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HomeMy WebLinkAboutJamboree Housing Corporation - JHC-Oakview, LLC - 2009-03-02TO FROM DATE Interdepartmental Memo Fred Wilson Agency Executive Director Stanley Smalewitz Agency Deputy Executive Director August 10 2010 SUBJECT Approval of Forst Implementation Agreement to Affordable Housing Agreement Between the Redevelopment Agency of the Coty of Huntington Beach and Colette's Children Home, Inc In December of 2008 the Agency extended Redevelopment Housing Set -Aside and HOME loan funds to Colette s Children Home, Inc for the purchase and rehabilitation of the ten -unit property located at 17432-17442 Keelson Lane (Project) Once rehabilitated the ten units will be kept affordable for 60 years The original project budget provided $257 000 for the construction/rehabilitation of the units However, because of unanticipated undisclosed mold and water damage the developer needs additional funds to complete the project Colette's did not due to the circumstances and decisions of various residents, have to expend all of designated $200 000 relocation assistance as originally planned Colette's is requesting that they be allowed to use remaining relocation funds to complete the construction portion of the Project This would require a revision to the project budget which is as per the definition of Project Budget" in the Agreement allowed with the approval of the Agency Executive Director As discussed the attached First Implementation Agreement to Affordable housing Agreement by and Between the Redevelopment Agency of the City of Huntington Beach and Colette s Children Home Inc was prepared by the City Attorney to transfer $86 605 from the Relocation Costs' line item to the Rehabilitation Costs line item to accommodate Colette s request and provide for completion of the project Please evidence your ap�foXal of this request below Approved Fd'Al Wilson, Executive Director, Redevelopment Agency of the City of Huntington Beach Date '(t—ta Memo Keelson Lane First Implementation Agmt 1 8/10/2010 11 42 00 AM FIRST IMPLEMENTATION AGREEMENT TO AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND COLETTE'S CHILDREN HOME INC THIS FIRST IMPLEMENTATION AGREEME T TO AFFORDABLE HOUSING AGREEMENT (this "Agreement"), dated �� , 2010 is entered into by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (herein called the "Agency') and COLETTE'S CHILDREN HOME a California non profit public benefit corporation (herein called the "Developer") Agency and Developer are individually referred to herein as a "Party" and collectively as the "Parties " Recitals A The Parties entered into that certain Affordable Housing Agreement dated on or about December 15, 2008 (the "Housing Agreement") The Housing Agreement provides for a loan from the Agency to assist in the Developer's acquisition and rehabilitation of the Property described in the Loan Agreement and the operation of ten units of very low and low income housing (the "Project") B During the rehabilitation of the Units the Developer encountered conditions that will require an increase to the funds allocated to Rehabilitation Costs in the Project Budget attached to the Housing Agreement as Exhibit D C A portion of the funds allocated to Relocation Costs in the Project Budget will not be needed for payment of those costs and the Parties desire to allow the use of such unencumbered and unexpended funds for payment of the increased Rehabilitation Costs D The definition of "Project Budget" in the Housing Agreement authorizes the Agency Executive Director to approve the proposed change to the Project Budget NOW THEREFORE, the Parties hereby agree as follows 1 The Project Budget attached to the Housing Agreement as Exhibit D is hereby revised to transfer unencumbered and unexpended funds in the amount of $86,605 from the "Relocation Costs" line item to the "Rehabilitation Costs" line item 2 The Project Budget attached to the Housing Agreement as Exhibit D is hereby replaced in its entirety with the Project Budget attached hereto as Exhibit 1 3 Except as set forth herein, all terms and provisions of the Housing Agreement shall remain in full force and effect Ist Implementation Agreement (1) doc Page 1 "DEVELOPER" "AGENCY" COLETTE' S CHILDREN HOME, INC, REDEVELOPMENT AGENCY OF THE a California nonprofit public benefit CITY OF HTINGTON BEACH a public corporation body corponytelaqd politic By / BY f*--. Pamela Hope Executive Director Its President / APPROVED AS TO FORM ti By ti7 1 eneral Counsel �, f By ANE, BALLMER & BERKMAN Agency Special Counsel 1st Implementation Agreement (1) doc Page 2 EXHIBIT 1 PROTECT BUDGET SOURCES Agency Loan (Set Aside Funds) $ 2 262 833 00 Mortgage Loan $ 560,000 00 Total Sources $ 2,822,833 00 USES Acquisition & Closing Costs $ 2,186,788 00 Relocation Costs (mcl Relocation Plan preparation) $ 113,395 00 Rehabilitation Costs $ 343 605 00 Other Soft Costs $ 54 045 00 Developer Fee $ 125,000 00 Total Uses $ 2,822,833 00 1st Implementation Agreement (1) doc Exhibit 1 7-, G Council/Agency Meeting Held: Z3— z2IM-2 Deferred/Continued to: Ngr%,,aand it o all A rov d ❑ Denied UAW _�ity�/grk4,%nature Council Meeting Date: 8/3/2009 Department ID Number: ED 09-36 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL MEMBERS/REDEVELOPMENT AGENCfCONOMIC BERS SUBMITTED BY: FRED A. WILSON, CITY ADMINISTRATXECUTIVE DIRECTOR PREPARED BY: STANLEY SMALEWITZ, DIRECTOR OF DEVELOPMENT / DEPUTY EXECUTIVE DIRECTOR SUBJECT: Approve First Amendment to Affordable Housing Agreement with Jamboree Housing Corporation for 17442 Koledo Lane Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: The First Amendment to the Affordable Housing Agreement with Jamboree Housing Corporation (JHC-Oakview, LLC) is submitted for Agency and City approval. This Amendment, in connection with the affordable housing project located at 17442 Koledo Lane, approved by the Agency on March 2, 2009, provides that HOME Investment Partnership funds, in an amount not to exceed $511,296.09, be substituted for Redevelopment Housing Set -Aside loan funds approved and encumbered for this project. Funding Source: An amount not to exceed $511,296.09 from HOME Investment Partnership program funds ($182,848.52 from FY 2007/08 HOME account 84780401.89250, and $328,447.57 from FY 2008/09 HOME account 84880401.89250). Recommended Action: Motion to: 1. Approve the First Amendment to Affordable Housing Agreement with JHC Oakview, LLC to substitute HOME Partnership funds in the amount of $511,296.09 for non - disbursed Redevelopment Housing Set -Aside Funds of the same amount. 