me the ey executed the same in hi cl their authorized capacityhes, and that by hisCerliheir signature on the instrument the personW , or the entity upon behalf of which person(74 acted, executed the instrument. / Witness my hand and official seal. (Signature of Notary). Capacity claimed by signer: (nods sections is OP77ONAL.) o Individual Corporate Officer(s): c- o Partner(s):41 � 17 General 0 Limited o Attorney -in -fact o Trustee(s) o Guardian/Conservator o Other: Signer is representing: Attention rotary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to an unauthorized document. THIS CERTIFICATE MUST BE ATTACHED TO TIIE DOCU1tENT DESCRIBED AT RIGHT: Title or TVDe of Document ' Number of Pagd —"K- Date of Document Signer(s) Other than Named Above 6 � 93 sgkmber 8. 19" rua1.:5872_11391 181460.55 • _ ac ,=4'�-;�; C00"IG CARTER z �- Co► ; 0 95-7719 Co _ 4 NOTARY PUBLIC - CALIFOANtA Of1A4GE COUNTY -.► - ISM Comm. Eapirea JUKE 14. 1fi9G State of California County of ORANGE COOKIE CARTER` ss. m ; d< � COWA. # 967719 1 c3 r�a'rARYrvabc.CALIFORNCA'M MNGE COUNTY bar Comm, rxp ma AWE 14. t996 On pf&pnER 61- , 199 3 , before me, (name, title of officer, e.g.. Ame Doc, Norary Pw is ") personally appeared rAVID MICHEiSCN (name{a) of signer(s)1 13 personally known to me —OR— b 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 capacitylies, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. Witness my hand and official seal. Capacity claimed by signer: Cl Individual Ir o Corporate Ofrcer(s): 9 Partner(s): zt General a Urnited la Attorney -in -fact :P Trustee(s) o Guardian/Conservator o Other: --.. {Signature of lVorary) r Mit iec6m 1r OPTIONAL) FIVE POINTS SENIORS, L.P., A CALIFORNIA LIMITED PARTNERSHIP BY: Signer Is representing: MICHELSON FAMILY TRUST, DATED AS OF DECEMBER 12, 1984, AS AMENDED MARCH 1, 1981, ITS GENERAL(Raw 01 Pe"05"-TV or ennry re, PARTNER Attention Notary: Although the information requested below is OPTIONAL, It could prevent fraudulent attachment of this certificate to an unauthorized document. THIS CERTIFICATE MUST BE ATTACHED TO THE hOCUMENT DESCRIBED AT RIGHT: Title or Type of Document MEMOPJ%NTUM OF AFFORDABLE HOUSING AGREEMENT Number of Pages 3 Date of Document 10-20-93 Signer(s) Other than Named Above ' Tv9L:5369-11391 I B2460_55 �G ' 9'�45�396- O Do f o=r'mWE=B? � F '-TAj _ c 4 TM'E rl"M E cot ## 10--JAM-1994 09:04 AM REQUESTED BY Recorded 1Ti iJ11ic1a1 Re.-Or-isRECORDING of Cra n_e Cc��t � wall#or��U AND WHEN RECORDED MAIL TO: lee A. Era^a:, cmnt:r Fe�:Crder Face I of 4 Fees: ; C.Gt Tav: ; G.G^ Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Executive Director SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY Exempt from recording fees pursuant to Government Code § 6103. Request for Notice Under Section 2924b Civil Code �f In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default ark¢ a copy of any Notice of Sale under the DeedSof Trust recorded as Instruments c !,QC-C- Y No. 1i6L" L571 /0-, 1993, in Book _, Page _, Official Records of Orange County, California, and describing land therein as See Exhibit A attached hereto executed by FIVE POINTS SENIORS, L.P., a California limited partnership as Trustor, in which �`srti l o�a r - .4u_^.� '► named as Beneficiary, and SEc"R, T!CS �'�°�✓4 , as Trustee, be mailed to the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, at 2000 Main Street, Huntington Beach, California 92648, Attention: Executive Director. NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED. % Executive Directo /0 n20— Date PUBL:5958_113911B2460.55 1w ALTA LOAN POLICY EXHIBIT "A" OR-9345386 ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, DESCRIBED AS FOLLOWS: PARCELS 1 AND 2, AS SHOWN ON A MAP FILED IN BOOK 134, PAGE 22 OF PARCEL MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING FROM THAT PORTION (HEREINAFTER CALLED THE "SUB-500 PORTION") OF SAID REAL PROPERTY LYING BELOW A DEPTH OF 500 FEET BENEATH THE SURFACE THEREOF, ALL OIL, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, AND INCLUDING ALL FISSIONABLE MATERIALS WITHIN OR THRT MAY BE PRODUCED FROM OR EXTRACTED OR TAKEN FROM THE SUB-500 PORTION OF THE SAID REAL PROPERTY, WHICH SAID OIL, GAS, ASPHALTUM, HYDROCARBONS AND MINERALS SHALL BE HEREINAFTER COLLECTIVELY CALLED THE "SUS-500 MINERALS", AS RESERVED IN DEED FROM HUNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUNE 21, 1979 IN BOOK 13195, PAGE 1898 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM THAT PORTION (HEREINAFTER CALLED THE "SUB-200 PORTION") OF SAID REAL PROPERTY LYING BELOW A DEPTH OF 200 FEET BENEATH THE SURFACE THEREOF, THE FOLLOWING: (A) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO LOCATE AND TO MAINTAIN SUBSURFACE PORTIONS OF OIL AND GAS WELLS IN THE SUB-200 PORTION OF SAID REAL PROPERTY, AND THE RIGHT TO DRILL FOR, PRODUCE, EXTRACT AND TAKE THE SUB-500 MINERALS FROM THE SUB-500 PORTION OF SAID REAL PROPERTY, AND THE RIGHT TO EXERCISE ALL OF THE RIGHTS AND PRIVILEGES NECESSARY FOR SUCH DRILLING, PRODUCING, EXTRACTING AND TAKING; AND, (B) THE SOLE AND EXCLUSIVE RIGHT TO USE THE SUB-200 PORTION OF SAID REAL PROPERTY TO CONDUCT OPERATIONS, FROM TIME TO TIME, BY METHODS NOW KNOWN OR UNKNOWN, WHICH, IN THE OPINION OF THE HUNTINGTON BEACH COMPANY, ARE REASONABLY DESIGNED TO BENEFIT OR FACILITATE THE DRILLING FOR, OR PRODUCTION, EXTRACTION OR TAKING OF THE SUB-500 MINERALS FROM THE SUB-500 PORTION OF SAID REAL PROPERTY, OR ANY MINERALS FROM OTHER LANDS OTHER THAN SAID REAL PROPERTY (HEREIN CALLED THE "OTHER LANDS"), TOGETHER WITH THE RIGHT TO DRILL A WELL OR WELLS OR USE ANY EXISTING WELLS IN, INTO OR THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY, FOR THE PURPOSE OF INJECTING INTO THE SUB-500 PORTION OF SAID REAL PROPERTY OR INTO OTHER LANDS, OIL, GAS, AIR, WATER OR OTHER LIQUID OR GASEOUS SUBSTANCES, INCLUDING THE RIGHT, FROM TIME TO TIME, TO IGNITE OR OTHERWISE ACTIVATE ANY PAGE 8 �.r ALTA LCAN POLICY OR-9345386 OR ALL OF SUCH SUBSTANCES SO INJECTED, OR ANY OR ALL OF THE SUB-500 MINERALS WITHII4 THE SUB-500 PORTION OF SAID REAL PROPERTY, OR ANY MINERALS FROM OTHER LANDS; AND, (C) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO DRILL INTO AND THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY FROM OTHER LANDS, BY MEANS OF A WELL OR WELLS DRILLED FROM THE SURFACE OF OTHER LANDS, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO REPAIR, REDRILL, DEEPEN, MAINTAIN, REWORK AND OPERATE SUCH WELLS AND PRODUCE ANY MINERALS FROM OTHER LANDS BY MEANS OF SUCH WELLS, OR PRODUCE ANY MINERALS FROM OTHER LANDS BY MEANS OF SUCH WELL OR WELLS, THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY; AND, (D) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO LOCATE, OPERATE AND MAINTAIN SUBSURFACE PORTIONS OF WELLS IN, INTO OR THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY, AND THE RIGHT, FROM TIME TO TIME, TO INJECT, STORE, PRESSURIZE AND REMOVE THE SUB-500 MINERALS OR ANY MINERALS FROM OTHER LANDS FOR THE PURPOSE OF STORING THE SAME IN THE SUB-500 PORTION OF SAID REAL PROPERTY, OR IN OTHER LAND. NOTHING HEREINABOVE SET FORTH SHALL BE DEEMED TO RESERVE ANY INTEREST IN THE SURFACE OR IN ANY PORTION OF SAID REAL PROPERTY LYING WITHIN 200 FEET MEASURED VERTICALLY DOWNWARD FROM THE SURFACE OF SAID REAL PROPERTY, ALL AS RESERVED IN DEED FROM HUNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUNE 21, 1979 IN BOOK 13195, PAGE 1898 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM, ALL WATER RIGHTS OF, OR RELATED TO, OR APPURTENANT TO SAID REAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, ALL RIGHT TO PERCOLATING WATER, ARTESIAN WATERS AND UNDERGROUND STREAMS, BUT EXCLUDING THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEED FROM HUNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUNE 21, 1979 IN BOOK 13195, PAGE 1898 OF OFFICIAL RECORDS. RO:MS PAGE 9 �W) State of California ) ss. County of ) ] MIAYt ilCt i..IOF�+rON eoM�. � ootesa lio�av Pubic — col+brr+lo o�w� cou+rrY t+Al/ Canm. E�irM MAY 1 t.11 On i -U 199.5 , before me, Aa4i&'g- c'70g4&A&2%2 �� 5!�� ( , title of q,Bict t.g., JdmeDoi, Notary Pu e ) personally appeared V personally known to me —OR— ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) islwe subscribed to the within instrument and acknowledged to me that he/she/they. executed the same in his/l:-erkheir authorized capacity/im, and that by hisA*FAheir signatures) on the instrument the person(O, or the entity upon behalf of which persons} acted, executed the instrument. Witness my hand and official seal. ±auwz�'or, L , U (Signature Notary) Capacity claimed by signer: Mis section is 0MONAL) o Individual Corporate Officer(s): f ` o Partner(s): ❑ General to L mited ❑ Attorney -in -fact ❑ Trustee(s) o Guardian/Conservator o Other: Signer is representing: person rs/ or Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to an unauthorized document. THIS CERTIFICATE Title or Type of Document MUST BE ATTACKED TO THE DOMJENT Number of Pages 3 Date of Document DESCRIBED AT RIGHT: Signer(s) Other than Named Above =fie 3t"b" 8. M PUBL:5872_113411Er-460.55 GUARANTY THIS GUARANTY (the "Guaranty") is hereby entered into in favor of THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency"), by NORMAN D. WARD and BUNNIE L. WARD (collectively, the "Guarantors"), as of the date set forth herein. EECIIAL5- A. The Agency and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer") have entered into or will enter into a certain Affordable Housing Agreement dated as of November 18, 1991 (the "Agreement") which provides in part that Guarantors shall provide a guaranty to the Agency. B. The Guarantors, who are beneficiaries of the trust which is a limited partner of the Developer, will significantly benefit by the execution by the Agency of the Agreement. C. The execution by the Guarantors of this Guaranty is a condition but for which the Agency would not execute the Agreement. D. Guarantors have reviewed and hereby approve the form and content of the Agreement. NOW, THEREFORE, in consideration of the execution of the Agreement, and of other valuable consideration, receipt of which is hereby acknowledged: 1. Guarantors guarantee to the Agency the full and timely performance of each and every obligation of the Developer pursuant to the Agreement. 2. This Guaranty is unconditional and may be enforced directly against the undersigned. No extensions, modifications or changes to the Agreement as Amended shall release the undersigned or affect this Guaranty in any way, and the undersigned waives notification thereof. 3. The undersigned hereby waive all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 4. Guarantors hereby waive and agree not to assert or take advantage of (a) any right to require the Agency to proceed against the Developer or to pursue any other remedy in the Agency's power before proceeding against the Guarantors, (b) demand, protest, and notice which the Agency may be required to provide to Developer under the Agreement, and (c) any duty on the part of Agency to disclose to Guarantors any facts Agency now or hereafter knows about the "Site" (as defined in the Agreement), the Agreement, or the Developer, regardless of whether Agency has reason to believe that any such facts ma-erially increase the risks beyond that which Guarantors intend to assume or has reason to believe that such facts are unknown to Guarantors PuaL:71 b0_113191 W-1460.50 t q C� rV�G►' Z� or has a reasonable opportunity to communicate such facts to Guarantors, it being understood and agreed that Guarantors are fully responsible for being and keeping informed of all circumstances regarding the Site, the Agreement, the obligations of the Developer, the financial condition of the Developer, and of all circumstances bearing on the risk of any obligation by Developer hereby guaranteed. 5. Guarantors shall have no right of subrogation and waive any right to enforce any remedy the Agency now has or may hereafter have against the Developer, and any benefit of, and any right to participat-- in any security now or hereafter held by Agency. 6. The obligations of Guarantors hereunder are independent of the obligations of Developer and, in the event of default hereunder, a separate action or zctions may be brought and prosecuted against Guarantors (or any other guarantor) whether or not Developer is joined therein or a separate action or actions are brought against Developer. 7. In the event of any litigation between Agency and one or both Guarantors arising out of this Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. 8. No provisions of this Guaranty can be waived nor can Guarantors be released from the obligations hereunder except by a writing duly executed by the Agency. 9. Guarantors agree to pay all reasonable attorney's fees and all other costs and expenses which may be incurred by Agency in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 10. Guarantors hereby waive notice of any demand by the Agency, as well as notice of any default by the Developer. 11. The Agency may assign this Guaranty. When so assigned, Guarantors shall be bound as above to the assignees without in any manner affecting Guarantors' liability hereunder. 12. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any successor or assignee thereof or any disaffirmance by a trustee of the Developer. 13. This Guaranty shall inure to the benefit of and bind the successors and assigns of Agency and Guarantors. 14. Guarantors agree that jurisdiction and venue with respect to any matter pertaining to the Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Orange, State of California, in an appropriate municipal court of that county, or in the Federal District Court in the Central District of California. Guarantors irrevocably waives any and all defenses based upon revenue or fgrLim non conveniens. 15. The laws of the State of California shall govern the interpretation and enforcement of this Guaranty. PVBL:7160 113191Ir-460.50 2 M 16. This Guaranty shall terminate and be of no force and effect as of the date which is seven years from the date of execution of this Guaranty. IN WITNESS WHEREOF, the undersigned have executed this Guaranty this 12 day of _ , 1993. Bunnie L. Ward "GUARANTORS' PUBL:7160_I13191s 4M.50 3 s �.1 GUARANTY THIS GUARANTY (the "Guaranty") is hereby entered into in favor of THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the 'Agency"), by DAVID MICHELSON and KATHLEEN M. MICHELSON (collectively, the 'Guarantors"), as of the date set forth herein. R-E!CITA4 La A. The Agency and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer") have entered into or will enter into a certair Affordable Housing Agreement dated as of November 18, I991 (the 'Agreement') which provides in part that Guarantors shall provide a guaranty to the Agency. B. The Guarantors, who are beneficiaries of the trust which is a general partner of the Developer, will significantly benefit by the execution by the Agency of the Agreement. C. The execution by the Guarantors of this Guaranty is a condition but for which the Agency would not execute the Agreement. D. Guarantors have reviewed and hereby approve the form and content of the Agreement. NOW, THEREFORE, in consideration of the execution of the Agreement, and of other valuable consideration, receipt of which is hereby acknowledged: 1. Guarantors guarantee to the Agency the full and timely performance of each and every obligation of the Developer pursuant to the Agreement. 2. This Guaranty is unconditional and nxty be enforced directly against the undersigned. No extensions, modifications or changes to the Agreement as Amended shall release the undersigned or affect this Guaranty in any %my, and the undersigned waives notification thereof. 3. The undersigned hereby waive all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 4. Guarantors hereby waive and agree not to assert or take advantage of (a) any right to require the Agency to proceed against the Developer or to pursue any other remedy in the Agency's power before proceeding against the Guarantors, (b) demand, protest, and notice which the Agency may be required to provide to Developer under the Agreement, and (c) any duty on the part of Agency to disclose to Guarantors any facts Agency now or hereafter knows about the "Site" (as defined in the Agreement), the Agreement, or the Developer, regardless of whether Agency has reason to believe that any such facts materially increase the risks beyond that which Guarantors intend to assume or has reason to believe that such facts are unknown to Guarantors PUBL:7160_313191B2460.50 I\k"*a Li -,MC •-V Z -A or has a reasonable opportunity to communicate such facts to Guarantors, it being understood and agreed that Guarantors are fully responsible for being and keeping informed of all circumstances regarding the Site, the Agreement, the obligations of the Developer, the financial condition of the Developer, and of all circumstances bearing on the risk of any obligation by Developer hereby guaranteed. 5. Guarantors shall have no right of subrogation and waive any right to enforce any remedy the Agency now has or may hereafter have against the Developer, and any benefit of, and any right to participata- in any security now or hereafter held by Agency. 6. The obligations of Guarantors hereunder are independent of the obligations of Developer and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantors (or any other guarantor) whether or not Developer is joined therein or a separate action or actions are brought against Developer. 7. In the event of any litigation between Agency and one or both Guarantors arising out of this Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. 8. No provisions of this Guaranty can be waived nor can Guarantors be released from the obligations hereunder except by a writing duly executed by the Agency. 9. Guarantors agree to pay all reasonable attorney's fees and all other costs and expenses which may be incurred by Agency in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 10. Guarantors hereby waive notice of any demand by the Agency, as well as notice of any default by the Developer. 11. The Agency may assign this Guaranty. When so assigned, Guarantors shall be bound as above to the assignees without in any manner affecting Guarantors' liability hereunder. 12. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any successor or assignee thereof or any disaffirmance by a trustee of the Developer. 13. This Guaranty shall inure to the benefit of and bind the successors and assigns of Agency and Guarantors. 14. Guarantors agree that jurisdiction and venue with respect to any matter pertaining to the Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Orange, Stare of California, in an appropriate municipal court of that county, or in the Federal District Court in the Central District of California. Guarantors irrevocably waives any and all defenses based upon revenue or forurn on conveniens. 15. The laws of the State of California shall govern the interpretation and enforcement of this Guaranty. euau7l6O_ t13t9IM-4W.so 2 IN WITNESS WHEREOF, the undersigned have executed this Guaranty this I day of DLr-, 1993. David Michelson Kathleen M. Michelson PVBL:7160 113191B2460.50 3 PROMISSORY NOTE SECURED BY DEED QF TRUST Huntington Beach, California 6 , 1993 1. Promiig to Pay. FIVE POINTS SENIORS, L.P., a California limited partnership ("Borrower", also referred to as 'Developer% promises to pay the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ('Holder,' also referred to as 'Agency% and/or order and assigns, at the office of the Agency in Huntington Beach, California, or at such other place as the Holder may designate in writing, the principal sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "Note Amount"). 2. InteCest Rate. Simple interest shall be charged by the Agency on the portion of the Note Amount remaining unpaid from time to time, from the date of the disbursement of the Note Amount until the date which is ten (10) years from the date of the disbursement of the Note Amount, at the rate of five percent (5%) per annum. 3. Affordable_ Housing Agreement. This Promissory Note is trade and delivered pursuant to and in implerrentation of an Affordable Housing Agreement by and between the Holder and the Borrower dated November 18, 1991 (the 'Agreement"), a copy of which is on file as a public record with the Holder and is incorporated herein by reference. The Agreement provides for the development of real property, and for the payment of moneys by the Holder to the Borrower in certain events therein set forth. The Borrower acknowledges that but for the execution of this Promissory Note, the Holder would not enter into the Agreement. Unless definitions of terms are expressly set out at length herein, each term shall have the same definition as set forth in the Agreement. 4, Principal and Intergst Payments. No payments of Principal and interest payments shall be required during &e first two years after the execution of this Note. During the third (3rd) through tenth (10) years after the execution of this Note, the Borrower shall make monthly payments on the first day of each month in such amounts as will fully amortize the balance of principal and interest over such eight (8) year repayment period. 5. Application,of Pa ments. Any sums received hereunder may, at the options of Holder hereof, be applied in any order to the payment of costs, interest, or principal due hereunder. 6. Prepayment. Privilege is reserved to make prepayments of principal on this Note without penalty or fee. 7. Non -Waiver. Failure to exercise any right the Holder may have or be entitled to, in the event of any default hereunder, shall not constitute a waiver of such right or any other right in the event of subsequent default. 8. Waiver of Presentment. etc. The Borrower and all guarantors and endorsers hereof hereby severally waive presentment for payment, protest and demand, notice of protest, PUHL:5865_11341 I Er-460.55 Page 1 of 3 demand and of dishonor and nonpayment of this Note and consent that the holder hereof may extend the time of payment or otherwise modify the terms of payment of any part or the whole of the debt evidenced by this Note, by agreement between the Holder and Borrower, and such consent shall not alter or diminish the liability of any person or the enforceability of this Note. Each and every party signing or endorsing this Note binds itself as a principal and not as a surety. In any action of proceeding to recover any sum herein provided for, no defense of adequacy of security, or that resort must first be had to security or to any other person shall be asserted. All of the terms, covenants, provisions, and conditions herein contained are made on behalf of, and shall apply to and bind, the undersigned and its successors and assigns, jointly and severally. 9, lie i n st . If any attorney is engaged by the Agency to enforce or construe any provision of this Note or the Deed of Trust, or as a consequence of any default or event of default hereunder, with or without the filing of any legal action or proceeding, then Borrower shall immediately pay upon demand all attomey's fires and all other costs incurred by Agency, together with interest thereon from the date of such demand until paid at the rate of interest applicable to the principal owing hereunder as if such unpaid attorney's fees and costs have been added to the principal. 10. Security of Note. This Note is secured, 'nt t� ab, by a Deed of Trust (the "Deed of Trust") of even date herewith executed by Borrower covering property located in Orange County, State of California, together with the buildings and improvements now or hereafter erected thereon. It. Maximum interest. No provision of this Note or any instrument securing payment hereof or otherwise relating to the debt evidenced hereby shall require the payment or permit the collection of interest in excess of the maximum permitted by applicable taw. If any excess of interest in such respect is herein or in such other instrument provided for, or shall be adjudicated to be so provided for herein or in any such instrument, the provisions of this paragraph shall govern, and neither Borrower or any endorsers of this Note nor their respective heirs, personal representatives, successors or assigns shall be obligated to pay the amount of such interest to the extent it is in excess of the amount permitted by applicable law. 12. Business Mlrpose. The undersigned warrants and represents that all funds advanced under this Note shall be applied and are intended solely for business or commercial purposes as set forth in the Agreement and not for any personal, family or household purposes. 13. Notice. Any demand or notice to be made or given under the terms hereof or any instrument now or hereafter securing this Note by the Holder to Borrower shall be effective when mailed or delivered in the manner specified in the Deed of Trust. 14. Default. In the event that there is a default in payment as scheduled herein or a default under the terms of the Deed of Trust securing this Note, or a default of the Agreement or in any other instrument executed by Borrower or any guarantor in favor of the Agency, may at its elections and without further notice, declare all amounts of the outstanding principal and accrued interest thereon immediately due and payable. In the event that the Agency elects to declare default as stated herein then this Note shall bear interest after default at the discount rate of the San Francisco office of the Federal Reserve Bank which is prevailing immediately prior to PUBL.5865_11391I1124W.55 Page 2 of 3 �.J default, plus five percent (5 %), and the Holder may take such action under the law or under these security documents securing this Note as Agency may determine necessary to enforce its rights hereunder. 15. Early Payment Requirement. Reference is made to the Deed of Trust for the right of the Beneficiary thereunder to accelerate the indebtedness evidenced by this Note. IN WITNESS HEREOF, this instrument has been executed as of the date set forth below. FIVE POINTS SENIORS, L.P., a California limited partnership By: Michelson Family Trust dated December 12, 1984, as amended March 1, 1985, its general partner Dated By: David Michelson, Trustee "BORROWER" MML:5865_1139116246o.55 Page 3 of 3 JA-94-001830, 1994 08 = 00 Ali FECOMMG REOtUMD B7 F6 ' i 1t14Vf",JW ME WSURAKE GOI.pA,4Y Recarlad lA Cffic&al R r s�Cdi RECORDING REQUESTED BY ) of Or.3nse Cca^ty, Ca?ifcrnia AND WIIEN RECORDED RETURN TO: ) Lee A, Branch, County Recorder Pa32 1 OF 14 Fees: ; 04-0 Tax 0.M Redevelopment Agency of the City of ) Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Executive Director ) J,Space Abovc This Linc For Recorder's Usc. This document is exempt from recording fees pursuant to Government Code Section 6103. DEED OF TRUST WITH ASSIGNMENT OF RENTS q p THIS DEED OF TRUST is made this Gm day of DEC. , 1993, by and between FIVE POINTS SENIORS, L.P., a California limited partnership (the "TRUSTOR"), 2 whose address is 2 South Alta Mira, South Laguna Beach, California 92677-3302, and FIRST vF i AMERICAN TITLE INSURANCE COMPANY (the "TRUSTEE"), whose address is 114 East Fifth Street, Santa Ana, California 92701, and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "BENEFICIARY'), whose address is 2000 Main Street, Huntington Beach, California 92648. WITNESSETH: That Trustor Irrevocably Grants, Transfers and Assigns, to Trustee, in Trust, with Power of Sale, that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein. TOGETHER WITH: (a) all buildings, improvements ar:d fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of said property secured by alien thereon or payable under any agreement for the sale 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, and all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement. FOR THE PURPOSE OF SECURING: 1. Payment of the sum of Two hundred Fifty Thousand Dollars ($250,000) with interest thereon according to the terms of a Promissory Note of even date herewith, made by Trustor, payable to the order of the Beneficiary and extensions or renewals thereof. squmhw 1.1093 Puet:5869 11391 I B24W.35 Page 1 of 10 2. Payment of such additional sums with interest thereon as: (a) may be hereafter borrowed from the Beneficiary by the then record owner or owners of said property when evidenced by another Promissory Note or Notes, or (b)as may be added to the indebtedness secured hereby in accordance with the provision of this Deed of Trust. 3. Performance of each and every obligation, covenant, promise or agreement of Trustor contained herein and in that certain Affordable Housing Agreement entered by and between Trustor and Beneficiary on November 18, 1991, (hereinafter the "Agreement"), including without limitation, the payment of liquidated damages pursuant to Section 608 of the Agreement. 4. Payment, with interest thereon, of any other present or future indebtedness or obligation of the Trustor (or of any successor -in -interest of the Trustor to said property) to the Beneficiary, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not, whether otherwise secured or not, or whether existing at the time of the execution of the Deed of Trust, or arising thereafter. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. To keep said property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the premises at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the premises wit~'tout Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry -rot; to pay when due all claims for labor performed and materials furnished in connection with such property and not to permit any mechanic's lien against such property; to comply with all laws affecting such property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon such property in violation of the law; and to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of said property may be reasonably necessary; to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. If the loan secured hereby or any part thereof is being obtained or should any additional loan be made hereafter for the purpose of financing rehabilitation improvements on said property, Trustor further agrees, anything in this Deed of Trust to the contrary notwithstanding; (a) to complete the same in accordance with City approved plans and specifications satisfactory to Beneficiary; (b) to allow Beneficiary to inspect such property at all times during rehabilitation; (c) to replace any work or materials unsatisfactory to Beneficiary within fifteen (15) calendar days after written notice from Beneficiary of such fact, which notice may be given to Trustor by registered or certified mail, sent to his last known address, or by personal service of the same; (d) that work shall not cease on the rehabilitation of such improvements for any reason whatsoever for a period of fifteen (15) calendar days, whether consecutive or not, without the written permission of the Beneficiary; (e) to pay when due all sqftmbw e. 19" eusL:5869_11391 I KNW.55 Page 2 of 10 claims for labor and materials furnished in connection with the said rehabilitation and not to permit any claims of lien for said work or material to be filed of record against the said property; (f) not to permit any stop notice claims to be presented to Beneficiary. If the said property is part of a larger tract upon which improvements will be constructed, Trustor shall make separate contracts and subcontracts for said construction which shall pertain to the said property only and shall keep separate, full and complete records of all work and materials furnished to the said property. Trustee upon presentation to it of an affidavit signed by the Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 2. To provide, and maintain in force at all time with respect to said property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefor shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefor and, in the event any such insurance policy and evidence of the payment of the premium therefor are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy theretofore delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorizer] either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for die cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds, at the option of the Beneficiary, shall either be applied in reduction of the indebtedness secured hereby whether due or not, or in such order as Beneficiary may determine, or be held by the Beneficiary and used to reimburse the Trustor for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. sepawtw S. M PUSL:5969_11391 I B2460s5 Page 3 of 10 Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 3. To pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting such property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment (c) when done, all encumbrances, charges and liens, with interest, on said property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 1f, by the laws of the United States of America, or of any state having jurisdiction over the Trustor, any tax is due or becomes due in respect to the issuance of the Note hereby secured, the Trustor covenants and agrees to pay such tax in the manner required by such law. Should Trustor fail to make any such payment, Beneficiary may elect to make such payment, Beneficiary may elect to make such payment and any amount so paid may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 4. That, should Trustor fail to make any payment or do any act as provided in this Deed of Trust, then Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 5. To appear in and defend any action or proceeding purporting to affect the security hereof or the property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in such property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. sqftmbw i. 190 PUBL:5369_11391 I824M.S5 Page 4 of 10 6. To pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 7. That, should the Trustor or any successor in interest to Trustor in such property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate said property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. S. That any award, settlement or damages for injury or damages to such property, or in construction with the transaction financed by such loan, and any award of damages 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 release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 9. That, by accepting payment of any sums secured hereby after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all sums so secured or to declare a default for failure so to pay. I0. That at any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and any Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of said property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of said property, Trustee may: (a) reconvey any part of said property, (b) consent to the malting of any map or plat thereof, (c) join in granting any easement thereon, (d) join in any agreement subordinating the lien or charge hereof. 11. That the lien hereof shall rerrain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 12. That, upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said Note or Notes to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive payoff of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto.' Such request sear 3. iW3 KFOU5869 113911132460.55 Page 5 of 10 and reconveyance shall operate as a re -assignment of the rents, issues, royalties and profits hereinafter assigned to Beneficiary. Five (5) years after issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in such request to retain them). 13. That as additional security, Trustor irrevocably assigns to Agency the rents, issues, and profits of the property affected by this Trust Deed for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Agency any duty to produce rents from the property affected by this Trust Deed, or cause Agency to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Trust Deed, or for any negligence in the management, upkeep, repaid, or control of such property. This is an absolute assignment, not an assignment for security only, and Beneficiary's right to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Trust Deed. Agency confers upon Trustor a license ("License') to collect and retain the rents, issues and profits of the property affected by this Trust Deed as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Agency may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Trust Deed. This right to collect rents, issues and profits shall not grant to Agency or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Agency or Trustee the duty to produce rents, issues or profits or maintain all or any part of the property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the said property, make cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of said property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of said property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Slftmbw B. JW3 PUBL:5869 113911 B2460.55 Page 6 of 10 Trustee's sale proceedings hereunder, shall not cure such breach or default not affect said sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor a subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 14. That if the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate% (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "said property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 15. That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement, and the Promissory Note, if applicable, hereunder, and upon default by Trustor under the terms of any encumbrance, charge or lien which is or appears to be prior or superior hereto, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary shall also deposit with Trustee this Deed of Trust and any Notes and all documents evidencing expenditures, secured hereby. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as ther required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for case in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public septembW 1. 190 PVBL:5869 113911132460.55 Page 7 of 10 announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive payoff of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale). After deducting all costs, fees and expense of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the terms hereof, not then repaid, with accrued interest at the rate then payable under the Note or Notes secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 16. To waive, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 17. That Beneficiary 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 and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where such property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 18. That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term 'Beneficiary' shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 19. That in the event the property secured by this Deed of Trust is income producing property consisting of four units or more, Trustor agrees to file with Beneficiary, at Beneficiary's request, monthly, on or before the 15th day of each month, a written operational report. Such operational report shall contain a brief but complete statement of the month's income and expenses of such property, a list of all vacancies, and a statement of any material change in the property or business carried on therein for such period. 20. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections s-fimber s. M PUBL:5869 11391 I B24W.55 Page 8 of 10 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable change, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with said property of this Deed of Trust, including changing Beneficiary's records pertaining to this Deed of Trust and the loan secured hereby in connection with the transfer of said property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing die same with another such policy. 21. That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 22. That should this Deed of Trust or any Note secured hereby provide any fee for prepayment of any indebtedness secured hereby, Trustor agrees to pay said fee, if any, of said indebtedness shall be paid prior to the due date thereof stated in said Note or this Deed of Trust even if and notwithstanding Trustor shall have defaulted in payment thereof, or in performance of any agreement hereunder, and Beneficiary, by reason thereof, shall have declared all sutras secured hereby immediately due and payable. 23. That Trustor has made certain representations and disclosures in order to induce Beneficiary to make the loan evidenced by the Promissory Note or Notes which this Deed of Trust secures, and in the event that Trustor has made any material misrepresentation or failed to disclose any material fact, Beneficiary at its option and without notice, shall have the right to declare the indebtedness secured hereby, irrespective of the maturity dale specified in such Note or Notes, immediately due and payable, and on failure to so pay Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. Any notice which any party hereto may desire or be required to give to the other parry shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. 3queber S. 19" PUBL:5869 113411 B2460.55 Page 9 of 10 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. FIVE POINTS SENIORS, L.P., a California limited partnership By: Michelson Family Trust, dated December 12, 1984, as amended March 1, 1985, its general partner By: - ra Ug., David Michelson, Trustee "TRUSTOR' sn.mea e. 1993 ruaL:5869_11391 I B24W.55 Page 10 of 10 COCI E CARTER z �'' COw.41967719 Cfl m ; a = = NOTARY PUBLIC - CAtFOANIAM _ L ors Mr-C COUNTY W Comm. Erpret X-M. 14,19% State of California ) *-'' COOKIE CARTER = ss. m :roc �- COMM. 0 967719 Co County of ORANGE ) _ _ NOTAORAUBLINGEc-CALF A RN >> OUNTY Of COMM. EXPMS JUKE 14. St'X On DECEMBER 6, 199 3 , before me, COOKIE CARTER (narne, Azle of officer, e.g.. Jane Doe, Notary Public") personally appeared DAVID MICHELSCN (nan>e(s) of signer(s)J ❑ personally known to me —OR— la 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 hislherltheir authorized capacitylies, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. Witness my hand and official seal. Capacity claimed by signer: ❑ Individual ❑ Corporate Officer(s): * Partner(s): CK General ❑ Limited ❑ Attorney -in -fact 9 Trustee(s) ❑ Guardian/Conservator o Other: +.Ir ir.� _ i ���!L� (77iis section is OP770rtiW-) FIVE POINTS SENIORS, L.F.r A CALIFORNIA LIMITED PARTNERSHIP BY: Signer is representing: MARCH It 19851 ITS GEZIERAL PARTNER mune o person sj or entuy ies Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to an unauthorized document. THIS CERTIFICATE Title or Type of Document nEEn of TROST WITH MUST BE ATTACHED ASSIGNMENT OF RENTS TO THE DOCUNIENT Number of Pages 10 Date of Document 12-6-93 DESCRIBED AT MGM% Signer(s) Other than Named Above NONE 3gdm6rr 1. 1"3 PuuL:5869 t1391ISi454.s5 kw ALTA LOAM POLICY OR-9345386 EXHIBIT "A" ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, DESCRIBED AS FOLLOWS: PARCELS 1 AND 21 AS SHOWN ON A MAP FILED IN BOOK 134, PAGE 22 OF PARCEL MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING FROM THAT PORTION (HEREINAFTER CALLED THE "SUB-500 PORTION") OF SAID REAL PROPERTY LYING BELOW A DEPTH OF 500 FEET BENEATH THE SURFACE THEREOF, ALL OIL, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, AND INCLUDING ALL FISSIONABLE MATERIALS WITHIN OR THAT MAY BE PRODUCED FROM OR EXTRACTED OR TAKEN FROM THE SUB-500 PORTION OF THE SAID REAL PROPERTY, WHICH SAID OIL, GAS, ASPHALTUM, HYDROCARBONS AND MINERALS SHALL BE HEREINAFTER COLLECTIVELY CALLED THE "SUB-500 MINERALS", AS RESERVED IN DEED FROM HUNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUNE 21, 1979 IN BOOK 13195, PAGE 1898 OF OFFICIAL RECORDS. ALSO EXCEPTING FRCM THAT PORTION (HEREINAFTER CALLED THE "SUB-200 PORTION") OF SAID REAL PROPERTY LYING BELOW A DEPTH OF 200 FEET BENEATH THE SURFACE THEREOF, THE FOLLOWING: (A) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO LOCATE AND TO MAINTAIN SUBSURFACE PORTIONS OF OIL AND GAS WELLS IN THE SUB-200 PORTION OF SAID REAL PROPERTY, AND THE RIGHT TO DRILL FOR, PRODUCE, EXTRACT AND TAKE THE SUB-500 MINERALS FROM THE SUB-500 PORTION OF SAID REAL PROPERTY, AND THE RIGHT TO EXERCISE ALL OF THE RIGHTS AND PRIVILEGES NECESSARY FOR SUCH DRILLING, PRODUTIN3, EXTRACTING AND TAKING; AND, (B) THE SOLE AND EXCLUSIVE RIGHT TO USE THE SUB-200 PORTION OF SAID REAL PROPERTY 30 CONDUCT OPERATIONS, FROM TIME TO TIME, BY METHODS NOW KNOWN OR UNKNOWN, WHICH, IN THE OPINION OF THE HUNTINGTON BEACH COMPANY, ARE REASONABLY DESIGNED TO BENEFIT OR FACILITATE THE DRILLING FOR, OR PRODUCTION, EXTRACTION OR TAKING OF THE SUB-500 MINERALS FROM THE SUB-500 PORTION OF SAID REAL PROPERTY, OR ANY MINERALS FROM OTHER LANDS OTHER THAN SAID REAL PROPERTY (HEREIN CALLED THE "OTHER LANDS"), TOGETHER WITH THE RIGHT TO DRILL A WELL OR WELLS OR USE ANY EXISTING WELLS IN, INTO OR THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY, FOR THE PURPOSE OF INJECTING INTO THE SUB-500 PORTION OF SAID REAL PROPERTY OR INTO OTHER LANDS, OIL, GAS, AIR, WATER OR OTHER LIQUID OR GASEOUS SUBSTANCES, INCLUDING THE RIGHT, FRO14 TIME TO TIME, TO IGNITE OR OTHERWISE ACTIVATE ANY PACE 8 ALTA LOAN POLICY OR ALL OF SUCH SUBSTANCES SO INJECTED, MINERALS WITHIN THE SUB-500 PORTION O OR-9345386 F (C) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO DRILL INTO AND THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY FROM OTHER LANDS, BY MEANS OF A WELL OR WELLS DRILLED FROM THE SURFACE OF OTHER LANDS, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO REPAIR, REDRILL, DEEPEN, MAINTAIN, REWORK AND OPERATE SUCH WELLS AND PRODUCE ANY MINERALS FROM OTHER LANDS BY MEANS OF SUCH WELLS, OR PRODUCE ANY MINERALS FROM OTHER LANDS BY MEANS OF SUCH WELL OR WELLS, THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY; AND, (D) THE SOLE AND EXCLUSIVE RIGHT, FROM TIME TO TIME, TO LOCATE, OPERATE AND MAINTAIN SUBSURFACE PORTIONS OF WELLS IN, IITTO OR THROUGH THE SUB-200 PORTION OF SAID REAL PROPERTY, AND THE RIGHT, FROM TIME TO TIME, TO INJECT, STORE, PRESSURIZE AND REMOVE THE SUB-S00 MINERALS OR ANY MINERALS FROM OTHER LANDS FOR THE PURPOSE OF STORING THE SAME IN THE SUB-500 PORTION OF SAID REAL PROPERTY, OR IN OTHER LAND. NOTHING HEREINABOVE SET FORTH SHALL BE DEEMED TO RESERVE ANY INTEREST IN THE SURFACE OR IN ANY PORTION OF SAID REAL PROPERTY LYING WITHIN 200 FEET MEASURED VERTICALLY DOWNWARD FROM THE SURFACE OF SAID REAL PROPERTY, ALL AS RESERVED IN DEED FROM HUNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUNE 21, 1979 IN BOOK 13195, PAGE 1898 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM, ALL WATER RIGHTS OF, OR RELATED TO, OR APPURTENANT TO SAID REAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, ALL RIGHT TO PERCOLATING WATER, ARTESIAN WATERS AND UNDERGROUND STREAMS, BUT EXCLUDING THE RIGHT OF SURFACE ENTRY, AS RESERVED IN DEED FROM 11UNTINGTON BEACH COMPANY, A CORPORATION, RECORDED JUNE 21, 1979 IN BOOK 13195, PAGE 1898 OF OFFICIAL RECORDS. RO:MS PAGE 9 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State County of [V6 . 'On before me, WE personally appeared 0 personally known tome -OR - ❑ t►sfactorp-evidence- to be the person(eywhose name(sy is/are subscribed to the within instrument and ac- knowledged to me that helshv..M7ey executed the same in hisAtef lreir authorized CT43A'L SEAL capacity(7cs; and that by his+ertttretr JUDY raCHARDS Notary rLuc-Gaa or"a signature(sTon the instrument the personasy, �COUNTY or the entity upon behalf of which the wof1 ExQta person(eyacted, executed the instrument. November 3. 1995 THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED AT RIGHT: Though the data requested here is not required by law. It could p event fraudulent reanachment of this ford. WITNESS my hand and official seal. No. 5193 � OPTIONAL SECTION CAPACITY CLAIMED BY SIGNER Though statute does not require V* Notary b tilt In the data below. doing so may prove hvak,able to persons re" on U1e docurnem- Q INDIVIDUAL [] CORPORATE OFFICER(S) TITLEtS) PARTNER(S) LIMITED GENERAL ATTORNEY -IN -FACT [] TRUSTEE(S) GUARDIAN -CONSERVATOR OTHER: SIGNER IS REPRESENTING: NAME OF PERSON(S) OR EVTrTY(IES) SIGNATURE OF NOTARY41=10eI OPTIONAL SECTION TITLE OR TYPE OF DOCUMENT NUMBER OF PAGES DATE OF DOCUMENT SIGNER(S) OTHER THAN NAMED ABOVE C1993 NATIONAL NOTARY ASSOCIATION - 8236 Remmet Ave.. P.O. Box 7184 • Canoga Park. CA 91309-7184 r!EED AIMIQRTZATION This is to certify that the interest in real property conveyed by the Deed of Trust dated D=mber b. 1993 from Five Points Seniors ("Grantor(s)", to the Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic (the "Agency"), is hereby accepted by the undersigned officer or agent on behalf of the Agency on Jan�a_ry , , _1994, pursuant to authority conferred by Resolution No. 2Q, and the Agency as Beneficiary consents to recordation thereof by its duly authorized officer. Dated: n 4 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic VA r5ONW-41AWOZ1jd:' - Title: Executive Dire V u�. 11 4 e TI OAJ , V AGENDA V CITY COUNCIL/REDEVELOPMENT AGENCY CITY OF HUNTINGTON BEACH MONDAY, DECEMBER 9, 1991 Adjourned Regular Meeting 7:00 P.M. - Room B-8 CALL ADJOURNED MEETING OF THE CITY COUNCIL/REDEVELOPMENT AGENCY TO ORDER ROLL CALL: Robitaije, Moul�to�n-Paterson, Winchell, Silva, Gr"n, MacAllister, Kel y PUBLIC COMMENTS av- p,* jrer?'fie, �Iefwa�,E a� Ona.•�9�++�� �cP�cSCrrfcrve /'C; c+wtsJ Cramp//rec. ht�aes • (City CouD,siJ)PRELIMINARY__REPORT FROM BUDGET TASR_FORCE A;1:. � / e 80-41cw- rAJA Forte. Ctia��.►...+J �i�i/ rc�.�f sc.%e�esfe✓ kv GALL "j s:" b 4* ^L w;Hrr G�ur..�•� �` �O r �c1 QRANGE N R W Communication from the City Attorney regarding assumption of legal representation by County of Orange of Montrose Chemical Lawsuit. RECOMMNDED : Accept the offer of the County Sanitation District and approve and authorize execution of the Collective Defense Agreement. �pP^ 0 0 (Redevelopment Agency) AMENDED & MODIFIED LOAN & A EEMABLE HOUSING AGREEMENT_ FIVE POINTS SENIOR VILLAS INC - 18660_MAIN ,ST_- AGENCY RESOLUTIQN NO, 220 Communication from Economic Development Director regarding consideration of an Amended and Modified Loan and Affordable Housing Agreement by and among the Redevelopment Agency of the City of Huntington Beach and Five Point Villas, Inc., for the project known as Five Points Senior Villas located at Main Street and Florida Avenue (18660 Main Street). RECOMMENDED ACTION: 1. Adopt AgPnQy Resolution-11o. 220 - "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 FIVE POINTS SENIORS." (Continued on next page) Page 2 - Council�7ency Agenda - 12/9/91 (2) 2. Approve and authorize execution of Affordable Housing Agreement between the Redevelopment Agency of the City of Huntington Beach and Five Points Seniors, Inc. qF 3. Authorize the allocation and expenditure of $750,000 in redevelopment housing set aside funds to implement the Affordable Housing Agreement (anticipated to be expended in 1993) . CALL CLOSED SESSION OF REDEVELOPMENT AGENCY �i f RECESS AGENCY TO CLOSED SESSION RECONVENE AGENCY /O: 2 OP. e" . ADJOURNMENT: Monday, December 16, 1991 at 5:30 P.M. in Room B -8 Council/Agency Agendas and Minutes are available at no charge to the public at the City Clerk's Office and by mail through paid subscription. CONNIE BROCKWAY, CITY CLERK Office of the City Clerk 2000 Main Street - 2nd Floor (536-5227) (12/9/91) (2) SUMMARY REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW ON AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND FIVE POINTS SENIORS This summary report has been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the California Health and Safety Code. This report sets fourth certain details of the proposed Affordable Housing Agreement ("Agreement") between the Agency and Five Points Seniors ("Developer") related to the development of a 164 unit senior citizen apartment project. While this transaction does not involve the conveyance of property from the Agency to the Developer, it does entail the provision of Agency financial assistance to effect the development of income restricted units. This report describes and specifies: 1. The costs of the proposed Agreement to the Agency, which includes the cost of providing a grant to this project, and the opportunity costs associated with providing a loan to the developer at a below market interest rate. 2. The value of the assistance being provided to the Developer. 3. The reasons for which the assistance is being provided. A. SALIENT POINTS OF THE AGREEMENT 1. Developer Responsibilities Under the terms of the proposed Agreement, the Developer must accept the following responsibilities: a. The project must consist of 164 senior citizen apartment units, constructed at the quality standard mandated by the Agency. b. For a thirty year period the project must set -aside 32 units for very low income households (0% to 50% of the Orange County median income), and 16 units for low to moderate income households (50% to 120% of the County median income). c. The project must be maintained in accordance with.the CC&RIs incorporated into the Agreement. d. A full-time activities director and an on -site manager must be employed and a van shuttle service must be provided for the project residents. e. The Agency note must be fully amortized over an eight year period, on a monthly basis. f. An equity contribution must be maintained from the commencement of construction through the end of the fifth year of project operation. The required contribution is: Through the second year of operation $1,500,000 Year 3 1,250,000 Year 4 1,000,000 Year 5 500,000 2. Agency Responsibilities The Agency is responsible for, and shall commit the following to the project: a. Upon the issuance of a Certificate of Occupancy, a $250,000 loan must be made to the Developer. The note will bear simple interest at 5% per annum. b. For a five year period after the issuance of a Certificate of Occupancy, an annual grant of $100,000 must be provided to the Developer. The total grant equals $500,000. C. The Agency shall use its best reasonable efforts to assist the Developer in securing very low income tenants that are recipients of federal housing subsidies. B. COST OF THE AGREEMENT TO AGENCY The estimated costs of the Agreement to the Agency are as follows: Total Present Value Grant $500,000 $365,800 Interest Gap for Agency Loan(1) 38,100 25,700 Total Costs to Agency $538,100 $391,500 -------------- -------------- (1) Opportunity cost of issuing a 50 loan versus earning 8.3% interest on invested funds. -2- C. ESTIMATED VALUE TO DEVELOPER ASSISTANCE BEING PROVIDED BY AGENCY The Agency is providing the Developer with a grant of $100,000 per year for five years. The Agency is also providing the Developer with a below market interest rate loan of $250,000. The value of the assistance package is estimated as follows: Total,Present Value Grant $500,000 $365,800 Interest Gap for Agency Loan(1) 59,400 41,200 -------------- Total Benefit to Developer $559,400 $407,000 (1) Benefit of receiving a 5% loan versus paying 10% interest on a conventionally financed loan. D. REASONS FOR THE PROVISIONS OF AGENCY ASSISTANCE Keyser Marston Associates, Inc. (KMA) analyzed the development economics of the proposed project to assess the need for Agency financial assistance. In a letter dated June 10, 1991, KMA concluded that the proposed 164 unit senior citizen apartment complex, with the attendant Agency restrictions, could not support the total estimated development costs. The impositions of income restrictions and construction/ongoing operational quality standards creates the need for the assistance package being proposed. -3- 114 ci ! �5 4SR bl d i � af AFFORDABLE HOUSING AGREEMENT (Five Points Senior Villas) by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AGENCY, and FIVE POINTS SENIORS, L.P. DEVELOPER I. II. TABLE OF CONTENTS [6100] SUBJECT OF AGREEMENT A. [6101] Purpose of Agreement B. [§102] The Site C. [§103] Parties to the Agreement 1. [§104] The Agency 2. [§105] The Developer D. [§106] The Guarantors E. [§107] Prohibition Against Change in Ownership, Management and Control of Developer [§200] AGENCY ASSISTANCE A. [§201] Agency Loan B. [§202] Note and Deed of Trust C. [6203] Agency Grant D. [6204] Submission of Evidence of Financing Commitments and Loan Closing [§300] DEVELOPMENT OF THE SITE A. [§301] Development of the Site by the Developer 1. [§302] Scope of Development 2. [§303] Site Plan 3. [§304] Construction Drawings and Related Documents 4. [§305] Approval of Plans, Drawings, and Related Documents S. [§306] Cost of Construction 6. [9307] Construction Schedule 7. [§308] Bodily Injury and Property Damage Insurance (i) OF 8. [6309] City and Other Governmental Agency Permits 9. [§310] Rights of Access 10. [§311] Local, State and Federal Laws 11. [§312] Antidiscrimination During Construction B. [6313] Taxes, Assessments, Encumbrances and Liens C. [§314] Prohibition Against Transfer of the Site, the Buildings or Structures Thereon D. [§315] Certificate of Completion E. [§316] Mortgage, Deed of Trust, Sale and Lease -Back Financing; Rights of Holders 1. [§317] No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease -Back for Development 2. [§318] Holder Not obligated to Construct Improvements 3. [§319] Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure 4. [§320] Right of the Agency to Cure Mortgage or Deed of Trust Default S. [§321] Environmental Matters IV. [§400] USE OF THE SITE A. [§401] Use in Conformance with Agreement B. [§402] Affordable Rental Housing C. [§403] Operating Expenses D. [§404] Management and Maintenance E. [§405] Rights of Access F. [6406] Developer's Equity G. 164071 Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction H. [6408] Nondiscrimination V. [§500] GENERAL PROVISIONS A. [§501] Notices, Demands and Communications Between the Parties B. (§502] Conflicts of Interest C. [§503] Enforced Delay; Extension of Times of Performance D. [§504] Nonliability of Officials and Employees of the Agency VI. [§600] DEFAULTS AND REMEDIES A. [§601] Defaults -- General B. (§602] Legal Actions 1. [§603] Instituticn of Legal Actions 2. (§604] Applicable Law 3. [§605] Acceptance of Service of Process C. (6606] Rights and Remedies Are Cumulative D. [5607] Inaction Not a Waiver of Default E. (§608] Liquidated Damages F. [§609] Remedies and Rights of Termination Prior to Conveyance 1. [§610] Damages 2. [§611] Specific Performance 3. [§612] Termination by the Developer Prior to Completion 4. [§613] Termination by the Agency Prior to Completion G. [§614] Remedies of the Parties for Default After Completion 1. [§615] Termination and Damages 2. [§616] Action for Specific Performance k..-J VI I. [§700] A. (§701] B. [§702] C. [§703] VIII. [§800] IX. [§900] SPECIAL PROVISIONS Real Estate Commissions Successors in Interest Memorandum of Agreement ENTIRE AGREEMENT, WAIVERS TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY ATTACHMENTS Attachment No. 1 Site Map and Legal Description Attachment No. 2 Guaranty Attachment No. 3 Promissory Note Secured by Deed of Trust Attachment No. 4 Construction Deed of Trust With Assignment of Rents Attachment No. 5 Schedule of Performance Attachment No. 6 Scope of Development Attachment No. 7 Certificate of Completion for Construction and Development Attachment No. 8 Declaration of Covenants, Conditions and Restrictions Attachment No. 9 Certification of Eligibility Attachment No. 10 Certification of Continuing Program Compliance Attachment No. 11 Operating Budget Attachment No. 12 Memorandum of Affordable Housing Agreement (iv) �d AFFORDABLE HOUSING AGREEMENT (Five Points Senior Villas) THIS AFFORDABLE HOUSING AGREEMENT (the "Agreement") is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency") and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer"). The Agency and the Developer hereby agree as follows: I. [§100] SUBJECT OF AGREEMENT A. [§101) Purpose of Agreement A. The Agency is required by California Health and Safety Code Section 33334.2, et seq., to expend a certain percentage of property taxes allocated to it for the purpose of increasing, improving and preserving the City of Huntington Beach's supply of Low- and Moderate -Income housing available at an Affordable Housing Cost. B. This Agreement provides for the development of a One Hundred Sixty -Four (164) unit senior citizen rental housing project (the "Project") on an approximately 1.89 acre parcel of land within the City of Huntington Beach. Forty-eight (48) of those units (the "Affordable Units") will be available pursuant to this Agreement for Very Low Income Households, Lower Income Households and Persons and Families of Low and Moderate Income at an Affordable Rent (as those terms are defined in Section 402 hereof) for a period of thirty (30) years. C. In consideration for the Developer's construction and operation of the Project and the Affordable Units, this Agreement provides that the Agency shall make available certain financial assistance in the form of a low interest loan and a series of five grants. C. [5102) The Site The Site is that real property located in the City of Huntington Beach ("City") as depicted and more fully described in the "Site Map and Legal Description" which is attached hereto as Attachment No. 1, and incorporated herein by reference. The Site is not located in any redevelopment project area of the City, but the development of the Project will be of benefit to the Main -Pier Redevelopment Project due to the creation of affordable housing near such project area. The Agency intends that the Affordable Units shall replace certain housing in the Main -Pier Redevelopment Project occupied by persons of Low and Moderate Income which was destroyed to facilitate certain redevelopment activities within such project k.d l.} area. The Developer owns, or will own at the time of the commencement of construction hereunder, fee simple title to the entire Site. C. [§103] Parties to the Agreement 1. [§104] The Agency The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, California Health and Safety Code Section 33000, et seg. The principal office of the Agency is located at City Hall, 2000 Main Street, Huntington Beach, California 92648. "Agency", as used in this Agreement, includes the Redevelopment Agency of the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. 