2. Authorize execution and recordation of the First Amendment to Affordable Housing Agreement, all attachments, and other necessary. related documents by the Mayor, City Administrator and City Clerk when advised by the City Attorney. Alternative Action(s): Do not approve the proposed transaction and provide staff with alternative directions. REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 8/3/2009 DEPARTMENT ID NUMBER: ED 09-36 Analysis: On March 2, 2009, the Agency approved an Affordable Housing Agreement with JHC-Oakview, LLC (Jamboree Housing Corporation) ("Jamboree") which provided for a Redevelopment Housing Set -Aside loan to Jamboree in the amount of $1,391,642 to assist with the acquisition and rehabilitation of the property located at 17442 Koledo Lane. The Agreement requires that the five, two -bedroom units be kept affordable at the very low income level for 60 years. Tenants residing at the property were relocated to accommodate the construction currently taking place on the property. Upon their determined eligibility, they will be allowed to return to their rental unit or, if determined to be ineligible as to their income or family size, they will be permanently relocated according to their needs. Following approval of the original Housing Agreement, the US Department of Housing and Urban Development (HUD) informed the City that previously allocated ADDI (American Dream Downpayment Initiative) funds could be used as HOME funds. Due to the timing of the ADDI funds, the City is required to commit the funds by 2009. Staff is recommending using the new allocations for the purpose of obligating these funds in a timely manner and using ;the Agency funds to continue its other affordable -housing goals. The City of Huntington Beach receives HOME Partnership funds each year from HUD for the acquisition, rehabilitation and construction of affordable housing. Because the 17442 Koledo Lane project provides for the acquisition and rehabilitation of affordable units, the substitution of HOME funds for Housing Set -Aside funds on the project is an appropriate use of the City's HOME funds. The required HOME match (25% of the HOME loan) is amply met by the amount of Housing Set -Aside funds of the project to date. Once approved, the First Amendment to Affordable Housing Agreement and attached loan documents will create a combined Housing Set-Aside/HOME funded project similar to the previous three approved residual receipts loan agreements granted to Jamboree. Terms have been incorporated into the loan and regulatory documents to clarify and enforce the HOME Program guidelines and regulations. Three of the five units will be designated HOME units. Both the HOME loan and the Agency loan will be subordinate to the previously funded conventional loan. Strategic Plan Goal: Enhance Economic Development. Environmental Status: Categorically excluded under the National Environment Protection Act (NEPA). Categorically exempt under the California Environmental Quality Act (CEQA), Section 15061 (b) (3). Attachment(s): -2- 7/21/2009 1:58 PM ATTACHMENT #1 FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT This FIRST AMENDDF�uTJ0 AFFORDABLE HOUSING AGREEMENT (this "Amendment") is dated as o OJ, 2009, between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency") and JHC — OAKVIEW, LLC, a California limited liability company ("Developer"), who agree as follows: RECITALS A. The Agency and Developer have heretofore entered into that certain Affordable Housing Agreement dated as of March 2, 2009 (the "Affordable Housing Agreement") with respect to that certain real property in the City of Huntington Beach ("City") and described in the Affordable Housing Agreement as the "Property". B. Agency is a redevelopment agency, a public body, corporate and politic organized and existing pursuant to State law (California Health and Safety Code Section 33100 et seq., the "Community Redevelopment Law"). C. Developer is a California limited liability company engaged in the business of developing, owning and managing affordable housing. D. Pursuant to the Affordable Housing Agreement, and to assist in providing housing within the City of Huntington Beach that is affordable to persons and families of very low, low and moderate income, the Agency has provided a loan to Developer in the original principal amount of $1,391,642, using Low and Moderate Income Housing Funds ("Agency Loan") in accordance with California Health and Safety Code Section 33334.2 et in., which loan is evidenced by a promissory note dated on or about March 2, 2009 (the "Agency Note") and secured by a deed of trust on the Property dated March 10, 2009, and recorded in the Official Records of Orange County, California ("Official Records") on March 10, 2009, as Document No. 2009000111406 (the "Agency Deed of Trust"). F. The Agency and Developer now desire to modify the Agency financial assistance so as to reduce the principal amount of the Agency Loan by $511,296.09 to $880,345.91, to provide a loan from the Agency to the Developer in the original principal amount of $511,296.09, using funds derived from the HUD HOME Program ("HOME Loan"), to clarify the priorities of the HOME Loan and the Agency Loan and to amend certain of the. other terms and conditions of the Agency Documents as provided herein. AHA Amendment.3 Page 1 NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE AGENCY AND DEVELOPER HEREBY AMEND THE AGENCY DOCUMENTS AS FOLLOWS: TERMS . 1. Defined Terms. The following terms shall have the indicated meanings. Other capitalized terms not otherwise defined herein shall bear the respective meanings set forth in the Affordable Housing Agreement. The term "Agency Deed of Trust" shall mean the Subordinated Deed of Trust with Assignment of Rents with Rider Attached Hereto, dated March 10, 2009 and recorded against the Site in the Official Records on March 10, 2009 as Instrument No. 2009000111406, as amended by Agency Loan Modification Agreement (defined below), in which Developer is the Trustor and the Agency is the Beneficiary, which secures the Agency Loan. The term "Agency Loan Documents" shall mean the Affordable Housing Agreement, as amended herein, the Agency Note, the Agency Deed of Trust, the Disbursement Agreement, the Agency Subordination Agreement, and the Agency UCC-1 Financing Statement. The term "Agency Note" shall mean that certain Promissory Note Secured by Deed of Trust with Assignment of Rents and Rider Attached Thereto, as amended by the Agency Loan Modification Agreement, in the amount of $880,345.91 from Developer as Maker to Agency as Holder dated March 2, 2009. The term "Agency Subordination Agreement" shall mean the Subordination Agreement entered into by the Agency, the Permanent Lender and the Developer, dated March 10 and recorded against the Site in the Official Records on March 10, 2009 as Instrument No. 2009000111407. The term "Agency UCC-1 Financing Statement" shall mean the UCC-1 Financing Statement filed in the California Secretary of State's Office on March 11, 2009 as Document 09- 7190273674 in connection with the Agency Loan. The term "HOME Deed of Trust" shall have the meaning set forth in Section 4 herein. The term "HOME Loan" shall mean the City's loan to Developer in an amount not to exceed Five Hundred Eleven Thousand Two Hundred Ninety -Six and 9/100s Dollars ($511,296.09) of HOME Funds, as evidenced by this Note and secured by the HOME Deed of Trust and the other HOME Loan Documents and having a lien on the Property that is junior in priority to the lien of the deed of trust in favor of the Conventional Lender. AHA Amendment.3 Page 2 The term "HOME Loan Documents" shall mean the HOME Note, the HOME Deed of Trust, the HOME Subordination Agreement and the HOME UCC-1 Financing Statement. The term "HOME Note" shall have the meaning set forth in Section 4 herein. The term "HOME Regulatory Agreement" 'shall have the meaning set forth in Section 5 herein. The term "HOME Subordination Agreement" shall have the meaning set forth in Section 6 herein. The term "HOME. UCC-1 Financing Statement" shall mean the UCC-1 Financing Statement filed in the California Secretary of State's Office on or about the date hereof in connection with the HOME Loan. The term "Pro Rata Percentages" shall mean the pro rata application of Residual Receipts to the repayment of the Agency Loan and the HOME Loan, reflecting the relative amounts of the Agency Loan and the HOME Loan. The Pro Rata Percentages shall be sixty- three and three tenths percent (63.3%) for the Agency Loan and thirty-six and seven tenths percent (36.7%) for the HOME Loan. 2. Affordable Housing Agreement. a. Any and all references in the Affordable