2. (§105] The Developer The Developer is Five Points Seniors, L.P., which is a California limited partnership. The principal office and mailing address of the Developer for the purposes of this Agreement is c/o Institutional Property Investors, Inc., 19800 MacArthur Boulevard, Suite 680, Irvine, California 92715. The sole general partner of the Developer is David R. Michelson, Trustee of the Michelson Family Trust, under trust dated as of December 12, 1984, as amended March 1, 1985. The Developer represents and warrants to the Agency as follows: (a) The Developer is a duly established limited partnership and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. (b) The Developer does not have any material contingent obligations or any material contractual agreements which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. (c) There are no material pending or, so far as is known to the Developer, threatened, legal proceedings to which the Developer is or may be made a party or to which any 11/15/91 7100u/2460/050 -2- k,ry of its property is or may become subject, which has not been fully disclosed in the documentation submitted to the Agency which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. (d) There is no action or proceeding pending or, to the Developer's best knowledge, threatened, relating to the dissolution or liquidation of the Developer, and there is no action or proceeding pending or, to the Developer's best knowledge, threatened by or against the Developer which could affect the validity and enforceability of the terms of this Agreement, or materially and adversely affect the ability of the Developer to carry out its obligations hereunder. (e) The Developer has performed all of its obligations to be performed at or prior to this date in accordance with the "Schedule of Performance", which is attached hereto as Attachment No. 5 and incorporated herein, and is not in default hereunder. Each of the foregoing items (a) to (e), inclusive, shall be deemed to be an ongoing representation and warranty. The Developer shall advise the Agency in writing if there is any material change pertaining to any matters set forth or referenced in the foregoing items (a) to (e), inclusive. D. [§1061 The Guarantors The "Guarantors" are David Michelson, Kathleen M. Michelson, Norman D. Ward and Bunnie L. Ward. As beneficiaries of the trusts which are partners of the Developer, the Guarantors will benefit materially by the execution of this Agreement. Concurrently with the execution of this Agreement the Guarantors shall execute and deliver to the Agency a guaranty of the Developer's obligations pursuant to this Agreement in the form of the "Guaranty" which is attached hereto as Attachments No. 2-A and 2-B and incorporated herein by reference. The parties agree and acknowledge that the delivery of the Guaranty by the Guarantors is a material inducement for the Agency to approve the Agreement, and that but for the provision of such Guaranty, the Agency would not approve this Agreement. E. [§107) Prohibition Against Change in Ownership, Management and Control of Developer The qualifications and identities of the Developer and its general partners are of particular interest and concern to the City and the Agency. It is because of these qualifications and identities that the Agency has entered into this Agreement with the Developer. Consequently, except as 11/15/91 7100u/2460/050 -3- expressly set forth in this Section 107 and Section 319 hereof, no person, whether a voluntary or involuntary successor in interest of the Developer, shall acquire any rights or powers under this Agreement nor shall the Developer assign or transfer all or any part of this Agreement or any rights hereunder without the prior written approval of the Agency. The Agency shall approve such a transfer upon receipt by the Developer of (i) reasonable evidence satisfactory to the Agency that the transferee has assumed in writing, and in full, the Developer's duties and obligations under this Agreement and the attachments hereto, (ii) an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Developer under this Agreement and that such obligations and this Agreement are binding on the transferee, and (iii) the Agency receives evidence acceptable to the Agency that either (a) the transferee has experience in the ownership, operation and management of rental housing developments such as the Developer Improvements without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such developments, or (b) the transferee agrees to retain a prcperty management firm with the experience and record described in Section (a) above. Written approval of the Agency shall also be required prior to any and all changes whatsoever in the identity of the person in control of the Developer, including any change in, or addition of, general partners of the Developer. The voluntary or involuntary sale or transfer of any general partnership interest of the Developer shall be deemed to constitute an assignment for the purposes of this Section 107 and the written approval of the Agency shall be required prior to effecting such a transfer. Any purported transfer, voluntary, involuntary, or by operation of law, except with the prior written consent of the Agency in accordance with this Section 107, shall constitute a default of Developer and shall confer no rights whatsoever upon any purported assignee or transferee. Notwithstanding any other provision of this Section 107 to the contrary, Agency approval of an assignment of this Agreement, or any interest therein, or an assignment of a general partnership interest or limited partnership interest in the Developer, shall not be required in connection with any transfer of an interest in the Developer so long as the existing general partner of the Developer retains operational and managerial control over development of the Site, provided that such transfer does not affect more than forty-nine percent (49%) of the existing general partnership interest in the Developer and the Developer shall remain responsible for the obligations of the Developer hereunder. All of the terms, covenants and conditions of this Agreement shall be binding upon and shall inure to the 11/15/91 7100u/2460/050 -4- benefit of the Developer and the permitted successors and assigns of the Developer. Whenever the term "Developer" is used herein, such term shall include any other permitted successors and assigns as herein provided. II. [§200] AGENCY ASSISTANCE A. 1§2011 Agency Loan Upon the issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, and subject to the applicable terms and conditions of this Agreement, the Agency agrees to loan to the Developer the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "Agency Loan"). B. [§202] Note and Deed of Trust The Agency Loan shall be evidenced by the Developer's execution of a "Promissory Note," in the form of Attachment No. 3 hereto, which is incorporated herein. The Promissory Note shall bear simple interest at the rate of five percent (5%) per annum for term of the loan. The Developer shall make monthly payments of principal and interest during the third (3rd) through tenth (loth) years of the Agency Loan, with payments amortized over the eight (8) year repayment period and with the loan balance due in full upon the tenth (loth) anniversary of the Agency Loan. The full amount of the Promissory Note, with all interest accrued thereon, shall be immediately due and payable upon the Developer's uncured default of this Agreement and/or the Promissory Note. The Developer's obligations pursuant to the Promissory Note shall be secured by the Developer's execution of a "Deed of Trust" in the form of Attachment No. 4 hereto, which is incorporated herein. The Deed of Trust shall be made subordinate to the obligations pursuant to any multifamily housing revenue bond issuance which provides funds for the construction of the Project. The Agency may, in its reasonable discretion, subordinate the Deed of Trust to any mortgage or deed of trust encumbering the Site which secures other financing obtained by the Developer necessary to undertake the development of the Site in accordance with this Agreement, provided that the Agency determines that such subordination is necessary to enable the Developer to develop the Developer Improvements. The Developer shall execute and deliver a copy of the Promissory Note and the Deed of Trust to the Agency as a condition precedent to the disbursement of the Agency Loan Proceeds. In connection with the Deed of Trust, the Agency may obtain, at the expense of the Developer, an ALTA lender's policy or policies of title insurance, together with such endorsements as are reasonably requested by the Agency. 11/15/91 7100u/2460/050 -5- C. [§203] Agency Grant Upon each of the first (1st) through fifth (5th) anniversaries of the issuance of a certificate of occupancy for the Developer Improvements, and provided the Developer is not in default of this Agreement, the Agency shall grant to the Developer the sum of One Hundred Thousand Dollars ($100,000) (for a total of Five Hundred Thousand Dollars ($500,000)). Such payments shall be in consideration for the Developer's agreement to provide housing to Very Low, Lower, and Low- and Moderate -Income Households at an Affordable Rent (as those terms are defined in Section 402 hereof), and to provide a high quality level of construction materials and amenities in the development and operation of the Developer Improvements, as set forth in this Agreement and the attachments hereto. D. [§204] Submission of Evidence of Financing Commitments and Loan Closing As required in this Agreement and within the time established therefor in the Schedule of Performance (Attachment No. 5), the Developer shall submit to the Agency evidence that the Developer has obtained sufficient equity capital and firm and binding commitments for financing necessary to undertake the development of the Site in accordance with this Agreement. The Agency shall approve or disapprove such evidence of financing commitments within the time set forth in the Schedule of Performance. Approval shall not be unreasonably withheld or conditioned. If the Agency shall reasonably disapprove any such evidence of financing, the Agency shall do so by written notice to the Developer stating the reasons for such disapproval and the Developer shall diligently pursue and shall within ninety (90) days of such notice submit to the Agency new evidence of financing. The Agency shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 204 for the approval or disapproval of the evidence of financing as initially submitted to the Agency. Such evidence of financing shall include the following: 1. A copy of the commitment obtained by the Developer for the mortgage loan or loans for financing to fund the construction_ of the applicable Developer Improvements. The commitment for financing shall be in such form and content acceptable to the Agency as reasonably evidences a legally binding, firm and enforceable commitment subject to the construction lender's customary and normal conditions and terms. That commitment letter from Wells Fargo National Bank dated September 23, 1991 which has been submitted to the Agency is hereby approved as meeting the requirements of this Section 1; and 11/15/91 7100u/2460/050 -6- 2. A copy of the contract between the Developer and one or more general contractors for the construction of the applicable Developer Improvements, certified by the Developer to be a true and correct copy thereof; and 3. A financial statement and/or other documentation satisfactory to the Agency as evidence of other sources of capital sufficient to demonstrate that the Developer has adequate funds to cover the equity requirements of construction of the Improvements and the requirements of Section 406 hereof. Such funds shall be in the amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) from the commencement of construction through the second (2nd) anniversary of the date a certificate of occupancy for the Developer Improvements is issued by the City. III. [§3001 DEVELOPMENT OF THE SITE A. [001] Development of the Site by the Developer At its option, the Agency shall have the right to review and approve the plans and specifications for the Developer Improvements as set forth in Sections 302 through 305 hereof. 1. [§302] Scope of Development The Site shall be developed as provided in the Scope of Development (Attachment No. 6). The Developer shall commence and complete construction of such improvements (the "Developer Improvements") by the respective times established therefor in the Schedule of Performance (Attachment No. 5) subject to Section 503 of this Agreement. The development shall include any plans and specifications submitted to City and/or Agency for approval, and shall incorporate or show compliance with all applicable mitigation measures. 2. [§303] Site Plan The Developer has prepared and submitted to the Agency for its approval Design Drawings and a Site Plan and related documents containing the overall plan for development of the Site in sufficient detail to enable the Agency to effectively evaluate the proposal for relationship of structures to landscape, physical and environmental considerations and conformity to the requirements of this Agreement. The Agency has approved such submissions. The Site shall be developed as established in this Agreement and such documents except as changes may be mutually agreed upon between the Developer and the Agency. Any such changes shall be within the limitations of the Scope of Development which is attached to this Agreement as Attachment No. 6 and incorporated herein. 11/15/91 7100u/2460/050 -7- tir.J �.i 3. 1§3041 Construction Drawings and Related Documents By the time set forth therefor in the Schedule of Performance (Attachment No. 5), the Developer shall prepare and submit to the City construction drawings, landscape plans, and related documents for development of the Site for building permit(s). During the preparation of all drawings and plans, staff of the Agency, City, and the Developer shall hold regular progress Meetings to coordinate the preparation of, submission to, and review of drawings, plans and related documents by the Agency. The staff of Agency, City, and the Developer shall communicate and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the Agency can receive prompt and speedy consideration. The Developer shall be obligated to obtain all City approvals required for the construction of the Developer Improvements. 4. [ §305 ] Approval of Plans, _ Drawings, and Related Documents The Agency and the City shall have the right of planning review, including plan check, of all plans and submissions, including any changes therein. The Agency shall approve or disapprove such plans and submissions within the same time periods established by the City for its review of construction and architectural plans and submissions. During each stage of the processing for Developer Improvements, the Agency and the City shall have the right to require additional information and shall advise the Developer if any submittal of plans or drawings is not complete or not in accordance with City/Agency procedures. If the Agency or the City determines that such a submittal is not complete or not in accordance with procedures, such tender shall not be deemed to constitute a submittal for purposes of satisfying the Schedule of Performance (Attachment No. 5). If the Developer desires to make any substantial changes in the construction plans after their approval by the Agency and the City, the Developer shall submit the proposed change to the Agency and the City for their approval. If the construction plans, as modified by the proposed change, conform to the requirements of Section 304 of this Agreement and the Scope of Development (Attachment No, 6) the Agency and the City shall approve or reject the proposed change and notify the Developer in writing within such periods as are established by the City for its review of such changes to construction and architectural plans and specifications. Such change in construction plans shall, in no event, be deemed approved by the Agency or the City without such an actual approval. 11/15/91 7100u/2460/050 -8- 5. [§306] Cost of Construction All the costs of site preparation, planning, designing and constructing the Developer Improvements and developing the Site and constructing all improvements thereon shall be borne solely by the Developer. As more fully set forth in the Scope of Development (Attachment No. 6), the Developer Improvements shall be constructed to the same or better standard of quality as the apartment project constructed by the Developer at 12200 Valley View, Garden Grove, California. The Developer shall also bear all costs related to discharging the duties of the Developer set forth in this Agreement. The Developer assumes the responsibility to construct and shall let contracts for or cause to be constructed all off -site improvements developed pursuant to this Agreement. The Developer shall be responsible for all fees associated with development of the Developer Improvements, including, without limitation, school facilities fees and impact fees ("School Fees"). Upon completion of the Developer Improvements, the Developer shall submit to the Agency a detailed and itemized report of its costs of development. The Agency agrees, upon request therefor by the Developer, to consider, but in no way is obligated, to issue or participate in the issuance of multi -family housing bonds ("Bonds") to assist in financing of the Project. For any such financing to proceed, it is understood that: (i) the entire cost of such financing, including without limitation costs of issuance, debt service, and financial advisement of the Agency, shall be borne by the Developer; (ii) the bonds shall have a rating of "A" or better from Moody's or Standard and Poor's; and (iii) neither the Agency nor the City shall have any liability, contingent or otherwise, concerning or with respect to such bonds. 6. [§307] Construction Schedule The Developer shall promptly begin and thereafter diligently prosecute to completion the construction of the Developer Improvements, with all construction commencing and being completed within the times specified therefor in the Schedule of Performance (Attachment No. 5), subject to Section 503 of this Agreement. 7. [§3081 Bodily Injury and Property Damage Insurance The Developer shall defend, indemnify, assume all responsibility for and hold the Agency, its officers, agents, representatives and employees harmless from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including reasonable attorneys' 11/15/91 7100u/2460/050 -9- fees and costs), which may be caused by any of the Developer's acts, omissions or failures to act under this Agreement, whether such activities or performance thereof be by the Developer or anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement. The Developer shall take out and maintain during the life of this Agreement a comprehensive liability policy in the amount of One Million Dollars ($1,000,000) combined single limit policy, including contractual liability, or such other higher amount as the Developer's construction lender may require, as shall protect the Developer, City and Agency from claims for such damages. The Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form of the insurance carrier setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and the Agency (and their respective officers, agents, and employees) as additional insureds under the policy. The certificate by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City and the Agency of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by the Developer shall be primary insurance and not contributing with any insurance maintained by the Agency or City, and the policy shall contain such an endorsement. The insurance policy or the certificate of insurance shall contain a waiver of subrogation for the benefit of the City and the Agency. The required certificate shall be furnished by the Developer at the time set forth therefor in the Schedule of Performance (Attachment No. 5). The Developer shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. S. 153091 City and Other Governmental Agency Permits Before commencement of construction or development of any buildings, structures or other works of improvement upon the Site or related offsite improvements, the Developer shall, at its own expense, take all actions necessary and proper to secure or cause to be secured any and all permits which may be required by the City or any other governmental agency affected by such construction, development or work. It 11/15/91 7100u/2450/050 -10- is understood that the Developer's obligation is to pay all necessary fees and to timely submit to the City final drawings with final corrections necessary to obtain a building permit; the Agency will, without obligation to incur liability or expense therefor, use its best efforts to expedite issuance of building permits and certificates of occupancy for construction that meets the requirements of the City Code. The Developer agrees and acknowledges that it shall be responsible for the cost of such environmental review and clearance as may be deemed necessary or appropriate in connection with the processing of land use entitlements with respect to the Site. 9. [0101 Rights of Access For the purpose of assuring compliance with this Agreement, representatives of the Agency and the City shall have the right of access to all portions of the Site without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including, but not limited to, the inspecticn of the work being performed in constructing the Developer Improvements, so long as they comply with all safety rules. Such representatives of the Agency or the City shall be those who are so identified in writing by the Executive Director of the Agency. The Agency shall indemnify and hold the Developer and its partners, employees and agents harmless frcm any bodily injury or related damages arising out of the activities of the Agency and the City as referred to in this Section 310. The Developer agrees to place and maintain on the Site during construction of the Developer Improvements one (1) sign indicating the respective roles of the Developer and the Agency in the Developer Improvements. The cost of the sign shall be borne solely by the Developer. 10. (§3111 Local State and Federal Laws The Developer shall carry out the construction of the Developer Improvements in conformity with all applicable laws, including all applicable federal and state labor standards; provided, however, Developer and its contractors, successors, assigns, transferees, and lessees do not waive their rights to contest any such laws, rules or standards. 11. [§312) Antidiscrimination During Construction The Developer, for itself and its successors and assigns, agrees that in the construction of the Developer Improvements provided for in this Agreement, the Developer will not discriminate against any employee or applicant for employment because of race, color, creed, religion, age, sex, marital status, handicap, national origin or ancestry. 11/15/91 7100u/2460/050 -11- OR �.i B. [§313] Taxes, Assessments, Encumbrances and Liens The Developer shall pay prior to delinquency all ad valorem taxes and assessments on the Site. Prior to issuance of a Certificate of Completion pursuant to Section 315, except for encumbrances allowed pursuant to this Agreement, including the lien of any multifamily housing revenue bond issuance which provides funds for the construction of the Project, the Developer shall not place on the Site or any part thereof any mortgage, trust deed, encumbrance or lien. Prior to issuance of a Certificate of Completion pursuant to Section 315, the Developer shall remove or have removed any levy or attachment made on any of the Site or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. After the issuance of a Certificate of Completion, the restrictions set forth in the prior two sentences shall terminate and be of no further force or effect. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. C. [§314) Prohibition Against Transfer of the Site, the Buildings or Structures Thereon Prior to the Developer's prepayment of the Agency Loan, the Developer shall not, except as permitted by this Agreement (including without limitation Section 107), without prior written approval of the Agency, which approval shall not be unreasonably withheld, make any total or partial sale, transfer, conveyance, assignment or lease of the whole or any part of the Site or of the buildings or structures on the Site. The Agency shall approve such a transfer upon receipt by the Developer of (i) reasonable evidence satisfactory to the Agency that the transferee has assumed in writing, and in full, the Developer's duties and obligations under this Agreement and the attachments hereto, (ii) an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Developer under this Agreement and that such obligations and this Agreement are binding on the transferee, and (iii) the Agency receives evidence acceptable to the Agency that either (a) the transferee has experience in the ownership, operation and management of rental housing developments such as the Developer Improvements without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such developments, or (b) the transferee agrees to retain a property management firm with the experience and record described in Section (a) above. This prohibition shall not be deemed to prevent construction loans allowable pursuant to this Agreement, the granting of temporary or permanent easements or permits to facilitate the development of the Site or to prohibit or restrict the leasing of any part or parts of a building or structure for occupancy for a term commencing upon completion. This prohibition shall 11/15/91 7100u/2460/050 -12- f� not be deemed to prevent a transfer of a general or limited partnership interest in the Developer, provided that a general or limited partner of the Developer does not convey more than forty-nine percent (497.) of its partnership interest, and each partner of the Developer shall retain at least fifty-one percent (51%) of its original ownership of the Partnership. D. f§3151 Certificate of Completion Within thirty (30) days after completion of all construction and development required by this Agreement to be completed by the Developer upon the Site in conformity with this Agreement, submission of a detailed and itemized report of its costs of development, and request for a Certificate of Completion, the Agency shall furnish the Developer with a "Certificate of Completion." Such Certificate shall be substantially in the form of Attachment No. 7 attached hereto and incorporated herein. The Agency shall not unreasonably withhold any such Certificate of Completion. Such Certificate of Completion shall be a conclusive determination of satisfactory completion of the construction required by this Agreement upon the Site and the Certificate of Completion shall so state. After recordation of such Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest therein shall not (because of such ownership, purchase, lease or acquisition), incur any obligation or liability under this Agreement except that such party shall be bound by the covenants contained in the "Declaration of Covenants, Conditions and Restrictions" (Attachment No. 8), Section 402 of this Agreement, and other documents establishing covenants on the Site in accordance with the provisions of this Agreement. The Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. If the Agency refuses or fails to furnish a Certificate of Completion for the Developer Improvements after written request from the Developer, the Agency shall, within thirty (30) days of written request therefor, provide the Developer with a written statement of the reasons the Agency has refused or failed to furnish a Certificate of Completion. The statement shall also contain Agency's opinion of the actions that the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate availability of specific items of materials for landscaping, the Agency may in its discretion issue its Certificate of Completion upon the posting of a bond or an unconditional letter of credit (in form and substance acceptable to the Agency and its legal counsel) by the Developer with the Agency in an amount representing a fair value of the work not yet completed, or upon withholding from funds otherwise payable pursuant to Section 201 an amount estimated in good faith by the Agency to represent one and one-half (1-1/2) times the cost of such work not yet completed. 11/15/91 7100u/2460/050 -13- Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the improvements, or any part thereof. Such Certificate of Completion is not a notice of completion as referred to in the California Civil Code, Section 3093. E. [§316] Mortgage, Deed of Trust, Sale and Lease -Back Financing; Rights of Holders 1. [§317I No Encumbrances Except_ Mortgages, Deeds of Trust, or Sale and Lease -Back for Development Mortgages, deeds of trust and sales and lease -backs are to be permitted before completion of the construction of the Developer Improvements, but only for the purpose of securing loans of funds to be used for the construction of the Developer Improvements, and any other purposes necessary and appropriate in connection with the construction required under this Agreement. The Developer shall notify the Agency in advance of any mortgage, deed of trust or sale and leaseback financing, if the Developer proposes to enter into the same before completion of the Developer Improvements. The words "mortgage" and "trust deed" as used hereinafter shall include sale and leaseback. The Developer shall not enter into any such conveyance for financing or refinancing without the prior written approval of the Agency, which approval Agency agrees to give if any such conveyance for financing is given to a responsible financial or lending institution or other acceptable person or entity. 2. 1§3181 Holder Not Obligated_ to Construct Improvements The holder of any mortgage or deed of trust authorized by this Agreement shall not be obligated by the provisions of this Agreement to construct or complete the Developer Improvements or to guarantee such construction or completion; nor shall any covenant be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 11/15/91 7100u/2460/050 -14- 3. [§3191 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure With respect to any mortgage or deed of trust granted by Developer as provided herein, whenever the Agency shall deliver any notice or demand to Developer with respect to any breach or default by the Developer in completion of the Developer Improvements, the Agency shall at the same time deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights of the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice (or if such default cannot reasonably be cured by such holder within sixty days, within such time period as is reasonably necessary to cure such default), to cure or remedy or commence to cure or remedy any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction, rehabilitation or completion of the Developer Improvements (beyond the extent necessary to conserve or protect the construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement satisfactory to the Agency. The holder (or the holder's successor in interest), in that event, must agree to complete, in the manner provided in this Agreement, the Developer Improvements to which the lien or title of such holder relates, and submit evidence reasonably satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder (or the holder's successor in interest) properly completing such construction shall be entitled, upon compliance with the requirements of Section 315 of this Agreement, to a Certificate of Completion, and shall be entitled to payment of the Agency Loan and Agency Grant upon compliance with all applicable covenants and the occurrence of all applicable conditions. 4. [§320) Right -of the Agency to Cure Mortgage -or Deed of Trust Default In the event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the Developer Improvements or any part thereof and the holder of any first mortgage or first deed of trust has not exercised its option to construct, the Agency shall have the right, within sixty (60) days after receipt of notice of such default, to cure the default. In such event, the Agency shall be entitled to reimbursement from the Developer of all proper costs and expenses associated with and attributable to the curing of the first mortgage or first deed of trust default or breach of this Agreement by the Developer and incurred by the Agency in curing such default. The Agency shall also be 11/15/91 7100u/2460/050 -15- entitled to a lien upon the Site to the extent of such incurred costs and disbursements. Any such lien shall be subject to the prior construction financing mortgages or deeds of trust. F. [63211 Environmental flatters 1. Definitions For the purposes of this Section 321, the following terms shall have the meanings herein specified: (a) The term "Hazardous !Materials" shall mean (i) any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seg.), as amended from time to time, and regulations promulgated thereunder; (ii) any "hazardous substance" as defined by the Carpenter -Presley -Tanner Hazardous Substance Account Act (California Health and Safety Code Sections 25300 et seg.), as amended from time to time, and regulations promulgated thereunder; (iii) asbestos; (iv) polychlorinated biphenyls; (v) petroleum, oil, gasoline (refined and unrefined) and their respective by-products and constituents; and (vi) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any "covernmental Requirements" (as defined in Subparagraph (c) of Paragraph 1 of this Section 321) either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to the environment. (b) The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time (whether before or after the date of this Agreement) emanating from the Site. (c) The term "Governmental Requirements" shall mean all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Agency, the Developer or the Site. 2. Obligation of Develcper to Remediate the Site Notwithstanding the obligation of Developer to indemnify Agency pursuant to Paragraph 4 of this Section 321 or any other obligations of the Developer pursuant to this Agreement, Developer shall, at its sole cost and expense, 11/15/91 7100u/2460/05O -16- promptly take (i) all actions required by any federal, state or local governmental agency or political subdivision or any Governmental Requirements with respect to the entire Site, and (ii) all actions necessary to make full economic use of the Site for the purposes described in this Agreement, which actions, requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination regardless of when such Hazardous Materials or Hazardous Materials Contamination were introduced to the Site and regardless of who is responsible for introducing such Hazardous Materials or Hazardous Materials Contamination to the Site (the "Site Remediation"). The Site Remediation shall include, but not be limited to, investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work required. The Developer shall take all actions necessary to promptly restore the Site to an environmentally sound condition for uses contemplated by this Agreement, notwithstanding any lesser standard of remediation allowable under applicable Governmental Requirements. The Developer's obligations under this Paragraph 2 of this Section 321 shall be referred to as the "Site Remediation" and shall survive the issuance of the Certificate of Completion. 3. Developer's Representations and Warranties Developer hereby represents and warrants to the Agency that, to the best of its knowledge: (a) No Hazardous Materials or Hazardous Contamination exist or are located on, in or under the Site. (b) No portion of the Site is being used or, to Developer's best knowledge after diligent inquiry, has ever been used prior to Developer's ownership or occupancy thereof, for the disposal, storage, treatment, processing or other handling of Hazardous Materials and the Site is not affected by any Hazardous Materials Contamination. (c) No asbestos or asbestos -containing materials have been installed, used, incorporated into, or disposed of on the Site. (d) No polychlorinated biphenyls are located on or in the Site, in the form of electrical transformers, fluorescent light fixtures with ballasts, cooling oils, or any other device or form. (e) No underground storage tanks are located on the Site or were located on the Site and subsequently removed or filled. 11/15/91 7100u/2450/050 -17- `j (f) No investigation, administrative order or notice, consent order and agreement, litigation or settlement with respect to Hazardous Materials or Hazardous Materials Contamination is pending or, to Developer's best knowledge after diligent inquiry, threatened, with respect to the Site or the existing operations thereon. (c) The Site and its existing uses comply and, to Developer's best knowledge after diligent inquiry, their prior uses at all times have complied with all applicable Governmental Requirements relating to environmental matters or Hazardous Materials. There is no condition on the Site which is in violation of any applicable: Governmental Requirements relating to Hazardous Materials, and Developer has received no communication from or on behalf of any federal, state or local governmental authority or agency that any such condition exists. The Site is not currently on and, to Developer's best knowledge after diligent inquiry, have never been on any federal or state "Superfund" list, and Developer is not aware that the Site is anticipated or threatened to be placed on such list. (h) True and correct copies of all (i) Developer's internal inspection reports with respect to the Site (ii) environmental audits, reports and studies received by Developer which concern the Site, and (iii) inspection reports conducted during the last two years from each applicable regulatory authority with respect to the Site in the possession or control of Developer, have been delivered to Agency. Developer shall deliver to Agency within five (5) days of Developer's receipt thereof all environmental reports, audits or studies, internal inspection reports and regulatory inspection reports, which concert_ the Site generated or received by Developer prior to t-he repayment in full of the Promissory Note. 4. Indemnification Developer shall save, protect, defend, indemnify and hold harmless Agency from and against any and all liabilities, suits, actions, claims, demands, penalties; damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency by reason of, resulting from, in connection with or arising in any manner whatsoever as a direct or indirect result of (i) the ownership of all or any part of the Site, (ii) any act or omission on the part of either Agency or Developer, or their agents, employees, contractors or 11/15/91 7100u/2460/050 -16- invitees, (iii) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination, (iv) the environmental condition of the Site, and (v) any Liabilities incurred under any Governmental Requirements relating to Hazardous Materials. Developer's obligations under this Section 321 shall survive after the issuance of the Certificate of Completion, and shall be a covenant running with the land in perpetuity, binding on all successors and assigns of Developer's interest in either this Agreement or the Site. 5. Duty to Prevent Hazardous Material Contamination. The Developer shall take all necessary precautions to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the highest standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 6. Environmental, Inquiries. The Developer shall notify the Agency, and provide to the Agency a copy or copies, of the following environmental permits, disclosures, applications, entitlements or inquiries relating to the Site: Notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and the Developer shall report to the Agency, as soon as possible after each incident, any unusual, potentially important incidents, including but not limited to, the following: (a) All required reports of releases of Hazardous Materials, including notices of any release of Hazardous Materials as required by any Governmental Requirement; (b) All fires; (c) All instances where asbestos has been or may be disturbed by repair work, tenant improvements or other activities in buildings containing asbestos; (d) All notices of suspension of any permits; 11/15/91 7100u/2460/050 -19- (e) All notices of violation from Federal, State or local environmental authorities; (£) All orders under the State Hazardous Waste Control Act and the State Hazardous Substance Account Act and corresponding federal statutes, concerning investigation, compliance schedules, clean up, or other remedial actions; (g) All orders under the Porter -Cologne Act, including corrective action orders, cease and desist orders, and clean-up and abatement orders; (h) Any notices of violation from OSHA or Cal -OSHA concerning employees' exposure to Hazardous Materials; (i) All complaints and other pleadings filed against the Developer and/or the Agency relating to the Developer's storage, use, transportation, handling or disposal of Hazardous Materials on the Site. In the event of a release of any Hazardous Materials into the environment, the Developer shall, as soon as possible after the release, furnish to the Agency a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating tc the release. Upon request of the Agency, the Developer shall furnish to the Agency a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. IV. [§400] USE OF THE SITE A. [6401] Use in Conformance with Agreement The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof that, during construction and thereafter, the Developer, such such successors and such assignees, shall use, operate and maintain the Site in conformity with this Agreement and shall devote the Site to uses specified in this Agreement for the periods of time specified therein. B. [§402] Affordable Rental Housing 1. Number of Units. The Developer covenants and agrees to develop a total of one hundred sixty-four (164) multifamily housing units on the Site in conformance with the 11/15/91 7100u/2460/050 -20- Scope of Development (Attachment No. 6). The Developer agrees to make available, restrict occupancy to, and rent thirty-two (32) of the units to "Very Low Income Households" and sixteen (16) additional units to "Persons and Families of Low- and Moderate Income" (for a total of forty-eight (48) restricted units), all at an "Affordable Rent" (the "Affordable Units"). However, the Developer shall be obligated to make available, restrict occupancy to, and rent sixteen (16) of the units to "Very Low Income Households," sixteen (16) additional units to "Lower income Households," and sixteen (16) additional units to "persons and families of Low- and Moderate Income," in lieu of the requirements of the preceding sentence, for the duration of the "Affordability Period" (as defined in paragraph 2 of this Section 402), upon the occurrence of all three of the following events: (a) the "Qualified Development Period" (as defined in the Regulatory Agreement and Declaration of Restrictive Covenants by and among the City, Developer and Dai-Ichi Kangyo Bank of California, dated as of November , 1991) shall have elapsed; and (b) the "Section 8 program" (as defined in paragraph 8 of this Section 402) or a reasonably similar successor or replacement federal rental subsidy or voucher program no longer exists; and (c) neither the City nor the Agency has instituted a rental subsidy or voucher program designed to subsidize the rents cf Very Low Income Households at levels equivalent to the Section 8 Program. The location of the Affordable Units shall be dispersed throughout the Developer Improvements and shall be reasonably acceptable to the Agency. The distribution of sizes (in terms of number of bedrooms) of the Affordable Units shall be in the same proportion as the distribution of sizes of all units within the Developer Improvements. There shall be not less than six (6) and not More than ten (10) Affordable Units on each floor of the Developer Improvements. Those Affordable Units located on the first floor of the Developer Improvements shall each be not less than Five Hundred Seventy (570) square feet. "Very Low Income Household" shall mean a household earning not greater than fifty percent (50%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety Code Section 50105. "Lower Income Household" shall mean a household earning not greater than eighty percent (80%) of Orange County median income, as determined by the United States Department of Housing and Urban development, as set forth in Health and Safety Code Section 50079.5. "Persons and Families of Low and Moderate Income" shall mean households earning not greater than one hundred twenty percent (120%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety Code Section 50093. 11/15/91 7100u/2460/050 -21- "Affordable Rent" shall have the meaning set forth in Health and Safety Code Section 50053, as further. defined in subparagraph 5 of this Section 402. 2. Duration of Affordability Requirements. The Affordable Units shall be subject to the requirements of this Section 402 for thirty (30) years, beginning on the date of the City's issuance of a certificate of occupancy for the Developer Improvements (the "Commencement Date"). The duration of this requirement shall be known as the "Affordability Period." All tenants residing in the Affordable Units during the last two (2) years of the Affordability Period shall be given notice at least once every six (6) months of the expiration date of this requirement, and that the rent payable on the Affordable Unit may be raised to a market rate rent at the end of the Affordability Period. The Developer shall execute, acknowledge and deliver to the Agency a "Declaration of Covenants, Conditions and Restrictions," in the form of Attachment No. 8 hereto and incorporated herein (the "Declaration"), which sets forth all of the requirements of this Section 402 of the Agreement in recordable form. The Developer consents to the recording of the Declaration in the official records of Orange County, California. 3. Selection of Tenants. The Developer shall give notice to the Agency of the City s issuance of the certificate of occupancy for the Developer Improvements and the Affordable Units, and shall give notice of the vacancy of each and any Affordable Unit thereafter. The Agency shall have five (5) working days from the receipt of such notice to deliver to the Developer a list of prospective tenants for such vacancy. The Developer shall send written notice of such vacancy to each person on such list. Such notice shall notify the recipient that he or she must directly contact the Developer or its designated leasing agent within fifteen (15) working days to apply for tenancy of such vacant Affordable Unit. The Developer shall not rent or lease such Affordable Unit during such fifteen (15) day period to any tenant not notified of such vacancy by the Agency. In the event that no tenant which is reasonably acceptable to the Developer applies for tenancy of the vacant unit within such time period, the Affordable Unit may be leased to another tenant selected by the Developer who meets all of the other requirements provided herein. 4. Income of Tenants. Prior to the rental or lease of any Affordable Unit to a tenant, and annually thereafter within thirty (30) days of the anniversary date of the tenant's occupancy of.the Affordable Unit, the Developer shall submit to the Agency a completed income computation and certification form, in the form of Attachment No. 9 hereto or such other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant leasing an 11/15/91 7100u/2460/050 -22- �..O Affordable Unit is a Very Low Income Household, or a Person or Family of Low- and Moderate -Income, whichever is applicable, and meets the eligibility requirements established for the Affordable Unit. The Developer shall obtain an income certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the - income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency: (1) obtain two (2) paycheck stubs from the tenant's two (2) most recent pay periods. (2) obtain a true copy of an income tax return from the tenant for the most recent tax year in which a return was filed. (3) obtain an income verification certification from the employer of the tenant. (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Very Low Income Household or Person or Family of Low- and Moderate -Income shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no longer qualified as a Very Low Income Household or Person or Family of Low- and Moderate -Income, the next available unit of comparable size must be rented to (or held vacant and available for immediate occupancy by) a Very Low Income Household or Person or Family of Low- and Moderate -Income, whichever is applicable. Such new tenant shall then constitute a Very Low Income Household or Person or Family of Low- and Moderate -Income for the purposes of this Section 402, and until such next available unit is rented to such tenant, the former Very Low Income Household or Person or Family of Low- and Moderate -Income who has ceased to qualify as such shall be deemed to continue to be a Very Low Income Household or Person or Family of Low- and Moderate -Income for the purposes of this Section 402. In 11/15/91 7100u/2460/050 -23- M addition, the Developer shall annually submit to the Agency a certified statement of the rental rate, income, ages and family size of each of the tenants of the Affordable Units in a form of Attachment No. 10 hereto or such other fora as may be provided by the Agency. 5. Determination of Affordable Rent for the Affordable Units. Each Affordable Unit shall be rented at an 'Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the thirty-two (32) Affordable Units required to be rented to Very Low Income Households shall be established at one -twelfth. (1/12) of thirty percent (30%) of fifty percent (50%) of Orange County median income, as determined by the United States Department of Housing and Urban Development. The maximum monthly rental amount for the Affordable Units required to be rented to Lower Income Households, if any, shall be established at one -twelfth (1/12th) of thirty percent (3001) of sixty percent (60%) of Orange County median income for tenants earning more than fifty percent (50%) and not more than sixty percent (60%) of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) of such tenant's annual income for tenants earning more than sixty percent (60%) and not more than eighty percent (807.) of Orange County median income. The maximum monthly rental amount for the Affordable Units required to be rented to Persons of Low- and Moderate Income shall be established at cne-twelfth (1/12th) of thirty percent (30%) of one hundred ten percent (110%) of Orange County median income for tenants earning more than eighty percent (807.) and not more than one hundred ten percent (1100") of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) of such tenant's annual income for tenants earning more than one hundred ten percent (110%) but not more than one hundred twenty percent (120%) of Orange County median income. The maximum monthly rental amount for each Affordable Unit rented to Persons of Low- and Moderate- Income shall be based upon the actual household size of the persons occupying the Affordable Unit. The maximum monthly rental amount for each Affordable Unit to be rented to Very Low Income Households and Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Very Low Income Household which is a "Section 8 Recipient", as defined in Section 402(8) hereof ("Section 8 Unit"), the maximum monthly rental amount for the next Affordable Unit rented to a Very Low Income Household which is not a Section 8 Recipient shall be based upon the actual household size of the person or persons occupying such Affordable Unit ("Actual Household Size Unit"). In the event any such Section 8 Unit is vacated and rerented to a Very Low Income Household which is not a Section 8 Recipient, then upon 11/15/91 7100u/2460/050 -24- �.,o the next vacation of an Actual Household Size Unit, such vacated Actual Fousehold Size Unit shall no longer be an Actual Household Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two (2) persons if it is a one (1) bedroom unit and three (3) persons if it is a two bedroom unit. In no event, however, shall the resenting of a Section 8 Unit to a Very Low Income Household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Furthermore, the maximum number of Actual Household Size Units required at any one time shall be sixteen (16). THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THE MAXIMUM RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT. Developer Initials: W2�. The maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building permits and not later than the Commencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forts: above upon the publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. 6. Senior Citizen Units. All of the units in the Developer Improvements, including without limitation the Affordable Units, shall be independent living apartments specially designed for the physical and social needs of "Senior Citizens" (persons fifty-five (55) years or older, subject to applicable law) in accordance with the requirements set forth in the Scope of Development (Attachment No. 6). The units shall be comprised of one and twc bedroom units, each with a private balcony or patio. The Developer shall state, in a prominent location in all advertising and marketing materials, that the Developer Improvements are designed for use and occupancy by Senior Citizens. Furthermore, the Developer shall restrict occupancy to Senior Citizens and "Qualified Permanent Residents" (as that term is defined in California Civil Code Section 51.3), in the rental of both the Affordable Units and the other units in the Developer Improvements. Except as otherwise provided herein, at least one person in residence in each dwelling unit must must be a Senior Citizen, and other residents in the same 11/15/91 7100u/2460/050 -25- dwelling unit who are not Senior Citizens must be Qualified Permanent Residents. Temporary quests of a Senior Citizen or Qualified Permanent Resident shall be allowed for a period of not more than sixty (60) days in any twelve (12) Month period. Upon the death, dissolution of marriage, hospitalization or other prolonged absence of the Senior Citizen in a dwelling unit, any Qualified Permanent Resident who has continuously resided in the dwelling unit with such Senior Citizen shall be permitted to continue as a resident of that dwelling unit. "Permitted Health Care Residents" (as that term is defined in California Civil Code Section 51.3) shall be permitted to occupy any dwelling unit during any period that such person is actually providing live-in, long-term or hospice health care to a Senior Citizen tenant or Qualified Permanent Resident tenant for compensation. 7. Bonds. In the event the Bonds (as defined in Section 306 hereof) are issued in connection with the acquisition, development or use of the Site, the Developer shall strictly comply with all covenants, conditions and requirements relating to the duties of the Developer pursuant to such Bonds and such agreements as are entered into in connection therewith. In the event Bonds are issued, during the period such Bonds are outstanding compliance with the requirements of the Bonds shall be deemed to comply with Paragraphs 1 through 5 (with the exception of the reporting requirements contained in paragraph 4) of this Section 402 for such period; after such period, this Section 402 shall remain in full force and effect. 8. Federal_ Housing Subsidies. The Agency shall use its best reasonable efforts to assist the Developer to secure as tenants of the Affordable Units dedicated to Very Low Income Households persons who are recipients ("Section 8 Recipients") of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937, or its successor ("Section 8 Program"). For purposes of calculating the rent payable by the tenant pursuant to Paragraph 5 of this Section, the amount paid to the Developer as a result of such certificates or vouchers shall not be deemed the payment of rent by the tenant. C. [§4031 Operating Expenses For a period of thirty (30) years beginning on the date of the City's issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall provide a full-time activities director, an on -site apartment manager and a van shuttle service which are available exclusively to and for the benefit of the tenants of the Developer Improvements. Such activities director shall be employed on the Site at least 11/15/91 7100u/2460/050 -26- forty (40) hours per week, and such van shuttle service shall be available for the use of the residents of the Developer Improvements at least thirty (30) hours per week. For a period of ten (10) years beginning on the date of the City's issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall annually expend not less than the amounts set forth in each category of the "Operating Budget" attached hereto as Attachment No. 11 and incorporated herein. The amount in each category of the Operating Budget shall be adjusted annually by the percentage change in the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles -Anaheim -Riverside Average, Subgroup "All Items" (1982/84=100). The Developer shall annually submit to the Agency a detailed report of its Operating Budget expenditures, with such costs itemized in the categories contained in the Operating Budget, not less than thirty (30) days prior to the anniversary of the issuance of the certificate of occupancy for the Developer Improvements. In accounting for such costs, the Developer shall use generally accepted accounting principles (GAAP), including applicable Financial Accounting Standards Board (FASB) Pronouncements. In the event any of the payments in any category or the Operating Budget is made to the Developer or a party which owns or is owned by the Developer or any of the partners of the Developer or the Guarantors or is otherwise affiliated with the Developer, such payment shall be deemed not to exceed a payment commensurate with industry standards for the service or product provided. The Executive Director of the Agency may, in his or her sole discretion, cause the audit of the Operating Budget expenses not more often than once each year by a public accounting firm of the Agency's choice. The parties agree to accept the results of such audit as the conclusive and final determination of actual Operating Budget expenditures. The Developer shall make available to the auditor all books and records pertaining to the Operating Expenses. The cost of the audit shall be borne by the Agency; provided, however, that the cost shall be borne solely by the Developer if the audit determines that actually incurred Operating Budget expenditures are at least five percent (5%) less than the expenditures reported by the Developer to the Agency. In addition, the Agency shall have the right at any time during normal business hours upon not less than two business days' prior notice, but not more than two times each year during this Agreement, to examine and inspect all books and records pertaining to the Operating Expenses. 11/15/91 7100u/2460/050 -27- D. [§404] Management and Maintenance The Developer shall hire a Management company to manage the Project and to maintain the improvements on the Site in accordance with the CC&Rs (Attachment No. 8). If at any time said management company fails to adequately maintain such areas, and such condition is not corrected after expiration of ninety (90) day: from the date of written notice from the Agency, the Agency may (but shall not be obligated to) perform the necessary maintenance and Developer shall pay such costs as are reasonably incurred for such maintenance. Issuance of a Certificate of Completion by the Agency shall not affect Developer's obligations under this section. E. [§405] Rights of Access The Agency, for itself and for the City and other public agencies, at their sole risk and expense, shall have the right to enter the Site or any part thereof which is owned or controlled by the Developer, at all reasonable times, for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site. Any such entry shall be made only after reasonable notice to Developer. Upon receipt of such notice, the Developer agrees to cooperate with the Agency in making the Site available for inspection by the Agency and/or City. Developer acknowledges and agrees that in the event that if for any reason the Developer fails to consent to such entry or inspection, the Agency may obtain an administrative inspection warrant or take such other legal actions as may be necessary to gain entry to and inspect the Site. The Agency shall indemnify and hold the Developer harmless from any costs, claims, damages or liabilities pertaining to any entry. F. [§4061 Developer's Ecuity At all times from the commencement of construction until the second (2nd) anniversary of the issuance of a certificate of occupancy (or temporary certificate of occupancy) for the Developer Improvements, the "Developer's Equity" (as defined below) shall be not less than One Million Five Hundred Thousand Dollars ($1,500,000). Thereafter, the Developer's Equity may be reduce, to not less than One Million Two Hundred Fifty Thousand Dollars ($1,250,000) upon the second (2nd) anniversary of the certificate of occupancy, to One Million Dollars ($1,000,000) upon the third (3rd) anniversary of the certificate of occupancy, to Five Hundred Thousand Dollars ($500,000) upon the fourth (4th) anniversary of the certificate of occupancy and until the fifth (5th) anniversary of the certificate of occupancy. For the purposes of this Section 406, "Developer's Equity" shall mean the difference 11/15/91 7100u/2460/050 -26- between the actually incurred costs of acquiring the Site and constructing and developing the Developer Improvements (including cost overruns), less the sum of the actually disbursed amount of loans obtained by the Developer for such acquisition, development and construction. Developer's Equity shall include any cash or government securities held by a construction lender on behalf of the Developer or its partners. G. (§407] Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction The covenants established in this Agreement shall, without regard to technical classification and designation, be binding upon and for the benefit and in favor of the Developer and the Agency, their respective successors and assigns, as to those covenants which are for their benefit. The covenants contained in this Agreement and the Declaration (Attachment No. 9) shall remain in effect until the expiration of the Affordability Period defined in Section 402 of this Agreement). The covenants against racial discrimination shall remain in perpetuity. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site or in the Project Area. The Agency shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. After issuance of a Certificate of Completion for all of the Developer Improvements, all of the terms, covenants, agreements and conditions set forth in this Agreement relating to the Site shall cease and terminate as to that portion of the Site for which the Certificate of Completion is issued, excepting only the provisions listed below which shall survive as follows: (a) Sections 310, 401 to 405, inclusive, relating to uses, maintenance and access. (b) Section 308 (relating to indemnification and insurance) shall remain in effect in accordance with the terms and conditions set forth therein. 11/15/91 7100u/2460/050 -29- (c) Sections 600 to 607 (relating to rights and remedies) shall remain in effect to the extent necessary to enforce other provisions of this Agreement. (d) The Promissory Note (Attachment No. 3), and all provisions contained in or referred to in documents to be recorded pursuant to this Agreement, including without limitation the Deed of Trust (Attachment No. 4), and the Declarations of Covenants, Conditions and Restrictions (Attachment No. 9). H. [§408] Nondiscrimination The Developer covenants by and for itself and any successors in interest 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 Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, religion, sex, marital status, national origin or ancestry 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 or herself, his cr her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or grcup 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 herself or any person claiming under or through him or her, 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 or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or 11/15/91 7100u/2460/050 -30- k..J through him or her, and this lease is made and accepted upon and subject to the following conditions: "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, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, 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 premises 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, creed, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, 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 premises." The covenants established in this Agreement and the deeds of conveyance for the Site shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Site, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against discrimination shall remain in effect in perpetuity. V. [§500] GENERAL PROVISIONS A. [§501] Notices, Demands and Communications Between the Parties Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if delivered by hand (and a receipt therefor is obtained or is refused to be given) or dispatched by registered or certified mail, postage prepaid, return receipt requested, or sent by telecopy or overnight delivery service, to the principal offices of the Agency and the Developer. Such written notices, demands and communications may be sent in the same manner to the Agency and the Developer at the addresses provided pursuant to Sections 104 and 105, with a copy of any notices to the 11/15/91 7100u/2450/050 -31- %.0 Developer to be sent to Bret H. Reed, Jr., a law corporation, 1300 Dove Street, Suite 200, Newport Beach, California 92660-2416 (which copy shall not constitute notice to the Developer), and to such other addresses as either party may from time to time designate by mail as provided in this Section 501. Any written notice, demand or communication shall be deemed received immediately if delivered by hand or sent by telecopy, shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail, and shall be deemed received on the next business day after it is sent if delivered by overnight delivery service. B. [§502] Conflicts of Interest No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which, affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. C. [§503] Enforced Delay; —Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of the Agency or the City other than in respect to the zoning of the Site to allcw development of the Developer Improvements); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Any 11/15/91 7100u/2460/050 -32- requests for extension shall be in writing. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Developer. D. [§5041 Nonliability of Officials and Employees of the Agency No member, official or employee of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency (or the City) or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. VI. [§600) DEFAULTS AND REMEDIES A. [§601) Defaults -- General Subject to the extensions of time set forth in Section 503, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings for damages or specific performance against the party in default until thirty (30) days after giving such notice in the case of monetary defaults or defaults reasonably capable of being cured in thirty (30) days, or such longer time as may be necessary to cure other defaults not reasonably capable of being cured within thirty (30) days, provided that such party immediately commences to cure, correct or remedy such failure or delay and completes such cure, correction or remedy with diligence. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. B. [§602] Legal Actions 1. 1§6031 Institution of Legal Actions In addition to any other rights or remedies and subject to the restrictions in Section 601, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Legal 21/15/91 7100u/2460/050 -33- M actions must be instituted in the Superior Court of the County of Orange, State of California, in an appropriate municipal court in that county, or in the Federal District Court in the Central District of California. 2. [§604] Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 3. [§605] Acceptance _of Service of Process In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on a general partner of the Developer shall be made by personal service upon a trustee of such partner or in such other manner as may be provided by law. C. [6606] Rights and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies 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 the other party. D. [§607] Inaction Not a Waiver of Default Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. E. [§608] Liquidated Danages IN THE EVENT THAT THE DEVELOPER IS I14 DEFAULT OF ITS OBLIGATIONS PURSUANT TO SECTION 402 OF THIS AGREEMENT, AND HAS NOT CURED SUCH DEFAULT WITHIN THE TIME REQUIRED BY SECTION 601 0£ THIS AGREEMENT, THE AGENCY SHALL BE ENTITLED TO OBTAIN PAYMENT IN THE AMOUNT OF THE AGENCY GRANT WHICH HAS BEEN DISBURSED PURSUANT TO SECTION 203 OF THIS AGREEMENT, LESS THE PRODUCT OF SIXTEEN THOUSAND SIX HUNDRED SIXTY-SEVEN DOLLARS 11/15/91 7100u/2460/050 -34- �.i ($16,667) TIMES THE NUMBER OF FULL YEARS WHICH HAVE ELAPSED BETWEEN THE ISSUANCE OF THE CERTIFICATE OF OCCUPANCY FOR THE PROJECT AND THE DATE OF THE DEFAULT. IN THE EVENT OF SUCH DEFAULT PURSUANT TO SECTION 402 OF THIS AGREEMENT, THE AGENCY WOULD SUSTAIN DP11AGES BY REASON THEREOF WHICH WOULD BE UNCERTAIN. SUCH DAMAGES WOULD INVOLVE SUCH VARIABLE FACTORS AS THE DELAY OR FAILURE OF THE AGENCY AND THE CITY TO PROVIDE AFFORDABLE HOUSING AS REQUIRED BY THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW AND THE CITY GENERAL PLAN, AND THE LOSS OF OPPORTUNITY TO ENGAGE IN OTHER POTENTIAL AFFORDABLE HOUSING TRANSACTIONS, RESULTING IN DAMAGE AND LOSS TO THE AGENCY. IT IS IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX THE AMOUNT OF SUCH DAMAGES TO THE AGENCY, BUT THE PARTIES ARE OF THE OPINION THAT SUCH DAMAGES WOULD APPROXIMATELY EQUAL THE SUM DERIVED BY THE FORMULA SET FORTH HEREIN, AND THE AGENCY SHALL BE ENTITLED TO SUCH AMOUNT AS A TOTAL OF ALL LIQUIDATED DAMAGES FOR SUCH DEFAULT AND NOT AS A PENALTY. IN THE EVENT THAT THE DEVELOPER SHOULD CHALLENGE THE APPLICABILITY OR EFFICACY OF THIS PARAGRAPH OR IF THIS PARAGRAPH SHOULD BE HELD VOID FOR ANY REASON, THE AGENCY SHALL BE ENTITLED TO THE FULL EXTENT OF DAMAGES OTHERWISE PROVIDED BY LAW. THE DEVELOPER AND THE AGENCY SPECIFICALLY ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY THEIR INITIALS BELOW: Develop'r s nitials Agency's Initials By: By: F. [§609] Remedies and Rights of Termination Prior to Completion 1. [§610] Damages If either party defaults with regard to any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured within the applicable period after service of the notice of default as set forth in Section 601, the defaulting party shall be liable to the other party for any damages caused by such default, except as provided in Sections 612 or 613 herein. 2. [§611] Specific Performance Subject to the applicable cure provisions contained in Section 601 herein, if either party defaults under any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the applicable cure period as set forth 11/15/91 7100u/2460/050 -35- in Section 601, the non -defaulting party at its option may thereafter (but not before) seek specific performance of terms of this Agreement. 3. [§612] Terminnaticn by the Developer Prior to Completion R -' In the event that prior to the Issuance of a Certificate of Completion the Developer is not in default of the Agreement and: (a) The Developer is unable to obtain financing necessary for the construction of the Improvements, provided that the Developer has used its best efforts to obtain such financing; or (b) The Agency is in default of the Agreement and has not cured or commenced to cure such default within the time period set forth in Section 601 hereof, then, subject to the applicable cure provisions contained in Section 601 herein, at the option of the Developer, thirty (30) days after written notice thereof is delivered to the Agency all provisions of this Agreement shall terminate and be of no further force and effect; thereafter, neither the Agency nor the Developer shall have any further rights against or liability to the other with respect to this Agreement. 4. [§613] Termination by the Agency Prior to Completion In the event that prior to the issuance of a Certificate of Completion the Agency is not in default of this Agreement and: (a) The Developer (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Site in violation of this Agreement; or (b) There is a change in the ownership of the Developer contrary to the provisicns of Section 107 hereof; or (c) The Developer does not submit certificates of insurance, construction plans, drawings and related documents as required by this Agreement, in the manner and by the dates respectively provided in this Agreement therefor and such default or failure shall not be cured within the applicable cure period as set forth in Section 601 hereof; (d) this Agreement and default within the Section 601 herein; The Developer is otherwise has not cured or commenced applicable time period set 11/15/91 7100u/2460/050 -36- in default under to cure such forth in then, at the option of the Agency, within the applicable cure period as set forth in Section 601 hereof, and subject to the rights of the mortgagee or deed of trust holder to cure as set forth in Section 319 hereof, after written notice thereof is delivered to the Developer, this Agreement shall be terminated, and thereafter neither party shall have any further rights against the other under this Agreement. G. [§614] Remedies of the Parties for Default After Completion 1. [§615] Termination and Damages After the issuance of a Certificate of Completion, if the Developer or the Agency defaults with regard to any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the time set forth in Section 601 hereof, the defaulting party shall be liable to the other party for any damages caused by such default. 2. [§616] Action for Specific Performance After the issuance of a Certificate of Completion, if either the Developer or the Agency defaults under any of the provisions of this Agreement the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the time set forth in Section 601 hereof, the nondefaulting party at its option may institute an action for specific performance of the terms of this Agreement. VII. [§700] SPECIAL PROVISIONS A. [§701] Real Estate Ccmmissions The Developer acknowledges and represents to the Agency that it has engaged the services of a broker and that it is liable for certain real estate commissions, broker's fees, or finder's fees which may accrue by means of the Developer's acquisition of the Site, and agrees to hold harmless the Agency from such commissions or fees as are alleged to be due from the party making such representations. B. [§702] Successors In Interest The terms, covenants, ccnditions and restrictions of this Agreement shall extend to and shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the Developer. 11/15/91 7100u/2460/050 -37- C. [§703] Memorandum of Agreement The Agency and the Developer agree to execute, acknowledge and cause to be recorded in the Official Records of Orange County, California, a short form memorandum of this Agreement in the form of the "Memorandum of Agreement" attached hereto as Attachment No. 12 and incorporated herein. The Memorandum of Agreement shall be for recording purposes only and shall not modify any of the terms of this Agreement. The Agency may cause the Memorandum of Agreement to be recorded upon the earlier to occur of the Developer's acquisition of the site or the execution of this Agreement. VIII. [§800] ENTIRE AGREEMENT, WAIVERS This Agreement may be signed in counterparts, and is executed in five (5) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through _ and Attachments 1 through 12, which constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Agency and the Developer, and all amendments hereto must be in writing by the appropriate authorities of the Agency and the Developer. In any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. IX. [§900] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before thirty (30) days after signing and delivery of this Agreement by Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been signed by the Agency. 11/15/91 7100u/2460/050 -38- �'i IN WITNESS WHEREOF, the Agency and the Developer have signed this Agreement on the respective dates set forth below. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic 1 �! Dated: , 1991 By: A r1 Chairman Dated: �, 1991 y: Executive Director � Dated ATTEST:' - APT A 'TO FORM: 01— Str ing, oc a Carlson & Rauth, Age y Special Counsel Cilty Attorney Agency General Counsel FIVE POINTS SENIORS, L.P., a California limited partnership By: MICHELSON FAMILY TRUST, dated as of December 12, 1984, as amended March 1, 1985, its general partner Dated: 1991 By: _j WAA David Michelson, Trustee 11/15/91 7100u/2460/050 -39- f, ARKED�AHUN CRINGES FROM C,IRO OF ) I J5-- g I A 1-TANS A DELETION t►'.l ANS AN ADDITIOrl L'10!k ell olp Iq 6* 01 PUP Pro AFFORDABLE HOUSING AGREEMENT (Five Points Senior Villas) by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and FIVE POINTS SENIORS, L.P. AGENCY, DEVELOPER �r AFFORDABLE HOUSING AGREEMENT (Five Points Senior Villas) THIS AFFORDABLE HOUSING AGREEMENT (the "Agreement") is entered into as of November 18 1991 by and between the REDEVELOPMENT AGE THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency") and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer"). The Agency and the Developer hereby agree as follows: I. [6100] SUBJECT OF AGREEMENT A. [§101] Purpose of Agreement A. The Agency is required by California Health and Safety Code Section 33334.2, et se_c.., to expend a certain percentage of property taxes allocated to it for the purpose of increasing, improving and preserving the City of Huntington Beach's supply of Low- and Moderate -Income housing available at an Affordable Housing Cost. B. This Agreement provides for the development of a One Hundred Sixty -Four (164) unit senior citizen rental housing project (the "Project") on an approximately 1.89 acre parcel of land within the City of Huntington Beach. Forty-eight (48) of those units (the "Affordable Units") will be available pursuant to this Agreement for Very Low Income Households, Lower Income Households and Persons and Families of Low and Moderate Income at an Affordable Rent (as those terms are defined in Section 402 hereof) for a period of thirty (30) years. C. In consideration for the Developer's construction and operation of the Project and the Affordable Units, this Agreement provides that the Agency shall make available certain financial assistance in the form of a low interest loan and a series of five grants. C. [§102] The Site The Site is that real property located in the City of Huntington Beach ("City") as depicted and more fully described in the "Site Map and Legal Description" which is attached hereto as Attachment No. 1, and incorporated herein by reference. The Site is not located in any redevelopment project area of the City, but the development of the Project will be of benefit to the Main -Pier Redevelopment Project due to the creation of affordable housing near such project area. The Agency intends that the Affordable Units shall replace certain housing in the Main -Pier Redevelopment Project occupied by persons of Low and Moderate Income which was destroyed to facilitate certain redevelopment activities within such project P -,o�4,0 Zo3 lWfrcf') *1 tie— /Sn �. � cc.G rel o f +Ecrfi G�Ctd of fruit �vJL.o-;ZeJ Zy i�,'s /rsr. .,t 5�,�t 1� �rw tf e- ° ti., tL,o--;Z4J f o ¢xu--1 e. 5','CA d ke-r r'� v� �e4 Y., «p le,►u,� 5 benefit of the Developer and the permitted successors and ' assigns of the Developer. Whenever the term "Developer" is used herein, such term shall include any other permitted successors and assigns as herein provided. II. [§200] AGENCY ASSISThNCE A. [§201] Agency Loan Upon the issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, and subject to the applicable terms and conditions of this Agreement, the Agency agrees to loan to the Developer the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "Agency Loan"). B. [§202] Note and Deed of Trust The Agency Loan shall be evidenced by the Developer's execution of a "Promissory Note," in the form of Attachment No. 3 hereto, which is incorporated herein. The Promissory Note shall bear simple interest at the rate of five percent (5%) per annum for term of the loan. The Developer shall make monthly payments of principal and interest during the third (3rd) through tenth (10th) years of the Agency Loan, with payments amortized over the eight (8) year repayment period and with the loan balance due in full upon the tenth (loth) anniversary of the Agency Loan. The full amount of the Promissory Note, with all interest accrued thereon, shall be immediately due and payable upon the Developer's uncured default of this Agreement and/or the Promissory Note. The Developer's obligations pursuant to the Promissory Note shall be secured by the Developer's execution of a "Deed of Trust" in the form of Attachment No. 4 hereto, which is incorporated herein. The Deed of Trust shall be made subordinate to the obligations pursuant to any multifamily housing revenue bond issuance which provides funds for the construction of the Project. The Agency may, in its reasonable discretion, subordinate the Deed of Trust to any mortgage or deed of trust encumbering the Site which secures other financing obtained by the Developer necessary to undertake the development of the Site in accordance with this Agreement, provided that the Agency determines that such subordination is necessary to enable the Developer to develop the Developer Improvements. The Developer shall execute and deliver a copy of the Promissory Note and the Deed of Trust to the Agency as a condition precedent to the disbursement of the Agency Loan Proceeds. In ccnnection with the Deed of Trust, the Agency may obtain, at the expense of the Developer, an ALTA lender's policy or policies of title insurance, together with such endorsements as are reasonably requested by the Agency. 12/05/91 7100u/2460/050 -5- ?`% /�,`�er i.aTebr Spptwes �fk Dcoelepef < c-<6 �nluof a� L�eneefii OGculs of Jam- �,�' LLt.., anc� �cr141 •rr,,it k..4 de -144 M Sa rims r.A .203 hp caf-j 4- Ne huJcGr of rccard ard�� . i- ciU�i�0rIze. by f �s A r«M�t� ti� fw ter �ec�i•�D.riL� is 4vt%a✓/zei 1.fwn r `'ic-'the-eYmittec�s'ucc ssors and'��`�' oi�-thy �eveloper-a p assigns of the Developer. Whenever the term "Developer" is used herein, such term shall include any other permitted successors and assigns as herein provided. -" - II . 1 §200y AGENdY A. 162011 Agency Loan Upon the issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, and subject to the applicable terms and conditions of this Agreement, the Agency agrees to loan to the Developer the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "Agency Loan"). B. [§202) Note and Deed of Trust The Agency Loan shall be evidenced by the Developer's execution of a "Promissory Note," in the form of Attachment No. 3 hereto, which is incorporated herein. The Promissory Note shall bear simple interest at the rate of five percent (5%) per annum for term of the loan. The Developer shall riake monthly payments of principal and interest during the third (3rd) through tenth (10th) years of the Agency Loan, with payments amortized over the eight (8) year repayment period and with the loan balance due in full upon the tenth (10th) anniversary of the Agency Loan. The full amount of the Pro:tissory Note, with all interest accrued thereon, shall be immediately due and payable upon the Developer's uncured default of this Agreement and/or the Promissory Note. The Developer's obligations pursuant to the Promissory Note shall be secured by the Developer's execution of a "Deed of Trust" in the form of Attachment No. 4 hereto, which is incorporated herein. The Deed of Trust shall be made subordinate to the obligations pursuant to any multifamily housing revenue bond issuance which provides funds for the construction of the Project. The Agency may, in its reasonable discretion, subordinate the Deed of Trust to any mortgage or deed of trust encumbering the Site which secures other financing obtained by the Developer necessary to undertake the development of the Site in accordance with this Agreement, provided that the Agency determines that such subordination is necessary to enable the Developer to develop the Developer Improvements. The Developer shall execute and deliver a copy of the Promissory Note and the Deed of Trust to the Agency as a condition precedent to the disbursement of the Agency Loan Proceeds. In connection with the Deed of Trust, the Agency may obtain, at the expense of the Developer, an ALTA.lender's policy or policies-of-title-insurance,-.-together-with-such ---' - endorsements as as are reasonably requested by the Agency. 12/04/91 7100u/2460/050 -5- C. (§203) Agency Grant Upon each of the first (1st) through fifth (5th) anniversaries of the issuance of a certificate of occupancy for the Developer Improvements, and provided the Developer is not in default of this Agreement, the Agency shall grant to the Developer the sum of One Hundred Thousand Dollars ($100,000) (for a total of Five Hundred Thousand Dollars ($500,000)). Such payments shall be in consideration for the Developer's agreement to prcvide housing to Very Low, Lower, and Low- and Moderate -Income Households at an Affordable Rent (as those terms are defined in Section 402 hereof), and to provide a high quality level of construction materials and amenities in the development and operation of the Developer Improvements, as set forth in this Agreement and the attachments hereto. D. [§204] Submission of Evidence of Financing Commitments and Loan Closing As required in this Agreement and within the time established therefor in the Schedule of Performance (Attachment No. 5), the Developer shall submit to the Agency evidence that the Developer has obtained sufficient equity capital and firm and binding commitments for financing necessary to undertake the development of the Site in accordance with this Agreement. The Agency shall approve or disapprove such evidence of financing commitments within the time set forth in the Schedule of Performance. Approval shall not be unreasonably withheld or conditioned. If the Agency shall reasonably disapprove any such evidence of financing, the Agency shall do so by written notice to the Developer stating the reasons for such disapproval and the Developer shall diligently pursue and shall within ninety (90) days of such notice submit to the Agency new evidence of financing. The Agency shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 204 for the approval or disapproval of the evidence of financing as initially submitted to the Agency. Such evidence of financing shall include the following: 1. A copy of the commitment obtained by the Developer for the mortgage loan or loans for financing to fund the construction of the applicable Developer Improvements. The commitment for financing shall be in such form and content acceptable to the Agency as reasonably evidences a legally binding, firm and enforceable commitment subject to the construction lender's customary and normal conditions and terms. That commitment letter from Wells Farao National Bank dated September 23, 1991 which has been submitted to the_. Agency is herebv approved as meetinq the requirements of this Section 1; and 12/05/91 7100u/2460/050 -6- 5. [§306] Cost of Construction All the costs of site preparation, planning, designing and constructing the Developer Improvements and developing the Site and constructing all improvements thereon shall be borne solely by the Developer. As more fully set forth in the Scope of Development (Attachment No. 6), the Developer Improvements shall be constructed to the same or better standard of quality as the apartment project constructed by the Developer at 12200 Valley View, Garden Grove, California. The Developer shall also bear all costs related to discharging the duties of the Developer set forth in this Agreement. The Developer assumes the responsibility to construct and shall let contracts for or cause to be constructed all off -site improvements developed pursuant to this Agreement. The Developer shall be responsible for all fees associated with development of the Developer Improvements, including, without limitation, school facilities fees and impact fees ("School Fees"). Upon completion of the Developer Improvements, the Developer shall submit to the Agency a detailed and itemized report of its costs of development. The Agency agrees, upon request therefor by the Developer, to consider, but in no way is obligated, to issue or participate in the issuance of multi -family housing bonds ("Bonds") to assist in financing of the Project. For any such financing to proceed, it is understood that: (i) the entire cost of such financing, including without limitation costs of issuance, debt service, and financial advisement of the Agency, shall be borne by the Developer; (ii) the bonds shall have a rating of "A" or better from Moody's or Standard and Poor's; and (iii) neither the Agency nor the City shall have any liability, contingent or otherwise, concerning or with respect to such bonds. 6. [$307] Construction Schedule The Developer shall promptly begin and thereafter diligently prosecute to completion the construction of the Developer Improvements, with all construction commencing and being completed within the times specified therefor in the Schedule of Performance (Attachment No. 5), subject to Section 503 of this Agreement. 7. [§308] Bodily Injury and Property Damage Insurance The Developer shall defend, indemnify, assume all responsibility for and hold the Agency, its officers, agents, representatives and employees harmless from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including reasonable attorneys' 12/05/91 7100u/2460/050 -9- 3. [0 19] Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure With respect to any mortgage or deed of trust granted by Developer as provided herein, whenever the Agency shall deliver any notice or demand to Developer with respect to any breach or default by the Developer in completion of the Developer Improvements, the Agency shall at the same time deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights of the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice (or if such default cannot reasonablv be cured by such holder within sixtv ys, within such -time period as is reasonably necessary to cure such a au o cure or remedy or commence to cure or remedy any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction, rehabilitation or completion of the Developer Improvements (beyond the extent necessary to conserve or protect the construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement satisfactory to the Agency. The holder (or the holder's successor in interest), in that event, must agree to complete, in the manner provided in this Agreement, the Developer Improvements to which the lien or title of such holder relates, and submit evidence reasonably satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder (or the holder's successor in interest) properly completing such construction shall be entitled, upon compliance with the requirements of Section 315 of this Agreement, to a Certificate of Completion, and shall be entitled to payment of the Agency Loan and Agency Grant upon compliance with all applicable covenants and the occurrence of all applicable conditions. 4. [020] Right _of_the Agency to Cure Mortgage or Deed of Trust Default In the event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the Developer Improvements or any part thereof and the holder of any first mortgage or first deed of trust has not exercised its option to construct, the Agency shall have the right, within sixty (60) days after receipt of notice of such default, to cure the default. In such event, the Agency shall be entitled to reimbursement from the Developer of all proper costs and expenses associated with and attributable to the curing of the first mortgage or first deed of trust default or breach of this Agreement by the Developer and incurred by the Agency in curing such default. The Agency shall also be 12/05/91 7100u/2460/050 -15- Scope of Development (Attachment No. 6). The Developer agrees to make available, restrict occupancy to, and rent thirty-two (32) of the units to "Very Low Income Households" and sixteen (16) additional units to "Persons and Families of Low- and Moderate Income" (for a total of forty-eight (48) restricted units), all at an "Affordable Rent" (the "Affordable Units"). However, the Developer shall be obligated to make available, restrict occupancy to, and rent sixteen (16) of the units to "Very Low Income Households," sixteen (16) additional units to "Lower Income Households," and sixteen (16) additional units to "persons and families of Low- and Moderate Income," in lieu of the requirements of the preceding sentence, for the duration of the "Affordability Period" (as defined in paragraph 2 of this Section 402), upon the occurrence: of all three of the following events: (a) the "Qualified Development Period" (as defined in the Regulatory Agreement and Declaration of Restrictive Covenants by and among the City, Developer and Dai-Ichi_Kanayo Sank of California, dated as ofAQPr_PmhAr 1991) shall have elapsed; and (b) the "Section 8 Program" (as defined in paragraph 8 of this Section 402) or a reasonably similar successor or replacement federal rental subsidy or voucher program no longer exists; and (c) neither the City nor the Agency has instituted a rental subsidy or voucher program designed to subsidize the rents of Very Low Income Households at levels equivalent to the Section 6 Program,The location of the Affordable Units shall be dispersed throughout the Developer Improvements and shall be reasonably acceptable to the Agency. The distribution of sizes (in terms of number of bedrooms) of the Affordable Units shall be in the same proportion as the distribution of sizes of all units within the Developer Improvements. There shall be not less than six (6) and not more than ten (10) Affordable Units on each floor of the Developer Improvements. Those Affordable Units located on the first floor of the Developer Improvements shall each be not less than Five Hundred Seventy (570) square feet. "Very Low Income Household" shall mean a household earning not greater than fifty percent (50%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety Code Section 50105. "Lower Income Household" shall mean a household earning not greater than eighty percent (80%) of Orange County median income, as determined by the United States Department of Housing and Urban development, as set forth in Health and Safety Code Section 50079.5. "Persons and Families of Low and Moderate Income" shall mean households earning not greater than one hundred twenty percent (120%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety Code Section 50093. 12/05/91 7100u/2460/050 -21- dwelling unit who are not Senior Citizens must be Qualified Permanent Residents. Temporary guests of a Senior Citizen or Qualified Permanent Resident shall be allowed for a period of not more than sixty (60) days in any twelve (12) month period. Upon the death, dissolution of marriage, hospitalization or other prolonged absence of the Senior Citizen in a dwelling unit, any Qualified Permanent Resident who has continuously resided in the dwelling unit with such Senior Citizen shall be permitted to continue as a resident of that dwelling unit. "Permitted Health Care Residents" (as that term is defined in California Civil Code Section 51.3) shall be permitted to occupy any dwelling unit during any period that such person is actually providing live-in, long-term or hospice health care to a Senior Citizen tenant or Qualified Permanent Resident tenant for compensation. 7. Bonds. In the event the Bonds (as defined in Section 306 hereof) are issued in connection with the acquisition, development or use of the Site, the Developer shall strictly comply with all covenants, conditions and requirements relating to the duties of the Developer pursuant to such Bonds and such agreements as are entered into in connection therewith.A 8. Federal Housing Subsidies. The Agency shall use its best reasonable efforts to assist the Developer to secure as tenants of the Affordable Units dedicated to Very Low Income Households persons who are recipients ("Section 8 Recipients") of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937, or its successor ("Section 8 Program"). For purposes of calculating the rent payable by the tenant pursuant to Paragraph 5 of this Section, the amount paid to the Developer as a result of such certificates or vouchers shall not be deemed the payment of rent by the tenant. C. [64031 Operating Expenses For a period of thirty (30) years beginning on the date of the City's issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall provide a full-time activities director, an on -site apartment manager and a van shuttle service which are available exclusively to and for the benefit of the tenants of the Developer Improvements. Such activities director shall be employed on the Site at least 22/05/91 7100u/2460/050 -26- C. [§7031 Memorandum of Agreement The Agency and the Developer agree to execute, acknowledge and cause to be recorded in the Official Records of Orange County, California, a short form memorandum of this Agreement in the form of the "Memorandum of Agreement" attached hereto as Attachment No. 12 and incorporated herein. The Memorandum of Agreement shall be for recording purposes only and shall not modify any of the terms of this Agreement. The Agency may cause the Memorandum of Agreement to be recorded upon the earlier to occur of the Developer's acquisition of the site or the execution of this Agreement. VIII. [§800] ENTIRE AGREEMENT, WAIVERS This Agreement may be signed in counterparts, and is executed in five (5) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through 39 and Attachments 1 through 12, which constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Agency and the Developer, and all amendments hereto must be in writing by the appropriate authorities of the Agency and the Developer. In any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. IX. 169001 TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before thirty (30) days after signing and delivery of this Agreement by Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been signed by the Agency. 12/05/91 7100u/2460/050 -36- �r ATTACHMENT NO. 2-A GUARANTY THIS GUARANTY (the "Guaranty") is hereby entered into in favor of THE REDEVELOPMENT AGENCY OF THE CITY OF IMTINGTON BEACH, a public body corporate and politic (the "Agency"), by DAVID MICHELSON and KATHLEEN M. MICHELSON (collectively, the "Guarantors"), as of the date set forth herein. R E C I T A L S A. The Agency and FIVE POINTL SENIORS, L� a California limited partnership (the "Developer") have entered into or will enter into a certain Affordable Housing Agreement (the "Agreement") which provides in part that Guarantors shall provide a guaranty to the Agency. B. The Guarantors, who are beneficiaries of the trust which is a general partner of the Developer, will significantly benefit by the execution by the Agency of the Agreement. C. The execution by the Guarantors of this Guaranty is a condition but for which the Agency would not execute the Agreement. D. Guarantors have reviewed and hereby approve the form and content of the Agreement. NOW, THEREFORE, in consideration of the execution of the Agreement, and of other valuable consideration, receipt of which is hereby acknowledged: 1. Guarantors guarantee to the Agency the full and timely performance of each and every obligation of the Developer pursuant to the Agreement. 2. This Guaranty is unconditional and may be enforced directly against the undersigned. No extensions, Modifications or changes to the Agreement as Amended shall release the undersigned or affect this Guaranty in any way, and the undersigned waives notification thereof. 3. The undersigned hereby waive all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 12/04/91 ATTACHMENT NO. 2-A 7100u/2460/050 Page 1 of 3 12. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any successor or assignee thereof or any disaffirmance by a trustee of the Developer. 13. This Guaranty shall inure to the benefit of and bind the successors and assigns of Agency and Guarantors. 14. Guarantors agree that jurisdiction and venue with respect to any matter pertaining to the Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Orange, State of California, in an appropriate municipal court of that county, or in the Federal District Court in the Central District of California. Guarantors irrevocably waives any and all defenses based upon revenue or forum non conveniens. 15. The laws of the State of California shall govern the interpretation and enforcement of this Guaranty. IN WITNESS hEEREOF, the undersigned have executed this Guaranty this day of , 19.22. David Michelson Kathleen M. Michelson 22/04/91 ATTACHMENT NO. 2-A 7100u/2460/050 Page 3 of 3 ATTACMIENT NO. 2-B GUARANTY THIS GUARANTY (the "Guaranty") is hereby entered into in favor of THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency"), by NORMAN D. WARD, and BUNNIE L. WARD (collectively, the "Guarantors"), as of the date set forth herein. R E C I T A L S A. The Agency and FIVE POINTS SENIORS, ;E., a California limited partnership (the "Developer") have entered into or will enter into a certain Affordable Housing Agreement (the "Agreement") which provides in part that Guarantors shall provide a guaranty to the Agency. B. The Guarantors, who are beneficiaries of the trust which is a.limited partner of the Developer, will significantly benefit by the execution by the Agency of the Agreement. C. The execution by the Guarantors of this Guaranty is a condition but for which the Agency would not execute the Agreement. D. Guarantors have reviewed and hereby approve the fora and content of the Agreement. NOW, THEREFORE, in consideration of the execution of the Agreement, and of other valuable consideration, receipt of which is hereby acknowledged: I. Guarantors guarantee to the Agency the full and timely performance of each and every obligation of the Developer pursuant to the Agreement. 2. This Guaranty is unconditional and may be enforced directly against the undersigned. No extensions, modifications or changes to the Agreement as Amended shall release the undersigned or affect this Guaranty in any way, and the undersigned waives notification thereof. 3. The undersigned hereby waive all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 12/04/91 ATTACHMENT NO. 2-B 7100u/2460/050 Page 1 of 3 12. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any successor or assignee thereof or any disaffirmance by a trustee of the Developer. 13. This Guaranty shall inure to the benefit of and bind the successors and assigns of Agency and Guarantors. 14. Guarantors agree that jurisdiction and venue with respect to any matter pertaining to the Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Orange, State of California, in an appropriate municipal court of that county, or in the Federal District Court in the Central District of California. Guarantors irrevocably waives any and all defenses based upon revenue or forur. non conveniens. 15. The laws of the State of California shall govern the interpretation and enforcement of this Guaranty. 16. This Guaranty shall terminate and be of no force and effect as of &bg date which is seyen years frcm the date of execution of this Guaranty. IN WITNESS WHEREOF, the undersigned have executed this Guaranty this day of , 1921. Norman D. Ward Bunnie L. Ward "GUARANTORS" 12/04/91 ATTACHMENT NO. 2-B 7100u/2460/050 Page 3 of 3 kw� h'r;�.,OD TO SI O71 CWLAMES FRO10 DRAn. OF 11- 15-91 A MEANS A DELETION PROMISSORY NOTE .,... jf„EANS AN AMMON SECURED BY DEED OF TRUST $250,000 Huntington Beach, California If 19 &l. Affordable Housing Agreement. This Promissory Note is made and delivered pursuant to and in implementation of an Affordable Housing Agreement by and between the_ ,REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGMS-DE.ACH.__a__rubl_ic__ body corporate and politic the "Holders and_FIVE POINTS SENIORS.-,._P_.,_a California limited nartnershiv (the `Borrower, dated November 18, 1991 (the "Agreement"), a copy of which is on file as a public record with the Holder and is incorporated herein by reference. The Agreement provides for the development of real property, and for the payment of moneys by the Holder to the Borrower u on certain events therein set forth. The Borrower acknowledges that but for the execution of this Promissory Note, the Holder would not enter into the Agreement. Unless definitions of terms are expressly set out at length herein, each term shall have the same definition as set forth in the Agreement. L2. Promise _to Pay. Upon_paymentof_the "Agency Loan" to Borrower pursuant to Section 201 of the_Agreement,_ orrower promises to pay r and/or order and assigns, at the office of the Agency in Huntington Beach, California, or at such other place as the Holder may designate in writing, the principal sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "Nate Amount"). J,J, Interest Rate. Simple interest shall be charged by the Agency on the portion of the Note Amount remaining unpaid from time to time, from the date of the disbursement of the Note Amount until the date which is ten (10) years from the date of the disbursement of the Note Amount, at the rate of five percent (5%) per annum. g. Principal and Interest Payments. No payments of principal and interest shall be required during the first two years after theAdisbursement of the Note Amount. During the third (3rd) through tenth (10) years after the ndisbursement of the Note Amount, the Borrower shall make monthly payments on W the first day of each month in such amounts as will fully amortize the balance of principal and interest over such eight (8) year repayment period. 5. Application of Payments. Any sums received hereunder may, at the option of Holder hereof, be applied in any order to the payment of costs, interest, or principal due hereunder. 23. That Trustor has made certain representations and disclosures in order to induce Beneficiary to make the loan evidenced by the Promissory Note or Notes which this Deed of Trust secures, and in the event that Trustor has made any material misrepresentation or failed to disclose any material fact, Beneficiary at its option and without notice, shall have the right to declare the indebtedness secured hereby, irrespective of the maturity date specified in such Note or Notes, immediately due and payable, and on failure to so pay Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 24. This Deed of Trust is subordinate to the Indenture of Trust, dated as of December 1, 1991, between the City and Dai-Ichi Icangyo Bank of California, as trustee, and the Construction Deed of Trust, Assignment of Rents and Fixture Filing, dated as of December 1, 1991 executed by Trustor in favor of American Securities Company. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. FIVE POINTS SENIORS, L.P., a California limited partnership By: Michelson Family Trust, dated December 12, 1984, as amended March 1, 1985, its general partner By: David Michelson, Trustee 12/06/91 8557u/2460/050 VAni12D TO sHo:1. Cp Aj S FRD'.l D or_ � r— P5 —1 RECORDING REQUESTED BY AND } WHEN RECORDED RETURN TO: } h L EANS A DELETION Redevelopment Agency of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92548 ) Attn: Executive Director ) (Space Above this Line For Recorder's Use) CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS DEED OF TRUST is made this day of December, 1991, by and between FIVE POINTS SENIORS, L.P., a California limited partnership (the "TRUSTOR"), whose address is: 19000 MacArthur Boulevard Suite 680, Irvine, California 92715 and FIRST AMERICAN TITLE INSURANCE COMPANY (the "TRUSTEE"), whose address is 114 East Fifth Street, Santa Ana, California 92701, and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTI! T N , a public body corporate and politic (the "BENEFICIARY"). WITNESSETH: That Trustor Irrevocably, Grants Transfers and Assigns, to Trustee, in Trust, with Power of Sale, that property in the City of Huntington Beach, County of Orange, State of California, described legally/In the Legal _Description _.tta_phgd hereto as Exhibit "A" and incorporated her e i n TOGETHER WITH: (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement for the sale 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, and all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement. FOR THE PURPOSE OF SECURING: 1. Payment of Dollars ($250,000) with of a Promissory Note of payable to the order of renewals thereof. the sum of Two Hundred Fifty Thousand interest thereon according to the terms even date herewith, made by Trustor, the Beneficiary and extensions or 12/04/91 8557u/2450/050 `! 2. Payment of such additional sums with interest thereon as: (a) may be hereafter borrowed from the Beneficiary by the then record owner or owners of said property when evidenced by another Promissory Note or Notes, or (b) as may be added to the indebtedness secured hereby in accordance with the provision of this Deed of Trust. 3. Performance of each and every obligation, covenant, promise or agreement of Trustor contained herein and in that certain Affordable Housing Agreement entered by and between Trustor and Beneficiary on November 18, 1991, (hereinafter the "Agreement"), inclu xng wx out limitation, the payment of liquidated damages pursuant to Section 608 of the Agreement. 4. Payment, with interest thereon, of any other present or future indebtedness or obligation of the Trustor (or of any successor -in -interest of the Trustor to said property) to the Beneficiary, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not, whether otherwise secured or not, or whether existing at tte time of the execution of the Deed of Trust, or arising thereafter. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. To keep said property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the premises at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the premises without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry -rot; to pay when due all claims for labor performed and materials furnished in connection with such property and not to permit any mechanic's lien against such property; to comply with all laws affecting such property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon such property in violation of the law; and to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of said property may be reasonably necessary; to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 12/04/91 6557u/2460/050 ATTACHMENT NO. 5 SCHEDULE OF PERFORMANCE I. GENERAL PROVISIONS 1. Execution of Aareement by_Agency. The Agency shall approve and execute this Agreement and shall deliver one (1) copy thereof to the Developer. Within thirty (30) days after the date of execution and submission of five (5) copies of this Agreement by the Developer. 2. Submission of Preliminary Completed. Site Plan. Developer sub- mits its Preliminary Site Plan to City and the Agency. 3. Agency/City Review of Site Completed. Plan. The Agency/City shall approve or disapprove the Preliminary Site Plan. 4. Submission of Complete Site Completed. Plan Application. Developer submits full and complete Site Plan application to City and the Agency. 5. Preparation ofCE2 ACompleted. Documentation_ Agency shall prepare all documentation necessary to comply with the California Environmental Quality Act. II. CONSTRUCTION DOCUMENTS AND BUILDING PERMIT 6. Submission of Complete Construction Drawings and Landsca ina Plan. Developer shall submit to the City complete Construction (working) Drawings and a Landscaping Plan, Sign Program, and Finish Grading Plan. Landscaping Plan and final Sign Program shall be completed and approval Within thirty (30) days from submittal to Planning Commission and City Council approval (Item 6 above). 12/04/91 ATTACHMENT NO. 5 7100u/2460/050 Page 1 of 3 �J1 obtained by Developer prior to completion of the Developer Improvements. 7. City Review of Complete Drawings and Plans. The Agency/City shall review the Complete Construction (working) Drawings, the Preliminary Landscaping Plan, Preliminary Sign Program, and Finish Grading Plan and provide comments. Within fourteen (14) days after submittal. 8. Revisions, if any. Developer Within thirty (30) days after shall prepare revised receipt of City's comments. Construction (working) Drawings a: necessary, and submit them to City for review. 9. Final Review and Complete Drawings. The City/Agency shall approve the revisions submitted by the Developer provided that the revisions necessary to accommodate the City's comments have been made; said approvals constitute the last City and Agency approvals required in order for the Developer to pull building permits. Within fourteen (14) days after submittal by Developer. 10. Developer Obtains Construc- Within ninety (90) days tion Financin after Agency approval of Agreement. III. CONSTRUCTION PHASE 11. Commencement of Construc- Within thirty (30) after the tion. Developer shall City is issuance of building commence construction of permits, but not later than the Developer Improvements. days after the Agency's approval of the Agreement. 12. Completion of Construction. Subject to any delays pursuant Developer shall complete to Section 503, the Developer construction of all of the is to use due diligence to Developer Improvements. complete the project within 12/04/91 ATTACHME14T NO. 5 7100u/2460/050 Page 2 of 3 twelve (12) months after commencement of the Developer Improvements; however, provided the Developer may request up to three (3) one (1) month extensions to be granted by the Executive Director of the Redevelopment Agency. Approval for such three extensions (but no other extensions) is not to be unreasonably withheld; provided that, notwithstanding the foregoing, construction shall be completed not later than eighteen (18) months after the earlier of (i) the commencement of the Developer Improvements or (ii) the time established in this Agreement for the commencement of construction of the Developer Improvements. IV. OPERATIONS PHASE 13. Disbursement of Agency Loan Upon the earlier of the The Agency shall disburse issuance of a temporary or the Agency Loan. final certificate of occupancy by the City for all of the Developer Improvements. 14. Disbursement of Agency Grant. The Agency shall disburse the Agency Grant. 15. Submission of Age and Income Certification Upon the first through fifth anniversaries of the,earlier of the issuance of the temporary or final certificate of occupancy. Immediately prior to each anniversary of the occupancy — of an Affordable Unit. 12/04/91 ATTACHMENT NO. 5 7100u/2460/050 Page 3 of 3 kJ ATTACHMENT N0. 6 SCOPE OF D PME The Developer is to construct a 164 unit senior citizen apartment complex with ancillary support services. The project will utilize the existing foundations and parking structure walls and generally the same site layout that currently remains as a result of a 1986 fire. The project will be for adults 55 years or over with units located in a security building with a total of 82 enclosed parking spaces which includes two (2) van parking spaces. Access to the complex and the on -site parking is via Florida Street. The four (4) story building will be provided with three (3) elevators for easy access to each level with on -site support services located throughout the building. The ancillary support services will include, a craft room, television/movie room, library, coffee bar, sewing/bingo room, piano lounge and a laundry room and the units range in size from a 576 square foot one (1) bedroom unit to an 864 square foot two (2) bedroom unit. The unit amenities include full kitchens, walk in closets, emergency pull down cords, stoves with automatic shut off sensors, showers with anti --scalding controls and handicapped hardware. The project proposal also will include, as required by the specific plan, a transit facility along Main Street for the mass transit of the residents of the specific plan area. This facility will include a bus stop and turn out area with two (2) covered shelters. The site plan shall be amended to indicate the location of the covered shelters. In addition to the transit facility, the project will be provided with a van pool service for the senior citizens. The van is a sixteen passenger vehicle which is provided for transport to local shopping areas. The project will also share a twenty-five passenger van with the applicant's newly constructed senior project in Garden Grove. This van will be utilized for scheduled special events. The type and configuration of the 48 affordable units will be as follows: The Developer agrees to make available, restrict occupancy to, and rent thirty-two (32) of the units to "Very Low Income Households" and sixteen (16) additional units to "Persons and Families of Low' and Moderate Income" (for a total of forty-eight (48) restricted units), all at an "Affordable Rent" (the "Affordable Units"). The location of the Affordable Units shall be dispersed throughout the Developer Improvements and shall be reasonable acceptable to the Agency. The distribution of sizes (in terms of number of bedrooms) of the Affordable Units shall be in the same proportion as the distribution of sizes of all units within the Developer Improvements. There shall be not less than six (6) and not more than ten (10) Affordable Units on each floor of the Developer Improvements. Those Affordable Units located on the first floor of the Developer Improvements shall each be not less than Five Hundred Seventy (570) square feet. ATTACHMENT NO. 6 ATTACHMENT NO. 7 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) } } [Space above for recorder.] CERTIFICATE OF COMPLETION FOR CONSTRUCTION AND DEVELOPMENT RECITALS A. An "Affordable Housing Agreement" was entered into by and between -the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency" and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer") dated as of NoreMj2pr 1 a. 122.L a copy of which is on file with the Agency as a public record at its offices at 2000 Main Street, Huntington Beach, California (the "Agreement"), and is incorporated herein by reference. B. As referenced in the Agreement, the Agency shall furnish the Developer with a Certificate of Completion upon completion of the "Developer Improvements" pursuant to the Agreement, which certificate shall be in such ford as to permit it to be recorded in the Recorder's Office of Orange County. C. Such certificate shall be conclusive determination of satisfactory completion of the construction required by the Agreement. D. The Agency has conclusively determined that the construction of the Developer Improvements on the real property described in Exhibit A attached hereto and incorporated herein (the "Site") as required by the Agreement has been satisfactorily completed. NOW THEREFORE, 12/04/91 ATTACHMENT NO. 7 7100u/2460/050 Page 1 of 2 ATTACIDIENT NO. 8 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) ) ) ) [Space above for recorder.] This Agreement is recorded at the request and for the benefit of the Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF Htn4TINGTON BEACH DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS THIS DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS (the "Declaration") is entered into this day of , 199_, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency"), and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer" RECITALS A. The Developer is fee owner of record of that certain real property (the "Site") located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". The Site is the subject of an Affordable Housing Agreement (the "Agreement") for the development, operation and maintenance of a senior citizen housing project. B. The Agreement provides for the execution and recordation of this document. Except as otherwise expressly provided in this Declaration, all terms shall have the same meanings as set forth in the Agreement. NOW, THEREFORE, THE AGENCY AND THE DEVELOPER AGREE AS FOLLOWS: 12/04/91 ATTACHMENT NO. 8 7100u/2460/050 Page 1 of 18 1. Affordable Housing A. Number of Units. The Developer covenants and agrees to develop a total of one hundred sixty-four (164) multifamily housing units on the Site in conformance with the Scope of Development (Attachment No. 6 to the Agreement). The Developer agrees to make available, restrict occupancy to, and rent thirty-two (32) of the units to "Very Low Income Households" and sixteen (16) additional units to "Persons and Families of Low- and Moderate Income," all at an "Affordable Rent" (the "Affordable Units"). However, the Developer shall be obligated to make available, restrict occupancy to, and rent sixteen (16) of the units to "Very Low Income Households," sixteen (16) additional units to "Lower Income Households," and sixteen (16) additional units to "persons and families of Low - and Moderate Income," in lieu of the requirements of the preceding sentence, for the duration of the "Affordability Period" (as defined in paragraph B of this Section 1), upon the occurrence of all three of the following events: (a) the "Qualified Development Period" (as defined in the Regulatory Agreement and Declaration of Restrictive Covenants by and among the City, Developer and Dai-Ichi Kanqvo Bank of California, dated as ofAPgcember 1. 1991) shall have elapsed; and (b) the "Section 8 Program" (as defined in paragraph G of this Section 1) or a reasonably similar successor or replacement federal rental subsidy or voucher program no longer exists; and (c) neither the City nor the Agency has instituted a rental subsidy or voucher program designed to subsidize the rents of Very Low Income Households. The location of the Affordable Units shall be dispersed throughout the Developer Improvements and shall be reasonably acceptable to the Agency. The distribution of sizes (in terms of number of bedrooms) of the Affordable Units shall be in the same proportion as the distribution of sizes of all units within the Developer Improvements. There shall be not less than six (6) and not more than ten (10) Affordable Units on each floor of the Developer Improvements. Those Affordable Units located on the first floor of the Developer Improvements shall each be not less than Five hundred Seventy (570) square feet. "Very Low Income Household" shall mean a household earning not greater than fifty percent (50%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety Code Section 50105. "Lower Income Household" shall mean a household earning not greater than eighty percent (60%) of Orange County median income, as determined by the United States Department of Housing and Urban development, as set forth in Health and Safety Code Section 50079.5. 12/04/91 ATTACHMENT NO. 8 7100u/2460/050 Page 2 of 18 %4.� k..r other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant leasing an Affordable Unit is a Very Low Income Household, Lower Income Household, or a Person or Family of Low- and Moderate -Income, whichever is applicable, and meets the eligibility requirements established for the Affordable Unit. The Developer shall obtain an income certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency: (1) obtain two (2) paycheck stubs from the tenant's two (2) most recent pay periods. (2) obtain a true copy of an income tax return from the tenant for the most recent tax year in which a return was filed. (3) obtain an income verification certification from the employer of the tenant. (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Very Low Income Household, Lower usehold or Person or Family of Low- and Moderate -Income or shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no longer qualified as a Very Low Income Household, Lower_ Income Household, or Person or Family of Low - and Moderate -Income, the next available unit of comparable size must be rented to (or held vacant and available for immediate occupancy by) a Very Low Income Household, Lower Income Households or Person or Family of Low- and Moderate -Income, whichever is applicable. Such new tenant shall then constitute a Very Low Income Household, Lower Income Household or Person or Family of Low- and Moderate -Income for the purposes of this Section 1, and until such next available unit is rented to such 12/04/91 ATTACHMENT NO. 8 7100u/2460/050 Page 4 of 18 tenant, the former Very Low Income Household, Lower Income Household, or Person or Family of Low- and toderate-Income who has ceased to qualify as such shall be deemed to continue to be a Very Low Income Household, Lower Income Household or Person or Family of Low- and Moderate -Income for the purposes of this Section 1. In addition, the Developer shall annually submit to the Agency a certification of the number of Affordable Units actually occupied by Very Low Income Households, Lower Income - Households, -and Persons or Families of Low- and Moderate -Income, and the ages of all tenants residing in the Developer Improvements, in the form of Attachment No. 10 to the Agreement or such other form as may be provided by the Agency. E. Determination of Affordable Rent for the Affordable Units. Each Affordable Unit shall be rented at an 'Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the Affordable Units required to be rented to Very Low Income Households shall be established at one -twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of Orange County median income. The maximum monthly rental amount for the Affordable Units required to be rented to Lower Income Households, if any, shall be established at one -twelfth (1/12th) of thirty percent (30%) of sixty percent (607.) of Orange County median income for tenants earning more than fifty percent (50%) and not more than sixty percent (607.) of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) of such tenant's annual income for tenant earning more than sixty percent (60%) and not more than eighty percent (80%) of the Orange County median income. The maximum monthly rental amount for the sixteen (16) Affordable Units required to be rented to Persons of Low- and Moderate Income shall be established at one -twelfth (1/12) of thirty percent (30%) of one hundred ten percent (110%) of Orange County median income for tenants earning more than eighty percent (80%) and not more than one hundred ten percent (110%) of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) of such tenants' annual income for tenants earning more than one hundred ten percent (110%) and not more than one hundred twenty percent (120%) of Orange County median income. The maximum monthly rental amount for each Affordable Unit rented to Persons of Low- and Moderate- Income shall be based upon the actual household size of the persons occupying the Affordable Unit. The maximum monthly rental amount for each Affordable Unit to be rented to Very Low Income Households and Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Very Low Income Household which is a "Section 8 Recipient", as defined in Paragraph G hereof ("Section 8 12/04/91 ATTACHMENT NO. 8 7100u/2460/050 Page 5 of 18 �r �r ATTEST: Agency Secretary APPROVED AS TO FORM: Stradling, Yocca, Carlson & Rauth, Agency Special Counsel City Attorney, Agency General Counsel Dated: 12/04/91 7100u/2460/050 FIVE POINTS SENIORS, L.P., a California invited partnership By: Michelson Family Trust, dated as of December 12, 1984, as amended March 1, 1985 its general partner By: David Michelson, Trustee A ATTACHMENT NO. 8 Page 18 of 18 ATTACHMENT NO. 10 INCOME COMPI.TrATION &ND CERTIFICATION NOTE TO APARTMENT OWNER: This form is designed to assist you in computing Annual Income in accordance with the method set forth in the Department of Housing and Urban Development ('NUD') Regulations (24 CFR 813). You should make certain that this form is at all times up to date with the HUD Regulations. Re jAddress of Apartment Building] I We, the undersigned state that Uwe have read and answered fully. frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the above apartment project. Listed below are the names of all persons who intend to reside in the unit: 1 2. 