Housing Agreement to (i) the "Regulatory Agreement" shall mean the HOME Regulatory Agreement; (ii) the "Agency Note" shall mean either. or both of the Agency Note, as amended by the Agency Loan Modification Agreement (as defined below), and the HOME Note as the context requires to confer the greatest rights to Agency; (iii) the "Agency Deed of Trust" shall mean either or both of the Agency Deed of Trust, as amended by the Agency Loan Modification Agreement, and the HOME Deed of Trust as the context requires to confer the greatest rights to Agency; and (iv) "Material Default" shall mean a Material Default under either or both the Agency Loan Documents and the HOME Loan Documents. b. Section 3.2 (Agency Financial Assistance) of the Affordable. Housing Agreement is hereby deleted in its entirety and replaced by the following: "3.2 Agency Financial Assistance. The Agency, pursuant to the terns of this Agreement, shall provide to Developer the Agency Loan and the City shall provide to Developer the HOME Loan. Upon satisfaction of all conditions precedent (or waiver by Agency) to Agency's obligation to fund the Agency Loan under this Agreement, Agency shall provide EIGHT HUNDRED EIGHTY THOUSAND THREE HUNDRED FORTY- AHA Amendment.3 Page 3 FIVE and 91/100s DOLLARS ($880,345.91) of the Agency Loan funds to Developer. Additionally, City shall provide HOME Loan funds to Developer in the amount of FIVE HUNDRED ELEVEN THOUSAND TWO HUNDRED NINETY-SIX and 9/100s DOLLARS ($511,296.09) to Developer. A portion of the HOME Loan in the amount of FIFTY THOUSAND DOLLARS ($50,000) (the "Relocation Funds") will be retained by the City for disbursement as needed to pay for relocation costs that are incurred after the Close of Escrow." C. Section 3.4 (Form of Agency Financial Assistance; Purpose of Note and Security) of the Affordable Housing Agreement is hereby deleted in its entirety and replaced by the following: "3.4 Form of Agency Financial Assistance; Purpose of Note and Security. In the event Developer is in Material Default of any of its obligations hereunder or under the Agency Regulatory Agreement or the HOME Regulatory Agreement, the entire principal balance of the Agency Loan and the entire balance of the HOME Loan plus any default interest due thereon shall immediately become due and payable, and Agency and/or City shall have the right, at their sole option, to: (a) demand full payment of the principal balance of the Agency Loan and the principal balance of the HOME Loan, plus all default interest; (b) take over ownership and management of the Site; and/or (c) foreclose on the Site under the Agency Deed of Trust and/or the HOME Deed of Trust." d. Section 3.10 (Subordination Agreement) of the Affordable Housing Agreement is hereby amended to include the following paragraph: "Without regard to the recording order of the Agency Deed of Trust and the HOME Deed of Trust, the Agency Loan Documents shall be of equal priority to the HOME Loan Documents, and the Agency and the City agree to share foreclosure proceeds as follows. If there is a foreclosure, or any other action, judicial or nonjudicial, under the Agency Deed of Trust and/or the City Deed of Trust (including without limitation the giving of a deed in lieu of foreclosure), the Agency and the City shall be entitled to share based on the Pro Rata Percentages in any proceeds which shall ensue from such action, after payment of all reasonable expenses of the Agency and/or the City incurred in connection with the action. The Agency Deed of Trust shall be of equal priority to the City Deed of Trust. As among those two deeds of trust, if either deed of trust is otherwise determined to be senior to the other, then notwithstanding the otherwise applicable effects of the California Civil Code and the California Code of Civil Procedure, upon foreclosure of the senior deed of trust and the elimination of the security created by the junior deed of trust, the holder of the foreclosing senior deed of trust shall share the foreclosure sale proceeds with the holder of the junior AHA Amendment.3 Page 4 deed of trust based on the Pro Rata Percentages set forth above, unless otherwise mutually agreed by the Agency and the City." 3. Agency Loan Modification. The Agency Note and the Agency Deed of Trust are hereby amended as set forth in the Agency Loan Modification Agreement attached to this Amendment as Exhibit "A" and incorporated herein by this reference ("Agency Loan Modification Agreement"). Following approval of this Amendment and execution of the Agency Loan Modification Agreement by the Developer, the Agency Executive Director or designee is authorized to execute and record the Agency Loan Modification Agreement in the Official Records. 4. HOME Note and HOME Deed of Trust. The Developer agrees to execute (i) the Promissory Note Secured by Deed of Trust with Assignment of Rents And Rider Attached Thereto evidencing the Agency's loan of the HOME Funds to Developer dated on or about the date hereof in the form attached to this Amendment as Exhibit `B" and incorporated herein by this reference ("HOME Note"), and (ii) the Subordinated Deed of Trust with Assignment of Rents with Rider Attached Hereto executed by Developer as Trustor in favor of City as Beneficiary securing the HOME Note dated on or about the date hereof and recorded against the Site in the Official Records in the form attached to this Amendment as Exhibit "C" and incorporated herein by this reference (the "HOME Deed of Trust"). 5. HOME Regulatory Agreement. As required by the HUD HOME Program regulations, City and Developer will execute the Amended and Restated Regulatory Agreement and Declaration of Covenants and Restrictions [Home Funds] containing HOME Program requirements applicable to the Project dated on or about the date hereof and recorded against the Site in the Official Records in the form attached to this Amendment as Exhibit "D" and incorporated herein by this reference ("HOME Regulatory Agreement"). The Regulatory Agreement as originally set forth in the Affordable Housing Agreement shall be superseded and replaced by the HOME Regulatory Agreement and shall be of no further force and effect. 6. HOME Subordination Agreement. The HOME Note, HOME Deed of Trust and HOME Agreement shall be subordinate to: the lien created by the deed of trust in favor of the Conventional Lender, and any other of the senior loan documents and all of the terms and conditions contained in the senior loan documents. The City, the Conventional Lender and the Developer shall execute a Subordination Agreement dated on or about the date hereof and recorded against the Site in the Official Records substantially in the form attached to this Amendment as Exhibit "E" and incorporated herein by this reference ("HOME Subordination Agreement"). 7. Recording Costs. Following approval of this Amendment and execution of the HOME Note, the HOME Deed of Trust, the HOME Regulatory Agreement and the HOME Subordination Agreement by the Developer, the Agency Executive Director or the City AHA Amendment.3 Page 5 Administrator or their designee is authorized to record the HOME Deed of Trust, the HOME Regulatory Agreement and the HOME Subordination Agreement in the Official Records. The Agency and/or City shall be responsible for any recording fees and costs associated with the implementation of this Amendment. 