3. 4. S. Name of Members Relationship of the to Head of Social Security Place of -Household H ChQW- A= Numbe Employment HEAD SPOUSE 6. The total anticipated income, calculated in accordance with the provisions of this paragraph 6. of all ns over the age of 18 y�eass listed above for the 12-month period beginning the date that Uwe p� move into a unit is $ Included in the total anticipated income listed above are: (a) all wages and salaries, ova M* a pay. commissions. foes, tips and bonuses and other compensation for personal services. before payroll deductions; (b) the net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for busis msa expansion or amortization of capital Webtedom or any allowam for depreciation of capital assets); (c) interest and dividends (mcluding iricome from assets excluded below); ATTACHMENT NO. 10 Page 1 of 9 (d) the full amount of periodic payments received from social security. annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts, including any lump sum payment for the delayed start of a periodic payment; (e) payments in lieu of earnings, such as unemployment and. disability compensation, workmen's compensation and severance pay; (f) the maximum amount of public assistance available to the above persons other than the amount of any assistance specifically designated for shelter and utilities; (g) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (h) nit regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the bead of the household or spouse; and W any earned income tax credit to the extent that it exceeds income tax liability. Excluded from such anticipated income are: (a) casual, sporadic or irregular gifts; (b) amounts which art specifically for or in reimbursetimt of medical expenses; (c) lump sum additions to family assets, such as inheritances, insurance payments (including payments under bealth and accident insurance and workmen's compensation). capital gains and settlement for personal or property losses; (d) amounts of educational scholarships paid directly to the student or the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment. Any amounts of such scbolarslzips or payments to veterans not used for the above purposes are to be included in income; (e) special pay to a household member who is away fioom home and exposed to hostile fire; (f) relocation payments under Title U of the Uniform Relocation Assistance and Real Property Acquisition Policies Law of 1970; (g) foster child care payments; (h) the value of coupon allotments for the purchase of food pursuant to the Food Stamp Law of 1977; (i) payments to volunteers under the Domestic Volunteer Saviae Law of 1973; 0) payments received under the Alaska Native Claims SettlementLlw; (k) income derived from certain submarginal land of the United States that is held in trust for certain In fin tribes; ATTACHMENT NO. 10 Page 2 of 9 kwo (1) payments or allowances made under the Department of Health and Human Services' Low -Income Home Energy Assistance Program; (m) payments received from the Job Training Parmership Law; _ (n) income derived from the disposition of funds of the Grand River Band of Ottawa Indians; and (o) the first S2,000.00 of per capita shares received from judgment funds awarded by the Indian Mims Commission or the Court of Claims. 7. Do the persons whose income or contributions are included in item 6 about: (a) have savings, stocks, bonds, equity in real property or other form of caFital investment (excluding the values of necessary items of personal property such as furnia= and automobiles and inheres in Indian trust land)Yes ^ No. _ or (b) have they disposed of any assets (other than at a foreclosure or ban]cruptcy We) during the last two years at less than fair market value?Yes No . (c) If the answer to (a) or (b) above is yes, does the combined total value of all such assets owned or disposed of by all such persons total more than S5,000? Yes No „ (d) If the answer to (c) above is yes, state: (1) the amount of income expected to be derived fmm such assets in the 12- month period beginning oa the date of initial occupancy in the unit that you propose to rent: $ . and (2) the amount of such income, if any, that was included in item 6 above: S S. (a) Are all of the individuals who propose to reside in the unit full-time students*?Yes No------., *A full-time student is an individual enrolled as a full-time student during each of 5 calendar mouths during the calendar year in which occupancy of the unit begins at an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full-time course of institutional or farm training tinder the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof. (b) If the answer to 8(a) is yes, is at least l of the proposed oocupaats of the unit a husband and wife entitled to file a joint federal income tax return? Yes _No . 9. Neither rriyself nor any other occupant of the unit Uwe propose to sent is the owner of the rental housing pro�'ect in which the tunic is located (hereinafter the O "wner"), has any family relatiotuhtp to the Owner, or owns directly or indirectly any interest in the Owner. For purposes of this paragraph. indirect ownership by ATTACHMENT NO. 10 Page 3 of 9 `.) an individual shall mean ownership by a family member. ownership by a corporation, partnership, estate or trust in proportion to the ownership or beneficial interest in such corporation, partnership, estate or trustee held by the individual or a family member. and ownership, direct or indirect. by a parmer of the individual. 10.'Ihis certificate is made with the knowledge that it will be relied upon by the Owner to determine maximum income for eligibility to occupy the unit; and I/we declare that all information set forth herein is true, cornea and complete and based upon information I/we deem reliable and that the statement of total anticipated income contained in paragraph 6 is reasonable and based upon such investigation as the undersigned deemed necessary. 11. I/we will assist the Owner in obtaining any information or documents required to verify the statements made herein, including either an income verification from my/our�t employer(s) or copies of foderal tax returns for the immediately preceding year. 12. i/we acknowledge that I/we have been advised that the malting of any misrepresentation or misstatement in this declaration will constitute a material breach of my/our agreement with the Owner to lease the unit and will entitle the Owner to prevent or terminate mylour occupancy of the unit by institution of an action for ejection or other appropriate prooee&gs. Uwe declare under penalty of perjury that the foregoing is true and correct. Executed this day of —in the City of — . California. Applicant [Signature of all pexsons over the age of 18 years listed in number 2 above required] FOR CONIPLEIlON BY APARTMENT OWNER ONLY: 1. calculation of eligible income: a. Enter amount entered for entire bousehold in 6 above: $ b.(I) If answer to 7(c) above is yes. enter the total amount entered in 7(dxl), subtract from that f gu re the amount entered in 7(d)(2) and enter the remaining balance {g, _ 1; (2) Multiply the amount entered in 7(c) times the current passbook savings rate to determine what the total annual earnings on the amount in 7(c) would be if invested in passbook ATTACHMENT NO. IO UMMA d Of 9 14W./ savings ($_ }. subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance ($ l; (3) Enter at right the grater of the amount calculated under (1) or (2) above: S ; c.TOTAL ELIGIBLE LNCOME (Line La plus line I.b(3)): $ 2. The amount entered in I.c: Qualifies the applicant(s) as a Lower Income Tenant(s). Does not qualify the applicant(s) as a Lower Income Tcaant(s). 3. Number of apartment unit assigned: Bedroom Size;--..nt S 4. This apartment unit [was/was not) last occupied for a period of 31 consecutive days by pr_rsons whose aggregate anticipated annual income as certified in the above manner upon their wmal o=pancy of the apartment wait qualified them as Lower Income Tenants. S. Method used to verify applicant(s) income: Employer income verification. Copies of tax returns. ATTACHMENT NO. 10 Page 5 of 9 INCOME VERMCAMN (FOR EMPLOYED PERSONS) The undersigned employee has applied for a rental unit located in a project fmaneed under the City of Huntington Beach Multifamily Housing Program for persons of low and moderate income. Every income statement of a prospective tenant mast be stringently verified. Pease indicate below the employee's current annual income from wages, overtime, bonuses. commissions or any other form of compensation received on a regular basis. Annual wages Overtime Bonuses Commissions Total cmrnt income i hereby certify that the statements above are true and complete to the best of my imowledge. Signature M Tale I hereby grant you permission to disclose my income to in order that they may determine my income eligibility for rental of are apartment located in their project which has been financed under the City of Huntington Beach Multifamily Housing Program. Signature Date Please send to: ATTACHMENT NO. LQ Page 6 of 9 INCOME VERIFICATION (for self-employed persons) I hereby attach copies of my individual federal and state income tax returns for the immediately preceding calendar year and certify that the information shown in such income tax returns is true and complete to the best of my knowledge. Signature Date ATTACBMENT NO. 10 Page 7 of 9 LIM 441) EXHIBIT D Period Covered (Annual or monthly) t CERTMCATE OF CONTMANG PROGRAM COMPLIANCE CITY OF HUN"MGTON BEACH (FIVE POINTS SENIORS PROJECT) The undersigned, Five Points Seniors, a general law partnership (the "Developee') . has read and is thoroughly familiar with the provisions of the various Developer Loan Documents associated with the Developer's participation in the City of Huntington Beach's (the 'Issuer") 1'4uldfamily Housing Program, such documents including: 1. The Regulatory Agreement dated as of October _.1991 among the Developer. the Issuer and (the Trustee) ; 2. The Loan Agreement dated as of October- 1991 among the Developer, the Issuer and the Truster; and 3. The Developer Note dated as of October —.1991 from the Developer to the Issuer tnd endorsed to the Trustee t+epnesenting the Developer's obligation to repay its Developer Loan. 4. As of the date of this Certificate, the following percentages of completed residential emits in the Development (i) are oompied by Very Low Income Tenants (as such tam is defined in 1be Regulatory Agreement) or (ii) , are currently vacant and being held available for such occupancy and have been so held continuously since the date a Very Low Income Tenant vacated such unit; as indicated: Total Units Completed: Number of Units Occupied by Very Low Income Tenants: Ptrcent of Tots] Unit, Occupied by Very Low Income Tenants: ATTACHMENT NO. 14 Page 8 of 9 Type of Units Occupied by Very Low Income Tenants: Studio Apartments One Bedroom Apartments Two Bedroom Apartments Unit Nos. Rent Charged Unit Nos. Rent Charged Unit Nos. Rent Charged Held vaunt for occupancy continuously since last occupied by Very Low income Tenant percentUnit Nos. Vacant Units percentUnit Nos. S. No Determination of Taxability (as defined in the Loan Agreement) has oxurnci and, to the Developer's Imowledge, no event has occumd which, with the passage of time, would cause a Determination of Taxability to occur for if such an event has occtured explain below the event and the steps being taken to remedy such event% The undersigned hereby certifies that the Developer is not in default under any of the tears sand provisions of the above documents. FIVE PONn SENIORS By: ATTACHMENT NO. 10 Page 9 of 9 �J ATTACHMENT NO. 12 MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT RECORDING REQUESTED BY AND ) WHEN RECORDED RETURN TO: ) Redevelopment Agency of the ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) Attention: Executive Director l (pace above for Recorder's use.) MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT This MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT ("Memorandum"), dated for identification purposes as of November 18 1991, is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEECH, a public body corporate and politic ("Agency") and FIVE POINTS, SENIORS, L.P., a California limited partnership ("Developer"). w� 1. Affordable Housing Agreement. Agency and Developer have executed an Affordable Housing Agreement (the "Agreement") dated for identification purposes as of.-TTnyF%Mh0r? R^ 1991, which concerns and is binding upon the current and future owners of that certain real property located in the City of Huntington Beach, County of Orange, State of California, more fully described in the Exhibit "A" attached hereto and incorporated herein by this reference. All of the terms, conditions, provisions and covenants of the Agreement are incorporated in this Memorandum by reference as though written out at length herein, and the Agreement and this Memorandum shall be deemed to constitute a single instrument or document. 2. Purpose of Memorandum. This Memorandum is prepared for recordation purposes only, and in no way modifies the terms, conditions, provisions and covenants of the Agreement. In the event of any inconsistency between the terms, conditions, provisions and covenants of this Memorandum and the Agreement, the terms, conditions, provisions and covenants of the Agreement shall prevail. 12/04/91 ATTACHMENT NO. 12 7100u/2460/050 Page 1 of 2 This PLEDGE OF LOAN AND GRANT PROCEEDS ("Agreement"), dated as of December 1, 1991, executed by Five Points Seniors, L.P., a California limited partnership ("Pledgor"), in favor of Wells Fargo Bank, N.A., a national banking association ("Lender") is entered into in connection with that certain Reimbursement Agreement of even date herewith between Pledgor and Lender (the "Reimbursement Agreement"). Capitalized terms used and not otherwise defined herein shall have the meanings set forth for them in the Reimbursement Agreement. In consideration of the issuance by Lender of a _ letter of credit in the face amount of $9,890,411.00 and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pledgor hereby agrees as hereinafter provided. 1. Assignment. Pledgor hereby pledges and grants to Lender a security interest, as security for the Secured Obligations (as defined below), in and to all of Pledgor's right, title and interest, whether now existing or hereafter arising, in and to the following (collectively, the "Collateral"): (a) Any and all proceeds paid or payable to Pledgor pursuant to or in connection with that certain Affordable Housing Agreement ("Affordable Housing Agreement") entered into by and between the Redevelopment Agency of the City of Huntington Beach (the "Agency") and Pledgor, including without limitation the proceeds of the loan to be made by the Agency (the "Agency Loan") in the amount of $250,000.00 and the grants (the "Agency Grants") in the cumulative amount of $500,000.00 (collectively, the "Proceeds"); (b) All present and future accounts, general intan- gibles, chattel paper, contract rights, deposit accounts, instruments and documents (as those terms are defined in the California Commercial Code) now or hereafter relating or arising with respect to the Proceeds and/or the use thereof, including without limitation: (i) all rights to the payment of money, including escrow proceeds arising out of the sale or other disposition of all or any portion of the Proceeds; (ii) any and all agreements and other documents relating to the Proceeds; (iii) all reserves, deferred payments, deposits, refunds, cost savings, bonds, insurance policies and payments of any kind relating to the Proceeds; and (iv) all supple- ments, Modifications and amendments to any of the foregoing; and 41X\A055024PAYC 120391 -1- (c) All cash and noncash proceeds and products of any of the foregoing, including without limitation (i) all interest and dividends earned on the Proceeds, (ii) all monies and other tangible or intangible property received upon a sale or other disposition of any of the Proceeds, and (iii) all rights to payment in connecticn with any cause of action with respect to any Proceeds, all of which proceeds and products shall, if received by Pledgor from time to time (except as otherwise expressly provided in the Loan Documents), be immediately delivered by Pledgor to Lender to be held and/or applied by Lender in accordance with this Agreement. The Affordable Housing Agreement, together with all contracts and other documents now or hereafter included in the Collateral shall be collectively referred to herein as the "Collateral Documents." 2. Obligations Secured. The pledge and security interest granted pursuant to this Agreement secures the prompt payment and performance of each of the following (collectively, the "Secured Obligations"): 2.1 Each of Pledgor's obligations to Lender under the Reimbursement Agreement and all other Loan Documents. 2.2 Each of Pledgor's obligations hereunder. 2.3 All other obligations owing to Lender, but only to the extent that any such obligation is described or referred to in a document, executed by Pledgor at Lender's request, which states that such obligation is secured hereby. 2.4 Any and all amendments, extensions and other modifications of any of the foregoing, including without liri-- tation amendments, extensions and other modifications that are evidenced by new or additional documents or that change the rate of interest on any Secured Obligation. 3. Representations and -Warranties. Pledgor hereby represents and warrants to Lender that: 3.1 Pledgor is the legal and equitable owner of the Collateral, free and clear of all liens, encumbrances and other rights and claims of other persons (other than Lender's interests hereunder). 3.2 Pledgor's principal place of business and chief executive and accounting offices are located at 19800 MacArthur Boulevard, Suite 680, Irvine, California 92715. 4\K\A055024PAYG 120891 - 2 - 3.3 To the best knowledge of Pledgor, except as otherwise disclosed to Lender in writing prior to the execution of this Agreement, each of the presently existing Collateral Documents is genuine, valid and enforceable against all appli- cable parties in accordance with its terms (except to the extent that enforceability is limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally). 4. Covenants of Pledgor. 4.1 Pledgor shall keep the Collateral free of all liens, encumbrances and other claims, shall diligently enforce its rights under all Collateral Documents, and shall take all actions which are reasonably necessary (and/or reasonably required by Lender) to maintain, preserve and protect the Collateral and Lender's interests with respect thereto. 4.2 Pledgor shall not, without Lender's prior written consent, which may be withheld in Lender's absolute discretion, sell, transfer, encumber or otherwise dispose of any Collateral or any interest therein (or contract to do any of the foregoing). 4.3 Pledgor shall not, without Lender's prior written consent: (a) amend, supplement, terminate or otherwise modify any Collateral Document; (b) release, relinquish or waive any right, or grant any approval or consent, with respect to any Collateral Document; (c) enter into any new agreement with respect to any Collateral; or (d) take any other action with respect to any Collateral which is inconsistent with this Agreement or which could impair Lender's interests hereunder. Any such termination, modification, waiver, approval or other action taken without such prior consent shall, at Lender's option, be void. 4.4 Pledgor shall, at Pledgor's sole expense, defend all actions, proceedings and other claims affecting the Collat- eral, including without limitation actions, proceedings and claims challenging Pledgor's title to the Collateral or the validity or priority of Lender's rights hereunder, and shall reimburse Lender on demand for all costs and expenses, includ- ing reasonable attorneys' fees, incurred by Lender in any such action or proceeding in which Lender may appear. 4.5 Pledgor shall keep accurate and complete records with respect to the Collateral and shall, if required by Lender from time to time, promptly deliver reports to Lender with respect to the Collateral in fora and substance reasonably satisfactory to Lender. 4\K\A055024p.Lrt 120891 - 3 - 4.6 Pledgor shall diligently comply with all laws relating to the Collateral, and with the terms of all Collat- eral Documents. without limiting the generality of the fore- going, Pledgor shall promptly pay all taxes, assessments, license fees and other public and private charges levied or assessed against any Collateral. 4.7 As soon as practicable, and in any event within 3 days of Pledgor's learning thereof, Pledgor shall notify Lender of: (a) Any default by Pledgor or any other Person under any Collateral Document, or the giving or receipt by Pledgor of any notice of default under any such document; (b) Any attachment or other legal process levied against any of the Collateral; (c) Any event or other circumstance which could materially and adversely affect the value of any Collateral or Lender's rights or remedies with respect thereto; (d) Any change in Pledgor's principal place of business and chief executive and accounting offices from the location set forth in Article 3; or (e) The removal of any records relating to the Collateral from the location set forth in Article 3. 4.8 At any time and from time to time, upon demand by Lender, Pledgor shall execute, deliver, acknowledge, file and/or record any notice, financing statement, continuation statement, assignment or other document or agreement that Lender reasonably deems necessary or advisable to create, preserve, continue or perfect any security interest intended to be created hereunder or to otherwise enable Lender to enforce its rights hereunder. 5. Collateral Paid Directly to Lender, Pledgor agrees that the Agency shall be required to disburse the proceeds of the Agency Loan and the Agency Grants directly to Lender for deposit into the Interest Account: provided, however, that until the occurrence of an Event of Default (as defined below), any proceeds constituting Agency Grants may be paid by Agency to Pledgor. 6. Performance of Pledaor's_Obligat ions by Lender. In the event that Pledgor fails to perform any obligation set forth herein, Lender may, but shall not be obligated to, perform the same, and the cost thereof shall be payable by Pledgor to Lender on demand and shall bear interest at the 4\K\A055024P.LTC 120891 " 4 - IN �.o Standard Rate of interest set forth in the Reimbursement Agreement. 7. Events of Default. The occurrence of any of the following shall constitute an "Event of Default" hereunder: (a) The occurrence of any Event of Default under the Reimbursement Agreement. (b) Default in any obligation secured hereby from time to time (subject to any applicable cure period). (c) The occurrence of any default (subject to applicable cure periods) by Pledgor under the Affordable Housing Agreement. (d) Any statement, representation or warranty made by Pledgor herein or in any document secured hereby proves to have been false or inaccurate in any riaterial respect when made. 8. Remedies. While any Event of Default remains uncured, Lender shall have all of the following rights and remedies, each of which may be exercised with or without further notice to Pledgor: (a) To foreclose Lender's security interests in any and/or all Collateral by any available judicial procedure or without judicial process; (b) To exercise all rights all rights and remedies available upon the occurrence of an Event of Default under the Reimbursement Agreement or any other Loan Document, including without limitation the right to declare any and/or all Secured Obligations immediately due and payable; (c) To appropriate any and/or all of the Collateral and apply it against any Secured Obligations then due, in such order of application as Lender chooses in its absolute discretion; (d) To collect interest, dividends, principal and all other sums payable upon or on account of the Collateral; (e) To notify any person obligated with respect to any Collateral that the same has been assigned to Lender and that all payments thereon are to be made to Lender; (f) To renew, extend, amend or otherwise modify any Collateral; to accelerate, release, settle, compromise, collect or liquidate any Collateral; to enter into agreements with respect to any Collateral; to give consents and waivers with 4\KW55024p.LYC 120891 - 5 MW respect to any Collateral; tc enforce payment and prosecute any action or proceeding with respect to any Collateral; and to otherwise exercise rights and remedies and act with respect to any Collateral as if it were the owner thereof; (g) To take possession of the Collateral with or without judicial process, and to enter any premises where any Collateral may be located for the purpose of taking possession of the Collateral; (h) To endorse, in the name of Pledgor or otherwise, any checks, notes and other evidences of payment relating to the Collateral, and/or to transfer any Collateral into the name of Lender or its nominee(s); (i) To liquidate any time deposit pledged to Lender hereunder prior to maturity and apply the proceeds against Secured obligations then due as described above, notwithstand- ing the fact that such liquidation may give rise to federal penalties for early withdrawal of funds; and (j) To exercise any and all other rights and remedies that Lender may have by law or under any applicable agreement, including without limitation all rights and remedies of a secured party under any applicable commercial code. 8.1 Application of Proceeds. The net cash proceeds of any collection, liquidation, sale or other disposition of Collateral by Lender shall be applied first to expenses incurred by Lender in connection with such collection, liqui- dation or other disposition (including without limitation expenses of retaking, holding, storing, processing, preparing for sale and selling, and reasonable attorneys' fees), and then to other Secured Obligations then due, application as to particular Secured Obligations or against principal or interest to be in Lender's absolute discretion. However, notwithstanding anything to the contrary contained herein, so long as no Event of Default has occurred, Lender shall consent to the disbursement of the proceeds of the Agency Loan from the Interest Account for the purpose of reimbursing Lender for amounts due to Lender as the result of "A Drawings" on the Letter of Credit, or for such other purposes as Lender may approve in its sole and absolute discretion. 8.2 Cumulatiye_Reredies. Lender's rights and remedies hereunder and under all other Loan Documents are cumulative and in addition to all rights and remedies provided by law or otherwise from time to time and each such right or remedy may be exercised concurrently or independently and as often as Lender deems advisable. G AK\A055024P AYC 120391 - 6 - t1w) 8.3 No Implied Waivers. No waiver of any default shall be implied from any omission by Lender to take action on account of such default if such default persists or is repeated. No waiver of any default shall affect any default other than the default expressly waived, and any such waiver shall be operative only for the time and to the extent stated. No waiver of any provision of any Loan Document shall be construed as a waiver of any subsequent breach of the same provision. Lender's consent to or approval of any act by Pledgor requiring further consent or approval shall not be deemed to waive or render unnecessary Lender's consent to or approval of any subsequent act. Failure or discontinuance of Lender, at any time or from time to time, to collect the payments under any Collateral Document shall not in any nanner affect the subsequent enforcement by Lender of its right, power and authority to collect them. 9. Actions by, Lender Following Default. While any Event of Default remains uncured, Lender shall have the right (but no obligation) to take such actions (in its name or in Pledgor's name) as Lender reasonably deems appropriate to cure any default by Pledgor under any Collateral Document or to otherwise protect the rights and interests of Pledgor and/or Lender with respect thereto. Lender shall incur no liability as a result of any such action if such action is taken in good - faith in accordance with the foregoing, and Pledgor shall defend, indemnify and hold Lender harmless from and against all claims, demands, causes of action, liabilities, losses, costs and expenses (including costs of suit and reasonable attorneys' fees) arising from or in connection with any such good faith action. 10. Eacilitation of Rights and Remedies. To facilitate Lender's exercise of the rights and remedies set forth herein, Pledgor authorizes Lender to exercise the following powers: (a) To enter any premises where books or records relating to the Collateral may be located, at reasonable times and following reasonable notice, for the purpose of inspecting, copying and/or removing any documents, files and records relat- ing to the Collateral (and any cabinets or other receptacles containing the same), and to use such supplies and space of Pledgor at its places of business as may be reasonably neces- sary to administer and control the Collateral or the handling of collections and realizations thereon; (b) To give notices to and to communicate with Agency with respect to the Collateral; (c) To take all steps and to institute (in Lender's name or Pledgor's name) all actions and proceedings deemed 4\K\AO55024PAYC 120391 - i - �.d necessary or advisable by Lender to effect the collection or realization upon any of the Collateral; and (d) To prepare, sign, file and/or record, for Pledgor in Pledgor's name, financing statements, applications for registration and similar papers. 11. Attorney -in -Fact. Pledgor hereby appoints Lender as its true and lawful attorney -in -fact for the purposes (a) of carrying out the provisions of this Agreement; (b) of taking all actions and executing all documents that Lender reasonably deems necessary or advisable to accomplish the purposes of this Agreement and/or to protect Lender's interests hereunder; and (c) while any Event of Default remains uncured, of enforcing Pledgor's rights and/or performing Pledgor's obligations (in Lender's name or in Pledgor's name) under any Collateral Document. In furtherance of clause (c), Pledgor shall deliver -• to Lender, upon Lender's demand while any Event of Default remains uncured, all documents which Lender reasonably requires to permit Lender's succession to Pledgor's interests, and to facilitate the enforcement by Lender of Pledgor's rights, with respect to any Collateral Document. The power of attorney granted hereunder is coupled with an interest and is irrevocable. 12. Cash Collateral Account. Any money received by Lender with respect to any Collateral may, at Lender's option, be retained in the Interest Account or in a non -interest - bearing cash collateral account, and the sane shall constitute Collateral for all purposes hereunder. 13. Specific Assignments-an!ft-Coasents. Upon Lender's demand from time to time, (a) Pledgor shall execute and deliver to Lender an assignment of contract(s), in form and substance satisfactory to Lender, which specifically -describes one or more of the Collateral Documents and (b) Pledgor shall use its best efforts to obtain and deliver to Lender a consent to assignment, in form and substance satisfactory to Lender, pursuant to which any party other than Pledgor to any such Collateral Document consents to such assignment and agrees to recognize Lender as Pledgor's successor in the event that Lender succeeds to Pledgor's interests, together with any and all further documents may be necessary or appropriate to further evidence or perfect the pledge given hereby. 14. Lender's Cos s and Expenses. Pledgor shall reimburse Lender within 5 days following written demand for all costs and expenses (including reasonable attorneys' fees) incurred by Lender in connection with the enforcement of this Agreement, regardless of whether any suit is filed, including without limitation all costs and expenses incurred in retaking, holding, storing, processing, preparing for sale and selling or 4 \K\A O55024P A V C 120891 - 3 - �i otherwise disposing of any Collateral. Such reimbursement obligations shall bear interest from the date of demand at the Standard Rate of interest set forth in the Reimbursement Agreement. 15. Obligations of amender With Respect to Collateral. Neither Lender's acceptance of the security interests granted hereunder nor any exercise by Lender of its rights and remedies hereunder shall be deemed to to an assumption by Lender of any obligation or liability of Pledgor under the terms of any Collateral Document, and Pledgor shall defend, indemnify and hold Lender harmless from and against all claims, demands, causes of action, liabilities, losses, costs and expenses (including costs of suit and reasonable attorneys' fees) arising from or in connection with any such obligation or liability. Lender's obligations with respect to Collateral in its possessicn shall be limited to the duty to exercise reason -- able care in the custody and preservation of such Collateral; provided, however, that Lender shall have no duty to take any steps to preserve the rights of Pledgor against other persons, or to initiate any action to protect against any decline in the market value of any Collateral. Lender shall not be obligated to take any action requested by Pledgor with respect to any Collateral unless such request is in writing and Lender deter- mines that the requested action(s) could not impair the value - of the applicable Collateral as security for the Secured obligations or otherwise impair Lender's interests hereunder. Lender may deliver any or all Collateral to Pledgor at any time, in which event the receipt thereof by Pledgor shall constitute a full acquittance of Lender with respect to the Collateral so delivered and Lender shall thereupon be dis- charged of all liability and responsibility with respect to such Collateral. Upon any transfer by Lender of any or all of the Secured Obligations, Lender may transfer any or all of the Collateral and shall thereupon be fully discharged of liability and responsibility with respect to the Secured obligations and/or Collateral so transferred; but Lender shall retain all applicable rights and interests hereunder with respect to any Secured Obligations and/or Collateral not then transferred. 16. Miscellaneous Waivers. Presentment, protest, notice of protest, notice of dishonor and notice of nonpayment are hereby waived with respect to any proceeds to which Lender is entitled hereunder. 17. Suggessors-and-Assignp., Subject to any applicable restrictions on assignment contained herein or in any of the Loan Documents, this Agreement shall bind, and shall inure to the benefit of, the successors and assigns of Pledgor and Lender. The term "Lender" shall include any holder or other owner from tire to time (including any pledgee) of any Secured obligation. 4%KVA055024PAYt 120891 - 9 - 18. Notices. All notices, demands, approvals and other communications provided for in this Agreement shall be in writing and shall be governed in all respects by the notice provisions of the Reimbursement Agreement. 19. Entirg Agreement; Modificationj Waiver. This Agreement, together with any other documents referred to herein, constitutes the entire agreement between Pledgor and Lender with respect to the matters set forth herein. No modification of this Agreement (including waivers of rights) shall be effective unless in writing and signed by the party against whoa enforcement of such modification is sought, and then only in the specific instance and for the specific purpose given. 20. Miscellaneous. This document may be executed in counterparts with the same force and effect as if the parties had executed one instrument, and each such counterpart shall constitute an original hereof. No provision of this Agreement that is held to be inoperative, unenforceable or invalid shall affect the remaining provisions, and to this end all provisions hereof are hereby declared to to severable. Time is of the essence of this Agreement. This Agreement shall be governed by the laws of the State of California. IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly executed as of the date first written above. "Pledgor": FIVE POINTS SENIORS, L.P., a California limited partnership By I David R. Michelson, Trustee of the Michelson Family Trust, u/d/t dated December 12, 1984, as amended March 1, 1985 Its General Partner 4MA055024PAYC 120891 's 10-17-1991 16:07 21Z 67��204 KEVSER MAR3TOPJ I-0c. P.02 eve Y REPORT PVROVANT TO SZCTIOU 33433 Ot TRI CAUTORKIA COXMZTY XIDEv3Lop7 M LAW ON AV A71ORDAUN 10108XVG ACIREXX XT AY AND xxTVZZM TU REDMLOPKENT AGXTCY OF TKa CITY O! XMINGTOM SUCK MD PIp3 POINTS SINIORB This summary report hda been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the California Health and Safety Code. This report sets fourth certain details of the proposed Affordable Housing Agreement ("Agreement") between the Agency and rive Points Seniors "Developer") related to the development of a 164 unit senior citizen apartment project. While this transaction does not involve the conveyance of property from the Agency to the Developer, it does entail the provision of Agency financial assistance, to effect the development of income restricted units. This report describes and specifies: i. The costs of the proposed Agreement to the Agency, which includes tha cost of providing a grant to this project, and the opportunity costs associated with providing a loan to. the developer at a below market interest rate. 2. The value of the assistance being provided to the Developer. 3. The reasons for which the assistance is being provided. A. SALUNT FOIRTx CY TBb AGREZKM �.. Developer Responsibilities Under the terms of the proposed Agreement, the Developer must accept the following responsibilities: a. The project must consist of 164 senior citizen apartment units, constructed at the duality standard mandated by the Agency. b. For a thirty year period the project must set -aside 32 units for very low income households (0% to 50% of the Orange County nsdian income), and lb unites for low to moderate income households (30 to 120t of the County median income). C. The project must be maintained in accordance with the CC&R'a incorporated into the Agreement. •' 10-17-1991 16:0g 213 62^ 5204 K.EVSER MARST0N ASSaC. P.©3 �J d. A full-time activities director and an on -site manager must be employed and a van shuttle service must be provided for the project residents. a. The Agency note must be fully amortised over an eight year period, on a monthly basis. f. An equity contribution must be maintained from the commencement of construction through the and of the fifth year of project operation. The required contribution ist Throuqh the second year of operation $11500,000 Year 3 1,2500000 Year 4 i,0001000 Year b 5001000 Z. agency Responsibilities The Agency is responsible for, and shall commit the following to the projectt a. Upon the i,snuance of a Certificate of occupancy, a $350,004 loan must be wade to the Developer. The note will bear simple interest at 5% per annum. b. For a five year period after the issuance of a Certificate of occupancy, an annual grant of $100, 000 must be provided to the Deve}.opor. The total grant equals $500,000. Co The Agency shall use its beet reasonable efforts to assist the Developer in securing very low income tenants that are recipients of federal housing subsidies. B. COST OY TIE AGRVZXUT TO AaUCY The estimated costs of the Agreement to the Agency are as followas Grant $500,000 $365,800 Interest Gap for Agency Loan(t) 3e,100 35,700 Total Costs to Agency $538,100 $391,5p0 (1) Opportunity cost of iesuinq a 51 loan versus earning 8.3t interest on invested funds. w2- 10-17-1991 16:Og 213 6c-- S2pq { KEYSER MARSTON Q�50c. �./ P. C4 C. ESTIKATZD VALUE TO DEV$LOpTA ASSIOTANCZ IDZINO VIOVIDiD VY AGINCY The Agency is providing the Developer with a grant of $100,000 per year for five years. The Agency is also providing the Developer with a below market interest rate loan of $250,000. The value of the assistance package is estimated as followss Grant $500,000 $355,8o0 Intereat Cap for Agency Loan(l) 590400 41,200 iaiiria i�wi4�ii Total Benefit to Developer $559,400 $447,000 (1) Benefit of receiving a 5t loan versus paying 10t interest on a conventionally financed loan. D. RXIBONZ FOR TEE PItOVleiost8 Or AQZWCY A88I8TUCB Keyser Marston Associates, Inc. (M) analyzed the development economics of the proposed project to assets the need for Agency financial assistance. xn a letter dated June 10, 1993., KHA concluded that the proposed 154 unit senior citizen apartment complex, with the attendant Agency restrictions, could not support the total oatimated development costs. The repositions of income restrictions and construction/ ongoing operational quality standards creates the need for the assistance package being proposed. -3- .10-17-1991 14:45 213 62P 5204 KEYSER MARSTON ASSOC. 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T . -• - 144 • Y• • _ wr_ ...—•r' • _ .. • _ • • �•r _ . . .•_ •. _4. • _ l7� .. ram.. �• � a .w.rr• t►ram �. w _ • • _. _. //// — .•._r!_t� _ _••_'r.--r.—w _w• • ..r•�_� r �.. . r • •^•• • w _ • •_ •-- •. a _. • w•-a. _ .... • N• w�F- +_._ ••Mr _.•.� _ M.—r �r__y+a••w r. _.•• .• r•7 wa .w ._.�._ .r�•.•w •. _. _. _.. • • • • • • .�_•_�rw•-• •w .•.._. •V—_.� • �_a• r._ rrr-�w.•_.•w. rr_•.�._ �...•.—w• ••t+••w.-•... —.�_r r..— V w—....rw+r.• �.r'� war• _-_w.�..r• r. • A+••lr-- - .r!•._,._�r..r•w•r_:�+r•�..Y.+_w_.....w.+� ._. ••.�. • •r• .err r_. a..... w—•• �-�r•�.n...•r . � _ �N.r _ r.. _ _. . ... _.� . •. _•__ _ . .. .... • . ..—_ ._ti . . •............ ..ter..... r...�.....•—.. .Fr•• _� • :r �. •r _• - .._—ww• ..• __�.•• ti•�. mow. ._ _r •/._—_ .•�.� r • . •• �. rY_.—• _ •.�Y�ti.� •t •. N w�--��..w.—_ _—___ww _..—ra il_#��_rM+�•�_ •• w� •V _..�• •wr W_ •-—n•.ra_ •_t +�.•_..••Y_�—rw.. _. •._ a.•_—. a..._�. r •—••r_�_•rf. _._•. _•�._... •�a_ri•w arm+.. .__r • y•aw.�+.. ..... __rwl. •.•_e_N_r.. ..._+a•_ s •r_._�.r a____—r.+ •+ w CITY OF HUNTINGTON BEACH PUBLIC NOTICE NOTItS OF JOINTJWbLIC HEARING / Qr W% A] B HOUSING( CITY COUNCIL/ --- REDEVELOP ENCY AGREEMENT j 1 �,/� FIVE POI TS SENOR VILLAS, INC. i 0/ % On November 4, 1991 at 7:00 p.m., or as soon thereafter as the matter maybe heard, at the City Council Chambers located at 2000 Main Street, Huntington Beach, California, the City Council of the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach will hold a joint public hearing to consider approval of a Loan and Affordable Housing Agreement (the "Agreement") by and among the Redevelopment Agency of the City of Huntington Beach (the "Agency") and Five Points Senior Villas, Incorporated. Such agreement references the project known as "Five Points Senior Villas", located at Main Street and Florida Avenue. The proposed Agreement and a staff report including a summary of the Agreement is available for public inspection at the Office of the City Clerk, 2000 Main Street, Huntington Beach, California. Should you desire further information concerning this matter, kindly call Greg Brown at (714) 960-8831. Michael T. Uberuaga, City Administrator, City of Huntington Beach By: Connie Brockway, City Clerk/Claok of 4, a,aN7 Publish in Huntington Beach Independent October 17, 1991. 0519y /Ilt�/G�Z d'� �D►n �' �✓��cG Pe4 rl jl� CAY covN<< 1 1,ee4eve1ym-PJ �5anc_ �Oa.ri p�ord�bte.o�s� .40P 4kp OFFICE OF THE CITY CLERK CITY OF HUNTINGTON BE.hC14 2000 MAIN STREET/P. 0. BOX 190 HUNTINGTON BEACH, CALIFORNIA 92648 Multifa= Image Mate (714) 374-1557 ***PLEASE DELIVER THE FOLLOWING MATERIAL AS SOON AS POSSIBLE*** TO: T-6 i ke,ts 3?04 FAX 'NO. FROM:DNIvr'C� NUMBER OF PAGES (INCLUDING COVER PAGE) DATE SER'T : L17/1A TIME SENT: Z _ ! _-r� _ �PM OPERATOR'S NAME TOA= PLEASE NOTIFY OPERATOR IMMEDIATELY IF NOT RECEIVED PROPERLY (714) 53f--5227 COMMENTS: CHARGE FOR THIS HXTERIAL: 1038K I February 19, 1991 Mr. Ray Silver Assistant City Administrator City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 RE: Five Points Seniors Dear Ray: rD FE8 20nR CITY OF HUNTINGTON BEACH ADMIMSTRATIVE fff ICE Five Points Seniors respectfully requests a deferment of the Park and Rec Fee, the Traffic Impact fee and the Library fee for a total amount of $681292. This request is only until the time I am to receive the first payment of the grant money from the City. This will allow me the ability to complete my project within the economic guidelines anticipated and assumed per Mike Adams letter of June 17, 1991. We do not wish to involve Barbara Kaiser or Kathy Head in altering the Affordable Housing Agreement due to the previous difficulties we had within that department. Our costs and equity has far exceeded the amount of project costs and developer equity, as required under that agreement. According to information submitted to us, the fees that were paid by the previous developer were $581,726. We have presently paid $68,832.17. For a total paid to the City of this project $650,558.17. The history of this site has been unusual. With the bureaucratic system within RTC, we relied on your Staff to be forthright in their assessment of fees paid and to be paid. Our understanding during all of 1991 was that this project would be economically feasible for the additional 16 units increase and no additional fees since 1985, such as traffic impact fees, would be assessed. We, as well as the inspectors for the bank on December 5, 1991, were told by your planning department the fees would be in accordance with the letter issued by Mike Adams on June 17, 1991 for $63,919.22 The latest issue of the surety bond for $167,000 has taken this entire situation totally out of context. This obligation was never assumed by more nor do I have any funds to pay this sum. I request a full waver of this obligation and directive to Staff to collect against the surety bond consistent with the terms of the bond. Which, I believe, consists of issuing a Certificate of Occupancy in September of 1992. A TTf/C/{/►! 6.4/T, 9, A At the present time, I am unable to continue work due to the lack of plumbing inspections. Would you please help us to get those completed so that we may continue working until this matter is settled at the March 2 City Council meeting. Finally if we are to attempt to have a temporary Certificate of Occupancy in September of 1992, we will need to have the cooperation of the Building Department with timely inspections and quick review of any field modifications. We believe, with cooperation of all parties involved, we can accomplish this goal. We look forward to resolving these matters at the March 2 Council meeting which hopefully will get this project back on track. Very truly yours, David Michelson General Partner cc: Pat Spencer SUMMARY REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW ON AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND FIVE POINTS SENIORS This summary report has been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the California Health and Safety Code. This report sets fourth certain details of the proposed Affordable Housing Agreement ("Agreement") between the Agency and Five Points Seniors ("Developer") related to the development of a 164 unit senior citizen apartment project. While this transaction does not involve the conveyance of property from the Agency to the Developer, it does entail the provision of Agency financial assistance to effect the development of income restricted units. This report describes and specifies: 1. The costs of the proposed Agreement to the Agency, which includes the cost of providing a grant to this project, and the opportunity costs associated with providing.a loan to the developer at a below market interest rate. 2. The value of the assistance being provided to the Developer. 3. The reasons for which the assistance is being provided. A. SALIENT POINTS OF THE AGREEMENT 1. Developer Responsibilities Under the terms of the proposed Agreement, the Developer must accept the following responsibilities: n. The project must consist of 164 senior citizen apartment units, constructed at the quality standard mandated by the Agency. b. For a thirty year period the project must set -aside 32 units for very low income households (0% to 50% of the Orange County median income), and 16 units for low to moderate income households (501 to 120% of the County median income). J c. The project must be maintained in accordance with the CC&R's incorporated into the Agreement. d. A full-time activities director and an on -site manager must be employed and a van shuttle service must be provided for the project residents. e. The Agency note must be fully amortized over an eight year period, on a monthly basis. f. An equity contribution must be maintained from the commencement of construction through the end of the fifth year of project operation. The required contribution is: Through the second year of operation $1,500,000 Year 3 1,250,000 Year 4 I,000,000 Year 5 5000000 2. Agency Responsibilities The Agency is responsible for, and shall commit the following to the project: a. Upon the issuance of a Certificate of Occupancy, a $250,000 loan must be made to the Developer. The note will bear simple interest at 5% per annum. b. For a five year period after the issuance of a Certificate of Occupancy, an annual grant of $100,000 must be provided to the Developer. The total grant equals $500,000. c. The Agency shall use its best reasonable efforts to assist the Developer in securing very low income tenants that are recipients of federal housing subsidies. B. COST OF THE AGREEMENT TO AGENCY The estimated costs of the Agreement to the Agency are as follows: Total Present Value Grant $500,000 $365,800 Interest Gap for Agency Loan(1) 380100 25,700 Total Costs to Agency $5380100 $391,500 (1) Opportunity cost of issuing a 5% loan versus earning 8.3% interest on invested funds. -2- } C. ESTIMATED VALUE TO DEVELOPER ASSISTANCE BEING PROVIDED BY ,✓ AGENCY The Agency is providing the Developer with a grant of $100,000 per year for five years. The Agency is also providing the Developer with a below aarket interest rate loan of $250,000. The value of the assistance package is estimated as follows: 12t21 Eresent value Grant $500,000 $365,800 Interest Gap for Agency Loan(1) 59,400 41,200 -------------- Total Benefit to Developer $559,400 $407,000 (1) Benefit of receiving a 5% loan versus paying 10% interest on a conventionally financed loan. D. REASONS FOR THE PROVISIONS OF AGENCY ASSISTANCE Xeyser Marston Associates, Inc. (MA) analyzed the development 1 economics of the proposed project to assess the need for Agency financial assistance. In a letter dated June 10, 1991, K A concluded that the proposed 164 unit senior citizen apartment complex, with the attendant Agency restrictions, could not support the total estimated development costs. The impositions of income restrictions and construction/ongoing operational quality standards creates the need for the assistance package being proposed. -3- .11 REQUEST FOR CITY COUNCIL ACTIOIR& 91-54 Date August 19, 1991 Submitted to: Honorable Mayor and City Council Members Submitted by: Michael T. Uberuaga, City Administrat"17(.1_ CL Prepared by: Barbara A. Kaiser, Deputy City AdministratorlEconnomsc Deve opment Director Subject: Exclusive Negotiation Agreement.Mve Points Senior Project at Main & : Florida Streets Consistent with Council Policy? K Yes [ l New Policy or Excepti Statement of Issue, Recommendation, Analysis, Funding Source, Alternative APPROVED BY CITY COUNCIL Cetions, Attachments: crrY CLERK The developer. Institutional Property Investors, Inc. (IPI), proposing the development of a 164-unit senior citizen rental complex located at Main and Florida Streets, has requested financial assistance. The proposed project obtained the necessary development entitlements from Planning Commission on May ll, 1991. Staff has reached tentative agreement with IPA regarding financial assistance for the project, and is requesting City Council action to confirm the agreement. . Approve an Exclusive Negotiation Agreement between Institutional Property Investors, Inc., and the City of Huntington Beach and direct staff to prepare appropriate loan agreements. The proposed project's developer. (IPI), has requested financial assistance from the city to enable this development to go forward. Without such assistance, IPI believes the project will not be economically feasible, and therefore would be abandoned. The proposed 164-unit project is designed to accommodate senior citizens of .which 20% or 32 units are conditioned to be 'affordable, and made available to low -moderate income individuals/families. This project is eligible for financial assistance using the city's 20% housing set aside funds, subject to a finding of benefit. As previously directed by the City Council at its study session on 3uly 15, 1991, staff has been negotiating with the developer to determine an appropriate level of financial assistance. We are now in a position to recommend that assistance which basically requires the developer to provide an additional 16 affordable units at moderate -income level for which the city, utilizing set aside funds, will provide the project with a $250,000 loan at 5% interest to be paid back over a ten-year term and an additional $500,000 grant paid over a five-year term at $100,000 per year to assure financial feasibility of the project. The above assistance is also conditioned upon IPI providing substantial equity ($1.5 million) toward the project, providing high -quality construction materials and other agreed upon amenities. KA A MATIVE ACTION: 1) Do not approve Exclusive Negotiation Agreement. ' 2) Direct staff to further negotiate. FUNDING_ SOURCE: 1) Redevelopment 20% Housing Set Aside funds for the project if later loan documents are approved. No funds are needed for the requested action. A Exclusive Negotiation Agreement. MTU/BAK/CPS:ls 9462r k ,1 EXCLUSIVE NEGOTIATING AGREEMENT (Five Points Senior Villas) THIS EXCLUSIVE NEGOTIATING AGREEMENT (the "Agreement") is made and entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic .(the "Agency") and the MICHELSON FAMILY TRUST, dated as of December 12, 1984 (the "Developer"). RECITALS The following recitals are a substantive part of this Agreement. A. In furtherance of the objectives of the Community Redevelopment Law of the State of California, Health and Safety Code Section 33000, et seq., and particularly Section 33334.2, .t Seq., the Agency desires to assist in the development of housing which is to be made available at an affordable housing cost to low- and moderate -income households. B. The Developer proposes to construct and operate a One Hundred Sixty -Four (164) unit senior citizen rental housing project (the "Project") on an approximately 1.84 acre parcel of land at the southwest corner of Main Street and Florida Street in the City of Huntington Beach (the "Proposed Development Site"). The Proposed Development Site is depicted on the Site Map attached hereto as Exhibit "A" and incorporated herein. The City of Huntington Beach (the "City") has approved Negative Declaration No. 91-3, Conditional Use Permit No. 91-4 and Conditional Exception (Variance) No. 91-7 with respect to the Project and the Proposed Development Site. C. The Developer desires to negotiate an Owner Participation Agreement ("OPA") with the Agency to assist the Developer in operating affordable housing within the Project. D. The parties recognize and acknowledge that the purpose of this Agreement is to establish a period during which the Developer shall have the exclusive right to negotiate with the Agency the terms of the OPA which will include, without limitation, the economics of the development, the site plan and specific uses of the development, and any other terms relevant to the development of the Project and the Proposed Development Site. E. The parties intend that during the Negotiating Period (as the term is hereinafter defined) each will perform certain actions and responsibilities under this Agreement. F. The Developer has formed Five Point' Seniors, a California general partnership, to act as the developer of the .. Project (the "Partnership'). The Partnership will consist of two general partners, one of which will be the Developer and one of which will be the Norman D. and Sunnie L. Ward Trust. The Developer and the Agency intend for the Partnership, if acceptable to the Agency, to assure the rights and obligations of the Developer pursuant to the OPA. NOW, THEREFORE, the parties hereto mutually agree as follows: 1. Negotiating Period. The Agency agrees to negotiate with the Developer and the Developer agrees to negotiate with the Agency for a thirty (30) day period from the date this Agreement is approved by the Agency ("Negotiating Period-). Agency and Developer shall negotiate diligently and in good faith to carry out the obligations of this Agreement on or before the times established in this Agreement, to establish development plans and concepts and to determine the economic feasibility of the development of the Project. The Agency and the Developer agree, for the period set forth above, to negotiate in good faith to prepare an OPA to be entered into between the Agency and the Developer concerning the Proposed Development Site and the Project. The Agency further reserves full discretion with respect to the conduct or disposition of any proceedings which require notice and a public hearing. The i� obligation to negotiate in good faith requires that Developer and Agency communicate with respect to those issues for which agreement has not been reached, and in such communication follow reasonable negotiation procedures including meetings, telephone conversations and correspondence. If on the last day of the Negotiating Period the Developer has not signed and submitted a draft OPA submitted by the Executive Director for signature by the Developer, then this Agreement shall automatically terminate without further notice by the Agency to the Developer, and both parties knowingly agree that neither party shall have any further rights or obligations to the other arising out of this Agreement. Further, both parties recognize and acknowledge that the purpose of this Agreement is solely to provide a procedure for negotiation, that each party is incurring costs pursuant to the negotiation process provided for in this Agreement, and that there is no intent to provide rights to the Developer in the proposed project aside from the opportunity to negotiate a potential OPA. If an OPA is signed and submitted by the Developer within the Negotiating Period, then this Agreement shall be extended for a period not to exceed thirty (30) days from the date of such submittal to enable the Agency to (i) determine whether it desires to enter into such OPA, and (ii) take the 6816u/2460/000 -2- • \/V actions necessary to bring such OPA before the Agency for consideration, action and authorization to sign, if such is approved. Developer acknowledges that the determination by -the Agency of whether it desires to enter into the OPA is at its sole and absolute discretion, Both parties further recognize and acknowledge that the Project would be subject to -planning review and approval by the City or an other governmental entity with authority to review such a project, if any such further review and approvals are required. 2. Developer Submission of Information. The Developer is required to make full disclosure to the Agency of all pertinent information concerning the Developer and the Partnership. The Developer represents to the Agency that within fifteen (15) days of the approval of this Agreement by the Agency it shall submit to the Agency Director for his review all basic information relating to the corporation which is reasonably requested by the Agency including, without limitation, information regarding capitalization, insurance, other liability and financial capacity issues, and an original or true copy of the executed partnership agreement which creates the Partnership or other proposed developer entity. In the event that during the term of this Agreement such information changes, Developer shall submit written evidence of such new information immediately to the Agency Executive Director for his review and consideration. The parties acknowledge that this requirement is necessary so that the Agency may verify the qualifications of the persons and entities which comprise the Developer. 3. Lead Negotiator for Developer. The Developer represents to the Agency that David Michelson, Trustee of the Developer, is the person with whom the Agency staff shall work with on a day-to-day basis concerning the negotiations toward the development of the Proposed Development Site and the Project. If the Developer desires to designate another individual as the lead negotiator on this Project, then it shall notify the Agency Director immediately. 4. Deposit. The Developer shall deliver a letter of credit, in a form reasonably acceptable to the Agency, in the amount of Twenty Thousand Dollars ($20,000) to the Agency upon mutual execution of this Agreement (the "Deposit"). If the Developer terminates this Agreement without cause or if the Agreement terminates for failure of the Developer to perform a required action, then the Agency shall be entitled to reimbursement for costs in negotiation contemplated herein. Such costs shall include reasonable attorneys' and advisory fees incurred by the Agency (the "Negotiation Costs"). The Agency will provide supporting documentation evidencing the Negotiation Costs. In the event that the Deposit exceeds the Negotiation Costs the remainder shall be returned to Developer. The Deposit shall be the maximum amount that the 6816u/2460/000 -3- Developer may be held responsible towards payment of the Negotiation Costs. In the event Developer executes a draft OPA submitted for signature by the Agency's Executive Director but the Agency Board: (i) does not approve the OPA; (ii) terminates the Agreement without cause, or (iii-) the Developer terminates the Agreement for failure of the Agency to perform a required action, the full amount of the Deposit shall be returned to Developer. If the Agency Board approves the OPA the Deposit shall be promptly returned to the Developer. 5. Financing. Developer agrees to provide within fifteen (15) days of the Agency approval of this Agreement a description of the proposed method of construction of the Project and permanent financing and amount and sources of capital therefor, which proposed financing method must include a One Million Five Hundred Thousand Dollar ($1,500,000) equity contribution from Developer. The OPA shall provide that the Developer's equity interest in the Project shall be a minimum of One Million Five Hundred Thousand Dollars ($1,500,000) at all times until the fourth (4th) anniversary of the commencement of construction of the Project (or such other period mutually agreed upon by the parties hereto), at which time the Developer's equity interest in the Project shall be a minimum of Five Hundred Thousand Dollars ($500,000). 6. Development Concept Package. Developer further agrees that within thirty (30) days of this Agreement it shall submit documents, reports and information (collectively, the 'Development Concept Package") concerning the proposed development that will provide the Agency with the following information: a. A preliminary site plan and architectural/design concept for the development showing access roads, amount and location of parking, location and size of all buildings, including height and perimeter dimensions, pedestrian an¢ vehicular circulation system (including access to upper floors), landscaping, elevations, perspective renderings and the architectural character of the project. b. A schedule for the development of all structures and improvements proposed and an estimate of development costs including construction and non -construction costs. C. An estimate of project income and expenses and a pro forma statement of project return adequate to enable the Agency to evaluate the economic feasibility of the proposed development. The economic pro forma shall be in a form typically submitted to a construction lender and shall include land prices as determined by the appraiser. The pro forma shall specify the form and amount of the equity to be contributed to the Project by the Developer. This information will be submitted for analysis to an economic consultant selected by the Agency in its sole discretion. Al� 6816u/2460/000 -4- V d. Biographical and background description of the Developer and all senior officers of the Developer, including such matters as (i) prior record with respect to the completion of projects, particularly those of a scale comparable to that proposed herein; (ii) record of any pending or past litigation and evidence of timely performance reflecting minimal litigation and/or disputes concerning the payment of joint venturers, contractors, suppliers or taxing authorities and (iii) record of satisfactory operation of residential projects. It is understood that the Agency may take appropriate steps to verify such matters, and the Developer agrees to cooperate in furnishing such information to the Agency. The Agency acknowledges that the materials submitted in connection with the obtaining of entitlements for the Project will be sufficient to satisfy requirement (a) above, and acknowledges receipt of the estimate of development costs pursuant to requirement (b) and the pro forma pursuant to - requirement (c) above. within twenty (20) days upon receipt of the Development Concept Package, the Agency staff shall review the development concept proposed by the Developer, together with the remainder of the Development Concept Package, and may either accept it, request modifications or reject it. If any such items are rejected, the Agency staff shall provide a list of deficiencies to the Developer and the Developer shall resubmit the Development Concept Package, with corrections, within ten (10) days of such rejection. . If the Agency staff accepts the Development Concept Package, the Agency and Developer shall continue to negotiate toward the execution of an OPA with respect to the development of the Project. •7. Design Objectives. The design and development objectives for the Project shall be specified in the OPA, and the actual development shall be in conformity therewith. The Agency shall cooperate fully with Developer's professional consultants and associates in providing them with any information and assistance reasonably within the capacity of the Agency to provide in connection with the preparation and execution of the drawings, plans and specifications or other documents or information required to be submitted by the Developer to the Agency or to the City pursuant to this Agreement or as required by state or local laws and regulations. This requirement does not obligate the Agency to incur any monetary costs therefor. All design, architectural and building plans for development shall be subject to the review and approval of the Agency and the City. S. Affordable Housing. The OPA shall provide that certain units within the Project shall be Trade available and 6816u/2460/000 -5- ` 1 s rented at an "Affordable Rent" (as defined in California Health and Safety Code Section 50053) as follows: (a) Sixteen (16) units for "Very Low Income Households" (as defined in Health and Safety Code Section 50105); (b) Sixteen (16) units for "Lower Income Households" (as defined in Health and Safety Code Section 50079.5); and (c) Sixteen (16) units for "Persons and Families of Low and Moderate Income" (as defined in Health and Safety Code Section 50093). The OPA shall require that such units be so restricted for thirty (30) years from the occupancy of the Project, and that such restrictions be recorded as an encumbrance against the Property. The Developer shall also be required under the OPA to perform high quality construction of the Project and to provide an activities director and van service to tenants during such thirty (30) year period. 9. A9encX Financial Assistance. The Agency shall be required under the OPA, in consideration for the Developer's performance of the affordable housing requirements set forth in Section 8 above, to -provide the following financial assistance to the Developer: (a) Upon the occupancy of the Project, the Agency shall make a loan of Two Hundred Fifty Thousand Dollars ($250,000) to the Developer. The loan shall accrue simple interest of five percent (5%) per annum. The loan shall be for a term of ten (10) years, with interest payments payable monthly in the third (3rd) through tenth (loth) years of the loan. The loan shall be secured by security mutually acceptable to the Agency and the Developer. (b) The Agency shall grant to the Developer the sum of One Hundred Thousand Dollars (5100,000) on each of the first (1st) through fifth (5th) anniversaries of the occupancy of the Project (for a total of Five Hundred Thousand Dollars ($500,000)) provided that the Developer is in compliance with the OPA. 10. Default. With the exception of those specified obligations herein which failure to perform may cause automatic termination, in the event that the Developer or the Agency fails to fulfill the obligations described in this Agreement within the times specified, the nonperforming party shall have ten (10) days following written notice from the other to commence to cure such failure to perform as may be identified in the written notice. If, in the objective judgment of the other party, the nonperforming party has failed to commence to 6816u/2460/000 -6- cure within such ten (10) day period, the other party may terminate this Agreement and, thereafter, neither party shall have any further rights or obligations to the other except as provided concerning the distribution of the Deposit in paragraph 4 herein. The Developer, by execution hereof knowingly agrees, notwithstanding anything herein to.the contrary, that it shall have no right to specific performance of this Agreement. Each party by -execution hereof knowingly agrees, notwithstanding anything to the contrary, that it shall have no right to money damages, nor any other legal remedies or equitable remedies under the law with respect to this Agreement. 11. Non -Discrimination. Developer shall not discriminate against nor segregate any person, or group of persons on account of sea, race, color, marital status, religion, handicap, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Proposed Development Site, nor shall the Developer establish or permit any such practice or practices of discrimination or segregation in the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land. 12. Environmental Requirements. Certain state and local environmental requirements may be applicable to the proposed development. Pursuant to such requirements certain environmental documents may be required to be prepared and certified for the proposed Project. The Developer agrees to supply information to determine the environmental impact of the proposed development and, at its sole cost and expense, to reimburse the Agency.and/or the City for the cost of preparation of such environmental impact documents, if any, as may need to be completed for the development of the Project. 13. No Real Estate Commissions. The Agency shall not be liable for any real estate commission or brokerage fees which may arise herefrom. The Agency represents that it has engaged no broker, agent or finder in connection with this transaction, and the Developer agrees to hold the Agency harmless from any claim by any broker, agent or finder retained by the Developer. 14. Compliance with Laws. The Developer acknowledges that under the OPA it shall be required to carry out the construction of its improvements in conformity with all applicable laws, including all applicable federal and state labor standards; provided, however, the Developer and its contractors, successors, assigns, transferees and lessees will not be waiving their rights to contest any such laws, rules and standards. 6816u/2460/000 -7- �.J 15. No Assignment. This Agreement shall not be assigned J by the Developer without prior written approval of the Agency, which the Agency shall grant or refuse at its sole discretion. 16. Agency -Assistance. The Agency shall cooperate fully in providing Developer with appropriate information and assistance, provided that the Agency shall not be obligated to incur costs therefor. 17. Press Releases. The Developer and Agency agree to discuss any press releases with a designated Agency representative prior to disclosure in order to assure accuracy and consistency of the information. 18_ Notices. All notices given or required to be given hereunder shall be in writing and addressed to the parties as set out below, or to such other address as may be noticed under and pursuant to this paragraph. Any such notice shall be considered served when actually received by the party intended, whether personally served or sent postage prepaid by registered br certified nail, return receipt requested, or sent by telecopy or overnight courier service. To Agency: Redevelopment Agency of the City'of Huntington Beach 2000 Main Street Huntington Beach, California 92648 .f Attn: Ms. Barbara Kaiser, Deputy City Administrator/Director of Economic Development To Developer: Institutional Property Investors, Inc. 19800 MacArthur Boulevard, Suite 680 Irvine, California 92715 Attn: Mr. David Michelson, President with a copy to: Bret H. Reed, Jr. A Law Corporation 1300 Dove Street, Suite 200 Newport Beach, California 92660 19., Integration of All Agreements. This Agreement supersedes any previous agreement entered into between the Developer and the Agency with respect to the Proposed Development Site and/or the Project. 20. Execution Authority. The signatories to this Agreement represent and warrant that they have the authority to execute this Agreement on behalf of the principals they purport to represent. 21. Time of Essence. Time is of the essence of every portion of this Agreement in which time is a material part. 6816u/2460/000 -a- Q 22. Governing Law. This Agreement shall be construed in accordance with the laws of the State of California. 23. Attorneys' Fees. In the event any action is taken pursuant to this Agreement, the prevailing party shall be entitled to recover from the other party its actual attorneys' fees and costs, whether'or not a final court judgment is entered. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year appearing -below. Dated: 62 ,. d_91 / REDEVELOPMENT -AGENCY OF THE CITY OF H ON BEACH, a public bad , corpo ate and olitic By: Chairman "AGENCY' ATTEST: 6. �V� Agency Secretary APPROVED AS TO FORM: Strad ing';J Y c a, Carlson b Rauth Specs 1 Counseu for the Agency City Attorney, Agency General Counsel 8 -l= ft i MICHELSON FAMILY TRUST, dated of December 12, 1984 Dated: / �� By: David Michelson, Trustee "DEVELOPER" 6816u/2460/000 -9- IN EXHIBIT "A" Site Map of Proposed Development Site (To Be Inserted) 6616u/2460/000 -10- Aok L�oCITY OF HUNTINGTON BEACH V" INTER-DEPARTh1ENT COMMUNICATION MuNTJW,3Vh MACH TO: Michael T. Uberuaga, City Administra or FROM: Leigh M. De Santis, Project Manage SUBJECT: FIVE POINTS -- ASSIGNMENT OF LOAN AND GRANT PROCEEDS DATE: __Apri1-5�1992 �l The DDA with Michelson governing the development of Five Points Senior Villas was amended in December 1991 to allow for assignment of the proceeds of the Agency loan and grant to Michelson to his bank. The assignment provision says that the assignment may be made on his request and by your signature without having to go to the City Council. Attached is .a letter from Michelson's attorney formally requesting assignment. Also attached are five copies of the assignment requiring your signature. The assignment document has been reviewed and approved as to form and content by the Agency's attorney. Please sign all five originals. Thank you. LDM:sar Attachments xc: Ray Silver, Assistant City Administrator Barbara A. Kaiser, Deputy City Administrator/Economic Development 0 APF z.o 1992 CITY Of HUNTINGTON BEACH ADMINiSTRATIlk IFfICZ 7- : s MURMINIMM The Redevelopment Agency of the City of Huntington Beach (the "Agency") hereby consents to all of the terms set forth in the Pledge of Loan and Grant Proceeds which is attached hereto and incorporated herein (the "Agreement") and hereby expressly agrees to recognize the rights of Lender (as that term is defined in the Agreement) pursuant to the Agreement. Without limitation upon the generality of the foregoing, Agency agrees that, until release by Lender of its rights under the Agreement, Agency shall not, without the express prior written consent of Lender, (i) cause, permit, execute, consent to, vote in favor of, suffer or seek to obtain any modification, amendment, dissolution or termination of the Affordable Housing Agreement (as that term is defined in the Agreement), provided that Lender's consent to the matters described in this clause (i) shall not be unreasonably withheld or delayed (it being understood that, without limiting the generality of the foregoing, it will be reasonable for Lender to withhold its consent to amendments or modifications which would adversely affect the interests assigned to Lender pursuant to the Agreement), or (ii) waive or release any material obligation of any party to the Affordable Housing Agreement, or permit or agree to any act or omission to act on the part of any such party or parties thereunder which would have the effect of reducing, changing, or otherwise materially and adversely affecting Lender's rights under the Agreement or the Affordable Housing Agreement. Agency agrees to disburse the proceeds of the Agency Loan (as that term is defined in the Agreement), when and if such funds are required to be disbursed pursuant to Section 201 of the Affordable Housing Agreement, directly to Lender, and further agrees that, upon receipt by Agency of written notice from Lender (i) stating that an Event of Default has occurred under the Reimbursement Agreement (as that term is defined in the Agreement) and (ii) directing Agency to pay any previously undisbursed amounts constituting the Agency Grants (as that term is defined in the Agreement) directly to Lender, Agency shall pay such amounts directly to Lender as they become due pursuant to the terms of the Affordable Housing Agreement. This consent is executed as of the date set forth below. Dated: CIAc Dated: ATTEST: !" Agency Clerk REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic Agency xecutive Di ctor APPROVED AS TO FORM: I. �A Stradl ng, Y c a, Carlson & Rauth Agency Specia Counsel 04/16/92 9819u/2460/000 -2- Director of Economic Development "AGENCY" RESOLUTION 2:0. - 220 A RESOLUTION OF THE REDEVELOPMENT AGE14CY OF THE CITY OF HUNTINGTON BEACH APPROVI14G AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND FIVE POINTS SENIORS WHEREAS, California Health and Safety Code Section 33334.2 and the Redevelopment Plan for the Main -Pier 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 purposes 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 low 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 ti No. 6026 dated June 26, 1989, and Agency Resolution No. 174 6 -1- 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 The Agency is required pursuant to Section 33413 to rehabilitate, develop or construct replacement dwelling units for those units housing persons and families of low and moderate income which have been destroyed or removed from the low- and moderate -income housing market as part of a redevelopment project; and The Agency has destroyed and removed certain units which housed persons of low and moderate 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 Affordable Housing Agreement ("Agreement") with Five Points Seniors, a California general partnership ("Developer"), for the development of affordable housing on a site located outside the Project Area ("Site"), as described in the Agreement; and The Agency has duly considered all terms and conditions of the proposed Agreement and believes that the development of the Site pursuant to the subject Agreement 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 -2- Res. 1-20 9 The City Council of the City of Huntington Beach has previously examined the environmental impact of the development proposed by the Agreement and has determined that the development will not have a significant effect on the environment, and has approved Negative Declaration No. 91-3 in conjunction with Use Permit No. 90-4 and Conditional Exception No. 91-7; and .The Agency has considered the report of Agency staff on the proposed development to be carried out pursuant to said Agreement, NOW, THEREFORE, The Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: 1. The Agency finds that the project will not result in any significant impacts on the environment beyond those effects considered by the City Council in its adoption of Negative Declaration No. 91-3 in conjunction with Use Permit No. 90-4 and Conditional Exception No. 91-7. The Agency hereby approves the Notice of Exemption prepared with respect to the development which indicates that the proposed Agreement is exempt from the California Environmental Quality Act pursuant to 1.4 Cal. Code Regulations Section 15061(b)(3), and directs the Secretary of the Agency to file the Notice of Exemption with the County Clerk of the County of Orange. 2. The Agency finds and determines that expenditures from the Housing Fund as contemplated by the Agreement will directly and specifically benefit, improve, and preserve the corrmunity's supply of low- and moderate -income housing within the meaning of Section 33334.2. -3 Res. 220 �1 1 rw 3. The Agency finds and determines that expenditures from the Housing Fund as contemplated by the Agreement are of benefit to the Project Area. 9. The Agency finds and determines that the housing units to be created by the Agreement which are restricted to persons and families of low and moderate 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 Agreement on behalf of the Agency. A Copy of the Agreement 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 carry out and implement the Agreement and to administer the Agency's obligations, responsibilities and duties to be performed under the Agreement and related documents. PASSED AND ADOPTED by the Redevelopment Agency of the City of Hunting9ton Beach at an adjourned regular meeting thereof held on this 9th day of December 199 1 . ' Chairman ATTE T: 47,1� 041OC/� Agency Secretary REVIEWED AND APPROVED: APPROVED AS TO FORM: _ I Agency Counsel INITIATED -AND APPR ED: City Administrator Q Lirector of Economic , Developmen/ / J Res. No. 1-1 *20 STATE OF CALIFORNIA COUNTY OF ORANGE i ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular adjourned meeting therecf held on the 9th day of December 1991 by the following vote: AYES: Councilmembers: Patterson, Winchell, Silva, Green, Kelly NOES: Councilmembers: MacAllister ABSENT: Councilmembers: Robitaille The torepaing instrument is a correct copy of the original on file in this office. Attest t I9-IL p11 Clerk and Ex-officiv Cl;:rk of the City (,be 61 of trie City cf Huntington Rath, Calitornia. My- CierFana ex-officio er of the City Council of the City of Huntington Beach, California .REQUEST FOF,�IEDEVELOPMENT Af-E NCY ACTION APPROVED BY P 4rn RH 91-84 -f Date _nPrpmhAr I A 1991 CLECK Submitted to: Honorable Chairman & Redevelopment Agency Members Submitted by: Michael T. Uberuaga, Chief Executive Off er / (,� r/ Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Developmen 6' Subject: REAPPROVAL OF AMENDED AFFORDABLE HOUSING AGREEMENT — FIVE POINTS SENIORS, L. P. Consistent with Council Policy? D4 Yes [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: �l�Ze" The Agency Board at its meeting of November 18, 1991 approved and authorized the Agency Secretary to execute an Affordable Housing Agreement with Five Points Seniors, a California General Partnership. After the Agency's action and prior to execution of the Agreement, the Bank involved in the financing requested several technical changes to the Agreement. All but one of these changes are procedural rather than substantive. The substantive change is a request from the Bank for approval of the Developers assignment of the proceeds of the Agency loan and grant to the Bank. It is the recommendation of the City Attorney and City Clerk that the Agency reauthorize the Agreement as amended. RECOMMENDATIQN: 1. Reapprove and reauthorize the Agency Secretary to execute the attached Resolution and amended Affordable Housing Agreement between the Redevelopment Agency of the City of Huntington Beach and Five Points Seniors, a California General Partnership. 2. Reauthorize the allocation and expenditure of $750,000 in redevelopment housing set aside funds to implement the Affordable Housing Agreement (anticipated to be expended in 1993). ANALY_ Attached is a redlined copy of the amended agreement which shows the changes. A brief summary of the changes follows: 1. Authorize the Agency Secretary to approve an assignment of proceeds. 2. Agreement effective as of November I8, 1991. 3. Delete statement that compliance with Bond documents is deemed compliance with affordable housing requirements of Affordable Housing Agreement (Section 402(7)). 4. Provides that commitment Ietter from Wells Fargo National Bank is accepted as evidence of financing (Section 204). P10/f fi5 1ZH 91-84 December 16, 1991 Page Two S. Provides that if lender cannot cure default within 60 days of notice, period for cure is as long as reasonably necessary to cure such default (Section 3I9). 6. Clarifies conditions under which Developer would be able to rent affordable units at a rent based upon an assumed household size of 2 rather than actual household size (Section 402). 7. Provides for Promissory Note to be executed concurrently with Affordable Housing Agreement, and provides that Developer's obligation to pay does not arise until loan proceeds are disbursed. 8. Provides that Deed of Trust is subordinate to the Deeds of Trust recorded in connection with the issuance of housing bonds. 9. Other minor changes, including specification of various dates and addresses. R Redevelopment Agency Housing Set Aside Funds — Previously approved. ALTERNATIVE AC110N• Do not approve amendments. ATTACHMENTS: 1. Resolution of Approval. 2. Affordable Housing Agreement: Five Points Seniors, L, P. as Amended. MTU/BAK/LDS:sar 0633y t t i RESOLUTION NO. 220 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 FIVE POINTS SENIORS WHEREAS, California Health and Safety Code Section 33334.2 and the Redevelopment Plan for the Main -Pier 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 purposes 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 low 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 -1- 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 The Agency is required pursuant to Section 33413 to rehabilitate, develop or construct replacement dwelling units for those units housing persons and families of low and moderate income which have been destroyed or removed from the low- and moderate -income housing market as part of a redevelopment project; and The Agency has destroyed and removed certain units which housed persons of low and moderate 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 Affordable Housing Agreement ("Agreement") with Five Points Seniors, a California general partnership ("Developer"), for the development of affordable housing on a site located outside the Project Area ("Site"), as described in the Agreement; and The Agency has duly considered all terms and conditions of the proposed Agreement and believes that the development of the Site pursuant to the subject Agreement 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 -2- Res. 220 f The City Council of the City of Huntington Beach has previously examined the environmental impact of the development proposed by the Agreement and has determined that the development will not have a significant effect on the environment, and has approved Negative Declaration No. 91-3 in conjunction with Use Permit No. 90-4 and Conditional Exception No. 91-7; and The Agency has considered the report of Agency staff on the proposed development to be carried out pursuant to said Agreement, NOW, THEREFORE, The Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: 1. The Agency finds that the project will not result in 1 any significant impacts on the environment beyond those effects considered by the City Council in its adoption of Negative Declaration No. 91-3 in conjunction with Use Permit No. 90--4 and Conditional Exception No. 91-7. The Agency hereby approves the Notice of Exemption prepared with respect to the development which indicates that the proposed Agreement is exempt from the California Environmental Quality Act pursuant to 14 Cal. Code Regulations Section 15061(b)(3), and directs the Secretary of the Agency to file the Notice of Exemption with the County Clerk of the County of Orange. 2. The Agency finds and determines that expenditures from the Housing Fund as contemplated by the Agreement will directly and specifically benefit, improve, and preserve the community's supply of low- and moderate -income housing within the meaning of Section 33334.2. _3- Res. 220 3. I.. 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 created by the Agreement which are restricted to persons and families of low and moderate 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 Agreement on behalf of the Agency. A copy of the Agreement 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 carry out and implement the Agreement and to administer the Agency's obligations, responsibilities and duties to be performed under the Agreement and related documents. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntinggton Beach at an adjourned regular meeting thereof held on this gth day of December 199 1 . Chairman ATTEST: APPROVED AS TO FORM: ,C�d%r'rztG ' Agency Secretary ' - Agency Counsel REVIEWED AND APPROVED: INITIATER AND APPR-VEp: City Administrator /0" irector of Economic , Developmen -4- 2a'•��c ��l� Res. 220 Res. No. 220 STATE OF CALIFORNIA COUNTY OF ORANGE ss: CITY OF HUNTINGTON BEACH j I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular adjourned meeting thereof held on the Oth day of December" 1991 by the following vote: AYES: Councilmembers: Patterson, Winchell, Silva, Green, Kelly NOES: Councilmembers: MacAllister ABSENT: Councilmembers: Robitaille 4�V4 G Lity Llerk and ex-officio Llerk of the City Council of the City of Huntington Beach, California .,THE 03ZAK01 COt'lii• WE k 0-m-4 Are Sii117 Atli CA 11", PROOF OF PUBLICATION (2015.5 C.C.P.) STATC OF CALIF06NIA, SS. County of Oranpe, Juanita Fo)kerts I em c citizen of thei Vnited States 0.1d o resident of the County aforesaid: t am over the age of eighteen Mrs. and not a parity tc or interested in the above entitled matter, 10the principal clerk of the printer Of The Orange County Register, a newspaper of genera; Circuletion, pu5lisheC! in the City of Santo Ana, County of Orange, and »hick neAspoper has been cidfudyed a newScicder of general circulation by the Svverior Court of She County of Orange. Sfcfe of California under th_ d3*e of Novemt•er 29,1905, Cose Numt A21046 that' the notice of which the annexed i5 0 orinit! copy, has been Dublished in ecCh regular and entire issue o! soic newspoper onY not in any SvDolemenf fher^Cf on the following Cates. to wit: I certif it (or declare) under Denafity of perjury that the fDregoing is true and correct. Executed at Santo Ana, Californic. Juanita Vclkerts Date ...........Dec. b, ............ 19 ..gl ...... . ' �✓ G a i Signature I j This space is for the County Clerk's filing Sfornpi Proof of Publication of 'ugtesch Five Points Senior villas issuance of revenue Bonds Paste Clipping of Notice SECURELY In This Soace �atpPts bI L�IC NOTICE narrow0PPeD( M► = M 1..Eel�'w , y t �l Ine i u M t r N H�m'YnyYCe«n. rv'1 try aiarrnh►iYMenNorM'i+• , par Ib. 1991 will Pod a GVW; MMPINI"Rr-1 aq "%Mt M to @X. tyyaee MYee Million ilvr Hw* is .d 0��r� Wro�oi�lera a„{si no.? iYw��Yentvsnel o+ mMi l -r e'�aa nert��tprr�a �m�vn�1 ►rl�aCiti vt M �1 Iin9Ta^ in! �roiaCl 4ensif�f bf i�1 - Un1t1 ana f lCK'aled M 1 h ��,,rat woo e1 1lI6dD fain For"brae ail nlpurd r tt< the rolad it, five >antf .$rniarf. v cefilofnia vI Dortwrstlip. re}�Tqya .ntIn airo to lne s�suonte I UdFdt Ore hn,(teQ fo r.,teMoM be nears e+ n» etee .!«nKn will n< 7 ' T• will hN0 . �frylµa1{ 200a ii/0Yn tr�!7 VP ing n tllOGh. Ceiityfye• tt rQU hQ%* an aidsliDns fl+9ev2rd• �t«t . krs r. '�pw�r CNv arboa +e Rgninlflrobr, ci1t, M Mu^• lino en Y3!arh, Os 171A1 a� , SSSY � haetT.11berWaP• tl� rnirgter . ira. Clt7 M tan leoocch i �rk M++e +k �rolktrar, C11r PROOF OF PUBLICATION T'd .., , 631SI93d A111nJJ 39lJhi 0 9E:ET T6, 90 031 r.x sz•,:: e,'-a Cs PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA, SS. County of OrCnge, Juanita Folkerts I am a citizen of the United States end a r ident of the County aforesaid; I am over the aae eighteen years, and n.-t a party to or interested ' the above entitled matter. I am the principal cl k of the Printer of The Orange County Register, a nesooper of genera; circulation, published in IV City of Santo Ana, County of Ora:ige, and which nev. paper has been odiutged a newspaper al generpi circulation by the Superior Court of the County o Orongl:, State of California under the dole of ovemter 29, 1905, Case Nunnter A210:6 thcl the node of which the annexed is a printed cony, hos been pyblished in each regular and entire issue of said netn•spopt:r and nit in any supplement thereof on t ie following dates, to VJt: tiovember 5 / 1991 I certify (or declare) under Penali of Perjury that the foregoing is true and correcl. Execut:d al Santa Ano, Catii nio. Juanita Folkerts Date ............4 .. Noykm r. 5...... 19 . 91........ Signal l Ills svocc is for lt)c Coun*y Clerk's tiling Sion-i� The forepoing�",!trument is a correct copy of the original on file in thi office. Attes � � / 19� L -- - city Clerk nrd U offici2 C.,--f. it the City Council of "he City of .11ul-1 a6►C11 Beat. . California. �D ByrT�7tu! rY•:1�+ . _ Deputy r Proof of Publication /c- Notice of Pubng City tell -..-- I PUBLIC NOTICE NOTICE OF PUBLIC HEARING City of Huntington Beach Five Points Senior Yittas / Issuance of �t)% Revenue Bonds NOTICE IS HEREBY GIVEN that the City Council, Of Cho City of Huntington' Beach, at is regular meet- Ing on Nov_ 18. 1991. will hold a public hearing and consider approval of the is• uance by lire City of Hun- tington Boach of Revenue. ` bonds In an amount not to- exceedNino Manion five. ■{TIC_ " Hundred Thousand dollars (59.500.000) for the pur- pose of ass'sting In the fi- nancing of the acquisition. construction and develop- ment of a multilamily rental housing development In the City ofHuntington Beach (the 'P.rolect'l. ,-The Project consists of 164 units and is located on 1.89 acres located at 1BG60 Main Street In the City of Huntington Coach, Caldor- Me. The owner of the Project Is Five Points Se. Nors, a California general partnership. All those Interested in mallets related to the Is. suance of said bonds are, invited to a:lend and be - heard it the meeting which- will commence at 7.00 p.m.: and will be hold In the City - Council Chambers. City: Han, 2000 Main Street,' Hunt nglon Beach. Califor-I nla. It you have any ques• Mons regarding the public hearing, please contacts` Barbara Kaiser, Deputyr City Administrator, City of Huntington Beach, at 1714) 576-5582. Michael T. Ube. ruaga, City Admtnistra. for. City of Huntington Beach By: Connle Brockway, City Clark PROOF OF PUBLICATION REQUEST F PROVED BY CITY GVUNCIL EVELOPMENT A�;ENCY ACTION p�AL ry. ,-.. Date ct .cK Submitted to: Honorable Chairman & Redevelopment Agency Members RH 91-77 November 18, 1991 Submitted by: Michael T. Uberuaga, Chief Executive Officer Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Development' Subject: AFFORDABLE HOUSING AGREEMENT - FIVE POINTS SENIORS, INC. 11 Consistent with Council Policy? [ ] Yes [ j New Policy or Exception &iveezi • o`�/� y Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: SIATEMENJ OF 1.55 : Under the auspices of an Exclusive Negotiation Agreement (ENA) approved by the City Council on August 19, 1991, staff has negotiated an agreement with Five Points Seniors for the inclusion of 48 affordable units - - out of a total of 164 units - -planned for the senior housing development at the corner of Main Street and Florida Avenue. An affordable housing agreement is attached for consideration by the Redevelopment Agency. RECOMMEN-DATIQ 1S: 1. Approve and authorize the Agency Secretary to execute the attached resolution, and the Affordable Housing Agreement between the Redevelopment Agency of the City of Huntington Beach and Five Points Seniors, a California General Partnership. 2. Authorize the allocation and expenditure of $750,000 in redevelopment housing set aside funds to implement the Affordable Housing Agreement (anticipated to be expended in 1993). ANALYSTS: On August 19, 1991, an ENA was approved, authorizing negotiations between the Redevelopment Agency and Five Points Seniors. After two months of negotiations, an agreement has been reached that would, if approved by the Council/Redevelopment Agency, provide 48 units of affordable housing within the larger 164-unit senior housing development approved for entitlements (CUP 91-4). Specifically, the agreements calls for the following: 1) A 3250.00Q_loan i1nd a $500,QM gmnt using RedeyelgpmCntn in asides funds. The Redevelopment Agency will loan housing set aside funds to the developer, Institutional Property Investors (IPI), in the amount of $250,000 for ten (10) years at 5% simple interest rate. Additionally, a grant of $500,000 - payable in $100,000 increments over a five-year period, is also a provided as part of the agreement. 2) 4S unni_lchousing. 32 units will be available to very -low income households (those earning 50% or less of the county median income), while 16 units will be available to low and moderate income households (those earning not more than 120% of median income). \`V U� PIQ/l/85 RH 91-77 November 18, 1991 Page Two 3) 3¢yg��ffordabilityjorAbe-restricted units. All of the affordable units will be restricted by covenant for thirty (30) years. This requirement will also help meet the Agency's replacement housing obligations in the Main —Pier Redevelopment Project Area. More detail on the developer's responsibilities, as well as the Agency's commitments, is discussed in the attached Section 33433 report. As a further financial incentive to the developer, the City (as issuer) sponsored $9,500,000 In multifamily housing revenue bonds for the construction of the project. FUNDING SOURCE: Redevelopment Agency Housing Set Aside Funds (Fiscal Impact Statement attached). ALTERNATIVE ACTION: Do not approve agreement, and direct staff to reopen negotiations with the developer. { 1) Resolution of Approval. 2) Section 33433 Report. 3) Affordable Housing Agreement: Five Points Seniors, Inc. 4) RCA dated August 19, 1991. 5) Fiscal Impact Statement No. 91-38. MTUBAK/GAB:ls 9784r IN CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION HUNnNGTON 8EACH To MICHAEL T. UBERUAGA From ROBERT J. FRANZ City Adninistrator Deputy City Administrator Subject REQUEST FUNDING TO Date NOVEMBER 12, 1991 ACCOMMODATE SENIOR CITIZEN AFFORDABLE HOUSING PROJECT FIS 91-38 As required under the authority of Resolution 4832. a Fiscal Impact Statement has been prepared and submitted relative to the request for funding in facilitating the construction of the Senior Citizen's complex at Main and Florida Streets. Anticipations are that a one-time loan to the developer in the amount of $250,000 plus a $500,000 grant, in five annual increments of $100,000, would constitute the City's contribution towards this effort. Upon approval of the City Council, the balance of the unaudited, undesignated Low Income Housing Fund would be reduced to $1,466,000 while that of the Low Income Housing Bond Fund would be reduced to $5,688,900 for the first year, with additional annual reductions of $100,000 for each of the next four years. ROBERT J. FRANZ Deputy City Administrator RJF:skd WPADSERT:656 REQUES `' FOR CITY COUNCkOACTiONH 91-54 Date August 19, 1991 Submitted to: Honorable Mayor and City Council Members Submitted by: Michael T. Uberuaga, City Administrat�(�_ Prepared by: Barbara A. Kaiser, Deputy City Administrator/EconomicDeve opment Director Subject: Exclusive Negotiation Agreement/Five Points Senior Project at Main & Florida Streets Consistent with Council Policy? M Yes [ I New Policy or Statement of Issue. Recommendation. Analysis, Funding Source. Alternative APPBAYIrD BY CITY COU:;CIL i fictions, Attachments: CrTI CLERK The developer, Institutional Property Investors, Inc. (iPI), proposing the development of a 164-unit senior citizen rental complex located at Main and Florida Streets, has requested financial assistance. The proposed project obtained the necessary development entitlements from Planning Commission on May 17, 1991. Staff has reached tentative agreement with IPA regarding financial assistance for the project, and is requesting City Council action to confirm the agreement. Approve an Exclusive Negotiation Agreement between Institutional Property Investors, Inc., and the City of Huntington Beach and direct staff to prepare appropriate loan agreements. The proposed project's developer, (IPI), has requested financial assistance from the city to enable this development to go forward. Without such assistance, IPI believes the project will not be economically feasible, and therefore would be abandoned. The proposed 164-unit project is designed to accommodate senior citizens of which 20% or 32 units are conditioned to be affordable, and made available to low -moderate income individuals/families. This project is eligible for financial assistance using the city's 20% housing set aside funds, subject to a finding of benefit. As previously directed by the City Council at its study session on July 15, 1991, staff has been negotiating with the developer to determine an appropriate level of financial assistance. We are now in a position to recommend that assistance which basically requires the developer to provide an additional 16 affordable units at moderate -income level for which the city, utilizing set aside funds, will provide the project with a $250,000 loan at 5% interest to be paid back over a ten-year term and an additional $500,000 grant paid over a five-year term at $100,000 per year to assure financial feasibility of the project. The above assistance is also conditioned upon IPI providing substantial equity ($1.5 million) toward the project, providing high -quality construction materials and other agreed upon amenities. No sin ALTERNATIU ACTION: 1) Do not approve Exclusive Negotiation Agreement. 2) Direct staff to further negotiate. FUNDING _SOJIRCE: 1) Redevelopment 20% Housing Set Aside funds for the project if later loan documents are approved. No funds are needed for the requested action. ATTACHMENT : Exclusive Negotiation Agreement. MTU/BAKICPS:ls 9462r EXCLUSIVE NEGOTIATING AGREEMENT (Five Points Senior Villas) THIS EXCLUSIVE NEGOTIATING AGREEMENT (the "Agreement") is made and entered into by and between the REDEVELOPMENT AGJENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency") and the MICHELSON FAMILY TRUST, dated as of December 12, 1984 (the "Developer"). RECITALS The following recitals are a substantive part of this Agreement. A. In furtherance of the objectives of the Community Redevelopment Law of the State of California, Health and Safety Code Section 33000, It seg., and particularly Section 33334.2, et seg., the Agency desires to assist in the development of housing which is to be made available at an affordable housing cost to low- and moderate -income households. B. The Developer proposes to construct and operate a One Hundred Sixty -Four (164) unit senior citizen rental housing project (the "Project") on an approximately 1.84 acre parcel of land at the southwest corner of Main Street and Florida Street in the City of Huntington Beach (the "Proposed Development Site"). The Proposed Development Site is depicted on the Site Map attached hereto as Exhibit "A" and incorporated herein. The City of Huntington Beach (the "City") has approved Negative Declaration No. 91-3, Conditional Use Permit No, 91-4 and Conditional Exception (variance) No. 91-7 with respect to the Project and the Proposed Development Site. C. The Developer desires to negotiate an Owner Participation Agreement ("OPA") with the Agency to assist the Developer in operating affordable housing within the Project. D. The parties recognize and acknowledge that the purpose of this Agreement is to establish a period during which the Developer shall have the exclusive right to negotiate with the Agency the terms of the OPA which will include, without limitation, the economics of the development, the site plan and specific uses of the development, and any other terms relevant to the development of the Project and the Proposed Development Site. E. The parties intend that during the Negotiating Period (as the term is hereinafter defined) each will perform certain actions and responsibilities under this Agreement. E�l F. The Developer has formed Five Point Seniors, a California general partnership, to act as the developer of the Project (the "Partnership"). The Partnership will consist of two general partners, one of which will be the Developer and one of which will be the Norman D. and Sunnie L. Ward Trust. The Developer and the Agency intend for the Partnership, if acceptable to the Agency, to assume the rights and obligations of the Developer pursuant to the OPA. NOW, THEREFORE, the parties hereto mutually agree as follows: 1. Ne otiatin Period. The Agency agrees to negotiate with the Developer and the Developer agrees to negotiate with the Agency for a thirty (30) day period from the date this Agreement is approved by the Agency ("Negotiating Period"). Agency and Developer shall negotiate diligently and in good faith to carry out the obligations of this Agreement on or before the times established in this Agreement, to establish development plans and concepts and to determine the economic feasibility of the development of the Project. The Agency and the Developer agree, for the period set forth above, to negotiate in good faith to prepare an OPA to be entered into between the Agency and the Developer concerning the Proposed Development Site and the Project. The Agency further reserves full discretion with respect to the conduct or disposition of any proceedings which require notice and a public hearing. The obligation to negotiate in good faith requires that Developer and Agency communicate with respect to those issues for which agreement has not been reached, and in such communication follow reasonable negotiation procedures including meetings, telephone conversations and correspondence. If on the last day of the Negotiating Period the Developer has not signed and submitted a draft OPA submitted by the Executive Director for signature by the Developer, then this Agreement shall automatically terminate without further notice by the Agency to the Developer, and both parties knowingly agree that neither party shall have any further rights or obligations to the other arising out of this Agreement. Further, both parties recognize and acknowledge that the purpose of this Agreement is solely to provide a procedure for negotiation, that each party is incurring costs pursuant to the negotiation process provided for in this Agreement, and that there is no intent to provide rights to the Developer in the proposed project aside from the opportunity to negotiate a potential OPA. If an OPA is signed and submitted by the Developer within the Negotiating Period, then this Agreement shall be extended for a period not to exceed thirty (30) days from the date of such submittal to enable the Agency to (i) determine whether it desires to enter into such OPA, and (ii) take the 6816u/2460/000 -2- actions necessary to bring such OPA before the Agency for consideration, action and authorization to sign, if such is approved. Developer acknowledges that the determination by the Agency of whether it desires to enter into the OPA is at its sole and absolute discretion. Both parties further recognize and acknowledge that the Project would be subject to -planning review and approval by the City or an other governmental entity with authority to review such a project, if any such further review and approvals are required. 2. Develo er Submission of Information. The Developer is required to make full disclosure to the Agency of all pertinent information concerning the Developer and the Partnership. The Developer represents to the Agency that within fifteen (15) days of the approval of this Agreement by the Agency it shall submit to the Agency Director for his review all basic information relating to the corporation which is reasonably requested by the Agency including, without limitation, information regarding capitalization, insurance, other liability and financial capacity issues, and an original or true copy of the executed partnership agreement which creates the Partnership or other proposed developer entity. In the event that during the term of this Agreement such information changes, Developer shall submit written evidence of such new information immediately to the Agency Executive Director for his review and consideration. The parties acknowledge that this requirement is necessary so that the Agency may verify the qualifications of the persons and entities which comprise the Developer. 3. Lead Negotiator for Developer. The Developer represents to the Agency that David Michelson, Trustee of the Developer, is the person with whom the Agency staff shall work with on a day-to-day basis concerning the negotiations toward the development of the Proposed Development Site and the Project. If the Developer desires to designate another individual as the lead negotiator on this Project, then it shall notify the Agency Director immediately. 4. Deposit. The Developer shall deliver a letter of credit, in a form reasonably acceptable to the Agency, in the amount of Twenty Thousand Dollars ($20,000) to the Agency upon mutual execution of this Agreement (the "Deposit"). If the Developer terminates this Agreement without cause or if the Agreement terminates for failure of the Developer to perform a required action, then the Agency shall be entitled to reimbursement for costs in negotiation contemplated herein. Such costs shall include reasonable attorneys' and advisory fees incurred by the Agency (the "Negotiation Costs"). The Agency will provide supporting documentation evidencing the Negotiation Costs. In the event that the Deposit exceeds the Negotiation Costs the remainder shall be returned to Developer. The Deposit shall be the maximum amount that the 6816u/2460/000 -3- Developer may be held responsible towards payment of the Negotiation Costs. In the event Developer executes a draft OPA submitted for signature by the Agency's Executive Director but the Agency Board: (i) does not approve the OPA; (ii) terminates the Agreement without cause, or (iii) the Developer terminates the Agreement for failure of the Agency to perform a required action, the full amount of the Deposit shall be returned to Developer. If the Agency Board approves the OPA the Deposit shall be promptly returned to the Developer. 5. Financing. Developer agrees to provide within fifteen (15) days of the Agency approval of this Agreement a description of the proposed method of construction of the Project and permanent financing and amount and sources of capital therefor, which proposed financing method must include a One Million Five Hundred Thousand Dollar ($1,500,000) equity contribution from Developer. The OPA shall provide that the Developer's equity interest in the Project shall be a minimum of One Million Five Hundred Thousand Dollars ($1,500,000) at all times until the fourth (4th) anniversary of the commencement of construction of the Project (or such other period mutually agreed upon by the parties hereto), at which time the Developer's equity interest in the Project shall be a minimum of Five Hundred Thousand Dollars ($500,000). 6. Development Concept Package. Developer further agrees that within thirty (30) days of this Agreement it shall submit documents, reports and information (collectively, the "Development Concept Package") concerning the proposed development that will provide the Agency with the following information: a. A preliminary site plan and architectural/design concept for the development showing access roads, amount and location of parking, location and.size of all buildings, including height and perimeter dimensions, pedestrian and vehicular circulation system (including access to upper floors), landscaping, elevations, perspective renderings and the architectural character of the project. b. A schedule for the development of all structures and improvements proposed and an estimate of development costs including construction and non -construction costs. C. An estimate of project income and expenses and a pro forma statement of project return adequate to enable the Agency to evaluate the economic feasibility of the proposed development. The economic pro forma shall be in a form typically submitted to a construction lender and shall include land prices as determined by the appraiser. The pro forma shall specify the form and amount of the equity to be contributed to the Project by the Developer. This information will be submitted for analysis to an economic consultant selected by the Agency in its sole discretion. 6816u/2460/000 -4- d. Biographical and background description of the Developer and all senior officers of the Developer, including such matters as (i) prior record with respect to the completion of projects, particularly those of a scale comparable to that proposed herein; (ii) record of any pending or past litigation and evidence of timely performance reflecting minimal litigation and/or disputes concerning the payment of joint venturers, contractors, suppliers or taxing authorities and (M) record of satisfactory operation of residential projects. It is understood that the Agency may take appropriate steps to verify such matters, and the Developer agrees to cooperate in furnishing such information to the Agency. The Agency acknowledges that the materials submitted in connection with the obtaining of entitlements for the Project will be sufficient to satisfy requirement (a) above, and acknowledges receipt of the estimate of development costs pursuant to requirement (b) and the pro forma pursuant to requirement (c) above. Within twenty (20) days upon receipt of the Development Concept Package, the Agency staff shall review the development concept proposed by the Developer, together with the remainder of the Development Concept Package, and may either accept it, request modifications or reject it. If any such items are rejected, the Agency staff shall provide a list of deficiencies to the Developer and the Developer shall resubmit the Development Concept Package, with corrections, within ten (10) days of such rejection. If the Agency staff accepts the Development Concept Package, the Agency and Developer shall continue to negotiate toward the execution of an OPA with respect to the development of the Project. 7. Design Objectives. The design and development objectives for the Project shall be specified in the OPA, and the actual development shall be in conformity therewith. The Agency shall cooperate fully with Developer's professional consultants and associates in providing them with any information and assistance reasonably within the capacity of the Agency to provide in connection with the preparation and execution of the drawings, plans and specifications or other documents or information required to be submitted by the Developer to the Agency or to the City pursuant to this Agreement or as required by state or local laws and regulations. This requirement does not obligate the Agency to incur any monetary costs therefor. All design, architectural and building plans for development shall be subject to the review and approval of the Agency and the City. 8. Affordable Housing. The OPA shall provide that certain units within the Project shall be made available and 6816u/2460/000 -5- k.W �.J rented at an "Affordable Rent" (as defined in California Health and Safety Code Section 50053) as follows: (a) Sixteen (16) units for "Very Low Income Households" (as defined in Health and Safety Code Section 50105); - (b) Sixteen (16) units for "Lower Income Households" (as defined in Health and Safety Code Section 50079.5); and (c) Sixteen (16) units for "Persons and Families of Low and Moderate Income" (as defined in Health and Safety Code Section 50093). The OPA shall require that such units be so restricted for thirty (30) years from the occupancy of the Project, and that such restrictions be recorded as an encumbrance against the Property. The Developer shall also be required under the OPA to perform high quality construction of the Project and to provide an activities director and van service to tenants during such thirty (30) year period. 9. A9ency Financial Assistance. The Agency shall be required under the OPA, in consideration for the Developer's performance of the affordable housing requirements set forth in Section 8 above, to provide the following financial assistance to the Developer: (a) Upon the occupancy of the Project, the Agency shall make a loan of Two Hundred Fifty Thousand Dollars ($250,000) to the Developer. The loan shall accrue simple interest of five percent (5%) per annum. The loan shall be for a term of ten (10) years, with interest payments payable monthly in the third (3rd) through tenth (10th) years of the loan. The loan shall be secured by security mutually acceptable to the Agency and the Developer. (b) The Agency shall grant to the Developer the sum of One Hundred Thousand Dollars ($100,000) on each of the first (Ist) through fifth (5th) anniversaries of the occupancy of the Project (for a total of Five Hundred Thousand Dollars ($500,000)) provided that the Developer is in compliance with the OPA. 10. Default. With the exception of those specified obligations herein which failure to perform may cause automatic termination, in the event that the Developer or the Agency fails to fulfill the obligations described in this Agreement within the times specified, the nonperforming party shall have ten (10) days following written notice from the other to commence to cure such failure to perform as may be identified in the written notice. If, in the objective judgment of the other party, the nonperforming party has failed to commence to 6816u/2460/000 -6- cure within such ten (10) day period, the other party may terminate this Agreement and, thereafter, neither party shall have any further rights or obligations to the other except as provided concerning the distribution of the Deposit in paragraph 4 herein. The Developer, by execution hereof knowingly agrees, notwithstanding anything herein to -the contrary, that it shall have no right to specific performance of this Agreement. Each party by execution hereof knowingly agrees, notwithstanding anything to the contrary, that it shall have no right to money damages, nor any other legal remedies or equitable remedies under the law with respect to this Agreement. 11. Mon -Discrimination. Developer shall not discriminate against nor segregate any person, or group of persons on account of sex, race, color, marital status, religion, handicap, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Proposed Development Site, nor shall the Developer establish or permit any such practice or practices of discrimination or segregation in the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land. 12. Environmental Requirements. Certain state and local environmental requirements may be applicable to the proposed development. Pursuant to such requirements certain environmental documents may be required to be prepared and certified for the proposed Project. The Developer agrees to supply information to determine the environmental impact of the proposed development and, at its sole cost and expense, to reimburse the Agency and/or the City for the cost of preparation of such environmental impact documents, if any, as may need to be completed for the development of the Project. 13. Do Real Estate Commissions. The Agency shall not be liable for any real estate commission or brokerage fees which may arise herefrom. The Agency represents that it has engaged no broker, agent or finder in connection with this transaction, and the Developer agrees to hold the Agency harmless from any claim by any broker, agent or finder retained by the Developer. 14. Compliance with Laws. The Developer acknowledges that under the OPA it shall be required to carry out the construction of its improvements in conformity with all applicable laws, including all applicable federal and state labor standards; provided, however, the Developer and its contractors, successors, assigns, transferees and lessees will not be waiving their rights to contest any such laws, rules and standards. 6816u/2460/000 -7- 15. No Assignment. This Agreement shall not be assigned by the Developer without prior written approval of the Agency, which the Agency shall grant or refuse at its sole discretion. 16. Agency Assistance. The Agency shall cooperate fully in providing Developer with appropriate information and assistance, provided that the Agency shall not be obligated to incur costs therefor. 17. Press Releases. The Developer and Agency agree to discuss any press releases with a designated Agency representative prior to disclosure in order to assure accuracy and consistency of the information. 18. Notices. All notices given or required to be given hereunder shall be in writing and addressed to the parties as set out below, or to such other address as may be noticed under and pursuant to this paragraph. Any such notice shall be considered served when actually received by the party intended, whether personally served or sent postage prepaid by registered or certified mail, return receipt requested, or sent by telecopy or overnight courier service. To Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Ms. Barbara Kaiser, Deputy City Administrator/Director of Economic Development To Developer: Institutional Property Investors, Inc. 19800 MacArthur Boulevard, Suite 680 Irvine, California 92715 Attn: Mr. David Michelson, President with a copy to: Bret H. Reed, Jr. A Law Corporation 1300 Dove Street, Suite 200 Newport Beach, California 92660 19. Integration of All Agreements. This Agreement supersedes any previous agreement entered into between the Developer and the Agency with respect to the Proposed Development Site and/or the Project. . 20. Execution Authority. The signatories to this Agreement represent and warrant that they have the authority to execute this Agreement on behalf of the principals they purport to represent. 21. Time of Essence. Time is of the essence of every portion of this Agreement in which time is a material part. 6816u/2460/000 -8- 22. Governing Law. This Agreement shall be construed in accordance with the laws of the State of California. 23. Attorne s• Fees. In the event any action is taken pursuant to this Agreement, the prevailing party shall be entitled to recover from the other party its actual attorneys' fees and costs, whether or not a final court judgment is entered. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year appearing below. Dated: ea�Lo oZ 119,91 REDEVELOPMENT AGENCY OF THE CITY OF H ON BEACH, a public bod -or ate and olitic By: Chairman "AGENCY" ATTEST: iqAf Agency Secretary APPROVED AS TO FORM: Strad�in4d Y a, Carlson & Rauth Speci 1 Couns for the Agency t &Z VA; 6 -1 6 �- City Attorney, y- Lt-1 Agency General Counsel MICHELSON FAMILY TRUST, dated of December 12, 1984 Dated: /J /`! By: cr David Michelson, Trustee "DEVELOPER" 6816u/2460/000 -9- EXHIBIT "A" Site Map of Pro osed Development Site (To Be Inserted) 6816u/2460/000 -10- 340 T E t 02 A A G 1 [ a f t r-. ll 1 This space Is Io Wfhe County Clerks Filing Stamp PROOF OF PUBLICATION (201S.5 C.C.P.) STATE OF CALIFORNIA, SS. County of Orange, I am a citizen of the Unlled States and a resident of the County aforesaid; I am over the age of eighteen Years, and not a party to or Interested In the above entitled matter, f am the principal Clerk of the printer of Orange County Register, a newspaper of general circulation, Published in the City of Santa Ana, County of Orange, and which newspaper has been adiudged a newspaper of general circulation by the Superior Court of the County of Orange, State of California, under the date of November 29.1905. Case Number A210/3; that the notice of which the annexed Is a Printed copy. has been published In each regular and entire Issue of said newspaper and not In any supplement thereof on the following dates, to wit: November 6, 1991 f certify (or declare) under Penalty of penury that the foregoing Is true and correct. Executed at Santa Ana, California. December 260 91 Date........................................................ 14 .............. nrze-�.ei Z��4�"r _,,� Signature PUBLIC NOTICE Proof of Publication of Five Points Senior Villas PUBLIC NOTICE 'e,V 1.LL 47 Ntlltar GIVtti •shad the C.ty Cow•I of the L�dy ( Of Hunt.ngt3n ., or 'lf s r 7.Nar eer Ing on Novem- De' Id. ImQ91, w.11 1104 o OWN.