8. Indemnification. a. Developer shall indemnify, protect, defend and hold harmless the Agency, the City and their respective officers, employees, counsels and agents, with counsel reasonably acceptable to Agency and City, from and against any and all loss, liability, damage, claim, cost, expense, and/or increased costs (including reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which results or arises in any way from noncompliance by Developer or its general contractor or any subcontractor with any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, ,the requirement to pay state or federal prevailing wages, if applicable). b. Developer hereby expressly reaffirms, acknowledges and agrees that neither City nor Agency has ever affirmatively represented to Developer or its contractor(s), in writing or otherwise, in a call for bids or otherwise, that the work to be performed pursuant to the Affordable Housing Agreement is not a "public work," as defined in Section 1720 of the California Labor Code. Developer hereby agrees that Developer shall have the obligation to provide any and all disclosures or identifications required by California Labor Code Section 1781 or any other similar law. Developer shall indemnify, protect, defend and hold harmless the Agency, City and their respective officers, employees, counsels and agents, with counsel reasonably acceptable to Agency and City, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs" (including reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction and/or operation of the Improvements, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way .from any of the following: (1) the noncompliance by Developer of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, the requirement to pay state prevailing wages, if applicable); and/or (2) failure by Developer to provide any required disclosure or identification as required by California Labor Code Section 1781, as the same may be amended from time to time, or any other similar law. C. It is agreed by the parties that, in connection with the development, construction (as defined by applicable law) and operation of the Improvements, including, without limitation, any and all public works (as defined by applicable law), Developer shall bear all risks of payment or non-payment of state prevailing wages, if applicable. "Increased costs" as used in this Section shall have the meaning ascribed to it in California Labor Code Section 1781. AHA Amendment.3 Page 6 d. The foregoing indemnity shall survive termination of the Affordable Housing Agreement as amended by this Amendment, and shall continue after Completion. 9. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 10. Agreement Remains in Effect. Except as amended hereby, the Affordable Housing Agreement is hereby ratified and confirmed, and continues in full force and effect Executed in Huntington Beach, California, as of the date first set forth above. AHA Amendment.3 [SIGNATURES APPEAR ON NEXT PAGE] Page 7 APPROVED AS TO FORM: _ � General Counsel 7/1 U�j AHA Amendment.3 "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic Chairperson [SIGNATURES CONTINUE ON NEXT PAGE] Page 8 AHA Amendment.3 "DEVELOPER" JHC — OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member Page 9 By:1111/1 nin Laura Archuleta Its: President California All -Purpose Acknowledgment State of California County of 0 ra, On 141, �5/ a00� before me, �51f SaA IC. 4af1Gh i l l r ) (here insert name personally appeared r _6wt-a Anna /&�, 2008 Code Section 1189 Compliant ficbliC who proved to me on the basis of satisfactory evidence to be the personj�d) whose name(,s') is/aFe subscribed to the within instrument and acknowledged to me that-he/sheA44ey executed the same in-his/her/ter authorized capacity0es), and that by-hie/her/their signature(,) on the instrument the person(,), or the entity upon behalf of which the person) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. SUSAN R. HANCHIN CommlSSlon # 1754968 SignatureNotary Public - California Orange County My Comm. EY4*eS Jul 2, 2011 (Seal) OPTIONAL INFORMATION Law does not require the information below. 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Box 2402 • Chatsworth, CA 91313-2402 • www.Nationa[Notary.org Item #5907 Reorder: Call Toll -Free 1-800-876-6827 EXHIBIT "A" AGENCY LOAN MODIFICATION AGREEMENT [BEHIND THIS PAGE] z RECORDING REQUESTED BY FIRST AMERICAN TITLE COMPANY NATIONAUCOMMERCIAL SERVICES COMMERCIAUINDUSTRIAL DIVISION iN P-`3.. qcU &M FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Secretary This Document was electronically recorded by First American National Commercial Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 11111111111111111111111111111111111111111111111111111111111111111 NO FEE 2009000427446 02:54pm 08/07/09 10559M159 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 SPACE ABOVE THIS LINE FOR RECORDER'S USE OFFICIAL BUSINESS Document entitled to free recording per Government Code Section 27383 AGENCY LOAN MODIFICATION AGREEMENT /} tciu sr This Agency Loan Modification Agreement (this "Modification") is made as of Joy 03, 2009 by JHC — OAKVIEW, LLC, a California limited liability company (hereinafter referred to as "Borrower") (whose address is c/o Jamboree Housing Corporation, 17701 Cowan Avenue, Ste 200, Irvine, CA 92614, Attn: Laura Archuleta, President) and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (hereinafter called "Agency") (whose address is 2000 Main Street, Huntington Beach, CA 92648, Attn: Agency Secretary), with reference to the following: A. The Agency and Borrower ("Owner" therein) had entered into that certain Affordable Housing Agreement dated as of March 2, 2009 (the "Affordable Housing Agreement"). B. Pursuant to the Affordable Housing Agreement, and to assist in providing housing within the City of Huntington Beach that is affordable to persons and families of very low income, the Beneficiary had made a loan to Borrower in the original principal amount of One Million Three Hundred Ninety -One Thousand Six Hundred Forty -Two and No/100s Dollars ($1,391,642.00), using Set Aside Funds ("Agency Loan") in accordance with California Health and Safety Code Section 33334.2 et sec.., which loan is evidenced by a promissory note dated on or about March 2, 2009 (the "Agency Note") and secured by a subordinate deed of trust on the Property dated March 10, 2009, and recorded in the Official Records of Orange County, California ("Official Records") on March 10, 2009, as Document No.. 2009000111406 (the "Agency Deed of Trust"). Agency Loan Modification.2 LMIHF Loan Modification Page 1 C. The Agency and Borrower have entered into that certain First Amendment to Affordable Housing Agreement dated on or about the date hereof ("First Amendment") in order to reduce the principal amount of the Agency by $511,296.09 to $880,345.91, and to provide for a loan from the Agency to the Borrower in the original principal amount of $511,296.09, using funds derived from the HUD HOME Program ("HOME Loan"). D. The Agency and Borrower now wish to modify the terms of the Agency Loan, the Agency Note, the Agency Deed of Trust, and the "Regulatory Agreement" (as originally defined in the Affordable Housing Agreement) in the manner set forth in this Modification. All capitalized terms not defined herein shall have the meaning ascribed to them in the Affordable Housing Agreement as amended by the First Amendment. NOW, WHEREFORE, the Agency and Borrower hereby agree that the Agency Note, Agency Deed of Trust and Regulatory Agreement are amended as follows: The following definitions are added to Section 1 of the Agency Note: The term "Conventional Lender" shall mean Clearinghouse Community Development Financial Institution. The term "HOME Loan" shall mean the City's loan to Borrower in an amount not to exceed Five Hundred Eleven Thousand Two Hundred Ninety -Six and 9/100s Dollars ($511,296.09) of