(: he]r.ng and cOnS dr. ac Qr�val oof tn! .stivpn[e t rM C,Ty of }I�nh ngl0n Beath Of rfvinl,e bond.'. on Omo int no• to �.• tf !d N.rw M1111on Fi*e-Mun- lar.fd Trwsord f]allars gw,SM.onr) For fne Pvroose of ss.st,ng .n try hnanc .rrq of 1tr1.1 ataoisihon, rnslr..[t.On. 1ntl oevs•oominf of a mutt.• r tam. IV rePtal Mvfi•W deye.ad• .wwnt in ('M1 Won e Pro Kt-1^ Tr! PrOWI Co'S-S1S Of 16s pros O'O is IM01-d on 1.8) acres i,<oted 01 1066) Mo1111 Slrlet In the •TY of ►'vnr.na- to, Be,--, Olit-rn'] Tne owntr Of I" PrO.ett is Fir! P.WS senors. a Coidorn.o Qrnefal porime%h•P A 1 fhoSa.rjefeSled n.—"ers relOted to Icy tsSVance of 10.d b,.IdS Ore inv.ted to Ot^enwdn rr`d bn heard a1 she .tye g - w.Il co.nmence OF 1. 30 Z,0 w II tx Re d in ft.e C ovnC.l C-ombrrs. Cit'r MO 1. riot Ata'n S1rrt, Nv1W1910n 11 eoch. Coaforn.a If You have any avlslIons rewrdIng trw voic ryQr.nQ. Piro Se tO••Snt* r bare iro.ser, fJlov V C•IV "M.n.s'ro+of. Cote 04 q�n. Y ngton B/aCR, Or (:1/) 1]6- S itv Ad- FA.tRQef s. u'p�•vo4f� e min•Ion Bs'rcror. C•IY oM�nhrW- B":1n.! 1l MCtwOY. City PROOF OF PUBLICATION • THE ORArGE fCOCt�iY �e �ser g C! N Gv1C A.V :81111 Anal CA 927'..1 PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA. SS. County of Orange, Juanita Folkerts I am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen w-crs, cnd mt V Vcr r to or interested I,. the C: Ge entitled matter. I am the principal clerk of the printer of The Orange County Register, o newspaper of general circulation, published in the City of Santa Ana, County of OrG1ge. and which newspaper has been adjudged a newsmoer of general circulation by the Superior Court of the County of Orange, State of Californic under the date of November 29, 1905, Case Number A210-16 that the notice of which the annexed is a printed copy, has been Published in each regular and entire issue of scid newspaper and not in any supplement thereof on the following dates, to wit: October 20, 21, 28, 1991 I certify (or declare) under Penal ity of perjury that the foregoing is true and correct. Executed at Santo Ana, California. Juanita Fclkert5 Date............... ... ....... 19 .91......... Signature This space is for t bounty Clerk's filing Stamps Proof of Publication of Notice of Joint Public Hearing City Council Redevelopment Agency PUSLIC NOTICE CITY Of 64UNTINGTON 31ACM teOTtCI Of JOINT esiillC N{AR14O MY COUP0 lt., RIOEVCLO►KSWT A61NCY toA4 L AtICRO Axle hOU.I4O 31MOR VILLAI INC. pn Nove.ntwr A, Ml of 1 :40 ., or os won therarter gspMmmo��mhrora, Of ■nLo,:ryMIte C.1mbNl to - Korea or '.1" Main Street, ;Hunt n9ton b@aCh, Coiiforn.a. IG"01 I I ..Ity tla. R—eh andd ?" Re• of Hum 0 tow, among 'Agencr; Ud Five POGnts Se• r1W vill", ,Incorporated. SUM ogrernent reWexes the project known o, F.ve Po.nls Senior Vdios', lof0t0d at Main Street and F iarrac Av- enue The propOsed Agree- 1nen1 and a Stott report Inclining o Summary of Ine Agre±ment IS Oy01101)10 for vvh,it 1nsp KI-an W Tne 0.4 ice of Ine Cdr Cltrii. 70.k MO.^ $,reel, Hunl,nglan 6MCh, COIit Xnic crWuid Yotl oe5.re Further inl�rma7ion COnCern- ing lhiS matter. kir%Sy CO 1 Greg Brown of (7141 99t7-3-131 M.Chowr T. VberuOpo, C.tv Ad- m,n.-drafo,, City of Hvr•V•ng' Von E•ecxn g- Conn.e (lroClwov. C;I C rerb. Club Of 141 44ipC.L" _ PROOF OF PUBLICATION e "STATE OF CAUFORNIA County of Orange I am a Citizen of the United States and a resident of the County aforesaid; f am over the age of eighteen years, and not a party to or interested in the below entitled matter i am a pdr-cipal ciark of the HU,"NGTON BEACH INDEPENDENT, a newspaper of general dmulation, printed and pubrshed In the City of Huntington Beach, County of Orange, State of Ca%fomia, and that at -Ached Notice is a true and complete copy as was printed and pubrshed In the Huntington Beach and Fountain Valley Issues of said newspaper to wit the Issue(s) of: October 17, 24, 1991 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on October 24 ► egg at Costa Mesa, California. Signature PUBLIC NOTICE PUBLIC NOTICE NOTICE OF JOINT PUBLIC REARING CITY OOVNCIL/ RIEDEVELOPMgMT AGENCY LOAN AND A"OADABLE PUBLIC NOTICES .H ISING AGREEMENT FIVE POINTS SENOR VILLAS, INC. On November 4. 1991 at 7.00 p.m., or as $oon 0-reader as the "tw may be heard, at the Ciy Council Chambers located at 2000 brain Street, Hurr rington Beach. 4 C.Vifomi.t. yh0 City Council of the City pf Huntington Beach anj the 1Xedrvetopmenl Agancy Af the Gry of Ilunur+yeoi Beach will hold a joint pub. IIC hea►Ing to consider aC- provel of a Loan and AI- /ordabro Housing Anree. lnen1 (the "Agreernen') by Sand among obtl Redevelop- ment Agency o1 the City of Huntington Beach (the I' 1 Lnd Five Poiniv! Sernor la s.Incurporated.� Such agreemerd references the project known as `Five Ponta SeWor Vi:las". I). cared at (,fain Sir" and Flondi Avenue. The pro. posed Agreement and a start report Including a sumrtury Ol the Agreement rs aYallab'e for puttic kn• spection 1n the (Y-1" of the City Cork. ZOO Main Street, Hwtling'on - Beach. "itornla. Shoad you de- sire further Information concerning this matter, ndl kiy p8 Greg town a1 (71d) 660-8871. Pubrished Huntington Beach Indeperldert Octo. bor 17, 24. 1991. 103.754A 0�0 PROOF OF PUBLICATION 1V ''STATE OF CALIFORNIA County of Orange am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or Interested in the below entitled matter. I am a principal clerk Gi the HU-NMNGTJN BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of Carfomia, and that attached Notice Is a true and complete copy as was printed and published In the Huntington Beach and Fountain Valley Issues of said newspaper to wit the issue(s) of: October 17, 24, 1991 I declare, under penalty of perjury, that the foregoing is true and correct Executed on October 24, r 1591_ at Costa Mesa, CaFfomia. �• r Signature PUBLIC NOTICE ! PUBLIC "OTIC£ ! HOTIC£ OF JOINT PUBLIC HEARING CITY COUNCIL! REDEVELOPMENT AGENCY LOAN AND AFFORDABLE PUBLIC NOTICES -- HOUSING AGREEMENT FIVE POINTS SENOR VILLASr INC. " On November 4, 1991 at 7:00 p.m., cr as soon lhereahcr as the matte may be heard, at the C tY Council Chambers located' at 2000 Main Streer• Hum tln�`tOn Beach, Cal,lornia.� the City Council CI the City of 4lunlir+g!pn Beach anc the Redevelopment Agern Of the CRY.Of Hunturcjt01`1 Beach will hold a }oi.�l put- sc hearing to Conskler al} provat of a Loan and At. ordabte Housing Agree- 1 ~1 Pho `Agreement") byau and sony via Redev609- 1rMA AW" of 0a Cily AS Huntington Beach Ithe rAgency j and Five Polrrts 'Servor il:as, tncorporaW. :Such evreement references the project known as "Five Polnrs Senior Vil:as", to - 'sated of Maln Sheet and Florida Avenue. The pro. posed "eemert and a 'staff report including a fummary of the Afireemettl Is availaWs for Futile kr- spection at the Office Of; the City Clerk, 21.DO Main Street. Huntingwri Beach, California. Should you de- sire further Information Concerning this matter, kindly cal Gf0g Crown at (714) 960-8831. Published Huntington Beach Independent Octo- ber 17, 24, 1991. 103-7saa PROOF OF PUBLICATION "STATE OF CAUFORNIA County of Orange , I am a Citizen of the United States and a resident of the County aforesaid* I am over the age of eighteen years, and not a party to or Interested in the below entitled matter. I am a principal clerk of the HUNTlNGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the atyr of Huntington Beach, County of Orange, State of Ca(ifomia, and that attached Notice is a true and complete copy as was printed and published In the Huntington Beach and Fountain Valley Issues of sad newspaper to wit the issue(s) of: October 31, 1991 PUBLIC NOTICE.. CITY OF HUNTINGTON BEACH NOTICE OF CANCELLATION JOINT PUBLIC HEARING LOAN AND AFFORDABLE HOUSING AGREEMENT ' Five POINT SENIOR VILLAS,:: INC. r A public hearing me: was originally Scheduled for November 4, 1991.' at 7:00 P.M. on the above nh erenced document bat b"n canca`Dd. The hear. • ing is tentatively rescued - led for November r1li. 1981. � The City of Huntingtan I declare under penalty of perjury, that the P Y P rI rY� InCOn apologizes for OW incOnveneente • t Ih:s a►ay foregoing is true and correct. cause. Any questions3 or Concerns Should 6a :,dF reclel to Greg Brown, Oa- Executed on, octOber 31 r jgg? velopment $peclallst.:-_01 (7714)SM- T?Ubar St Costa Mesa,Calico ia. City AdmInWrator, CCltx . of Huntington Bomb, 00, By: Gonnla Brockway, City Clock _ Published Huntington Independent Octo. ber 31.1991 '16 Signature Signature im-a n PROOF OF PUBLICATION - Iji �rJ "STAT8 OF CAUFORNIA County of Orange . 1 am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or Interested in the b3low entitled matter. 1 am a principal clerk of the HU"NGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the CRy of Huntington Beach, County of Orange, State 'of Cafifomia, and that attached Notice is a true and complete copy as was printed and published In the Huntington Beach and Fountain Valley issues of said newpaper to wit the issue(s) of: October 31, 1991 PUBLIC NOTICE, CITY OF . HUNTINGTON BEACH , NOTICE OF CANCELLA(flON . JOINT PU$&IC "FAR11Mp . LOAN AMU AFFoamiLs r HOUSING e AGREEMENT" F FtVIE POINT SElttOMt VILLAS, .: INC. r A public hearing the. was ofigrna'ly scheduisd for November a, 1901.1at 7:00 P.M. on the above r91- •renced document hills been cancelled. The I'+dn tenta:iv" rraefr�" Zs t declare. under penalty of perjury, that the Ht1191. far November r foregoing is true and correct The City of HuntinWm Beach apologies tar any invonylinience this rlMV Executed ori.. October 31 . .. ,199 1 Cause. Any Quesitons : or Concerns should be .416 rectvOloe to G-eg SfSpeclal.s. D at. Costa Mesa, Cafiomia. (7114) 535l T2.Wahaoub.n...,'• City Administrator, C11tr t of Huntington Basch,' By: Connie Brockway, Ctty Clerk Published Hunilnpton Signature each Indepondent CCW er 31, 1991 '` mug PROOF OF PUBLICATION "STATE OF CAUFORNIA County of Orange am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or Interested in the below entitled matter. I am a principal cleric of the HU"NGTON BEACH fr11vil_.PE1:wra• a, A i•viii,.....rare, vi Cb`.il:.ra. circulation, printed ane, published in the City of Hundington Beach, Cotaiy of Orange, State of CaGiomia, and that attached Notice is a true and complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of said newspaper to wit the issues)of: October 17* 1991 1 declare, under penalty of perjury, that the foregoing is true and correct. Executed on. Octobfar 17, 199L at Costa Mesa, California Signature PUBLIC NOTICE PUBLIC NOTICE NOTICE OF HEARING LOAN AND AFFORDABLE HOUSING AGREEMENT FIVE POINTS SENOR VILLAS, INC. On November 4. 1991 at 7:00 p.m.. or as soon thereafter as tha matter may be heard. at the City Council Chambers located at 2a.0 main Street. Hurt. tinglon Beach. California. the City Council of the City fof Hunting,on Beach and the Redevelopment Agency of the City of Huntington Beach wit{ hold a Joni pub- lic hearing to Consider ao- proval of a Loan and At - fordable Housing Agree- ment Me "Apeement"j by and among the Redevelop- ment Agency of the C.ly of Huntington Beach 'the ••Agony') and Five Points Senior 1r Jas. Incoryorated. Such agreement references the project Itnowq as "Five Points Senior Villas". to- taled at Main Street and Florida Avenue. The pro-' Posed Agreement acd a star) report Including a. summary of She Agreement is ava,lable for public ln•l speclion at the Office of the City Clerk. 2003 Main Street. Hunf.nglen Beach. CaMornia. Should You de- sire further Informa+ion concerning this master. kindly call Greg Brown it p14j 963.8831. Published Huntington Beach 1neependant Octo-, bet 17. 1991. 1 • --- _ . - -.. f 07-T54r r 3 PROOF OF PUBLICATION PUBLIC NOTICE 091n+-TVb11L '�O? NOTICE OFAHEARING Ct C��� LOAN AND AFFORDABLE HOUSIN GREEMENT ` �[ FIVE POINTS SENIOR VILLAS, INC. On November 4, 1991 at 7:00 p.m., or as soon thereafter as the matter may be heard, at the City Council Chambers located at 2000 Main Street, Huntington Beach, California, the City Council of the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach will hold a joint public hearing to consider approval of a Loan and Affordable Housing Agreement (the "Agreement") by and among the Redevelopment Agency of the City of Huntington Beach (the "Agency") and Five Points Senior Villas, Incorporated. Such agreement references the project known as "Five Points Senior Villas", located at Main Street and Florida Avenue. The proposed Agreement and a staff report including a summary of the Agreement is available for public inspection at the Office of the City Clerk, 2000 Main Street, Huntington Beach, California. Should you desire further information concerning this matter, kindly call Greg Brown at (714) 950-8931. Michael T. Uberuaga, City Administrator, City of Huntington Beach By: Connie Brockway, City Clerk 17 Publish in Huntington Beach Independent Octoberf; 1991. 0519y 4-0 �5f d 4 fe CITY OF HUNTINGTON BEACH IINTER-DEPARTMENT COMMUNICATION HUNTINCT NV 51ACH To MICHAEL T. UBERUAGA From ROBERT J. FRANZ City Administrator Deputy City Administrator Subject REQUEST FUNDING TO Date NOVEMBER 12, 1991 ACCOMMODATE SENIOR CITIZEN AFFORDABLE HOUSING PROJECT FIS 91-38 As required under the authority of Resolution 4832, a Fiscal Impact Statement has been prepared and submitted relative to the request for funding in facilitating the construction of the Senior Citizen's complex at Main and Florida Streets. Anticipations are that a one-time loan to the developer in the amount of $250,000 plus a $500,000 grant, in five annual increments of $100,000, would constitute the City's contribution towards this effort. Upon approval of the City Council, the balance of the unaudited, undesignated Low Income Housing Fund would be reduced to $1,466.000 while that of the Low Income Housing Bond Fund would be reduced to $5,688,900 for the first year, with additional annual reductions of $100,000 for each of the next four years. RJF:skd WPADSERT:656 OR RESOLUTION NO. 219 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 FIVE POINTS SENIORS WHEREAS, California Health and Safety Code Section 33334.2 and the Redevelopment Plan for the Main -Pier 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 purposes of increasing, improving and preserving the cormnunity's supply of low and moderate income housing available at affordable housing cost to persons and families of low 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 -1- dated June 26, 19B9, 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 The Agency is required pursuant-'to'Section 33413 to rehabilitate, develop or construct replacement dwelling units for those units housing persons and families of low and moderate income which have been destroyed or removed from the low- and moderate -income housing market as part of a redevelopment project; and The Agency has destroyed and removed certain units which housed persons of low and moderate 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 Affordable Housing Agreement ("Agreement") with Five Points Seniors, a California general partnership ("Developer"), for the development of affordable housing on a site located outside the Project Area ("Site"), as described in the Agreement; and The Agency has duly considered all terms and conditions of the proposed Agreement and believes that the development of the -Site pursuant to the subject Agreement 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 -2- LIN The City Council of the City of Huntington Beach has previously examined the environmental impact of the development proposed by the Agreement and has determined that the development will not have a significant effect on the environment, and has approved Negative Declaration No. 91-3 in conjunction with Use Permit No. 90-4 and Conditional Exception No. 91-7; and The Agency has considered the report of Agency staff on the proposed development to be carried out pursuant to said Agreement, NOW, THEREFORE, The Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: 1. The Agency finds that the project will not result in any significant impacts on the environment beyond those effects considered by the City Council in its adoption of Negative Declaration No. 91-3 in conjunction with Use Permit No. 90-4 and Conditional Exception No. 91-7. The Agency hereby approves the Notice of Exemption prepared with respect to the development which indicates that the proposed Agreement is exempt from the California Environmental Quality Act pursuant to 14 Cal. Code Regulations Section 15061(b)(3), and directs the Secretary of the Agency to file the Notice of Exemption with the County Clerk of the County of Orange. 2. The Agency finds and determines that expenditures from the Housing Fund as contemplated by the Agreement will directly and specifically benefit, improve, and preserve the corrinunity's supply of low- and moderate -income housing within the meaning of Section 33334.2. -3- 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 created by the Agreement which are restricted to persons and families of low and moderate 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 Agreement on behalf of the Agency. A copy of the Agreement 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 carry out and implement the Agreement and to administer the Agency's obligations, responsibilities and duties to be performed under the Agreement and related documents. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meets t e f held on this_ 1M day of ,November , 199 .r • Chairman ATTEST: Agin y ecre REVIEWED AND APPROVED: City Administrator APPROVED AS TO FORM: A, 1--3 }I Agency Counsel 3-c of-L-11 INITIATED AND APPROVED: rri recto o fl-rc mic Development -4- �10' Res �.,o . 219 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH) I, CONNIE 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 a meeting of said Redevelopment Agency held on the 18th day of November _ _ , 19,a, and that it was so adopted by the following vote: AYES: Members: Winchell, Silva, Green,Kelly, Rabitaille, Moulton -Patterson NOES: • Members: MacAllister ABSENT: Members: b�� Clerk of the edeve opmen gFTency o the City of Huntington Be ch, Ca. L.` I. II. U TABLE OF CONTENTS [§100] SUBJECT OF AGREEMENT A. [5101] Purpose of Agreement B. [§102] The Site C. [§103] Parties to the Agreement 1. [5104] The Agency 2. [§105] The Developer D. [6106] The Guarantors E. [§107] Prohibition Against Change in Ownership, Management and Control of Developer [§200] AGENCY ASSISTANCE A. [§201] Agency Loan B. [§202] Note and Deed of Trust C. [§203] Agency Grant D. [§204] Submission of Evidence of Financing Commitments and Loan Closing [§300] DEVELOPMENT OF THE SITE A. [§301] Development of the Site by the Developer 1. [§302] Scope of Development 2. [§303] Site Plan 3. [§304] Construction Drawings and Related Documents 4. [§305] Approval of Plans, Drawings, and Related Documents 5. [§306] Cost of Construction 6. [§307] Construction Schedule 7. [§308] Bodily Injury and Property Damage Insurance 8. [§309] City and Other Governmental Agency Permits 9. [§310] Rights of Access 10. [§311] Local, State and Federal Laws 11. [9312] Antidiscrimination During Construction B. [§313] Taxes, Assessments, Encumbrances and Liens C. (1314] Prohibition Against Transfer of the Site, the Buildings or Structures Thereon D. [§315) Certificate of Completion E. 1§3161 Mortgage, Deed of Trust, Sale and Lease -Back Financing; Rights of Holders 1. [§317] No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease -Back for Development 2. [§318] Holder Not Obligated to Construct Improvements 3. [§319] Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure 4. (§320] Right of the Agency to Cure Mortgage or Deed of Trust Default 5. [§321] Environmental Matters IV. [§400] USE OF THE SITE A. [§401] Use in Conformance with Agreement B. [§402] Affordable Rental Housing C. [§403] Operating Expenses D. [§404] Management and Maintenance E. [§405] Rights of Access F. 1§4061 Developer's Equity G. [§407] Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction H. [§4081 Nondiscrimination M VI. [5500] GENERAL PROVISIONS A. [§501] Notices, Demands and Communications Between the Parties B. (6502] Conflicts of Interest C. [§503] Enforced Delay; Extension of Times of Performance D. [§504] Nonliability of Officials and Employees of the Agency [§600] DEFAULTS AND REMEDIES A. [§601] Defaults -- General B. [§602] Legal Actions 1. [§603] Institution of Legal Actions 2. [§604] Applicable Law 3. [§605] Acceptance of Service of Process C. (§606) Rights and Remedies Are Cumulative D. (§607] Inaction Not a Waiver of Default E. (5608] Liquidated Damages F. 156091 Remedies and Rights of Termination Prior to Conveyance 1. [6610] Damages 2. {§611] Specific Performance 3. [§612] Termination by the Developer Prior to Completion 4. [§613] Termination by the Agency Prior to Completion G. 1§6141 Remedies of the Parties for Default After Completion 1. [§6151 Termination and Damages 2. [§616] Action for Specific Performance �.01 VII. [§700] SPECIAL PROVISIONS A. [§701] Real Estate Commissions B. 1§7021 Successors in Interest C. [§703] Memorandum of Agreement VIII. [68001 ENTIRE AGREEMENT, WAIVERS IX. 159001 TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY ATTACHMENTS Attachment No. 1 Site Map and Legal Description Attachment No. 2 Cuaranty Attachment No. 3 Promissory Note Secured by Deed of Trust Attachment No. 4 Construction Deed of Trust With Assignment of Rents Attachment No. 5 Schedule of Performance Attachment No. 6 Scope of Development Attachment No. 7 Certificate of Completion for Construction and Development Attachment No. 8 Declaration of Covenants, Conditions and Restrictions Attachment No. 9 Certification of Eligibility Attachment No. 10 Certification of Continuing Program Compliance Attachment No. 11 Operating Budget Attachment No. 12 Memorandum of Affordable Housing Agreement �101 �Wd AFFORDABLE HOUSING AGREEMENT (Five Points Senior Villas) THIS AFFORDABLE HOUSING AGREEMENT (the "Agreement") is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HU TINGTON BEACH, a public body corporate and politic (the "Agency") and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer"). The Agency and the Developer hereby agree as follows: I. [6100) SUBJECT OF AGREEMENT A. (§loll Purpose of Agreement A. The Agency is required by California Health and Safety Code Section 33334.2, et Res., to expend a certain percentage of property taxes allocated to it for the purpose of increasing, improving and preserving the City of Huntington Beach's supply of Low- and Moderate -Income housing available at an Affordable Housing Cost. B. This Agreement provides for the development of a One Hundred Sixty -Four (164) unit senior citizen rental housing project (the "Project") on an approximately 1.89 acre parcel of land within the City of Huntington Beach. Forty-eight (48) of those units (the "Affordable Units") will be available pursuant to this Agreement for Very Low Income Households, Lower Income Households and Persons and Families of Low and Moderate Income at an Affordable Rent (as those terms are defined in Section 402 hereof) for a period of thirty (30) years. C. In consideration for the Developer's construction and operation of the Project and the Affordable Units, this Agreement provides that the Agency shall make available certain financial assistance in the form of a low interest loan and a series of wive grants. C. [§102] The Site The Site is that real property located in the City of Huntington Beach ("City") as depicted and more fully described in the "Site Map and Legal Description" which is attached hereto as Attachment No. 1, and incorporated herein by reference. The Site is not located in any redevelopment project area of the City, but the development of the Project will be of benefit to the Main -Pier Redevelopment Project due to the creation of affordable housing near such project area. The Agency intends that the Affordable Units shall replace certain housing in the Main -Pier Redevelopment Project occupied by persons of Low and Moderate Income which was destroyed to facilitate certain redevelopment activities within such project %.W' �.O' area. The Developer owns, or will own at the time of the commencement of construction hereunder, fee simple title to the entire Site. C. [5103] Parties to the Agreement 1. [§104) The Agency The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, California Health and Safety Code Section 33000, et seq. The principal office of the Agency is located at City Hall, 2000 Main Street, Huntington Beach, California 92648. "Agency", as used in this Agreement, includes the Redevelopment Agency of the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. 2. IS1051 The Developer The Developer is Five Points Seniors, L.P., which is a California limited partnership. The principal office and mailing address of the Developer for the purposes of this Agreement is c/o Institutional Property Investors, Inc., 19800 MacArthur Boulevard, Suite 680, Irvine, California 92715. The sole general partner of the Developer is David R. Michelson, Trustee of the Michelson Family Trust, under trust dated as of December 12, 1984, as amended March 1, 1985. The Developer represents and warrants to the Agency as follows: (a) The Developer is a duly established limited partnership and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. (b) The Developer does not have any material contingent obligations or any material contractual agreements which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. (c) There are no material pending or, so far as is known to the Developer, threatened, legal proceedings to which the Developer is or may be made a party or to which any �(p 11/05/91 (#) . 7100u/2460/050 -2- of its property is or may become subject, which has not been fully disclosed in the documentation submitted to the Agency which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. (d) There is no action or proceeding pending or, to the Developer's best knowledge, threatened, relating to the dissolution or liquidation of the Developer, and there is no action or proceeding pending or, to the Developer's best knowledge, threatened by or against the Developer which could affect the validity and enforceability of -the terms of this Agreement, or materially and adversely affect the ability of the Developer to carry out its obligations hereunder. (e) The Developer has performed all of its obligations to be performed at or prior to this date in accordance with the "Schedule of Performance", which is attached hereto as Attachment No. 5 and incorporated herein, and is not in default hereunder. Each of the foregoing items (a) to (e), inclusive, shall be deemed to be an ongoing representation and warranty. The Developer shall advise the Agency in writing if there is any material change pertaining to any matters set forth or referenced in the foregoing items (a) to (e), inclusive. D. 1§1063 The Guarantors The "Guarantors" are David Michelson, Kathleen M. Michelson, Norman D. Ward and Bunnie L. Ward. As beneficiaries of the trusts which are partners of the Developer, the Guarantors will benefit materially by the execution of this Agreement. Concurrently with the execution of this Agreement the Guarantors shall execute and deliver to the Agency a guaranty of the Developer's obligations pursuant to this Agreement in the form of the "Guaranty" which is attached hereto as Attachments No. 2-A and 2-B and incorporated herein by reference. The parties agree and acknowledge that the delivery of the Guaranty by the Guarantors is a material inducement for the Agency to approve the Agreement, and that but for the provision of such Guaranty, the Agency would not approve this Agreement. E. [61071 Prohibition Against Change in Ownership Management and Control of Developer The qualifications and identities of the Developer and its general partners are of particular interest and concern to the City and the Agency. It is because of these qualifications and identities that the Agency has entered into this Agreement with the Developer. Consequently, except as 11/05/92 (#) ;1 7100u/2460/050 -3- �Wj �W) expressly set forth in this Section 107 and Section 319 hereof, no person, whether a voluntary or involuntary successor in interest of the Developer, shall acquire any rights or powers under this Agreement nor shall the Developer assign or transfer all or any part of this Agreement or any rights hereunder without the prior written approval of the Agency. The Agency shall approve such a transfer upon receipt by the Developer of (i) reasonable evidence satisfactory to the Agency that the transferee has assumed in writing, and in full, the Developer's duties and obligations under this Agreement and the attachments hereto, jii) an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Developer under this Agreement and that such obligations and this. Agreement are binding on the transferee, and Iiii) the Agency receives evidence acceptable to the Agency that either (a) the transferee has experience in the ownership, operation and management of rental housing developments such as the Developer Improvements without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such developments, or (b) the transferee agrees to retain a property management firm with the experience and record described in Section (a) above. Written approval of the Agency shall also be required prior to any and all changes whatsoever in the identity of the person in control of the Developer, including any change in, or addition of, general partners of the Developer. The voluntary or involuntary sale or transfer of any general partnership interest of the Developer shall be deemed to constitute an assignment for the purposes of this Section 107 and the written approval of the Agency shall be required prior to effecting such a transfer. Any purported transfer, voluntary, involuntary, or by operation of law, except with the prior written consent of the Agency in accordance with this Section 107, shall constitute a default of Developer and shall confer no rights whatsoever upon any purported assignee or transferee. Notwithstanding any other provision of this Section 107 to the contrary, Agency approval of an assignment of this Agreement, or any interest therein, or an assignment of a general partnership interest or limited partnership interest in the Developer, shall not be required in connection with any transfer of an interest in the Developer so long as the existing general partner of the Developer retains operational and managerial control over development of the Site, provided that such transfer does not affect more than forty-nine percent (49%) of the existing general partnership interest in the Developer and the Developer shall remain responsible for the obligations of the Developer hereunder. All of the terms, covenants and conditions of this Agreement shall be binding upon and shall inure to the 11/05/91 (#) • 7100u/2460/050 -4- M benefit of the Developer and the permitted successors and assigns of the Developer. Whenever the term "Developer" is used herein, such term shall include any other permitted successors and assigns as herein provided. II. [§2001 AGENCY ASSISTANCE A. 1§2011 Agency Loan Upon the issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, and subject to the applicable terms and conditions of this Agreement, the Agency agrees to loan to the Developer the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "Agency Loan"). B. (§202] Note and Deed of Trust The Agency Loan shall be evidenced by the Developer's execution of a "Promissory Note," in the form of Attachment No. 3 hereto, which is incorporated herein. The Promissory Note shall bear simple interest at the rate of five percent (5%) per annum for term of the loan. The Developer shall make monthly payments of principal and interest during the third (3rd) through tenth (loth) years of the Agency Loan, with payments amortized over the eight (8) year repayment period and with the loan balance due in full upon the tenth (10th) anniversary of the Agency Loan. The full amount of the Promissory Note, with all interest accrued thereon, shall be immediately due and payable upon the Developer's uncured default of this Agreement and/or the Promissory Note. The Developer's obligations pursuant to the Promissory Note shall be secured by the Developer's execution of a "Deed of Trust" in the form of Attachment No. 4 hereto, which is incorporated herein. The Deed of Trust shall be made subordinate to the obligations pursuant to any multifamily housing revenue bond issuance which provides funds for the construction of the Project. The Agency may, in its reasonable discretion, subordinate the Deed of Trust to any mortgage or deed of trust encumbering the Site which secures other financing obtained by the Developer necessary to undertake the development of the Site in accordance with this Agreement, provided that the Agency determines that such subordination is necessary to enable the Developer to develop the Developer Improvements. The Developer shall execute and deliver a copy of the Promissory Note and the Deed of Trust to the Agency as a condition precedent to the disbursement of the Agency Loan Proceeds. In connection with the Deed of Trust, the Agency may obtain, at the expense of the Developer, an ALTA lender's policy or policies of title insurance, together with such endorsements as are reasonably requested by the Agency. 11/05/91 (#) -e 7100u/2460/050 -5- C. [§203] Agency Grant Upon each of the first (1st) through fifth (5th) anniversaries of the issuance of a certificate of occupancy for the Developer Improvements, and provided the Developer is not in default of this Agreement, the Agency shall grant to the Developer the sum of One Hundred Thousand Dollars ($100,000) (for a total of Five Hundred Thousand Dollars ($500,000)). Such payments shall be in Consideration for the Developer's agreement to provide housing to Very Low, Lower, and Low- and Moderate -Income Households at an Affordable Rent (as those terms are defined in Section 402 hereof), and to provide a high quality level of construction materials and amenities in the development and operation of the Developer Improvements, as set forth in this Agreement and the attachments hereto. D. [§204) Submission of Evidence of Fin_a_ncinq Commitments and Loan Closing As required in this Agreement and within the time established therefor in the Schedule of Performance (Attachment No. 5), the Developer shall submit to the Agency evidence that the Developer has cbtained sufficient equity capital and firm and binding commitments for financing necessary to undertake the develcpment of the Site in accordance with this Agreement. The Agency shall approve or disapprove such evidence of financing commitments within the time set forth in the Schedule of Performance. Approval shall not be unreasonably withheld or conditioned. If the Agency shall reasonably disapprove any such evidence of financing, the Agency shall do so by written notice to the Developer stating the reasons for such disapproval and the Developer shall diligently pursue and shall within (_) days of such notice submit to the Agency new evidence of financing. The Agency shall approve or disapprove such new evidence of financing in the same runner and within the same times established in this Section 204 for the approval or disapproval of the evidence of financing as initially submitted to the Agency. Such evidence of financing shall include the following: 1. A copy of the commitment obtained by the Developer for the mortgage loan or loans for financing to fund the construction of the applicable Developer Improvements. The commitment for financing shall be in such form and content acceptable to the Agency as reasonably evidences a legally binding, firm and enforceable commitment subject to the construction lender's customary and normal conditions and terns; and 2. A copy of the contract between the Developer and one or More general contractors for the construction of the �4 11/05/91 (#) • 7100u/2460/050 -6- applicable Developer Improvements, certified by the Developer to be a true and correct copy thereof; and 3. A financial statement and/or other documentation satisfactory to the Agency as evidence of other sources of capital sufficient to demonstrate that the Developer has adequate funds to cover the equity requirements of construction of the Improvements and the requirements of Section 406 hereof. Such funds shall be in the amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) from the commencement of construction through the second (2nd) anniversary of the date a certificate of occupancy for the Developer Improvements is issued by the City. III. [ §300 j DEVELOPMENT OF THE SITE A. [§301) DeveioDment of the Site by the Developer At its option, the Agency shall have the right to review and approve the plans and specifications for the Developer Improvements as set forth in Sections 302 through 305 hereof. 1. [§3021 Scone of Development The Site shall be developed as provided in the Scope of Development (Attachment No. 6). The Developer shall commence and complete construction of such improvements (the "Developer Improvenents") by the respective times established therefor in the Schedule of Performance (Attachment No. 5) subject to Section 503 of this Agreement. The development shall include any plans and specifications submitted to City and/or Agency for approval, and shall incorporate or show compliance with all applicable mitigation. measures. 2. [§303] Site Plan The Developer has prepared and submitted to the Agency for its approval Design Drawings and a Site Plan and related documents containing the overall plan for development of the Site in sufficient detail to enable -the Agency to effectively evaluate the proposal for relationship of structures to landscape, physical and environmental considerations and conformity to the requirements of this Agreement. The Agency has approved such submissions. The Site shall be developed as established in this Agreement and such documents except as changes may be mutually agreed upon between the Developer and the Agency. Any such changes shall be within the limitations of the Scope of Development which is attached to this Agreement as Attachment No. 6 and incorporated herein. 11/05/91 (#) S1 7100u/2460/050 -7- �W' 3. [63041 Construction Drawings and Related Documents By the time set forth therefor in the Schedule of Performance (Attachment No. 5), the Developer shall prepare and submit to the City construction drawings, landscape plans, and related documents for development of the Site for building pernit(s). During the preparation of all drawings and plans, staff of the Agency, City, and the Developer shall hold regular progress meetings to coordinate the preparation of, submission to, and review of drawings, plans and related documents by the Agency. The staff of Agency, City, and the Developer shall communicate and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the Agency can receive prompt and speedy consideration. The Developer shall be obligated to obtain all City approvals required for the construction of the Developer Improvements. 4. [§305] Approval of Plans, Drawings, and Related Documents The Agency and the City shall have the right of planning review, including plan check, of all plans and submissions, including any changes therein. The Agency shall approve or disapprove such plans and submissions within the same time periods established by the City for its review of construction and architectural plans and submissions. During each stage of the processing for Developer Improvements, the Agency and the City shall have the right to require additional information and shall advise the Developer if any submittal of plans or drawings is not complete or not in accordance with City/Agency procedures. If the Agency or the City determines that such a submittal is not complete or not in accordance with procedures, such tender shall not be deemed to constitute a submittal for purposes of satisfying the Schedule of Performance (Attachment No. 5). If the Developer desires to make any substantial changes in the construction plans after their approval by the Agency and the City, the Developer shall submit the proposed change to the Agency and the City for their approval. If the construction plans, as modified by the proposed change, conform to the requirements of Section 304 of this Agreement and the Scope of Development (Attachment No. 6) the Agency and the City shall approve or reject the proposed change and notify the Developer in writing within such periods as are established by the City for its review of such changes to construction and architectural plans and specifications. Such change in construction plans shall, in no event, be deemed approved by the Agency or the City without such an actual approval. 11/05/91 (#) S� 7100u/2460/050 -8- Q S. [§306) Cost of Construction All the costs of site preparation, planning, designing and constructing the Developer Improvements and developing the Site and constructing all improvements thereon shall be borne solely by the Developer. As more fully set .forth in the Scope of Development (Attachment No. 6), the Developer Improvements shall be constructed to the same or better standard of quality as the apartment project constructed by the Developer at Valley View, Carden Grove, California. The Developer shall also bear all costs related to discharging the duties of the Developer set forth in this Agreement. The Developer assumes the responsibility to construct and shall let contracts for or cause to be constructed all off -site improvements developed pursuant to this Agreement. The Developer shall be responsible for all fees associated with development of the Developer Improvements, including, without limitation, school facilities fees and impact fees ("School Fees"). Upon completion of the Developer' Improvements, the Developer shall submit to the Agency a detailed and itemized report of its costs of development. The Agency agrees, upon request therefor by the Developer, to consider, but in no way is obligated, to issue or participate in the issuance of multi -family housing bonds ("Bonds") to assist in financing of the Project. For any such financing to proceed, it is understood that: (i) the entire cost of such financing, including without limitation costs of issuance, debt service, and financial advisement of the Agency, shall be borne by the Developer; (ii) the bonds shall have a rating of "A" or better from Moody's or Standard and Poor's; and (iii) neither the Agency nor the City shall have any liability, contingent or otherwise, concerning or with respect to such bonds. 6. [§3071 Construction Schedule The Developer shall promptly begin and thereafter diligently prosecute to completion the construction of the Developer Improvements, with all construction commencing and being completed within the times specified therefor in the Schedule of Performance (Attachment No. 5), subject to Section 503 of this Agreement. 7. [§308) Bodily Injury and Prope_rty_DamacZe insurance The Developer shall defend, indemnify, assume all responsibility for and hold the Agency, its officers, agents, representatives and employees harmless from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including reasonable attorneys' 11/05/91 (#) 7100u/2460/050 -9- .� k.0F Q fees and costs), which may be caused by any of the Developer's acts, omissions or failures to act under this Agreement, whether such activities or performance thereof be by the Developer or anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement. The Developer shall take out and maintain during the life of this Agreement a comprehensive liability policy in the amount of One Million Dollars ($1,000,000) combined single limit policy, including contractual liability, or such other higher amount as the Developer's construction lender may require, as shall protect the Developer, City and Agency from claims for such damages. The Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form of the insurance carrier setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and the Agency (and their respective officers, agents, and employees) as additional insureds under the policy. The certificate by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City and the Agency of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by the Developer shall be primary insurance and not contributing with any insurance maintained by the Agency or City, and the policy shall contain such an endorsement. The insurance policy or the certificate of insurance shall contain a waiver of subrogation for the benefit of the City and the Agency. The required certificate shall be furnished by the Developer at the time set forth therefor in the Schedule of Performance (Attachment No. 5). The Developer shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. B. 1§3093 City and Other Governmental Agency Permits Before commencement of construction or development of any buildings, structures or other works of improvement upon the Site or related offsite improvements, the Developer shall, at its own expense, take all actions necessary and proper to secure or cause to be secured any and all permits which may be required by the City or any other governmental agency affected by such construction, development or work. It a 11/05/91 (#) 7100u/2450/050 -10- is understood that the Developer's obligation is to pay all necessary fees and to timely submit to the City final drawings with final corrections necessary to obtain a building permit; the Agency will, without obligation to incur liability or expense therefor, use its best efforts to expedite issuance of building permits and certificates of occupancy for construction that meets the requirements of the City Code. The Developer agrees and acknowledges that it shall be responsible for the cost of such environmental review and clearance as may be deemed necessary or appropriate in connection with the processing of land use entitlements with respect to the Site. 9. [63101 Rights of Access For the purpose of assuring compliance with this Agreement, representatives of the Agency and the City shall have the right of access to all portions of the Site without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the Developer Improvements, so long as they comply with all safety rules. Such representatives of the Agency or the City shall be those who are so identified in writing by the Executive Director of the Agency. The Agency shall indemnify and hold the Developer and its partners, employees and agents harmless from any bodily injury or related damages arising out of the activities of the Agency and the City as referred to in this Section 310. The Developer agrees to place and maintain on the Site during construction of the Developer Improvements one (1) sign indicating the respective roles of the Developer and the Agency in the Developer Improvements. The cost of the sign shall be borne solely by the Developer. 10. [§311] Local, State and Federal Laws The Developer shall carry out the construction of the Developer Improvements in conformity with all applicable laws, including all applicable federal and state labor standards; provided, however, Developer and its contractors, successors, assigns, transferees, and lessees do not waive their rights to contest any such laws, rules or standards. 11. [§312) Antidiscrimination During Construction The Developer, for itself and its successors and assigns, agrees that in the construction of the Developer Improvements provided for in this Agreement, the Developer will not discriminate against any employee or applicant for employment because of race, color, creed, religion, age, sex, marital status, handicap, national origin or ancestry. Je 11/05/91 M 3*J 7100u/2460/050 -11- • B. [§313] Taxes, Assessments, Encumbrances and Liens The Developer shall pay prior to delinquency all ad valorem taxes and assessments on the Site. Prior to issuance of a Certificate of Completion pursuant to Section 315, except for encumbrances allowed pursuant to this Agreement, including the lien of any multifamily housing revenue bond issuance which provides funds for the construction of the Project, the Developer shall not place on the Site or any part thereof any mortgage, trust deed, encumbrance or lien. Prior to issuance of a Certificate of Completion pursuant to Section 315, the Developer shall remove or have removed any levy or attachment made on any of the Site or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. After the issuance of a Certificate of Completion, the restrictions set forth in the prior two sentences shall terminate and be of no further force or effect. Nothing herein contained shall be deemed to prohibit the Developer'from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. C. (§314) Prohibition Against Transfer of the Site, the Buildings or Structures ThereonR Prior to the Developer's prepayment of the Agency Loan, the Developer shall not, except as permitted by this Agreement (including without limitation Section 107), without prior written approval of the Agency, which approval shall not be unreasonably withheld, make any total or partial sale, transfer, conveyance, assignment or lease of the whole or any part of the Site or of the buildings or structures on the Site. The Agency shall approve such a transfer upon receipt by the Developer of (i) reasonable evidence satisfactory to the Agency that the transferee has assumed in writing, and in full, the Developer's duties and obligations under this Agreement and the attachments hereto, (ii) an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Developer under this Agreement and that such obligations and this Agreement are binding on the transferee, and (iii) the Agency receives evidence acceptable to the Agency that either (a) the transferee has experience in the ownership, operation and management of rental housing developments such as the Developer Improvements without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such developments, or (b) the transferee agrees to retain a property management firm with the experience and record described in Section (a) above. This prohibition shall not be deemed to prevent construction loans allowable pursuant to this Agreement, the granting of temporary or permanent easements or permits to facilitate the development of the Site or to prohibit or restrict the leasing of any part or parts of a building or structure for occupancy for a term commencing upon completion. This prohibition shall 'it 11/05/91 M � 7100u/2460/050 -12- not be deemed to prevent a transfer of a general or limited partnership interest in the Developer, provided that a general or limited partner of the Developer does not convey more than forty-nine percent (49%) of its partnership interest, and each partner of the Developer shall retain at least fifty-one percent (51%) of its original ownership of the Partnership. D. 153151 Certificate of C2M. letion Within thirty (30) days after completion of all construction and development required by this Agreement to be completed by the Developer upon the Site in conformity with this Agreement, submission of a detailed and itemized report of its costs of development, and request for a Certificate of Completion, the Agency shall furnish the Developer with a "Certificate of Completion." Such Certificate shall be substantially in the form of Attachment No. 7 attached hereto and incorporated herein. The Agency shall not unreasonably withhold any such Certificate of Completion. Such Certificate of Completion shall be a conclusive determination of satisfactory completion of the construction required by this Agreement upon the Site and the Certificate of Completion shall so state. After recordation of such Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest therein shall not (because of such ownership, purchase, lease or acquisition), incur any obligation or liability under this Agreement except that such party shall be bound by the covenants contained in the "Declaration of Covenants, Conditions and Restrictions" (Attachment No. 8), Section 402 of this Agreement, and other documents establishing covenants on the Site in accordance with the provisions of this Agreement. The Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. If the Agency refuses or fails to furnish a Certificate of Completion for the Developer Improvements after written request from the Developer, the Agency shall, within thirty (30) days of written request therefor, provide the Developer with a written statement of the reasons the Agency has refused or failed to furnish a Certificate of Completion. The statement shall also contain Agency's opinion of the actions that the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate availability of specific items of materials for landscaping, the Agency may in its discretion issue its Certificate of Completion upon the posting of a bond or an unconditional letter of credit (in form and substance acceptable to the Agency and its legal counsel) by the Developer with the Agency in an amount representing a fair value of the work not yet completed, or upon withholding from funds otherwise payable pursuant to Section 201 an amount estimated in good faith by the Agency to represent one and one-half (1-1/2) times the cost of such work not yet completed. 11/05/91 (#) 7100u/2460/050 -13- .31 Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the improvements, or any part thereof. Such Certificate of Completion is not a notice of completion as referred to in the California Civil Code, Section 3093. E. (§316] Mortgage, Deed of Trust, Sale and Lease -Back Financing; Rights of Holders ti 1. (§317] No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease -Back for Development Mortgages, deeds of trust and sales and lease -backs are to be permitted before completion of the construction of the Developer Improvements, but only for the purpose of securing loans of funds to be used for the construction of the Developer Improvements, and any other purposes necessary and appropriate in connection with the construction required under this Agreement. The Developer shall notify the Agency in advance of any mortgage, deed of trust or sale and leaseback financing, if the Developer proposes to enter into the same before completion of the Developer Improvements. The words "mortgage" and "trust deed" as used hereinafter shall include sale and leaseback. The Developer shall not enter into any such conveyance for financing or refinancing without the prior written approval of the Agency, which approval Agency agrees to give if any such conveyance for financing is given to a responsible financial or lending institution or other acceptable person or entity. 2. {§318] Holder Not Obligated to Construct Improvements The holder of any mortgage or deed of trust authorized by this Agreement shall not be obligated by the provisions of this Agreement to construct or complete the Developer Improvements or to guarantee such construction or completion; nor shall any covenant be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 4 V 11/05/91 (#) %� 7100u/2460/050 -14- 1W 3. [§319] Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure With respect to any mortgage or deed of trust granted by Developer as provided herein, whenever the Agency shall deliver any notice or demand to Developer with respect to any breach or default by the Developer in completion of the Developer Improvements, the Agency shall at the same time deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights of the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction, rehabilitation or completion of the Developer Improvements (beyond the extent necessary to conserve or protect the construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement satisfactory to the Agency. The holder, in that event, must agree to complete, in the manner provided in this Agreement, the Developer Improvements to which the lien or title of such holder relates, and submit evidence satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder prcperly completing such construction shall be entitled, upon compliance with the requirements of Section 315 of this Agreement, to a Certificate of Completion, and shall be entitled to payment of the Agency Loan and Agency Grant upon compliance with all applicable covenants and the occurrence of all applicable conditions. 4. [§320] Right of the Agency to Cure Mortgage or Deed of Trust Default In the event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the Developer Improvements or any part thereof and the holder of any first mortgage or first deed of trust has not exercised its option to construct, the Agency shall have the right, within sixty (60) days after receipt of notice of such default, to cure the default. In such event, the Agency shall be entitled to reimbursement from the Developer of all proper costs and expenses associated with and attributable to the curing of the first mortgage or first deed of trust default or breach of this Agreement by the Developer and incurred by the Agency in curing such default. The Agency shall also be entitled to a lien upon the Site to the extent of such incurred costs and disbursements. Any such lien shall be subject to the prior construction financing mortgages or deeds of trust. 11/05/91 (# ) . 3-i 7100u/2460/oso -15- k.,1 F. 1§3211 Environmental Matters 1. Definitions For the purposes of this Section 321, the following terms shall have the meanings herein specified: (a) The term "Hazardous Materials" shall mean (i) any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et sea.), as amended from time to time, and regulations promulgated thereunder; (ii) any "hazardous substance" as defined by the Carpenter -Presley -Tanner Hazardous Substance Account Act (California Health and Safety Code Sections 25300 et seer.), as amended from time to time, and regulations promulgated thereunder; (iii) asbestos; (iv) polychlorinated biphenyls; (v) petroleum, oil, gasoline (refined and unrefined) and their respective by-products and constituents; and (vi) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any "Governmental Requirements" (as defined in Subparagraph (c) of Paragraph 1 of this Section 321) either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to the environment. (b) The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities; soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time (whether before or after the date of this Agreement) emanating from the Site. (c) The term "Governmental Requirements" shall mean all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Agency, the Developer or the Site. 2. Obliaation of Developer to Remediate the Site Notwithstanding the obligation of Developer to indemnify Agency pursuant to Paragraph 4 of this Section 321 or any other obligations of the Developer pursuant to this Agreement, Developer shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state or local governmental agency or political subdivision or any �kI`11/05/91 (#) 7100u/2460/050 -16- Governmental Requirements with respect to the entire Site, and (ii) all actions necessary to make full economic use of the Site for the purposes described in this Agreement, which actions, requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination regardless of when such Hazardous Materials or Hazardous Materials Contamination were introduced to the Site and regardless of who is responsible for introducing such Hazardous Materials or Hazardous Materials Contamination to the Site (the "Site Remediation"). The Site Remediation shall include, but not be limited to, investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work required. The Developer shall take all actions necessary to promptly restore the Site to an environmentally sound condition for uses contemplated by this Agreement, notwithstanding any lesser standard cf remediation allowable under applicable Governmental Requirements. The Developer's obligations under this Paragraph 2 of this Section 321 shall be referred to as the "Site Remediation" and shall survive the issuance of the Certificate of Completion. 3. Developer's Representations and Warranties Developer hereby represents and warrants to the Agency that, to the best of its knowledge: (a) No Hazardous Materials or Hazardous Contamination exist or are located on, in or under the Site. {b) No portion of the Site is being used or, to Developer's best knowledge after diligent inquiry, has ever been used prior to Developer's ownership or occupancy thereof, for the disposal, storage, treatment, processing or other handling of Hazardous Materials and the Site is not affected by any Hazardous Materials Contamination. (c) No asbestos or asbestos -containing materials have been installed, used, incorporated into, or disposed of on the Site. (d) No polychlorinated biphenyls are located on or in the Site, in the form of electrical transformers, fluorescent light fixtures with ballasts, cooling oils, or any other device or form. (e) No underground storage tanks are located on the Site or were located on the Site and subsequently removed or filled. 