HOME Funds, as evidenced by the HOME Note and secured by the HOME Deed of Trust and the other HOME Loan Documents and having a lien on the Property that is junior in priority to the lien of the deed of trust in favor of the Conventional Lender. The term "HOME Loan Documents" shall mean the HOME Note, the HOME Deed of Trust, the HOME SubordinationAgreement and the HOME UCC-1 Financing Statement. The term "HOME Deed of Trust" shall mean the Subordinated Deed of Trust with Assignment of Rents with Rider Attached Hereto, executed by Borrower as Trustor in favor of City as Beneficiary dated on or about the date hereof and recorded against the Site in the Official Records, which secures the HOME Note and the HOME Loan evidenced hereby. The term "HOME Note" shall mean that certain Promissory Note Secured by Deed of Trust with Assignment of Rents and Rider Attached Thereto dated on or about the date hereof evidencing the HOME Loan. The term "HOME Regulatory Agreement" shall mean the Amended and Restated Regulatory Agreement and Declaration of Covenants and Restrictions [Home Funds] containing HOME Program requirements applicable to the Project entered into by the City and the Borrower dated on or about the date hereof and recorded against the Site in the Official Records. The term "HOME Subordination Agreement" shall mean the Subordination Agreement entered into by the City, the Permanent Lender and the Borrower, dated on or about the date hereof and recorded against the Site in the Official Records. LMIHF Loan Modification Page 2 Agency Loan Modification.2 The term "HOME UCC-1 Financing Statement" shall mean the UCC-1 Financing Statement filed in the California Secretary of State's Office or about the date hereof in connection with the HOME Loan. The term "Pro Rata Percentages" shall mean the pro rata application of Residual Receipts to the repayment of the Agency Loan and the HOME Loan, reflecting the relative amounts of the Agency Loan and the HOME Loan. The Pro Rata Percentages shall be sixty- three and three tenths percent (63.3%) for the Agency Loan and thirty-six and seven tenths percent (36.7%) for the HOME Loan. 2. The original principal amount of the Agency Loan is hereby amended to be Eight Hundred Eighty Thousand Three Hundred Forty -Five and 91/100s Dollars ($880,345.91). 3. The Agency Note evidencing the Agency Loan is hereby amended in all respects to substitute the sum of $880,345.91 in place of $1,391,642, as the original principal amount of the Agency Loan evidenced thereby. All references in the Agency Note to the Affordable Housing Agreement shall mean the Affordable Housing Agreement as amended by the First Amendment. All references in the Agency Note to the Agency Deed of Trust shall mean the Agency Deed of Trust as amended hereby. 4. The Agency Deed of Trust securing the Agency Loan is hereby amended in all respects to substitute the sum of $880,345.91 in place of $1,391,642, as the original principal amount of the Agency Loan secured thereby. All references in the Agency Deed of Trust to the Affordable Housing Agreement shall mean the Affordable Housing Agreement as amended by the First Amendment. All references in the Agency Deed of Trust to the Agency Note shall mean the Agency Note as amended hereby. 5. The first paragraph of Section 2. of the Agency Note is deleted in its entirety and replaced with the following: "Commencing on the third anniversary of the Effective Date of the Agreement, and every succeeding year during the 60-year term of this Note, Maker must utilize FIFTY PERCENT (50%) of Net Operating Income for the previous one- year period ("Available Net Operating Income") to repay the HOME Loan and the Agency Loan through the pro rata application of such share of Net Operating Income according to the Pro Rata Percentages. However, Maker may first utilize 100% of Available Net Operating Income with respect to each calendar year, to make payment of any theretofore unpaid portion of the Deferred Developer Fee, until paid in full. If a payment on this Note is required by Maker pursuant to the terms hereof, Maker shall make such payment no later than one hundred (120) days following the end of the applicable calendar year. All payments to the City shall be applied first to the payment of all expenses, charges, costs and fees incurred by or payable to City by Borrower pursuant to the terms of the HOME Loan Documents (in such order and manner as City, in its sole discretion, may elect), then to the payment of all interest accrued to the date of such payment, and then to reduce the principal amount owed. All prepayment of principal on this LMIHF Loan Modification Page 3 Agency Loan Modification.2 Note shall be applied to the most remote principal installment or installments until paid. Notwithstanding anything to the contrary contained herein, after the occurrence and during the continuation of a default under the City Deed of Trust, all amounts received by the City from any party shall be applied in such order as the City, in its sole discretion, may elect." 6. Section 4 of the Agency Note is deleted in its entirety and replaced with the following: "4. Acceleration of Obligation. Upon the occurrence of a uncured Material Default of Maker under this Note, the Agency Deed of Trust or any obligation secured thereby (including the obligations in the Agreement and the HOME Regulatory Agreement), the HOME Note, the HOME Deed of Trust or any obligation secured thereby (including the obligations in the Agreement and the HOME Regulatory Agreement), the Agreement, the HOME Regulatory Agreement, or in any other instrument now or hereafter securing the obligations evidenced hereby, then, and in any of such events, Holder may, at its option, declare this Note and all the obligations hereby evidenced to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity." 7. The Agency Deed of Trust shall secure the Agency Note as amended by this Modification. 8. Clauses (2) and (3) in the paragraph at the top of page 2 of the Deed of Trust are deleted in their entirety and replaced them with the following: "(2) the performance of Trustor's obligations under that certain "Affordable Housing Agreement" by and between Trustor ("Developer" therein) and Beneficiary ("Agency" therein) dated March 2, 2009; (3) the performance of Trustor's obligations under that certain "Amended and Restated Regulatory Agreement and Declaration of Covenants and Restrictions [HOME Funds]", by and among Trustor ("Owner" therein), the City of Huntington Beach, a municipal corporation of the State of California, and Beneficiary ("Agency" therein) dated on or about Jtrfy o5 , 2009;" bus r 9. Paragraph 5 of the Rider to Subordinated Deed of Trust with Assignment of Rents is deleted in its entirety and replaced with the following: "5. Default. The term "default" as used in the Deed of Trust shall mean a "Material Default" as defined in the Agreement and/or an "Event of Default" as defined in the Amended and Restated Regulatory Agreement and Declaration of Covenants and Restrictions [HOME Funds]." LMIHF Loan Modification Page 4 Agency Loan Modification.2 10. The Agency Deed of Trust is amended to add a new paragraph 6. to the Rider to Subordinated Deed of Trust with Assignment of Rents incorporated therein as follows: "6. Equal Priority. Without regard to the recording order of the Agency Deed of Trust and the HOME Deed of Trust, the Agency Loan Documents shall be of equal priority to the HOME Loan Documents, and the Agency and the City agree to share foreclosure proceeds as follows. If there is a foreclosure, or any other action, judicial or nonjudicial, under the Agency Deed