11/05/91 (#) II 7100u/2450/050 -17- V (f) No investigation, administrative order or notice, consent order and agreement, litigation or settlement with respect to Hazardous Materials or Hazardous Materials Contamination is pending or, to Developer's best knowledge after diligent inquiry, threatened, with respect to the Site or the existing operations thereon. (g) The Site and its existing uses comply and, to Developer's best knowledge after diligent inquiry,.their prior uses at all times have complied with all applicable Governmental Requirements relating to environmental matters or Hazardous Materials. There is no condition on the Site which is in violation of any applicable Governmental Requirements relating to Hazardous Materials, and Developer has received no communication from or on behalf of any federal, state or local governmental authority or agency that any such condition exists. The Site is not currently on and, to Developer's best knowledge after diligent inquiry, have never been on any federal or state "Superfund" list, and Developer is not aware that the Site is anticipated or threatened to be placed on such list. (h) True and correct copies of all (i) Developer's internal inspection reports with respect to the Site (ii) environmental audits, reports and studies received by Developer which concern the Site, and (iii) inspection reports conducted during the last two years from each applicable regulatory authority with respect to the Site in the possession or control of Developer, have been delivered to Agency. Developer shall deliver to Agency within five (5) days of Developer's receipt thereof all environmental reports, audits or studies, internal inspection reports and regulatory inspection reports, which concern the Site generated or received by Developer prior to the repayment in full of the Promissory Note. 4. indemnification Developer shall save, protect, defend, indemnify and hold harmless Agency from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency by reason of, resulting from, in connection with or arising in any manner whatsoever as a direct or indirect result of (i) the ownership of all or any part of the Site, (ii) any act or omission on the part of either Agency or Developer, or their agents, employees, contractors or 11/05/91 (#) �,I# 7100u/2460/050 -18- invitees, (iii) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination, (iv) the environmental condition of the Site, and (v) any Liabilities incurred under any Governmental Requirements relating to Hazardous Materials. Developer's obligations under this Section 321 shall survive after the issuance of the Certificate of Completion, and shall be a covenant running with the land in perpetuity, binding on all successors and assigns of Developer's interest in either this Agreement or the Site. . S. Duty to Prevent Hazardous Material Contamination. The Developer shall take all necessary precautions to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all -Governmental Requirements with respect to Hazardous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the highest standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 6. Environmental Inquiries. The Developer shall notify the Agency, and provide to the Agency a copy or copies, of the following environmental permits, disclosures, applications, entitlements or inquiries relating to the Site: Notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and the Developer shall report to the Agency, as soon as possible after each Incident, any unusual, potentially important incidents, including but not limited to, the following: (a) All required reports of releases of Hazardous Materials, including notices of any release of Hazardous Materials as required by any Governmental Requirement; (b) All fires; (c) All instances where asbestos has been or may be disturbed by repair work, tenant improvements or other activities in buildings containing asbestos; (d) All notices of suspension of any permits; 11/05/91 (n) �� 7100u/2460/050 -19- �.i (e) All notices of violation from Federal, State or local environmental authorities; (f) All orders under the State Hazardous Waste Control Act and the State Hazardous Substance Account Act and corresponding federal statutes, concerning investigation, compliance schedules, clean up, or other remedial actions; (g) All orders under the Porter -Cologne Act, including corrective action orders, cease and desist orders, and clean-up and abatement orders; (h) Any notices of violation from OSHA or Cal -OSHA concerning employees' exposure to Hazardous Materials; (i) All complaints and other pleadings filed against the Developer and/or the Agency relating to the Developer's storage, use, transportation, handling or disposal of Hazardous Materials on the Site. In the event of a release of any Hazardous Materials into the environment, the Developer shall, as soar. as possible after the release, furnish to the Agency a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the -release. Upon request of the Agency, the Developer shall furnish to the Agency a copy or -copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. IV. (§400] USE OF THE SITE A. (§401) Use in Conformance with Agreement The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof that, during construction and thereafter, the Developer, such such successors and such assignees, shall use, operate and maintain the Site in conformity with this Agreement and shall devote the Site to uses specified in this Agreement for the periods of time specified therein. B. 1§4021 Affordable Rental Housing 1. Number of Units. The Developer covenants and agrees to develop a total of one hundred sixty-four (164) multifamily housing units on the Site in conformance with the `lr 7100u/2460/050 -20- Scope of Development (Attachment No. 6). The Developer agrees to make available, restrict occupancy to, and rent thirty-two (32) of the units to "Very Low Income Households" and sixteen (16) additional units to "Persons and Families of Low- and Moderate Income" (for a total of forty-eight (48) restricted units), all at an "Affordable Rent" (the "Affordable Units"). However, the Developer shall be obligated to make available, restrict cccupancy to, and rent sixteen (16) of the units to "Very Low Income Households," sixteen (16) additional units to "Lower Income Households," and sixteen (16) additional units to "persons and families of Low- and Moderate Income," in lieu of the requirements of the preceding sentence, for the duration of the "Affordability Period" (as defined in paragraph 2 of this Section 402), upon the occurrence of all three of the following events: (a) the "Qualified Development Period" (as defined in the Regulatory Agreement and Declaration of Restrictive Covenants by and among the City, Developer and dated as of November `, 1991) shall have elapsed; and (b) the "Section 8 Program" (as defined in paragraph 8 of this Section 402) or a reasonably similar successor or replacement federal rental subsidy or voucher program no longer exists; and (c) neither the City nor the Agency has instituted a rental subsidy or voucher program designed to subsidize the rents of Very Low Income Households. The location of the Affordable Units shall be dispersed throughout the Developer Improvements and shall be reasonably acceptable to the Agency. The distribution of sizes (in terms of number of bedrooms) of the Affordable Units shall be in the same proportion as the distribution of sizes of all units within the Developer Improvements. There shall be not less than six (6) and not more than ten (10) Affordable Units on each floor of the Developer Improvements. Those Affordable Units located on the first floor of the Developer Improvements shall each be not less than Five Hundred Seventy (570) square feet. "Very Low Income Household" shall mean a household earning not greater than fifty percent (50%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety Code Section 50105. "Lower Income Household" shall mean a household earning not greater than eighty percent (80%) of Orange County median income, as determined by the United States Department of Housing and Urban development, as set forth in Health and Safety Code Section 50079.5. "Persons and Families of Low and Moderate Income" shall mean households earning not greater than one hundred twenty percent (1207.) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety Code Section 50093. 11/05/91 (#) �[ 7100u/2460/050 -21- 7 "Affordable Rent" shall have the meaning set forth in Health and Safety Code Section 50053, as further defined in subparagraph 5 of this Section 402. 2. Duration of Affordability Requirements. The Affordable Units shall be subject to the requirements of this Section 402 for thirty (30) years, beginning on the date of the City's issuance of a certificate of occupancy for the Developer Improvements (the "Commencement Date"). The duration of this requirement shall be known as the "Affordability Period." All tenants residing ir. the Affordable Units during the last two (2) years of the Affordability Period shall be given notice at least once every six (6) months of the expiration date of this requirement, and that the rent payable on the Affordable Unit may be raised to a market rate rent at the end of the Affordability Period. The Developer shall execute, acknowledge and deliver to the Agency a "Declaration of Covenants, Conditions and Restrictions," in the form of Attachment 11o. 8 hereto and incorporated herein (the "Declaration"), which sets forth all of the requirements of this Section 402 of the Agreement in recordable form. The Developer consents to the recording of the Declaration in the official records of Orange County, California. 3. Selection of Tenants. The Developer shall give notice to the Agency of the City s issuance of the certificate of occupancy for the Developer Improvements and the Affordable Units, and shall give notice of the vacancy of each and any Affordable Unit thereafter. The Agency shall have five (5) working days from the receipt of such notice to deliver to the Developer a list of prospective tenants for such vacancy. The Developer shall send written notice of such vacancy to each person on such list. Such notice shall notify the recipient that he or she must directly contact the Developer or its designated leasing agent within fifteen (15) working days to apply for tenancy of such vacant Affordable Unit. The Developer shall not rent or lease such Affordable Unit during such fifteen (15) day period to any tenant not notified of such vacancy by the Agency. In the event that no tenant which is reasonably acceptable to the Developer applies for tenancy of the vacant unit within such time period, the Affordable Unit may be leased to another tenant selected by the Developer who meets all of the other requirements provided herein. 4. Income of Tenants. Prior to the rental or lease of any Affordable Unit to a tenant, and annually thereafter within thirty (30) days of the anniversary date of the tenant's occupancy of the Affordable Unit, the Developer shall submit to the Agency a completed income computation and certification fora, in the fora of Attachment No. 9 hereto or such other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant leasing an 11/05/91 (#) k1X 7100u/2460/050 -22- Affordable Unit is a Very Low Income Household, or a Person or Family of Low- and Moderate -Income, whichever is applicable, and meets the eligibility requirements established for the Affordable Unit. The Developer shall obtain an income certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency. (1) obtain two (2) paycheck stubs from the tenant's two (2) most recent pay periods. (2) obtain a true copy of an income tax return from the tenant for the most recent tax year in which a return was 'filed. (3) obtain an income verification certification from the employer of the tenant. (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Very Low Income Household or Person or Family of Low- and Moderate -Income shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no longer qualified as a Very Low Income Household or Person or Family of Low- and . Moderate -Income, the next available unit of comparable size must be rented to (or held vacant and available for immediate occupancy by) a Very Low Income Household or Person or Family of Low- and Moderate -Income, whichever is applicable. Such new tenant shall then constitute a Very Low Income Household or Person or Family of Low- and Moderate -Income for the purposes of this Section 402, and until such next available unit is rented to such tenant, the former Very Low Income Household or Person or Family of Low- and Moderate -Income who has ceased to qualify as such shall be deemed to continue to be a Very Low Income Household or Person or Family of Low- and Moderate -Income for the purposes of this Section 402. In 11/05/91 (#) �11 7100u/2460/050 -23- 1 addition, the Developer shall annually submit to the Agency a certified statement of the rental rate, income, ages and family size of each of the tenants of the Affordable Units in a form of Attachment No. 10 hereto or such other form as may be provided by the Agency. 5. Determination of Affordable Rent for the Affordable Units. Each Affordable Unit shall be rented at an 'Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the thirty-two •(32) Affordable Units required to be rented to Very Low Income Households shall be established at one -twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of Orange County median income, as determined by the United States Department of Housing and Urban Development. The maximum monthly rental amount for the Affordable Units required to be rented to Lower Income Households, if any, shall be established at one -twelfth (1/12th) of thirty percent (30%) of sixty percent (60%) of Orange County median income for tenants earning more than fifty percent (507.) and not more than sixty percent (60%) of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) of such tenant's annual income for tenants earning more than sixty percent (607.) and not more than eighty percent (80%) of Orange County median income. The maximum monthly rental amount for the Affordable Units required to be rented to Persons of Low- and Moderate Income shall be established at one -twelfth (1/12th) of thirty percent (30%) of one hundred ten percent (110%) of Orange County median income for tenants -earning more than eighty percent (80%) and not more than one hundred ten percent .(110%) of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) or such tenant's annual income for tenants earning more than one .hundred twenty percent (120%) of Orange County median income. The maximum monthly rental amount for each Affordable Unit rented to Persons of Low- and Moderate- Income shall be based upon the actual household size of the persons occupying the Affordable Unit. The maximum monthly rental amount for each Affordable Unit to be rented to Very Low Income Households and Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Very Low Income Household which is a "Section 8 Recipient", as defined in Section 402(8) hereof ("Section 8 Unit"), the maximum monthly rental amount for the next Affordable Unit rented to a Very Low Income Household which is not a Section 8 Recipient shall be based upon the actual household size of the person or persons occupying such Affordable Unit ("Actual Household Size Unit"). In the event any such Section 8 Unit is vacated and rerented to a Very Low Income Household which is not a Section 8 Recipient, then upon 11/05/91 M �� 7100u/2460/050 -24- �6d the next vacation of an Actual Household Size Unit, such vacated Actual Household Size Unit shall no longer be an Actual Household Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two (2) persons if it is a one (1) bedroom unit and three (3) persons if it is a two bedroom unit. In no event, however, shall the rerentirg of a Section 8 Unit to a Very Low Income Household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Furthermore, the maximum number of -Actual Household Size Units required at any one time shall be sixteen {16). THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT THE MAXIMUM RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT. Developer Initials: The maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building permits and not later than the Commencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth above upon the publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. 6. Senior Citizen Units. All of the units in the Developer Improvements, including without limitation the Affordable Units, shall be independent living apartments specially designed for the physical and social needs of "Senior Citizens" (persons fifty-five (55) years or older, subject to applicable law) in accordance with the requirements set forth in the Scope of Development (Attachment No. 6). The units shall be comprised of one and two bedroom units, each with a private balcony or patio. The Developer shall state, in a prominent location in all advertising and marketing materials, that the Developer Improvements are designed for use and occupancy by Senior Citizens. Furthermore, the Developer shall restrict occupancy to Senior Citizens and "Qualified Permanent Residents" (as that term is defined in California Civil Code Section 51.3), in the rental of both the Affordable Units and the other units in the Developer Improvements. Except as otherwise provided herein, at least one person in residence in each dwelling unit must must be a Senior Citizen, and other residents in the same 11/05/91 (#) ql 7100u/2460/050 -25- dwelling unit who are not Senior Citizens must be Qualified Permanent Residents. Temporary guests of a Senior Citizen or Qualified Permanent Resident shall be allowed for a period of not more than sixty (60) days in any twelve (12) month period. Upon the death, dissolution of marriage, hospitalization or other prolonged absence of the Senior Citizen in a dwelling unit, any Qualified Permanent Resident who has continuously resided ir. the dwelling unit with such Senior Citizen shall be permitted to continue as a resident of that dwelling unit. "Permitted Health Care Residents" (as that terra is defined in California Civil Code Section 51.3) shall be permitted to occupy any dwelling unit during any period that such person is actually providing live-in, long-term or hospice health care to a Senior Citizen tenant or Qualified Permanent Resident tenant for compensation. 7. Bonds. In the event the Bonds tas defined in Section 306 hereof) are issued in connection with the acquisition, development or use of the Site, the Developer shall strictly comply with all covenants, conditions and requirements relating to the duties of the Developer pursuant to such Bonds and such agreements as are entered into in connection therewith. In the event Bonds are issued, during the period such Bonds are outstanding compliance with the requirements of the Bonds shall be deemed to comply with Paragraphs 1 through 5 (with the exception of the reporting requirements contained in paragraph 4) of this Section 402 for such period; after such period, this Section 402 shall remain in full force and effect. 8. Federal Housing Subsidies. The Agency shall use its best reasonable efforts to assist the Developer to secure as tenants of the Affordable Units dedicated to Very Low Income Households persons who are recipients ("Section 8 Recipients") of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937, or its successor ("Section 8 Program"). For purposes of calculating the rent payable by the tenant pursuant to Paragraph 5 of this Section, the amount paid to the Developer as a result of such certificates or vouchers shall not be deemed the payment of rent by the tenant. C. [§4031 Operating Expenses For a period of thirty (30) years beginning on the date of the City's issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall provide a full-time activities director, an on -site apartment manager and a van shuttle service which are available exclusively to and for the benefit of the tenants of the Developer Improvements. Such activities director shall be employed on the Site at least 11/05/91 (#) 7100u/2460/050 -26- kww forty (40) hours per week, and such van shuttle service shall be available for the use of the residents of the Developer Improvements at least thirty (30) hours per week. For a period of ten (10) years beginning on the date of the City's issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall annually expend not less than the amounts set forth in each category of the "Operating Budget" attached hereto as Attachment No. 11 and incorporated herein. The amount in each category of the Operating Budget shall be adjusted annually by the percentage change in the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles -Anaheim -Riverside Average, Subgroup "All Items" (1982/84=100). The Developer shall annually submit to the Agency a detailed report of its Operating Budget expenditures, with such costs itemized in the categories contained in the Operating Budget, not less than thirty (30) days prior to the anniversary of the issuance of the certificate of occupancy for the Developer Improvements. In accounting for such costs, the Developer shall use generally accepted accounting principles (GAAP), including applicable Financial Accounting Standards Board (FASB) Pronouncements. In the event any of the payments in any category or the Operating Budget is made to the Developer or a party which owns or is -owned by the Developer or any of the partners of the Developer or the Guarantors or is otherwise affiliated with the Developer, such payment shall be deemed not to exceed a payment commensurate with industry standards for the service or product provided. The Executive Director of the Agency may, in his or her sole discretion, cause the audit of the Operating Budget expenses not more often than once each year by a public accounting firm of the Agency's choice. The parties agree to accept the results of such audit as the conclusive and final determination of actual Operating Budget expenditures. The Developer shall make available to the auditor all books and records pertaining to the Operating Expenses. The cost of the audit shall be borne by the Agency; provided, however, that the cost shall be borne solely by the Developer if the audit determines that actually incurred Operating Budget expenditures are at least five percent (5%) less than the expenditures reported by the Developer to the Agency. In addition, the Agency shall have the right at any time during normal business hours upon not less than two business days' prior notice, but not more than two times each year during this Agreement, to examine and inspect all books and records pertaining to the Operating Expenses. 11/05/91 (#) 7100u/2460/050 -27- •� D. [§4041 Management and Maintenance The Developer shall hire a management company to manage the Project and to maintain the improvements on the Site in accordance with the CC&Rs (Attachment No. 8). If at any time said management company fails to adequately maintain such areas, and such condition is not corrected after expiration of ninety (90) days from the date of written notice from the Agency, the Agency may (but shall not be obligated to) perform the necessary maintenance and Developer shall pay such costs as are reasonably incurred for such maintenance. Issuance of a Certificate of Completion by the Agency shall not affect Developer's obligations under this section. E. 1§4051 Rights of Access The Agency, for itself and for the City and other public agencies, at their sole risk and expense, shall have the right to enter the Site or any part thereof which is owned or controlled by the Developer, at all reasonable times, for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site. Any such entry shall be made only after reasonable notice to Developer. Upon receipt of such notice, the Developer agrees to cooperate with the Agency in making the Site available for inspection by the Agency and/or City. Developer acknowledges and agrees that in the event that if for any reason the Developer fails to consent to such entry or inspection, the Agency may obtain an administrative inspection warrant or take such other legal actions as may be necessary to gain entry to and inspect the Site. The Agency shall indemnify and hold the Developer harmless from any costs, claims, damages or liabilities pertaining to any entry. F. ($4061 Develo er's E it At all times from the commencement of construction until the second (2nd) anniversary of the issuance of a certificate of occupancy (or temporary certificate of occupancy) for the Developer Improvements, the "Developer's Equity" (as defined below) shall be not less than One Million Five Hundred Thousand Dollars ($1,500,000). Thereafter, the Developer's Equity may be reduced to not less than One Million Two Hundred Fifty Thousand Dollars ($1,250,000) upon the second (2nd) anniversary of the certificate of occupancy, to One Million Dollars ($1,000,000) upon the third (3rd) anniversary of the certificate of occupancy, to Five Hundred Thousand Dollars ($500,000) upon the fourth (4th) anniversary of the certificate of occupancy and until the fifth (5th) anniversary of the certificate of occupancy. For the purposes of this Section 406, "Developer's Equity" shall mean the difference 11/05/91 (#) 7100u/2460/050 -28- between the actually incurred costs of acquiring the Site and constructing and developing the Developer Improvements (including cost overruns), less the sum of the actually disbursed amount of loans obtained by the Developer for such acquisition, development and construction. Developer's Equity shall include any cash or government securities held by a construction lender on behalf of the Developer or its partners. G. [54071 Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction The covenants established in this Agreement shall, without regard to technical classification and designation, be binding upon and for the benefit and in favor of the Developer and the Agency, their respective successors and assigns, as to those covenants which are for their benefit. The covenants contained in this Agreement and the Declaration (Attachment No. 9) shall remain in effect until the expiration of the Affordability Period defined in Section 402 of this Agreement). The covenants against racial discrimination shall remain in perpetuity. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the cortmunity and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site or in the Project Area. The Agency shah have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. After issuance of a Certificate of Completion for all of the Developer Improvements, all of the terms, covenants, agreements and conditions set forth in this Agreement relating to the Site shall cease and terminate as to that portion of the Site for which the Certificate of Completion is issued, excepting only the provisions listed below which shall survive as follows: (a) Sections 310, 401 to 40S, inclusive, relating to uses, maintenance and access. (b) Section 308 (relating to indemnification and insurance) shall remain in effect in accordance with the terms and conditions set forth therein. 11/05/91 (#) 7100u/2460/050 -29- 015 (c) Sections 600 to 607 (relating to rights and remedies) shall remain in effect to the extent necessary to enforce other provisions of this Agreement. (d) The Promissory Note (Attachment No. 3), and all provisions contained in or referred to in documents to be recorded pursuant to this Agreement, including without limitation the Deed of Trust (Attachmment No. 4), and the Declarations of Covenants, Conditions and Restrictions (Attachment No. 9). H. (§408) Nondiscrimination The Developer covenants by and for itself and any successors in interest 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 Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, religion, sex, marital status, national origin or ancestry 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 or herself, his or her heirs, executors, administrators and assigns,.and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, 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 herself or any person claiming under or through him or her, 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 or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or 11/05/91 (#) 7100u/2460/050 -30- through him or her, and this lease is made and accepted upon and subject to the following conditions: "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, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, 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 premises 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, creed, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, 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 premises." The covenants established in this Agreement and the deeds of conveyance for the Site shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Site, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against discrimination shall remain in effect in perpetuity. V. [§500] GENERAL PROVISIONS A. [§501] Notices, Demands and Communications Between the Parties Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if delivered by hand (and a receipt therefor is obtained or is refused to be given) or dispatched by registered or certified mail, postage prepaid, return receipt requested, or sent by telecopy or overnight delivery service, to the principal' offices of the Agency and the Developer. Such written notices, demands and communications may be sent in the same manner to the Agency and the Developer at the addresses provided pursuant to Sections 104 and 105, with a copy of any notices to the f 11/05/91 7100u/2460/050 -31- �� 6M Developer to be sent to Bret H. Reed, Jr., a law corporation, 1300 Dove Street, Suite 200, Newport Beach, California 92660-2416 (which copy shall not constitute notice to the Developer), and to such other addresses as either party may from time to time designate by mail as provided in this Section 501. Any written notice, demand or communication shall be deemed received immediately if delivered by hand or sent by telecopy, shall be deemed received on the third day from the date it is postmarked if delivered by registered•or certified mail, and shall be deemed received on the next business -day after it is sent if delivered by overnight delivery service. B. [§502] Conflicts of Interest No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. C. 1§503] Enforced Delay; Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of the Agency or the City other than in respect to the zoning of the Site to allow development of the Developer Improvemerts): or any other causes beyond the control or without the fault of the party -claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Any 11/05/91 (#) l�� 7100u/2460/050 -32- requests for extension shall be in writing. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Developer. D. (65041 Nonliability of Officials and Employees of the Agency No member, official or employee of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency (or the City) or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. VI. [560O1 DEFAULTS AND REMEDIES A. 1§6011 Defaults -- General Subject to the extensions of time set forth in Section 503, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately cor.tmence to cure, correct, or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings for damages or specific performance against the party in default until thirty (30) days after giving such notice in the case of monetary defaults or defaults reasonably capable of being cured in thirty (30) days, or such longer time as may be necessary to cure other defaults not reasonably capable of being cured within thirty (30) days, provided that such party immediately commences to cure, correct or remedy such failure or delay and completes such cure, correction or remedy with diligence. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. B. [§602) Le al Actions 1. [§603] Institution of Legal Actions In addition to any other rights or remedies and subject to the restrictions in Section 601, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Legal 11/05/91 (#) 7100u/2460/050 -33- actions must be instituted in the Superior Court of the County of Orange, State of California, in an appropriate municipal court in that county, or in the Federal District Court in the Central District of California. 2. 166041 Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 3. [§6051 Acceptance of Service of Process In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on a general partner of the Developer shall be made by personal service upon a trustee of such partner or in such other manner as may be provided by law. C. [§6061 Rights and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by -either party of one or more of such rights or remedies 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 the other party. D. 156071 Inaction Not a Waiver of Default Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. E. [5608] Li idated Damages IN THE EVENT THAT THE DEVELOPER IS IN DEFAULT OF ITS OBLIGATIONS PURSUANT TO SECTION 402 OF THIS AGREEMENT, AND HAS NOT CURED SUCH DEFAULT WITHIN THE TIME REQUIRED BY SECTION 601 OF THIS AGREEMENT, THE AGENCY SHALL BE ENTITLED TO OBTAIN PAYMENT IN THE AMOUNT OF THE AGENCY GRANT WHICH HAS BEEN DISBURSED PURSUANT TO SECTION 203 OF THIS AGREEMENT, LESS THE PRODUCT OF SIXTEEN THOUSAND SIX HUNDRED SIXTY-SEVEN DOLLARS 11/05/91 (#) 7100u/2460/050 -34- ($16,667) TIMES THE NUMBER OF FULL YEARS WHICH HAVE ELAPSED BETWEEN THE ISSUANCE OF THE CERTIFICATE OF OCCUPANCY FOR THE PROJECT AND THE DATE OF THE DEFAULT. IN THE EVENT OF SUCH DEFAULT PURSUANT TO SECTION 402 OF THIS AGREEMENT, THE AGENCY WOULD SUSTAIN DAMAGES BY REASON THEREOF WHICH WOULD BE UNCERTAIN. SUCH DAMAGES WOULD INVOLVE SUCH VARIABLE FACTORS AS THE DELAY OR FAILURE OF THE AGENCY AND THE CITY TO PROVIDE AFFORDABLE HOUSING AS REQUIRED BY THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW AND THE CITY GENERAL PLAN, AND THE LOSS OF OPPORTUNITY TO ENGAGE IN OTHER POTENTIAL AFFORDABLE HOUSING TRANSACTIONS, RESULTING IN DAMAGE AND LOSS TO THE AGENCY. IT IS IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX THE AMOUNT OF SUCH DAMAGES TO THE AGENCY, BUT THE PARTIES ARE OF THE OPINION THAT SUCH DAMAGES WOULD APPROXIMATELY EQUAL THE SUM DERIVED BY THE FORMULA SET FORTH HEREIN, AND THE AGENCY SHALL BE ENTITLED TO SUCH AMOUNT AS A TOTAL OF ALL LIQUIDATED DAMAGES FOR SUCH DEFAULT AND NOT AS A PENALTY. IN THE EVENT THAT THE DEVELOPER SHOULD CHRLLENGE THE APPLICABILITY OR EFFICACY OF THIS PARAGRAPH OR IF THIS PARAGRAPH SHOULD BE HELD VOID FOR ANY REASON, THE AGENCY SHALL BE ENTITLED'TO THE FULL EXTENT OF DAMAGES OTHERWISE PROVIDED BY LAW. THE DEVELOPER AND THE AGENCY SPECIFICALLY ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY THEIR INITIALS BELOW: Developer's Initials Agency's Initials By: By- F. 1§6091 Remedies and Rights of Termination Prior to Completion 1. [§6101 Dames If either party defaults with regard to any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured within the applicable period after service of the notice of default as set forth in Section 601, the defaulting party shall be liable to the other party for any damages caused by such default, except as provided in Sections 612 or 613 herein. 2. [56111 Specific Performance Subject to the applicable cure provisions contained in Section 601 herein, if either party defaults under any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the applicable cure period as set forth 11/05/91 M 7100u/2460/050 -35- �.O, in Section 601, the non -defaulting party at its option may thereafter (but not before) seek specific performance of terms of this Agreement. 3. [§612) Termination by the Developer Prior to Completion In the event that prior to the Issuance of a Certificate of Completion the Developer is not in default of the Agreement and: (a) The Developer is unable to obtain financing necessary for the construction of the Improvements, provided that the Developer has used its best efforts to obtain such financing; or (b) The Agency is in default of the Agreement and has not cured or commenced to cure such default within the time period set forth in Section 601 hereof, then, subject to the applicable cure provisions contained in Section 601 herein, at the option of the Developer, thirty (30) days after written notice thereof is delivered to the Agency all provisions of this Agreement shall terminate and be of no further force and effect; thereafter, neither the Agency nor the Developer shall have any further rights against or liability to the other with respect to this Agreement. 4. 1§613I Termination by the Agency Prior to -Completion In the event that prior to the issuance of a Certificate of Completion the Agency is not in default of this Agreement and: (a) The Developer (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Site in violation of this Agreement; or (b) There is a change in the ownership of the Developer contrary to the provisions of Section 107 hereof; or (c) The Developer does not submit certificates of insurance, construction plans, drawings and related documents as required by this Agreement, in the manner and by the dates respectively provided in this Agreement therefor and such default or failure shall not be cured within the applicable cure period as set forth in Section 601 hereof; (d) The Developer is otherwise in default under this Agreement and has not cured or commenced to cure such default within the applicable time period set forth in Section 601 herein; 11/05/91 (#) 7100u/2460/050 -36- then, at the option of the Agency, within the applicable cure period as set forth in Section 601 hereof, and subject to the rights of the mortgagee or deed of trust holder to cure as set forth in Section 319 hereof, after written notice thereof is delivered to the Developer, this Agreement shall be terminated, and thereafter neither party shall have any further rights against the other under this Agreement. G. 1§6141 Remedies of the Parties for Defau Completion 1. [66151 Termination and Damages After the issuance of a Certificate of Completion, if the Developer or the Agency defaults with regard to any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within the time set forth in Section 601 hereof, the defaulting party shall be liable to the other party for any damages caused by such default. 2. [§616] Action for Snecific Performance After the issuance of a Certificate of Completion, if either the Developer or the Agency defaults under any of the provisions of this Agreement the nondefaulting party shall serve written notice of such default upon the defaulting party.' If the default is not cured by the defaulting party within the time set forth in Section 601 hereof, the nondefaulting party at its option may institute an action for specific performance of the terms of this Agreement. vIi. [§700] SPECIAL PROVISIONS A. [§7011 Real Estate Commissions The Developer acknowledges and represents to the Agency that it has engaged the services of a broker and that it is liable for certain real estate commissions, broker's fees, or finder's fees which may accrue by means of the Developer's acquisition of the Site, and agrees to hold harmless the Agency from such commissions or fees as are alleged to be due from the party making such representations. B. [§702) Successors In Interest The terms, covenants, conditions and restrictions of this Agreement shall extend to and shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the Developer. 11/05/91 (#) 7100u/2460/050 -37- .� C. [§703] Memorandum of -Agreement The Agency and the Developer agree to execute, acknowledge and cause to be recorded in the Official Records of Orange County, California, a short form memorandum of this Agreement in the fora of the "Memorandum of Agreement" attached hereto as Attachment No. 12 and incorporated herein. The Memorandum of Agreement shall be for recording purposes only and shall not modify any of the terms of this Agreement. The Agency may cause the Memorandum of Agreement to be recorded upon the earlier to occur of the Developer's acquisition of the site or the execution of this Agreement. VIII. [§800] ENTIRE AGREEMENT, WAIVERS This Agreement may be signed in counterparts, and is executed in five (5) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through _ and Attachments 1 through 12, which constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Agency and the Developer, and all amendments hereto must be in writing by the appropriate authorities of the Agency and the Developer. In any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. IX. [§900] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before thirty (30) days after signing and delivery of this Agreement by Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been signed by the Agency. n 11/05/91 (#) �[/ 7100u/2460/050 -38- M IN WITNESS WHEREOF, the Agency and the Developer have signed this Agreement on the respective dates set forth below. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic Dated: , 1991 Dated: , 1991 Dated: , 1991 ATTEST: Secretary APPROVED AS TO FORM: By: Chairman By: Executive Director By: Deputy Executive Director Stradling, Yocca, Carlson & Rauth, Agency Special Counsel City Attorney Agency General Counsel Dated: FIVE POINTS SENIORS, L.P., a California limited partnership By: MICHELSON FAMILY TRUST, dated as of December 12, 1984, as amended March 1, 1985, its general partner 1991 By: David Michelson, Trustee 11/05/91 (#) 7100u/2460/050 -39- P t-.0) ATTACHMENT NO. 1 SITE MAP AND LEGAL DESCRIPTION [To Be Inserted] 11/05/91 t„ 7100u/2460/050 ATTACHMENT NO. 1 ATTACHMENT NO. 2-A GUARANTY THIS GUARANTY (the "Guaranty") is hereby entered into in favor of THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency"), by DAVID MICHELSON and KATHLEEN M. MICHELSON (collectively, the "Guarantors"), as of the date set forth herein. R E C I T A L S A. The Agency and FIVE POINT SENIORS, a California general partnership (the "Developer") have entered into or will enter into a certain Affordable Housing Agreement (the "Agreement") which provides in part that Guarantors shall provide a guaranty to the Agency. B. The Guarantors, who are beneficiaries of the trust which is a general partner of the Developer, will significantly benefit by the execution by the Agency of the Agreement. C. The execution by the Guarantors of this Guaranty is a condition but for which the Agency would not execute the Agreement. D. Guarantors have reviewed and hereby approve the form and content of the Agreement. NOW, THEREFORE, in consideration of the execution of the Agreement, and of other valuable consideration, receipt of which is hereby acknowledged: 1. Guarantors guarantee to the Agency the full and timely performance of each and every obligation of the Developer pursuant to the Agreement. 2. This Guaranty is unconditional and may be enforced directly against the undersigned. No extensions, modifications or changes to the Agreement as Amended shall release the undersigned or affect this Guaranty in any way, and the undersigned waives notification thereof. 3. The undersigned hereby waive all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 11/05/91 ATTACHMENT 110. 2-A 7100u/2460/050 Page 1 of 3 90 4. Guarantors hereby waive and agree not to assert or take advantage of (a) any right to require the Agency to proceed against the Developer or to pursue any other remedy in the Agency's power before proceeding against the Guarantors, (b) demand, protest, and notice which the Agency nay be required to provide to Developer under the Agreement, and (c) any duty on the part of Agency to disclose to Guarantors any facts Agency now or hereafter knows about the "Site" (as defined in the Agreement), the Agreement, or the Developer, regardless of whether Agency has reason to believe that any such facts materially increase the risks beyond that which Guarantors intend to assume or has reason to believe that such facts are unknown to Guarantors or has a reasonable opportunity to communicate such facts to Guarantors, it being understood and agreed that Guarantors are fully responsible for being and keeping informed of all circumstances regarding the Site, the Agreement, the obligations of the Developer, the financial condition of the Developer, and of all circumstances bearing on the risk of any obligation by Developer hereby guaranteed. 5. Guarantors shall have no right of subrogation and waive any right to enforce any remedy the Agency now has or may hereafter have against the Developer, and any benefit of, and any right to participate in any security now or hereafter held by Agency. 6. The obligations of Guarantors hereunder are independent of the obligations of Developer and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantors (or any other guarantor) whether or not Developer is joined therein or a separate action or actions are brought against Developer. 7. In the event of any litigation between Agency and one or both Guarantors arising out of this Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. S. No provisions of this Guaranty can be waived nor can Guarantors be released from the obligations hereunder except by a writing duly executed by the Agency. 9. Guarantors agree to pay all reasonable attorney's fees and all other costs and expenses which may be incurred by Agency in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 10. Guarantors hereby waive notice of any demand by the Agency, as well as notice of any default by the Developer. 11. The Agency nay assign this Guaranty. When so assigned, Guarantors shall be bound as above to the assignees without in any manner affecting Guarantors' liability hereunder. 11/05/91 ATTACIDIENT NO. 2-A ,`�u 7100u/2460/050 Page 2 of 3 kwo �d' 12. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any successor or assignee thereof or any disaffirmance by a trustee of the Developer. 13. This Guaranty shall inure to the benefit of and bind the successors and assigns of Agency and Guarantors. 14. Guarantors agree that jurisdiction and venue with respect to any matter pertaining to the Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Orange, State of California, in an appropriate municipal court of that county, or in the Federal District Court in the Central District of California. Guarantors irrevocably waives any and all defenses based upon revenue or forum non conveniens. 15. The laws -of the State of California shall govern the interpretation and enforcement of this Guaranty. IN WITNESS WHEREOF, the undersigned have executed this Guaranty this day of , 19i, David Michelson Kathleen M. Michelson 11/05/91 ATTACHMENT NO. 2-A 7100u/2460/050 Page 3 of 3 ATTACHMENT NO. 2-B Cali -AWA THIS GUARANTY (the "Guaranty") is hereby entered into in favor of THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINCTON BEACH, a public body corporate and politic (the "Agency"), by NORKkN D. WARD, and BUNI£ L. WARD (collectively, the "Guarantors"), as of the date set forth herein. R E C I T A L S A. The Agency and FIVE POINT SENIORS, a California general partnership Ithe "Developer") have entered into or will enter into a certain Affordable Housing Agreement (the "Agreement") which provides in part that Guarantors shall provide a guaranty to the Agency. B. The Guarantors, who are beneficiaries of the trust which is a general partner of the Developer, will significantly benefit by the execution by the Agency of the Agreement. C. The execution by the Guarantors of this Guaranty is a condition but for which the Agency would not execute the Agreement. D. Guarantors have reviewed and hereby approve the form and content of the Agreement. NOW, THEREFORE, in consideration of the execution of the Agreement, and of other valuable consideration, receipt of which is hereby acknowledged: 1. Cuarantors guarantee to the Agency the full and timely performance of each and every obligation of the Developer pursuant to the Agreement. 2. This Guaranty is unconditional and may be enforced directly against the undersigned. No extensions, modifications or changes to the Agreement as Amended shall release the undersigned or affect this Guaranty in any way, and the undersigned waives notification thereof. 3. The undersigned hereby waive all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. Q� 11/05/91 ATTACHMENT NO. 2-B �v 7100u/2460/050 Page 1 of 3 V 4. Guarantors hereby waive and agree not to assert or take advantage of (a) any right to require the Agency to proceed against the Developer or to pursue any other remedy in the Agency's power before proceeding against the Guarantors, (b) demand, protest, and notice which the Agency may be required to provide to Developer under the Agreement, and (c) any duty on the part of Agency to disclose to Guarantors any facts Agency now or hereafter knows about the "Site" (as defined in the Agreement), the Agreement, or the Developer, regardless of whether Agency has reason to believe that any such facts materially increase the risks beyond that which Guarantors intend to assume or has reason to believe that such facts are unknown to Guarantors or has a reasonable opportunity to communicate such facts to Guarantors, it being understood and agreed that Guarantors are fully responsible for being and keeping informed of all circumstances regarding the Site, the Agreement, the obligations of the Developer, the financial condition of the Developer, and of all circumstances bearing on the risk of any obligation by Developer hereby guaranteed. 5. Guarantors shall have no right of subrogation and waive any right to enforce any remedy the Agency now has or may hereafter have against the Developer, and any benefit of, and any right to participate in any security now or hereafter held by Agency. 6. The obligations of Guarantors hereunder are independent of the obligations of Developer and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantors (or any other guarantor) whether or not Developer is joined therein or a separate action or actions are brought against Developer. 7. in the event of any litigation between Agency and one or both Guarantors arising out of this Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. 8. No provisions of this Guaranty can be waived nor can Guarantors be released from the obligations hereunder except by a writing duly executed by the Agency. 9. Guarantors agree to pay all reasonable attorney's fees and all other costs and expenses which may be incurred by Agency in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 10. Guarantors hereby waive notice of any demand by the Agency, as well as notice of any default by the Developer. 11. The Agency may assign this Guaranty. When so assigned, Guarantors shall be bound as above to the assignees without in any manner affecting Guarantors' liability hereunder. 11/05/91 ATTACEMEENT NO. 2-B !_q 7100u/2460/050 Page 2 of 3 12. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any successor or assignee thereof or any disaffirmance by a trustee of the Developer. 13. This Guaranty shall, inure to the benefit of and bind the successors and assigns of Agency and Guarantors. 14. Guarantors agree that jurisdiction and venue with respect to any matter pertaining to the Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of Orange, State of California, in an appropriate municipal court of that county, or in the Federal District Court in the Central District of California. Guarantors irrevocably waives any and all defenses based upon revenue or forum non conveniens. 15. The laws of the State of California shall govern the interpretation and enforcement of this Guaranty. 16. This Guaranty shall terminate and be of no force and effect as of IN WITNESS WHEREOF, the undersigned have executed this Guaranty this day of , 19_ Norman D. Ward Bunnie L. Ward "GUARANTORS" 11/05/91 ATTACHMENT NO. 2-B �� 7100u/2460/050 Page 3 of 3 $250,000 ATTACHMENT NO. 3 PROMISSORY NOTE SECURED BY DEED OF TRUST Huntington Beach, California 19^ I. Promise to Pay. FIVE POINT SENIORS, a California limited partnership Borrower", also referred to as "Developer"), promises to pay the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Holder," also referred to as "Agency") and/or order and assigns, at the -office of the Agency in Huntington Beach, California, or at such other place as the Holder may designate in writing, the principal sum of Two Hundred Fifty Thousand Dollars ($250,000) (the "Note Amount"). 2. Interest Rate. Simple interest shall be charged by the Agency on the portion of the Note Amount remaining unpaid from time -to time, from the date of the disbursement of the Note Amount until the date which is ten (10) years from the date of the disbursement of the Note Amount, at the rate of five percent (5%) per annum. 3. Affordable Housing Agreement. This Promissory Note is made and delivered pursuant to and in implementation of an Affordable Housing Agreement by and between the Holder and the Borrower dated , 1991 (the "Agreement"), a copy of which is on file as a public record with the Folder and is incorporated herein by reference. The Agreement provides for the development of real property, and for the payment of moneys by the Holder to the Borrower in certain events therein set forth. The Borrower acknowledges that but for the execution of this Promissory Note, the Holder would not enter into the Agreement. Unless definitions of terms are expressly set out at length herein, each term shall have the same definition as set forth in the Agreement. 4. Principal and Interest Payments. No payments of Principal and interest payments shall be required during the first two years after the execution of this Note. During the third (3rd) through tenth (10) years after the execution of this Note, the Borrower shall make monthly payments on the first day of each month in such amounts as will fully amortize the balance of principal and interest over such eight (8) year repayment period. 5. AAplicationof Payments. Any sums received hereunder may, at the options of Holder hereof, be applied in any order to the payment of costs, interest, or principal due hereunder. 11/05/91 ATTACIMENT NO. 3 7100u/2460/050 Page 1 of 4 6. Pre2ayment. Privilege is reserved to make prepayments of principal on this Note without penalty or fee. 7. Non -Waiver. Failure to exercise any right the Holder may have or be entitled to, in the event of any default hereunder, shall not constitute a waiver of such right or any other right in the event of subsequent default. 8. Waiver of_Presentment, .etc. The Borrower and all guarantors and endorsers hereof hereby severally waive presentment for payment, protest and demand, notice.of protest, demand and of dishonor and nonpayment of this Note and consent that the holder hereof may extend the time of payment or otherwise modify the terms of payment of any part or the whole of the debt evidenced by this Note, by agreement between the Holder and Borrower, and such consent shall not alter or diminish the liability of any person or the enforceability of this Note. Each and every party signing or endorsing this Note binds itself as a principal and not as a surety. In any action of proceeding to recover any sum herein provided for, no defense of adequacy of security, or that resort must first be had to security or to any other person shall be asserted. All of the terms, covenants, provisions, and conditions herein contained are made on behalf of, and shall apply to and bind, the undersigned and its successors and assigns, jointly and severally. S. Collection Costs. I£ any attorney is -engaged by the Agency to enforce or construe any provision of this Note or the Deed of Trust, or as a consequence of any default or event of default hereunder, with or without the filing of any legal action or proceeding, then Borrower shall immediately pay upon demand all attorney's fees and all other costs incurred by Agency, together with interest thereon from the date of such demand until paid at the rate of interest applicable to the principal owing hereunder as if such unpaid attorney's fees and costs have been added to the principal. 10. Security of Note. This Note is secured, inter alia, by a Deed of Trust (the "Deed of Trust") of even date herewith executed by Borrower covering property located in Orange County, State of California, together with the buildings and improvements now or hereafter erected thereon. 11. Maximum Interest. No provision of this Note or any instrument securing payment hereof or otherwise relating to the debt evidenced hereby shall require the payment or permit the collection of interest in excess of the maximum permitted by applicable law. If any excess of interest in such respect is herein or in such other instrument provided for, or shall be adjudicated to be so provided for herein or in any such instrument, the provisions of this paragraph shall govern, and neither Borrower or any endorsers of this Note nor their 11/05/91 ATTACIMENT NO. 3 ��,� 7100u/2460/050 Page 2 of 4 r L' r L' respective heirs, personal representatives, successors or assigns shall be obligated to pay the amount of such interest to the extent it is in excess of the amount permitted by applicable law. 12. Business Purpose. The undersigned warrants and represents that all funds advanced under this Note shall be applied and are intended solely for business or commercial purposes as set forth in the Agreement and not for any personal, family or household purposes. 13. Notice. Any demand or notice to be made or given under the terms hereof or any instrument now or hereafter securing this Note by the Holder to Borrower shall be effective when mailed or delivered in the manner specified in the Deed of Trust. 14. Default. In the event that there is a default in payment as scheduled herein or a default under the terms of the Deed of Trust securing this Note, or a default of the Agreement or in any other instrument executed by Borrower or any guarantor in favor of the Agency, may at its elections and without further notice, declare all amounts of the outstanding principal and accrued interest thereon immediately due and payable. In the event that the Agency elects to declare default as stated herein then this Note shall bear interest after default at the discount rate of the San Francisco office of the Federal Reserve Bank which is prevailing immediately prior to default, plus five percent (5%), and the Holder may take such action under the law or under these security documents securing this Note as Agency may determine necessary to enforce its rights hereunder. 15. Early Payment Requirement. Reference is made to the Deed of Trust for the right of the Beneficiary thereunder to accelerate the indebtedness evidenced by this Note. IN WITNESS HEREOF, this instrument has been executed as of the date set forth below. FIVE POINTS SENIORS, L.P., a California limited partnership By: Michelson Family Trust dated December 12, 1984, as amended March 1, 1985, its general partner Dated: 199_ By: David Michelson, Trustee "GUARANTORS" 11/05/91 ATTACHMENT NO. 3 7100u/2460/050 Page 3 of 4 fro ATTACELMENT NO. 4 RECORDING REQUESTED BY ) ) WHEN RECORDED RETURN TO: ) Redevelopment Agency of the City ) of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: ) (Space Above this Line For Recorder's Use) CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS DEED OF TRUST is made this day of 199_, by and between FIVE POINTS SENIORS, L.P., a California limited partnership (the "TRUSTOR"), whose address is: , California and FIRST AMERICAN TITLE INSURANCE COMPANY (the TRUSTEE"), whose address is California and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "BENEFICIARY"). WITNESSETH: That Trustor Irrevocably, Grants Transfers and Assigns, to Trustee, in Trust, with Power of Sale, that property in the City of Huntington Beach, County of Orange, State of California, described legally as: LECAL DESCRIPTION (To Be Inserted] 11/05/91 ATTACIDIENT NO. 4 lk 7100u/2460/050 Page 1 of 13 TOGETHER WITH: (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement for the sale 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, and all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement. FOR THE PURPOSE OF SECURING: 1. Payment of the sum of Two Hundred Fifty Thousand Dollars ($250,000) with interest thereon according to the terms of a Promissory Note of even date herewith, made by Trustor, payable to the order of the Beneficiary and extensions or renewals thereof. 2. Payment of such additional sums with interest thereon as: (a) may be hereafter borrowed from the Beneficiary by the then record owner or owners of said property when evidenced by another Promissory Note or Notes, or (b) as may be added to the indebtedness secured hereby in accordance with the provision of this Deed of Trust. 3. Performance of each and every obligation, covenant, promise or agreement of Trustor contained herein and in that certain Affordable Housing Agreement entered by and between Trustor and Beneficiary on , 19—, (hereinafter the "Agreement"), including without limitation, the payment of liquidated damages pursuant to Section 608 of the Agreement. 4. Payment, with interest thereon, of any other present or future indebtedness or obligation of the Trustor (or of any successor -in -interest of the Trustor to said property) to the Beneficiary, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not, whether otherwise secured or not, or whether existing at the time of the execution of the Deed of Trust, or arising thereafter. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. To keep said property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the premises at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or 11/05/91 ATTACHMENT 110. 4 t 7100u/2460/050 Page 2 of 13 �7 demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the premises without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry -rot; to pay when due all claims for labor performed and materials furnished in connection with such property and not to permit any mechanic's lien against such property; to comply with all laws affecting such property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon such property in violation of the law; and to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of said property may be reasonably necessary; to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. If the loan secured hereby or any part thereof is being obtained or should any additional loan be made hereafter for the purpose of financing rehabilitation improvements on said property, Trustor further agrees, anything in this Deed of Trust to the contrary notwithstanding; (a) to complete the same in accordance with City approved plans and specifications satisfactory to Beneficiary; (b) to allow Beneficiary to inspect such property at all times during rehabilitation; (c) to replace any work or materials unsatisfactory to Beneficiary within fifteen (15) calendar days after written notice from Beneficiary of such fact, which notice may be given to Trustor by registered or certified mail, sent to his last known address, or by personal service of the same; (d) that work shall not cease on the rehabilitation of such improvements for any reason whatsoever for a period of fifteen (15) calendar days, whether consecutive or not, without the written permission of the Beneficiary; (e) to pay when due all claims for labor and materials furnished in connection with the said rehabilitation and not to permit any claims of lien for said work or material to be filed of record against the said property; (f) not to permit any stop notice claims to be presented to Beneficiary. If the said property is part of a larger tract upon which improvements will be constructed, Trustor shall make separate contracts and subcontracts for said construction which shall pertain to the said property only and shall keep separate, full and complete records of all work and materials furnished to the said property. Trustee upon presentation to it of an affidavit signed by the Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 11/05/91 ATTACMENT NO. 4 -11U 7100u/2460/050 Page 3 of 13 2. To provide, and maintain in force at all time with respect to said property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefor shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefor and, in the event any such insurance policy and evidence of the payment of the premium therefor are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy theretofore delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance'or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds, at the option of the Beneficiary, shall either be applied in reduction of the indebtedness secured hereby whether due or not, or in such order as Beneficiary may determine, or be held by the Beneficiary and used to reimburse the Trustor for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so 11/05/91 ATTACHMENT NO. 4 7100u/2460/050 Page 4 of 13 `r f restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 3. To pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting such property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment (c) when done, all encumbrances, charges and liens, with interest, on said property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. If, by the laws of the United States of America, or of any state having jurisdiction over the Trustor, any tax is due or becomes due in respect to the issuance of the Note hereby secured, the Trustor covenants and agrees to pay such tax in the manner required by such law. Should Trustor fail to make any such payment, Beneficiary may elect to make such payment, Beneficiary may elect to make such payment and any amount so paid may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 4. That, should Trustor fail to make any payment or do any act as provided in this Deed of Trust, then Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or 11/05/91 ATTACHMENT 110. 