of Trust and/or the City Deed of Trust (including without limitation the giving of a deed in lieu of foreclosure), the Agency and the City shall be entitled to share based on the Pro Rata Percentages in any proceeds which shall ensue from such action, after payment of all reasonable expenses of the Agency and/or the City incurred in connection with the action. The Agency Deed of Trust shall be of equal priority to the City Deed of Trust. As among those two deeds of trust, if either deed of trust is otherwise determined to be senior to the other, then notwithstanding the otherwise applicable effects of the California Civil Code and the California Code of Civil Procedure, upon foreclosure of the senior deed of trust and the elimination of the security created by the junior deed of trust, the holder of the foreclosing senior deed of trust shall share the foreclosure sale proceeds with the holder of the junior deed of trust based on the Pro Rata Percentages set forth above, unless otherwise mutually agreed by the Agency and the City." 11. The "Regulatory Agreement" (as originally defined in the Affordable Housing Agreement) shall be superseded and replaced by the HOME Regulatory Agreement and shall be of no further force and effect. 12. Except as expressly provided otherwise in this Modification, the Agency Note and the Agency Deed of Trust shall remain in full force and effect, enforceable in accordance with their terms. 13. This Modification may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. Executed in Huntington Beach, California, as of the date first set forth above. [SIGNATURES APPEAR ON NEXT PAGE] LMIHF Loan Modification Page 5 Agency Loan Modification.2 "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic Chairperson APPROVED AS TO FORM: Ge eral Counsel Jvdoj [SIGNATURES CONTINUE ON NEXT PAGE] LMIHF Loan Modification Page 6 Agency Loan Modification.2 "DEVELOPER" JHC — OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member 1 By: Laura Archuleta Its: President LMIHF Loan Modification Page 7 Agency Loan Modification.2 State of California County of Orange On lj(q 16'I acog before me, R, 9-a r r'l , a Notary Public, personally appeared LA,uat {h'chc�.( {�� , who proved to me on the basis of satisfactory evidence to be the perso4o whose name(g) is/ar-e subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(-ies , and that by his/her/their signaturekg) on the instrument the person), or the entity upon behalf of which the persono acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is hue and correct. WITNESS my hand and official seal. SUSAN R. HANCHIN Commission # 1754968 Notary Public - California Signature (Seal) Orange County My Comm. Expires Jul 2, 2011 State of California County of Orange On &et(p 57 - Dom; vW F before me, f� �. SP �} , a Notary Public, personally appeared &irtf.L � V6 4,J L _ Ft WA.) , who proved to me on the basis of satisfactory evidence to be the persore whose namea)4s4o subscribed to the within instrument and acknowledged to me that l fl D executed the same in4tis4ie heir authorized capacity(OP, , and that bye iTeir ignatures on the instrument the persor�s or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. P. L. ESPARZA Commission # 1857021 Z Notary Public - California Z 0Orange County D SignaturM Comm. Ex Tres Aug4, 2013 e - eal) Exhibit A LEGAL DESCRIPTION Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: LOT 43 OF TRACT NO. 4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO. 4301, AS ABANDONED BY THAT CERTAIN RESOLUTION NO. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN, UNDER AND/OR THAT MAY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH V. MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, DATED OCTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, OFFICIAL RECORDS, RECORDS OF ,ORANGE COUNTY, CALIFORNIA, WHICH DEED FURTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTITLE THE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIGHTS IN OR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPTH OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, OR THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED TO CITY OF HUNTINGTON BEACH RECORDED IN BOOK 6511, PAGE 679, OFFICIAL RECORDS. APN: 165-232-08 EXHIBIT `B" HOME PROMISSORY NOTE [BEHIND THIS PAGE] [HOME LOAN] PROMISSORY NOTE SECURED BY DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED THERETO DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust securing same, must be surrendered to Trustee for cancellation before reconveyance will be made. PROMISSORY NOTE SECURED BY DEED OF TRUST Principal Loan Amount: $511,296.09 Interest: 0% Huntington Beach, California Note Date: -may 3 , 2009 4WIM-sr FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of the City of Huntington Beach ("City"), a municipal corporation of the State of California ("Holder"), at a place designated by Holder, the principal sum of FIVE HUNDRED ELEVEN THOUSAND TWO HUNDRED NINETY-SIX and 9/100s DOLLARS ($511,296.09) or such portion thereof as is advanced from Holder to Maker pursuant to an Affordable Housing Agreement dated as of March 2, 2009 by and between Maker ("Developer" therein) and Holder.., . ("Agency" therein), as amended by that certain First Amendment To Affordable Housing. Agreement dated on or about the date hereof (the "Agreement"), plus interest at the rate , of; ZERO PERCENT (0%) simple interest. The Agreement is hereby incorporated by reference) as: ; though fully set forth herein. Any capitalized terms not defined herein shall have the meanings:' ascribed to them in the Agreement. The obligation of the Maker to the Holder hereunder shall be secured by that certai Subordinated Deed of Trust with Assignment of Rents with Rider Attached Hereto dated�y`g�, 2009, executed by the Maker as Trustor in favor of City as Beneficiary and recorded against the Site to be developed (the "Site") in the Official Records of Orange County, California ("Official Records") on or about the date hereof, which secures this Note and the HOME Loan evidenced hereby (the "HOME Deed of Trust"). The obligation of the Maker set forth in this Note is subject to acceleration as set forth in the Agreement. The Agreement and the HOME Deed of Trust are public records on file in the offices of the Holder. 1. Definitions. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Agreement. In addition, the following terms shall have the following meanings: The term "Agency Deed of Trust" shall mean the Subordinated Deed of Trust with Assignment of Rents with Rider Attached Hereto, dated March 10, 2009 and recorded against the Site on March 10, 2009 as Instrument No. 2009000111406 in the Official Records, in which Maker is the Trustor and the Agency is the Beneficiary, which secures the Agency Loan. The term "Agency Loan" shall mean the loan of Set Aside funds from the Agency to Maker to pay a portion of the cost of acquiring and rehabilitating the Site, in the amount and HOME Promissory Note Page 1 of 5 Agree: Jamboree-17442 Koledo pursuant to the terms and conditions described in the Agreement, secured by the Agency Deed of Trust and the other Agency Loan Documents. The term "Agency Loan Documents" shall mean the Agreement, the Agency Note, the Agency Deed of Trust, the Disbursement Agreement, the Agency Subordination Agreement, and the UCC-1 Financing Statement. The term "Agency Note" shall mean that certain Promissory Note Secured by Deed of Trust with Assignment of Rents and Rider Attached Thereto, as amended, in the amount of $881,213.00 from Developer as Maker to Agency as Holder dated March 2, 2009. The term "Agency Subordination Agreement" shall mean the Subordination Agreement entered into by the Agency, the Permanent Lender and the Maker, dated March 10 and recorded against the Site on March 10, 2009 as Instrument No. 2009000111407. The term "Agency UCC-1 Financing Statement" shall mean the UCC-1 Financing Statement filed in the California Secretary of State's Office on March 11, 2009 as Document 09- 7190273674 in connection with the Agency Loan. The term "Conventional Lender" shall mean Clearinghouse Community Development Financial Institution. The. -term "Disbursement Agreement" shall mean that certain Disbursement Agreement dated March 2, 2009 by and between,Agency and Conventional Lender. The term "HOME Loan" shall mean the City's loan to Maker in an amount not to exceed Five Hundred Eleven Thousand Two Hundred Ninety -Six and 9/100s Dollars ($511,296.09) of HOME Funds, as evidenced by this Note and secured by the HOME Deed of ' Trust and the other HOME Loan Documents and having a lien on the Property that is junior in priority to the lien of the deed of trust in favor of the Conventional Lender. The term "HOME Loan Documents" shall mean this Note, the HOME Deed of Trust, the HOME Subordination Agreement and the HOME UCC-1 Financing Statement. The term "HOME Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions entered into by the City and the Maker, dated on or about the date hereof and recorded against the Site. The term "HOME Subordination Agreement" shall mean the Subordination Agreement entered into by the City, the Permanent Lender and the Maker, dated on or about the date hereof and recorded against the Site. The term "HOME UCC-1 Financing Statement" shall mean the UCC-1 Financing Statement filed in the California Secretary of State's Office or about the date hereof in connection with the HOME Loan. HOME Promissory Note Page 2 of 5 Agree: Jamboree-17442 Koledo The term "Pro Rata Percentages" shall mean the pro rata application of Residual Receipts to the repayment of the Agency Loan and the HOME Loan, reflecting the relative amounts of the Agency Loan and the HOME Loan. The Pro Rata Percentages shall be sixty- three and three tenths percent (63.3%) for the Agency Loan and thirty-six and seven tenths percent (36.7%) for the HOME Loan. 2. HOME Loan. This Note evidences the obligation of the Maker to the Holder for the repayment of Set Aside Funds loaned to the Maker by the Holder (the "HOME Loan") to finance the rehabilitation of the Site and implementation of the Project pursuant to the Agreement. The Maker shall not make any sale, assignment or conveyance, or transfer in any other form, of the Site, or any part thereof, or interest therein without the express written consent of the Holder as set forth in Section 2.5 of the Agreement. 3. Payment of Obli ag tion. Commencing on the third anniversary of the Effective Date of the Agreement, and every succeeding year during the 60-year term of this Note, Maker must utilize FIFTY PERCENT (50%) of Net Operating Income for the previous one-year period ("Available Net Operating Income") to repay the HOME Loan and the Agency Loan through the pro rata application of such share of Net Operating Income according to the Pro Rata Percentages. However, Maker may first utilize 100% of Available Net Operating Income with respect to each calendar year, to make payment of any theretofore unpaid portion of the Deferred Developer Fee, until paid in full. If a payment on this Note is required by Maker pursuant. to the terms hereof, Maker shall make such payment no later than one hundred (120) days following the end of the applicable calendar year. All payments to the City shall be applied first to the payment of all expenses, charges, costs and fees incurred by or payable to City, by Maker pursuant to the terms of the HOME Loan Documents (in such order and manner as City, in its sole discretion, may elect), then to the payment of all interest accrued to the date of such payment, and then to reduce the principal. amount owed.., All prepayment of principal on .this Note shall be applied to the most remote principal installment or installments until paid. Notwithstanding anything to the contrary contained herein, after the occurrence and during the continuation of a default under the City Deed of Trust, all amounts received by the City from any party shall be applied in such order as the City, in its sole discretion, may elect. The term "Net Operating Income" shall mean all income derived from the Site, including without limitation all tenant rent, fees and charges (excepting tenants' security deposits but including deposits forfeited by tenants), any rental subsidy payments received for the Units, the proceeds of business interruption and similar insurance, and the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project, but excluding any interest income earned on the Capital Reserve Account and on the tenant security deposits, less (i) payments of principal and interest, if any, required to be paid in such year by Maker with respect to any note, mortgage, or deed of trust (excepting this Note) with respect to the Site or Project, (ii) all reasonable and customary expenses actually incurred (or to be incurred if accounted for on an accrual basis) in leasing, managing, operating, maintaining, and repairing the Site, (iii) all capital expenses incurred pertaining to the Site excepting those to be paid from the Capital Reserve Account, (iv) the required deposits into the Capital Reserve Account, and (v) reasonable and customary property management fees, social services and resident services fees, administrative costs, salaries, benefits, overhead costs, and such other and further reasonable and customary operating HOME Promissory Note Page 3 of 5 Agree: Jamboree-17442 Koledo and management expenses incurred in operating the Site. Depreciation expenses shall not be a reduction against Net Operating Income. 4. Prepayment (a) Penalties. Maker may prepay the principal balance of this Note at any time without penalty. In the event Maker prepays the entire balance of this Note including all accrued interest, the covenants, conditions and restrictions imposed on the Site by the HOME Regulatory Agreement shall remain in full force and effect for the full 60-year term as specified therein. (b) Effect on Covenants. If, at the end of the 60-year term of this Note, an unpaid balance remains on this Note, Maker may choose to do either of the following: (a) Maker may choose to continue to maintain the covenants, conditions and restrictions imposed on the Site by the HOME Regulatory Agreement, in which case the Holder shall not require repayment of the balance of this Note and the Agency Loan shall not accrue any interest for the period during which said covenants, conditions and restrictions are maintained; or (b) Maker may choose not to maintain the covenants, conditions and restrictions imposed on the Site by the HOME Regulatory Agreement, in which case the entire principal balance of the HOME Loan plus all accrued interest on the HOME Loan shall immediately become due and payable. 