4 4 7100u/2460/050 Page 5 of 13 u �.d compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ Counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. S. To appear in and defend any action or proceeding purporting to affect the security hereof or the property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee nay appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in such property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 6. To pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 7. That, should the Trustor or any successor in interest to Trustor in such property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate said property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. S. That any award, settlement or damages for injury or damages to such property, or in construction with the transaction financed by such loan, and any award of damages 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 release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 11/05/91 ATTACHMENT NO. 4 7100u/2460/050 Page 6 of 13 n ` 9. That, by accepting payment of any sums secured hereby after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all sums so secured or to declare a default for failure so to pay. 10. That at any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and any Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of said property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of said property, Trustee may: (a) reconvey any part of said property, (b) consent to the making of any map -or plat thereof, (c) join in granting any easement thereon, (d) join in any agreement subordinating the lien or charge hereof. 11. That the lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 12. That, upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said Note or Notes to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive payoff of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Such request and reconveyance shall operate as a re -assignment of the rents, issues, royalties and profits hereinafter assigned to Beneficiary. Five (5) years after issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in such request to retain them). 13. That as additional security, Trustor irrevocably assigns to Agency the rents, issues, and profits of the property affected by this Trust Deed for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Agency any duty to produce rents from the property affected by this Trust Deed, or cause Agency to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or 11/05/91 ATTACHMENT NO. 4 7100u/2460/050 Page 7 of 13 k"'' k,..0) any other parties, for any dangerous or defective condition of the property affected by this Trust Deed, or for any negligence in the management, upkeep, repaid, or control of such property. This is an absolute assignment, not an assignment for security only, and Beneficiary's right to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Trust Deed. Agency confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Trust Deed as they become due and payable, until the occurrence of a -default hereunder. Upon such default, the License shall be automatically revoked and Agency may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Trust Deed. This right to collect rents, issues and profits shall not grant to Agency or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Agency or Trustee the duty to produce rents, issues or profits or maintain all or any part of the property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the said property, make cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of said property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of said property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary May enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all 11/05/91 ATTACMENT NO: 4 7100u/2460/050 Page 8 of 13 such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default not affect said sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary nay determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor a subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 14. That if the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"; (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless -the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "said property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 11/05/91 ATTACHMENT NO. 4 7100u/2460/050 Page 9 of 13 15. That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement, and the Promissory Note, if applicable, hereunder, and upon default by Trustor under the terms of any encumbrance, charge or lien which is or appears to be prior or superior hereto, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary shall also deposit with Trustee this Deed of Trust and any Notes and all documents evidencing expenditures, secured hereby. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell -said property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for case in lawful -money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive payoff of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale). After deducting all costs, fees and expense of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the terms hereof, not then repaid, with accrued interest at the rate then payable under the Note or Notes secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 16. To waive, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 17. That Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, 11/05/91 ATTACHMENT NO. 4 7100u/2460/050 Page 10 of 13 executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where such property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 16. That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 19. That in the event the property secured by this Deed of Trust is income producing property consisting of four units or more, Trustor agrees to file with Beneficiary, at Beneficiary's request, monthly, on or before the 15th day of each month, a written operational report. Such operational report shall contain a brief but complete statement of the month's income and expenses of such property, a list of all vacancies, and a statement of any material change in the property or business carried on therein for such period. 20. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable change, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with said property of this Deed of Trust, including changing Beneficiary's records pertaining to this Deed of Trust and the loan secured hereby in connection with the transfer of said property, or releasing an existing policy of fire insurance or other casualty insurance 11/05/91 ATTACHMENT NO. 4 7100u/2460/050 Page 11 of 13 held by Beneficiary and replacing the same with another such policy. 21. That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 22. That should this Deed of Trust or any Note secured hereby provide any fee for prepayment of any indebtedness secured hereby, Trustor agrees to pay said fee, if any, of said indebtedness shall be paid prior to the due date thereof stated in said Note or this Deed of Trust even if and notwithstanding Trustor shall have defaulted in payment thereof, cr in performance of any agreement hereunder, and Beneficiary, by reason thereof, shall have declared all sums secured hereby immediately due and payable. 23. That Trustor has made certain representations and disclosures in -order to induce Beneficiary to make the loan evidenced by the Promissory Note or Notes which this Deed of Trust secures, and in the event that Trustor has made any material misrepresentation or failed to disclose any material fact, Beneficiary at its option and without notice, shall have the right to declare the indebtedness secured hereby, irrespective of the maturity date specified in such Note or Notes, immediately due and payable, and on failure to so pay Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. 11/05/91 ATTACHMENT NO. 4 7100u/2450/050 Page 12 of 13 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. FIVES POINTS SENIORS, L.P., a California general partnership By: Michelson Family Trust, dated December 12, 1984, as amended March 1, 1985, its general partner By: David Michelson, Trustee 11/05/91 ATTACEMENT NO. 4 �{s 7100u/2460/050 Page 13 of 13 V ATTACHMENT NO. 5 SCHEDULE OF PERFORMANCE I. GENERAL PROVISIONS 1. Execution of Agreement by_,Agency. The Agency shall approve and execute this Agreement and shall deliver one'(1) copy thereof to the Developer. Within thirty (30) days after the date of execution and submission of five (5) copies of this Agreement by the Developer. 2. Submission of Preliminary Completed. Site Plan. Developer sub- mits its Preliminary Site Plan to City and the Agency. 3. Agency/City Review of Site Completed. Plan. The Agency/City shall approve or disapprove the Preliminary Site Plan. 4. Submission of Complete Site Completed. Plan Application. Developer submits full and complete Site Plan application to City and the Agency. S. Preparation of CEOA Documentation. Agency shall prepare all documentation necessary to comply with the California Environmental Quality Act. Prior to Agency consideration and execution of the Agreement. II. CONSTRUCTION DOCUMENTS AND BUILDING PERMIT 6. Submission of _Complete Construction Drawings and Landscaping Plan. Developer shall submit to the City complete Construction (working) Drawings and a Landscaping Plan, Sign Program, and Finish Grading Plan. Landscaping Plan and final Sign Program shall be completed and approval Within thirty (30) days from submittal to Planning Commission and City Council approval (Item 8 above). 11/05/91 ATTACHMENT NO. 5 �[ 7100u/2460/050 Page 1 of 3 ,U V obtained by Developer prior to completion of the Developer Improvements. 7. City Review of Complete Drawings and Plans. The Agency/City shall review the Complete Construction (working) Drawings, the Preliminary Landscaping Plan, Preliminary Sign Program, . and Finish Grading Plan and provide comments. Within fourteen (14) days after submittal. B. Revisions, if any. Developer Within thirty 130) days after shall prepare revised receipt of City's comments. Construction (working) Drawings as necessary, and submit them to City for review. 9. Final Review and Comolete Drawings. The City/Agency shall approve the revisions submitted by the Developer provided that the revisions necessary to accommodate the City's comments have been made; said approvals constitute the last City and Agency approvals required in order for the Developer to pull building permits. 10. Developer Obtains Construc- tion Financin . III. CONSTRUCTION PHASE Within fourteen (14) days after submittal by Developer. Within after Agency Agreement. (!) days approval of 11. Commencement of Construc- Within thirty (30) after the tion. Developer shall City's issuance of building commence construction of permits, but not later than the Developer Improvements. days after the Agency's Approval of the Agreement. 12. Completion of Construction. Subject to any delays pursuant Developer shall complete to Section 503, the Developer construction of all of the is to use due diligence to Developer Improvements. complete the project within 11/05/91 ATTACEMENT NO. 5 L 7100u/2460/050 Page 2 of 3 twelve (12) months after commencement of the Developer Improvements; however, provided the Developer may request up to three (3) one (1) month extensions to be granted by the Executive Director of the Redevelopment Agency. Approval for such three extensions (but no other extensions) is not to be unreasonably withheld; provided that, notwithstanding the foregoing, construction shall be completed not later than eighteen (18) months after the earlier of (i) the commencement of the Developer Improvements or (ii) the time established in this Agreement for the commencement of construction of the Developer Improvements. IV. OPERATIONS PHASE 13. Disbursement of Agency Loan Upon the earlier -of the The Agency shall disburse issuance of a temporary or the Agency Loan. final certificate of occupancy by the City for all of the Developer Improvements. 14. Disbursement of Agency Grant. The Agency shall disburse the Agency Grant. 15. Submission of Age and Income Certification Upon the first through fifth anniversaries of the issuance of the earlier of the temporary or final certificate of occupancy. Thirty (30) t prior to each the issuance of occupancy Improvements. 11/05/91 ATTACHMENT NO. 5 7100u/2460/050 Page 3 of 3 o sixty (60) days anniversary of of a certificate for the Developer w. ATTACHMENT NO. 6 SCOPE OF DEVELOPMENT [To Be Inserted] 11/05/91 ATTACHMENT NO. 6 Ct] 7100u/2460/050 �o} Q ATTACHMENT NO. 7 RECORDING REQUESTED BY ) AND WHEN RECORDED NAIL TO: ) } ISpace above for recorder.) CERTIFICATE OF COMPLETION FOR CONSTRUCTION AND DEVELOPMENT RECITALS A. An "Affordable Housing Agreement" was entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency" and FIVE POINTS SENIORS, L.P., a California limited partnership (the "Developer") dated as of , a copy of which is on file with the Agency as a public record at its offices at 2000 Main Street, Huntington Beach, California (the "Agreement"), and is incorporated herein by reference. B. As referenced in the Agreement, the Agency shall furnish the Developer with a Certificate of Completion upon completion of the "Developer Improvements" pursuant to the Agreement, which certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. C. Such certificate shall be conclusive determination of satisfactory completion of the construction required by the Agreement. D. The Agency has conclusively determined that the construction of the Developer Improvements on the real property described in Exhibit A attached hereto and incorporated herein (the "Site") as required by the Agreement has-been satisfactorily completed. NOW THEREFORE, 11/05/91 ATTACHMENT NO. 7 7100u/2460/050 Page 1 of 2 ." 1 k..) 1. As provided in the Agreement, the Agency does hereby certify that the construction of the Developer Improvements on the Site has been fully and satisfactorily performed and completed. 2. Nothing contained in this instrument shall modify in any other way any other provisions of the Agreement. IN WITNESS WHEREOF, the Agency has executed this certificate this day of , 199_. REDEVELOPMENT AGENCY OF THE CITY OF MTINGTON BEACH, a public body corporate and politic By: Its: ATTEST: Agency Secretary 11/05/91 ATTACEDIENT NO. 7 7100u/2460/050 Page 2 of 2 k1.0' EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: [To Be inserted.] 11/05/91 EXHIBIT "A" TO q 3 7100u/2460/050 ATTACHMENT NO. 7 • M STATE OF CALIFORNIA Ss. COUNTY OF ORANGE On this day of , 1991 before me, the undersigned, a Notary Public in and for said State, personally appeared J. known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed this instrument as the (insert title of the officer) of the Redevelopment Agency of the City of Huntington Beach and acknowledged to me that the Redevelopment Agency of the City of Huntington Beach executed it. Signature of Notary Public (SEAL) QA 11/05/91 41 7100u/2460/050 ATTACHMENT NO. 7 ATTACHMENT NO. 8 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: ) Space above for recorder. This Agreement is recorded at the request and for the benefit of the Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY -OF THE CITY OF HUNTINGTON BEACH D_ECLARATI.ON OF COVENANTS, CONDITIONS, AND RESTRICTIONS THIS DECLARATION OF -COVENANTS, CONDITIONS, AND RESTRICTIONS (the "Declaration") is entered into this day of , 199_, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency"), and FIVE POINT SENIORS, a California general partnership (the "Developer"). RECITALS A. The Developer is fee owner of record of that certain real property (the "Site") located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". The Site is the subject of an Affordable Housing Agreement (the "Agreement") for the development, operation and maintenance of a senior citizen housing project. B. The Agreement provides for the execution and recordation of this document. Except as otherwise expressly provided in this Declaration, all terms shall have the same meanings as set forth in the Agreement. NOW, THEREFORE, THE AGENCY AND THE DEVELOPER AGREE AS FOLLOWS: 11/05/91 ATTACHMENT NO. 8 7100u/2460/050 Page 1 of 18 1. Affordable Housing A. Number of Units. The Developer covenants and agrees to develop a total of one hundred sixty-four (164) multifamily housing units on the Site in conformance with the Scope of Development (Attachment No. 6 to the Agreement). The Developer agrees to make available, restrict occupancy to, and rent thirty-two (32) of the units to "Very Low Income Households" and sixteen (16) additional units to "Persons and Families of Low- and Moderate Income," all at an "Affordable Rent" (the "Affordable Units"). However, the Developer shall be obligated to make available, restrict occupancy to, and rent sixteen (16) of the units to "Very Low Income Households," sixteen (16) additional units to "Lower Income Households," and sixteen (16) additional units to "persons and families of Low - and Moderate Income," in lieu of the requirements of the preceding sentence, for the duration of the "Affordability Period" (as defined in paragraph B of this Section 1), upon the occurrence of all three of the following events: (a) the "Qualified Development Period" (as defined in the Regulatory Agreement and Declaration of Restrictive Covenants by and among the City, Developer and , dated as of November `, 1991) shall have elapsed; and (b) the "Section 8 Program" (as defined in paragraph G of this Section 1) or a reasonably similar successor or replacement federal rental subsidy or voucher program no longer exists; and (c) neither the City nor the Agency has instituted a rental subsidy or voucher program designed to subsidize the rentsof Very Low Income Households. The location of the Affordable Units shall be dispersed throughout the Developer Improvements and shall be reasonably acceptable to the Agency. The distribution of sizes (in terms of number of bedrooms) of the Affordable Units shall be in the same proportion as the distribution of sizes of all units within the Developer Improvements. There shall be not less than six (6) and not more than ten (10) Affordable Units on each floor of the Developer Improvements. Those Affordable Units located on the first floor of the Developer Improvements shall each be not less than Five Hundred Seventy (570) square feet. "Very Low Income Household" shall mean a household earning not greater than fifty percent (5001) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety Code Section 50105. "Lower Income Household" shall mean a household earning not greater than eighty percent (60%) of Orange County median income, as determined by the United States Department of Housing and Urban development, as set forth in Health and Safety Code Section 50079.5. 11/05/91 ATTACHMENT NO. 8 ��� 7100u/2460/O50 Page 2 of 18 "Persons and Families of Low and Moderate Income" shall mean a household earning not greater than one hundred twenty percent (120%) of Orange County median income, as determined by the United States Department of Housing and Urban Development, as set forth in Health and Safety Code Section 50093. "Affordable Rent" shall have the meaning set forth in Health and Safety Code Section 50053, as further defined in subparagraph E of this Section 1. B. Duration of Affordability Requirements. The Affordable Units shall be subject to the requirements of this Section 1 for thirty (30) years, beginning on the date of the City's issuance of a certificate of occupancy for the Developer Improvements (the "Commencement Date"). The duration of this requirement shall be known as the "Affordability Period." All tenants residing in the Affordable Units during the last two (2) years of the Affordability Period shall be given notice at least once every six (6) months of the expiration date of this requirement, and that the rent payable on the Affordable Unit may be raised to a market rate rent at the end of the Affordability Period. The Developer consents to the recording of this Declaration in the official records of Orange County, California. C. Selection of Tenants. The Developer shall give notice to the Agency of the City s issuance of the certificate of occupancy for the Developer Improvements and the Affordable Units, and shall give notice of the vacancy of each and any Affordable Unit thereafter. The Agency shall have five (5) working days from the receipt of such notice to deliver to the Developer a list of prospective tenants for such vacancy. The Developer shall send written notice of such vacancy to each person on such list. Such notice shall notify the recipient that he or she must directly contact the Developer or its designated leasing agent within fifteen (15) working days to apply for tenancy of such vacant Affordable Unit. The Developer shall not rent or lease such Affordable Unit during such fifteen (15) day period to any tenant not notified of such vacancy by the Agency. In the event that no tenant which is reasonably acceptable to the Developer applies for tenancy of the vacant unit within such time period, the Affordable Unit may be leased to another tenant selected by the Developer who meets all of the other requirements provided herein. D. Income of Tenants. Prior to the rental or lease of any Affordable Unit to a tenant, and annually thereafter within thirty (30) days of the anniversary date of the tenant's occupancy of the Affordable Unit, the Developer shall submit to the Agency a completed intone computation and certification form, in the form of Attachment No. 9 to the Agreement or such 11/05/91 ATTACHMENT NO. 8 n 7100u/2460/050 Page 3 of 18 R j other form as may be provided by the Agency. The Developer shall certify that to the best of its knowledge each tenant leasing an Affordable Unit is a Very Low Income Household or a Person or Family of Low- and Moderate -Income, whichever is applicable, and meets the eligibility requirements established for the Affordable Unit. The Developer shall obtain an income certification from the tenant of each Affordable Unit and shall certify that, to the best of the Developer's knowledge, the income of the tenant is truthfully set forth in the income certification form. The Developer shall verify the income certification of the tenant in one or more of the following methods as specifically requested by the Agency: (1) obtain two (2) paycheck stubs from the tenant's two (2) most recent pay periods. (2) obtain a true copy of an income tax return from the tenant for the most recent tax year in which a return was filed. .(3) obtain an income verification certification from the employer of the tenant. (4) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the tenant receives assistance from such agencies. (5) obtain an alternate form of income verification reasonably requested by the Agency, if none of the above forms of verification is available to the Developer. A person or family who at the time of income certification qualified as a Very Low Income Household or Person or Family of Low- and Moderate -Income or shall continue to be deemed so qualified, until such time as the person or family's income is redetermined and the person or family is determined by the Agency to no longer be so qualified, even if such person or family's income has subsequently increased to an amount above the applicable income level. Upon the Agency's determination that the tenant is no longer qualified as a Very Low Income Household or Person or Family of Low- and Moderate -Income, the next available unit of comparable size must be rented to (or held vacant and available for immediate occupancy by) a Very Low Income Household or Person or Family of Low- and Moderate -Income, whichever is applicable. Such new tenant shall then constitute a Very Low Income Household or Person or Family of Low- and Moderate -Income for the purposes of this Section 1, and until such next available unit is rented to such tenant, the former Very Low Income Household or Person or Family of Low- and Moderate -Income who has ceased to qualify as such shall be deemed to continue to be a Very Low Income ,l 11/05/91 ATTACFAENT NO. 8 7100u/2460/050 Page 4 of 18 Household or Person or Family of Low- and Moderate -Income for the purposes of this Section 1. In addition, the Developer shall annually submit to the Agency a certification of the number of Affordable Units actually occupied by Very Low Income Households and Persons or Families of Low- and Moderate -Income, and the ages of all tenants residing in the Developer Improvements, in the form of Attachment No. 10 to the Agreement or such other form as may be provided by the Agency. E. Determination of Affordable Rent for the Affordable Units. Each Affordable Unit shall be rented at an "Affordable Rent" to be established by the Agency as provided herein. The maximum monthly rental amount for the Affordable Units required to be rented to Very Low Income Households shall be established at one -twelfth 11/12) of thirty percent (30%) of fifty percent (50%) of Orange County median income. The maximum monthly rental amount for the Affordable Units required to be rented to Lower Income Households, if any, shall be established at one -twelfth (1/12th) of thirty percent (30%) of sixty percent (60%) of Orange County median income for tenants earning more than fifty percent (50,,) and not more than sixty percent (60%) of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) of such tenant's annual income for tenant earning more than sixty percent (60%) and not more than eighty percent (80%) of the Orange County median income. The maximum monthly rental amount for the sixteen (16) Affordable Units required to be rented to Persons of Low- and Moderate Income shall be established at one -twelfth (1/12) of thirty percent (30%) of one hundred ten percent (11001) of Orange County median income for tenants earning more than eighty percent (80%) and not more than one hundred ten percent (110%) of Orange County median income, and one -twelfth (1/12th) of thirty percent (30%) of such tenants' annual income for tenants earning more than one hundred ten percent (110%) and not more than one hundred twenty percent (120%) of Orange County median income. The maximum monthly rental amount for each Affordable Unit rented to Persons of Low- and Moderate- Income shall be based upon the actual household size of the persons occupying the Affordable Unit. The maximum monthly rental amount for each Affordable Unit to be rented to Very Low Income Households and Lower Income Households shall be based upon the assumed household size of two (2) persons for each one (1) bedroom unit and three (3) persons for each two (2) bedroom unit, except as hereinafter provided. Upon the rental of any Affordable Unit to a Very Low Income Household which is a "Section 8 Recipient", as defined in Paragraph G hereof ("Section 8 Unit"), the maximum monthly rental amount for the next Affordable Unit rented to a Very Low Income Household which is not a Section 8 Recipient shall be based upon the actual household size of the person or persons occupying such 11/05/91 ATTACHMENT NO. 8 7100u/2460/OSO Page 5 of 18 ft9q Affordable Unit ("Actual Household Size Unit"). In the event any such Section 8 Unit is vacated and rerented to a Very Low Income Household which is not a Section 8 Recipient, then upon the next vacation of an Actual Household Size Unit, such vacated Actual Household Size Unit shall no longer be an Actual Household Size Unit and the maximum monthly rental amount for such Affordable Unit shall be based upon the assumed household size of two t2) persons if it is a one (1) bedroom unit and three (3) persons if it is a two bedroom unit. In no event, however, shall the rerenting of a Section 8 Unit to a Very Low Income Household which is not a Section 8 Recipient authorize the Developer to increase the rental amount charged to an existing tenant of an Actual Household Size Unit. Furthermore, the maximum number of Actual Household Size Units required at any one time shall be limited to sixteen (16). THE DEVELOPER UNDERSTANDS AND M40WINGLY AGREES THAT THE MAXIMUM RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS NOT NECESSARILY EQUAL TO THE FAIR MARKET RENT AMOUNT OF THE AFFORDABLE UNITS, AND IS PROBABLY ESTABLISHED AT A PRICE WHICH IS SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT. Developer Initials: The maximum monthly rental amount for the Affordable Units shall be determined by the Agency not earlier than ninety (90) days after the date of issuance of building permits and not later than the Commencement Date. The maximum monthly rental amount of the Affordable Units shall be adjusted annually by the formula set forth above upon the publication of revised Orange County median income figures by the United States Department of Housing and Urban Development. F. Senior Citizen Units. All of the units in the Developer Improvements, including without limitation the Affordable Units, shall be independent living apartments specially designed for the physical and social needs of "Senior Citizens" (persons fifty-five (55) years or older, subject to applicable law) in accordance with the requirements set forth in the Scope of Development (Attachment No. 6 to the Agreement). The units shall be comprised of one and two bedroom units, each with a private balcony or patio. The Developer shall state, in a prominent location in all advertising and marketing materials, that the Developer Improvements are designed for use and occupancy by Senior Citizens. Furthermore, the Developer shall restrict occupancy to Senior Citizens and "Qualified Permanent Residents" (as that term is defined in California Civil Code Section 51.3), in the rental of both the Affordable Units and the other units in the Developer Improvements. Except as otherwise provided herein, at least one person in residence in each dwelling unit must must be a Senior Citizen, and other residents in the same 11/05/91 ATTACHMENT NO. 8 7100u/2460/050 Page 6 of 16 dwelling unit who are not Senior Citizens must be Qualified Permanent Residents. Temporary guests of a Senior Citizen or Qualified Permanent Resident shall be allowed for a period of not more than sixty (60) days in any twelve (12) month period. Upon the death, dissolution of marriage, hospitalization or other prolonged absence of the Senior Citizen in a dwelling unit, any Qualified Permanent Resident who has continuously resided in the dwelling unit with such Senior Citizen shall be permitted to continue as a resident of that dwelling unit. "Permitted Health Care Residents" (as that term is defined in California Civil Code Section 51.3) shall be permitted to occupy any dwelling unit during any period that such person is actually providing live-in, long-term or hospice health care to a Senior Citizen tenant or Qualified Permanent Resident tenant for compensation. G. Federal Housing Subsidies. The Agency shall use its best reasonable efforts to assist the Developer to secure as tenants of the Affordable Units dedicated to Very Low Income Households persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937, or its successor ("Section 8 Recipients"). For purposes of calculating the rent payable by the tenant pursuant to Paragraph E of this Section, the amount paid to the Developer as a result of such certificates or vouchers shall not be deemed the payment of rent by the tenant. H. Operations. For a period of thirty (30) years beginning on the date of the City's issuance of certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall provide a full-time activities director, an on -site apartment manager and a van shuttle service which are available exclusively to and for the benefit of the tenants of the Developer Improvements. Such activities director shall be employed on the Site at least forty (40) hours per week, and such van shuttle service shall be available for the use of the residents of the Developer Improvements at least thirty (30) hours per week. For a period of ten (10) years beginning on the date of the City's issuance of a certificate of occupancy or temporary certificate of occupancy for the Developer Improvements, the Developer shall annually expend not less than the amounts set forth in each category of the "Operating Budget" attached to the Agreement as Attachment No. 11 and incorporated herein. The amount in each category of the Operating Budget shall be adjusted annually by the percentage change in the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles -Anaheim -Riverside Average, Subgroup "All Items" (1982/84=100). The Developer shall 11/05/91 ATTACHMENT 110. 8 7100u/2460/050 Page 7 of 18 jD1 annually submit to the Agency a detailed report of its Operating Budget expenditures, with such costs itemized in the categories contained in the Operating Budget, not less than thirty (30) days prior to the anniversary of the issuance of the certificate of occupancy for the Developer Improvements. In accounting for such costs, the Developer shall use generally accepted accounting principles (GAAP), including applicable Financial Accounting Standards Board (FASB) Pronouncements. In the event any of the payments in any category or the Operating Budget is made to the Developer or a party which owns or is owned by the Developer or -any of the partners of the Developer or the Guarantors or is otherwise affiliated with the Developer, such payment shall be deemed not to exceed a payment commensurate with industry standards for the service or product provided. The Executive Director of the Agency may, in his or her sole discretion, cause the audit of the Operating Budget expenses not more often than once each year by a public accounting firm reasonably satisfactory to the Agency. The parties agree to accept the results of such audit as the conclusive and final determination of actual Operating Budget expenditures. The Developer shall make available to the auditor all books and records pertaining to the Operating Expenses. The cost of the audit shall be borne by the Agency; provided, however, that the cost shall be borne solely by the Developer if the audit determines that actually incurred Operating Budget expenditures are at least five percent (5%) less than the expenditures reported by the Developer to the Agency. In addition, the Agency shall have the right at any time during normal business hours upon not less than two business days prior notice, but not more than two times each year during the period of this Declaration to examine and inspect all books and records pertaining to the Operating Expenses. 2. Non -Discrimination The Developer, on behalf of itself and its successors, assigns, and each successor in interest to the Site or any part thereof, hereby covenants and agrees: (a) To use, devote, operate and maintain the Site and each part thereof, for the purposes and the residential uses specified in the Agreement. (b) Not to discriminate upon the basis of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer or rental, or in the use, occupancy, tenure, or enjoyment of the Site or any improvements thereon, or of any part thereof. Each and every deed, lease, and contract entered into with respect to 11/05/91 ATTACfDSENT NO. 8 �� 7100u/2460/050 Page 8 of 18 the Site shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (1) In deeds: "The grantee herein covenants by and for itself, it successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (2) In leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, 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 sex, marital status, race, color, creed, religion, national origin, or ancestry, in the leasing, renting, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit 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." (3). In contracts: "There shall be no discrimination against or segregation of, any persons, or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, rental, sublease, transfer, use, occupancy, tenure or enjoyment of the 11/05/91 ATTACHMENT NO. 8 3 7100u/2460/050 Page 9 of 18 td u u land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 3. Use Restrictions. The Site shall be occupied, used and maintained as follows: a. Each dwelling unit shall be used only for private apartment dwelling purposes, with appurtenant facilities, and for no other purposes. b. No sign of.any kind shall be displayed to the public view on or from any unit without the approval of the Agency. All signs otherwise permitted under this section shall conform with all -ordinances and other regulations of the City. C. The Developer and the occupants shall not permit or suffer anything to be done or kept upon said premises which will increase the rate of insurance on any building, or on the contents thereof, or impair the structural integrity thereof or which will obstruct or interfere with the rights of other occupants, or annoy them by unreasonable noises or otherwise, nor shall any occupant commit or permit any nuisance on the premises or fail to keep the premises free of rubbish, clippings and trash or commit or suffer any illegal act to be committed thereon. The Developer shall comply with all of the requirements of all governmental authorities with respect to the premises. If by reason of the occupancy or uses of the premises the rate of insurance on the Site shall be increased, the Developer shall become personally liable for the additional insurance premiums. d. There shall be no structural alteration, construction or removal of any building, fence or other structure on the Site (other than repairs or rebuilding permitted herein) without the approval of the City or the Agency and in accordance with the City Code. e. The Developer shall not permit the parking, storing or keeping of any vehicle except wholly within the parking areas designated therefor. The Developer shall not permit the parking, storing or keeping of any large commercial type vehicle (dump truck, cement mixer truck, oil or gas truck, etc.), or any recreational vehicle (camper unit, camper shell detached from a private passenger vehicle, motor home, trailer, 1� 11/05/91 ATTACHMENT NO. 8 7100u/2460/050 Page 10 of 18 boat trailer, mobilehome or other similar vehicle, except when parked within an enclosed parking space), boats over twenty (20) feet in length or any vehicle other than a private passenger vehicle or the passenger van required by Section 1(G) hereof upon any portion of the Site, including parking spaces. The Developer shall not permit major repairs or major restorations of any motor vehicle, boat, trailer, aircraft or other vehicle to be conducted upon any portion of the Site, including parking spaces, except for emergency repairs thereto and then -only to the extent necessary to enable movement thereof to a proper repair facility. No inoperable vehicle shall be stored or kept anywhere on the Site. The Developer shall have the right to remove, at the tenant's expense, any vehicle parked, stored or kept in violation of the provisions of this Declaration. In addition, all provisions of the Huntington Beach Municipal Code, including amendments thereto, shall apply. S. Occupancy. Occupancy of each dwelling unit shall be restricted to occupancy standards set forth in the Huntington Beach Municipal Code or state standards, as are effective or as may be effective or amended. The Developer shall not be permitted to lease or rent any dwelling unit thereon for transient or hotel purposes. Any lease or rental agreement covering an apartment shall provide that the terms of the lease or rental agreement shall be subject in all respects to the provisions of this Declaration of Conditions, Covenants and Restrictions and that any failure by the lessee to comply with the terms of such documents shall be a default under the lease or rental agreement. All leases and rental agreements shall be in writing. All prospective tenants/ occupants of the Site shall make application through the Developer. 6. Inspection. To the extent permitted by law, the City of Huntington Beach and the Agency shall have the right of entry, at reasonable business hours and upon no less than twenty-four (24) hours advance notice, onto the Site to inspect for the need for repairs or maintenance. Entry onto the Site or into any unit for other than emergency repairs may be made only after such advance notice and request for entry. If request for entry is denied or the Site or any applicable unit is unoccupied, the City or Agency may apply for an appropriate warrant or other order from a court of appropriate jurisdiction. 7. Subdivision. No part of the Site shall at any time be owned by a cooperative housing corporation, nor shall the Developer take any steps in connection with a conversion to such ownership or 11/05/91 ATTACHMENT NO. 8 D� 7100u/2460/050 Page 11 of 18 �� t..} �.01 uses. Other than obtaining a final subdivision nap on the Site and a final subdivision public report from the California Department of Real Estate, the Developer shall not take any steps in connection with a conversion of the Site to a condominium ownership, or with a conversion of the Site to "timeshare" ownership. 8. Exterior Maintenance. The exterior areas of the Site shall be kept free of rubbish, debris and other unsightly or unsanitary materials. a. Project Improvement, Maintenance and Repair (2) Land Use Areas and Improvements {a) Exterior yard areas and parking areas shall be kept free of deterioration, including: (i) Potholes (ii) Cracks in asphalt so as to become uneven, unsightly surface conditions (iii) Weeds growing through asphalt. (b) Perimeter fencing, landscaping and irrigation system shall be routinely inspected and maintained in good condition. b. Each occupant of the Site shall have the affirmative obligation to prevent what might be considered a fire hazard or a condition dangerous to the public health, safety and general welfare; or constitute an unsightly appearance or otherwise detract from the aesthetic and property values of neighboring dwelling units and properties. The following minimum performance standards for the maintenance of buildings, yards, and Landscaping shall be adhered to by the Developer: the 'following: (1) Landscaping on the Site shall be absent of (a) Lawns with grasses in excess of six (6) inches in height. (b) Untrimmed hedges. (c) Trees, shrubbery, lawns and other plant life dying from lack of water or other necessary maintenance. V� 11/05/91 ATTACMENT NO. 8 ` 71COu/2460/050 Page 12 of 18 (d) Trees and shrubbery grown uncontrolled without proper pruning. (e) Vegetation so overgrown as to be likely to harbor rats or vermin. (f) Dead, decayed or diseased trees, weeds and other vegetation. -(g) Inoperative irrigation system(s). (2) Yard areas shall be maintained so as to be absent of the following: (a) Broken or discarded furniture, appliances and other household equipment stored in yard areas for periods exceeding one (1) week. (b) Packing boxes, lumber, trash, dirt and other debris stored in yards for unreasonable periods in areas visible from public property or neighboring properties. (c) Unscreened trash cans, bins or containers stored for unreasonable periods in areas visible from public streets and common areas. (3) No building, wall or fence may be left in an unnaintained condition so that any of the following exist: (a) Buildings abandoned, boarded up, partially destroyed or left unreasonably in a state of partial construction. (a) Unpainted buildings or buildings with peeling paint in such a condition as to: i. Cause dry rot, warping and termite infestation; or ii. Constitute an unsightly appearance that detracts from the aesthetic or property values of neighboring properties. 11/05/91 ATTACEMENT NO. 8 7100u/2450/050 Page 13 of 18 11 t (c) Broken windows, constituting hazardous conditions and/or inviting trespassers and malicious mischief. (d) Damaged garage doors that may become inoperative or unsafe to operate. (e) Graffiti remaining on any portion of the property for a period exceeding fifteen (15) days. (f) Building interiors and -exteriors shall be maintained to meet standards of similar residential property in the -City of Huntington Beach. 9. Agency and City,Right of Review and Enforcement The City of Huntington Beach ("City") and the Agency shall be made parties to this Declaration for the limited purpose as specified herein as follows: a. Changes or amendments to this Declaration must be submitted for City and Agency review and approval. b. In the event of inaction by the Developer, the City and Agency are hereby granted expedient power to enforce all provisions of this Declaration including, but not limited to, the maintenance of the Improvements and all yards, buildings and landscaping areas within the Site. C. The City and Agency are hereby granted the express power to enforce all laws and ordinances of the State of California and/or the City on yards, structures, and private parking areas within the Site. Nothing within this Declaration, however, shall be construed as imposing an obligation or requiring the City or Agency to enforce any provision thereof. d. The City and the Agency shall be given prior written notice of any proposed amendment to this Declaration. Such notice shall be given by mailing a copy of the precise language of the proposed amendment to the City of Huntington Beach, c/o City Clerk, together with a letter of transmittal explaining the proposed change in general terms. The City and the Agency shall have an opportunity to review and comment upon the proposed amendment for a period of not less than forty-five (45) days prior to the effective date of any such proposed amendment. If the City or Agency fail to respond within forty-five (45) days, the proposed change(s) and amencknent(s) shall be deemed approved, unless that time period is extended by mutual agreement of all parties. {� 11/05/91 ATTACHMENT NO. 8 �� 7100u/2460/050 Page 14 of 18 �-01 10. City of Huntington Beach Right of Entry for Code_ Enforcement, Repair and Traffic_Requlation (a) Right of Entry. To the extent permitted by law, Developer hereby acknowledges and intends and thus grants to the City, through the City's duly authorized agents or employees, the right to enter upon the Site for the following purposes: (1) Inspection, maintenance and repair of the Site. (2) Enforcement of local traffic and/or parking regulations. (b) Reimbursements of City -Expenditures. All costs and expenses incurred by the City arising out of its inspection, maintenance and repair of the Site, as provided hereinabove ("City Maintenance Costs"), shall be charged as an expense of the Developer and shall be paid within ten (10) days of receipt of an invoice for same. (c) Assessments and Lien Rights of the _City. If City Maintenance Costs are not paid within thirty (30) days from the date due, said unpaid costs and expenses shall become a special assessment against the Site and, upon confirmation by the City Council, shall be collected in the same manner as real property taxes and shall be subject to the same penalties, procedures and sale in case of delinquency as is provided for real property taxes. 11. Mortgage Protection Notwithstanding any and all provisions elsewhere in this Declaration to the contrary, in order to induce lenders and investors to participate in the financing of the Improvements, the following provisions are added hereto, and to the extent these added provisions conflict with any other provisions of this Declaration, these added provisions shall control: (a) Any first mortgagee or third party foreclosure purchaser who comes into possession or who obtains title to the Site pursuant to the remedies provided in the mortgage or foreclosure of the mortgage, or by deed or assignment in lieu of foreclosure, will not be liable for such Site's unpaid charges which accrue prior to such possession or acquisition of title. The assessment liens provided for herein shall be subordinate to the lien or equivalent security interest of any first mortgage recorded prior to the date any such charges become due, and no violation of this Declaration shall invalidate such lien or security interest. Such subordination 11/05/91 ATTACHMENT NO. 8 (,( 7100u/2460/050 Page 15 of 18 .101 k.� V1 shall apply only to assessments which accrue prior to a sale or transfer of such Site pursuant to a decree of foreclosure or trustee's sale. Such sale or transfer shall not relieve such Site from liability for any assessments thereafter becoming due or from the lien of any such subsequent assessment. (b) First mortgagees shall have the right to examine the books and records of the Developer during normal business hours. (c) In the event of substantial damage to or destruction of the'Site or any portion thereof, the mortgagee of any first mortgage on the Site shall be entitled to timely written notice of any such damage or -destruction, and no provision in this Declaration shall be interpreted to entitle the Developer or any other party to priority over any rights of the first mortgagee of the Site pursuant to its mortgage in the case of a distribution to such Developer of insurance proceeds or condemnation awards for losses to or a taking of the Site. (d) If the Site or portion thereof is made the subject matter of any condemnation or eminent domain proceeding or is otherwise sought to be acquired by a condemning authority, then the mortgagee of any first mortgage will be entitled to timely written notice of any such proceeding or proposed acquisition, and no provision in this Declaration shall be interpreted to entitle the Developer or any other party to priority over such mortgagee with respect to the distribution to such lot of the proceeds of any award or settlement. (e) As used in this Section 11, "first mortgagee" means any mortgagee under a mortgage which is a first lien of record made in good faith and for value, or a junior lien of record made in good faith and for value by the City, the Agency or an institutional lender in order to assist in the financing of the construction of the Improvements. 12. Miscellaneous Provisions a. If any provision of this Declaration or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Declaration, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Declaration; and each provision of this Declaration shall be valid and enforceable to the fullest extent permitted by law. 11/05/91 ATTACHMENT 110. 8 �� 7100u/2460/050 Page 16 of 18 b. This Declaration shall be construed in accordance with the laws of the State of California. C. In the event action is instituted to enforce any of the provisions of this Declaration, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorney's fees and costs. d. The Developer shall be required to take all reasonable steps necessary to insure that each tenant and all assignees, and transferors have knowledge of all terms and conditions of this Declaration. 13. Runs with the Land The covenants and agreements established in this Agreement shall, without regard to technical classification and designation, be binding on the Developer and any.successor in interest to the Site, or any part thereof, for the benefit of and in favor of the Agency, its successor and assigns, and the City of Huntington Beach. The covenants contained in paragraphs 2(a) and 4 through 12 of this Agreement shall remain in effect for the Affordability Period, and shall automatically terminate and be of no further force or effect after such time. The covenants against discrimination contained in paragraphs 2b and 3 shall remain in effect in perpetuity. IN WITNESS WHEREOF, the Agency and the Developer have executed this Declaration of Conditions, Covenants and Restrictions. Dated: Dated: Dated: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Chairman By: Executive Director By: Deputy Executive Director "AGENCY" 11/05/91 ATTACHMENT NO. 8 7100u/2460/050 Page 17 of 18 �`, u ATTEST: Agency Secretary APPROVED AS TO FORM: 5tradling, Yocca, Carlson & Rauth, Agency Special Counsel City Attorney, Agency General Counsel Dated: Dated: FIVE POINT SENIORS, a California general partnership By: Michelson Family Trust, dated as of December 12, 1984, its general partner By: David Michelson, Trustee By: Norman D. and Bunnie L. Ward Trust, dated its general partner By: Ward, Trustee "DEVELOPER" 11/05/91 ATTACFLMENT NO. 8 ,�/ 7100u/2460/050 Page 18 of 18 ATTACHMENT NO. 9 CERTIFICATION OF ELIGIBILITY Part I -- General Information 1. Project Name 2. Project Location 3. Name of Lender 4. Landlord's Name Part II -- Unit Information 7. Unit 8. Number of 9. Monthly 10. Number of Address Bedrooms Payment Occupants Part III -- Affidavit of Renter I, and I, as applicants for rental of a Low and Moderate Income Unit in the above -described Project, do hereby represent and warrant as follows: A. (My/Our) adjusted income (anticipated total annual income) does not exceed: [ ] (120% of Orange County Median Income) [ ] $ ( 80% of Orange County Median Income) [ ] $ ( 50% of Orange County Median Income) The following computation includes all income (I/we) anticipate receiving for the 12-month period beginning on the date (I/we) execute a rental agreement for a Low or Moderate Income Unit or the date on which (I/we) will initially occupy such unit, whichever is earlier. 21/05/91 ATTACHMENT NO. 9 7100u/2460/050 Page 1 of 5 ., V V 1. For the renter and all family members include: (a) amount of wages, salaries, overtime pay, commissions, fees, tips and bonuses, and payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (before payroll deductions) (b) net income from business or profession or rental of property (without deduction for repayment of debts or expansion of business) (c) interest and dividends (d) periodic receipts such as social security, annuities, pensions, retirement funds, insurance policies, disability or death benefits, alimony, child support, regular contributions -or gifts from persons not occupying the unit (e) public assistance allowance or grant plus excess of maximum allowable for shelter or utilities over the actual allowance for such purposes (f) regular and special pay and allowances of a member of armed services (whether or not living in the dwelling) who is head of the family or spouse subtotal (a) - (f) Less: portion of above items which are income of a family member who is less than 18 years old or a full-time student ( } Total Eligible Income Note: The following items are not considered income: casual or sporadic gifts; amounts specifically for or in reimbursement of medical expenses; lump sum payment such as inheritances, insurance payments, capital gains and settlement for personal or property losses; educational scholarships paid directly to the student or educational institution; government benefits to a veteran for education; special pay to a serviceman head of family away from home and under hostile fire; foster child care 11/05/91 ATTACHMENT NO. 9 7100u/2460/050 Page 2 of 5 XN I payments; value of coupon allotments for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible household; relocation payments under Title II of Uniform relocation Assistance and Real Property Acquisition Policies Act of 1970; payments received pursuant to participation in the following programs: VISTA, Service Learning Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience. 2: As of the first day of occupancy of the unit which (I/we) propose to rent (a) either (myself/ourselves) or at least one -other occupant of the unit is not an individual enrolled as a full-time student during each of five (5) calendar months during the calendar year in which occupancy of the unit begins at an educational institution which normally maintains a regular faculty and curriculum and normally.has a regularly enrolled body of students in attendance and is not an individual pursuing a full-time course of institutional on farm training under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof or (b) if all of the occupants of the unit will be individuals described in (a), either (myself/ourselves) or one other occupant of the unit is a husband or wife entitled to make a single return jointly of Federal income taxes. 3. This affidavit is made with the knowledge that it will be relied upon by the Landlord to determine maximum income for eligibility and (I/we) warrant that all information set forth in this Part III is true, correct and complete and based upon information (I/we) deem reliable and that the estimate contained in paragraph 1 is reasonable and based upon such investigation as the undersigned deemed necessary. 4. (I/We) will assist the Landlord in obtaining any information or documents required to verify the statements made in this Part III and have attached hereto copies of federal income tax returns for the past two years. 5. (I/We) acknowledge that (I/we) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of (my/our) agreement with the Landlord to rent the unit and will additionally enable the Redevelopment Agency of the City of Huntington Beach to initiate and pursue all applicable legal and equitable remedies with respect to the unit and to me/us. 11/05/91 ATTAMIENT NO. 9 / 7100u/2460/050 Page 3 of 5 ��7 (I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct. Date Applicant SUBSCRIBED AND SWORN to before me this day of , (Notary Seal) Notary Public in and for the State of My Commission Expires: V 11/05/91 ATTACFDIENT NO. 9 `� 7100u/2460/050 Page 4 of 5 %.J INCOME VERIFICATION (for employed persons) The undersigned employee has applied for rental of a dwelling unit located in a redevelopment housing project in the City of Huntington Beach. Every income statement of a prospective purchaser must be stringently verified. Please indicate below the employee's current annual income from wages, overtime, bonuses, -commissions or any other form of compensation received on a regular basis. Annual wages Overtime Bonuses Commissions Total current income I hereby certify that the statements above are true and complete to the best of my knowledge. Signature Date Title I hereby grant permission to disclose my income to the Agency and , the Project Operator, in connection with my proposed rental of a dwelling unit located in their project. Signature Please send to: Date 11/05/91 ATTACHMENT NO. 9 7100u/2460/050 Page 5 of 5 t1� P& N ATTACHMENT NO. 10 CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE The undersigned, , being duly authorized to execute this certificate on behalf of Five Point Seniors, a California general partnership (the "Developer"), hereby represents and warrants that: 1. He has read and is thoroughly familiar with the provisions of the Affordable Housing Agreement ("Agreement") by and between the Redevelopment Agency of the City of Huntington Beach -(the "Agency") and (the Developer), of which this certification is an attachment. 2. As of the date of this certificate, the following percentages of completed residential units in the Project (i) are occupied by Low- and Moderate -Income Households, Low Income Households and Very Low Income Households (as such terms are defined in the Agreement or (ii) are currently vacant and being held available for such occupancy and have been so held continuously since the date a Low- and Moderate -Income Household, Low or Very Low Income Household vacated such unit, as indicated: Occupied by Low and Moderate Income Tenants: % Unit Nos.:' Occupied by Low Income Tenants: % Unit Nos.: Occupied by Very Low Income Tenants: % Unit Nos.: Held vacant for occupancy continuously since last occupied by Low or Very Low Income Tenants: % Unit Nos.: Occupied by at least one Senior Citizen (55 years or older) and Qualified Residents (45 years or older, if Senior Citizen is also a tenant) % Unit Nos.: FIVE POINT SENIORS, a California general partnership By: ^ Its: 11/05/91 ��� 7100u/2460/050 ATTACHMENT NO. 10 009'TT£l 008'9s$ 000'ZT$ oov, , z£$ 000'ZT 000'ZT OOi,'8S 00o'8v$ 000'OZ 000'8zs 000'81s 00ir' $IrT $ 009'6 009'6T OOz'STT$ 000'ZT 000'ZT OOti' bT oov'Oz 000't,z oov'Z£s IT 'ON INSWHO' 11V OSO/09VZ/n00TL 16/S0/TT HS.NOW/SIWee '8Z$ WSOW/000' T t HINOW000'T5 HIN014/000' T $ Waal xx S PD 000'Zts HIN014/999'T$ HXNOW/SINn/£Z't,T$ HlNOW/XINn/S1'65 HINOW/008$ *anoH/00.95 HZNOW/0001Tt HZNOR/OOZ'T$ SN3w:Luvav + HINOW/000' T 5 HM014/000 I n lN3Wl'dVaV + HMCW/000' Z5 S3SN3dX3 'I'dnNN`d ' 101 3SN3ax3 1Naw3ovmV14 3SN3aX3 0XISIMN3ACIV 3SN3dX3 NVA gV101 30,RVN31N 1 VW svo NO I IVZ I I'dowv NvO'I 3SN3dX3 N'dA MUM 3ONVIdnSNI 7vios NVA JS.Z I'3 I 8'd I'I /3�i I 3 3SN3dX3 30NVdnSNI 3SN3dX3 S3IZIAI13'd 3SN3dX3 MMUVd gVIO1 SZI33N3S 33tMnSNI H17V3H s Sf17d %LT cD s3xxs 'I1o2i va = Sn'Ia 3SN3dX3 'I'IOUAVd 3SYS Civw '83373H OSIYI/S AISCI NVA ,I.HUS I S SH 30I330/ZSINOIZd303U U3N3cmvo /NOS'd3d aONVN31NIKW 'F.OZ03SIa S31IIAIXOV u3ovNvw/NOI ZvsZS I N I Idav V9T SSINn 3o USSIMM VINU03I1Y3- 'H3VSS NOZONIlMH siN3wiEvav N32IZI0 uoimS SINIOd 3AI3 NMOa?I' US 3SN3dX3 MUM 130Qn$ ONIIVdsd0 11 'ON IN3WHOV11V U ATTACHMENT NO. 12 MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT RECORDING REQUESTED BY AND ) WHEN RECORDED RETURN TO: } - 3 Redevelopment Agency of the ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) Attention: Executive Director ] (Space above for Recorder's use.) MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT This MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT ("Memorandum"), dated for identification purposes as of J. 19_, is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic ("Agency") and FIVE POINT SENIORS, a California general partnership ("Developer"). 1. Affordable Housin A regiment. Agency and Developer have executed an Affordable Housing Agreement (the "Agreement") dated for identification purposes as of , 19___,, which concerns and is binding upon the current and future owners of that certain real property located in the City of Huntington Beach, County of Orange, State of California, more fully described in the Exhibit "A" attached hereto and incorporated herein by this reference. All of the terms, conditions, provisions and covenants of the Agreement are incorporated in this Memorandum by reference as though written out at length herein, and the Agreement and this Memorandum shall be deemed to constitute a single instrument or document. 2. Purpose of Memorandum. This Memorandum is prepared for recordation purposes only, and in no way modifies the terms, conditions, provisions and covenants of the Agreement. In the event of any inconsistency between the terms, conditions, provisions and covenants of this Memorandum and the Agreement, the terms, conditions, provisions and covenants of the Agreement shall prevail. 11/05/91 ATTACHMENT NO. 12 1� 7100u/2460/050 Page 1 of 3 The parties have executed this Memorandum on the dates specified immediately adjacent to their respective signatures. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic . Dated: 1991 By: Chairman Dated: 1991 By: Executive Director Dated: 1991 By: Deputy Executive Director ATTEST: Secretary APPROVED AS TO FORM: Stradling, Yocca, Carlson & Rauth, Agency Special Counsel City Attorney Agency General Counsel FIVE POINT SENIORS, a California general partnership By: MICHELSON FAMILY TRUST, dated as of December 12, 1984, its general partner Dated: By: David [Michelson, Trustee 11/05/91 ATTACHMENT NO. 12 7100u/2460/OSO Page 2 of 3 Dated: By: NORMAN D. AND BUNNiE L. WARD TRUST, dated as of its general partner By: Ward, Trustee 11/05/91 ATTACM47ITT NO. 12 `� 7100u/2460/050 Page 3 of 3 i / g4L EXHIBIT A LEGAL DESCRIPTION [To Be Inserted] 11/05/91 ATTACHMENT NO. 12 7100u/2460/050 Exhibit "A" �73