5..., Acceleration of Obligation. Upon the 'occurrence of a uncured Material Default of Maker under this Note, the HOME Deed of Trust or any obligation secured thereby (including the obligations in the Agreement and the HOME Regulatory Agreement), the Agency Note, the Agency Deed of Trust or any obligation secured thereby (including the obligations in the Agreement and the HOME Regulatory Agreement), the Agreement, the HOME Regulatory Agreement, or in any other instrument now or hereafter securing the obligations. evidenced hereby, then, and in any of such events, Holder may, at its option, declare this Note and all the obligations hereby evidenced to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity. 6. Default Interest. If any event occurs giving Holder the right to accelerate this Note pursuant to Section 4 above, the entire unpaid and unforgiven principal owing hereunder shall, as of the date of such default, commence to accrue interest at a rate equal to two percentage points above the reference rate published by Bank of America N.A., or the maximum non -usurious interest rate permitted by law, whichever is less. 7. Collection Costs; Attorneys' Fees. If any attorney is engaged by Holder because of any event of an uncured Material Default under this Note or the HOME Deed of Trust or to enforce any provision of either instrument, whether or not suit is filed hereon, Holder shall bear its own attorney's fees and costs. 8. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. HOME Promissory Note Page 4 of 5 Agree: Jamboree-17442 Koledo 9. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. 10. Usury. Notwithstanding any provision in this Note, HOME Deed of Trust or other document securing same, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. 11. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above written. "MAKER" JHC — OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: Laura Archuleta Its: President HOME Promissory Note Page 5 of 5 Agree: Jamboree-17442 Koledo EXHIBIT "C" HOME DEED OF TRUST [BEHIND THIS PAGE] This Document was electronically recorded by FIRSTECORDIN AREQUTITLECOMPANY First American National Commercial NATIONAVCOMMERCIAL SERVICES COMMERCIAUINDUSTRIALDIVISION Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder Order No. > 111111111111111111111111111111111111Jill11111 II 111 Ill NO FEE 2009000427447 02:54pm 08/07/09 Escrow No. 105 59 D11 A36 14 Loan No. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Secretary SPACE ABOVE THIS LINE FOR RECORDER'S USE] EXEMPT FROM RECORDING FEE PER GOV. CODE § 6103] [HOME LOAN] SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. This SUBORDINATED DEED OF TRUST WITM ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO ("Deed of Trust"), made �, 2009, between JHC — OAKVIEW, LLC, a California limited liability company, herein called TRUSTOR, whose address is 17701 Cowan Avenue, Suite 200, Irvine, California 92614; and THE CITY OF HUNTINGTON BEACH ("City"), a municipal corporation of the State of California, herein called TRUSTEE, and THE CITY OF HUNTINGTON BEACH ("City"), a municipal corporation of the State of California, herein called BENEFICIARY, WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Huntington Beach, County of Orange, State of California, described as: SEE EXHIBIT "A" ATTACHED HERETO together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of FIVE HUNDRED ELEVEN THOUSAND TWO HUNDRED NINETY-SIX and 9/100s DOLLARS ($511,296.09) with interest thereon, according to the terms of that certain promissory note of even date Agree: Jamboree-17442 Koledo HOME Deed of Trust herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof, (2) the performance of Trustor's obligations under that certain "Affordable Housing Agreement" by and between Trustor ("Developer" therein) and the Redevelopment Agency of the City of Huntington Beach ("Agency") dated March 2, 2009, as amended by that certain First Amendment To Affordable Housing Agreement dated on or about the date hereof (the "Agreement"); (3) the performance of Trustor's obligations under that certain "Amended and Restated Regulatory Agreement and Declaration of Covenants and Restrictions [HOME Funds]", by and among Trustor ("Owner" therein), Agency, and Beneficiary ("City" therein) dated on or about the date hereof, (4) the performance of each agreement of Trustor incorporated by reference or contained herein; and (5) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County September 17, 1964, and in all other counties September 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 566 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427 Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56 Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6625 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 4, 5 and 6 hereoi) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. 2 Agree: Jamboree-17442 Koledo HOME Deed of Trust The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. Signature of Trustor JHC — OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation a California nonprofit corporation Its: Man %rtt�-a ember By: Laura Archuleta Its: President STATE OF CALIFORNIA ) )ss. COUNTY OF QVAYI�e > On 09 before me, yh'l U �-42-Ald-e , a Notary Public, personal appeared Laum Ay-ck tk t-e k-a J , who proved to me on the basis of satisfactory evidence to be the personf4 whose name( is/are subscribed to the within instrument and acknowledged to me that Jie/she/they executed the same in 41is—/her/their authorized capacity), and that by his/her/their signature.(.aj on the instrument the person*, or the entity upon behalf of which the person(( acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. EMILY LAZALDE Commission # 1838993 Notary Public - California i Signature (Seal) Orange County Comm. Expires Feb 28, 2013 Agree: Jamboree-17442 Koledo HOME Deed of Trust DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder to invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same is 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; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. Agree: Jamboree-17442 Koledo HOME Deed of Trust B. It is mutually agreed: 1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition or proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid and that all other obligations secured hereby, including but not limited to Trustor's obligations under the Regulatory Agreement and Declaration of Covenants and Restrictions [HOME Funds], have been performed as agreed, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or be a receiver to the appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and 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 also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without Agree: Jamboree-17442 Koledo HOME Deed of Trust demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of 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 recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of. all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed 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 pledges, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to 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. Agree: Jamboree-17442 Koledo HOME Deed of Trust DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO TRUSTEE: The undersigned is the legal owner and holder of the note or notes of all indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied and all other obligations secured by the foregoing Deed of Trust, including but not limited to Trustor's obligations under the Regulatory Agreement and Declaration of Covenants and Restrictions [HOME Funds], have been performed as agreed; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, and all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note and Reconveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. Agree: Jamboree-17442 Koledo HOME Deed of Trust DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH a public body, corporate and politic TRUSTEE Agree: Jamboree-17442 Koledo HOME Deed of Trust RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS RIDER VUBORDINATED DEED OF TRUST WITH RIDER ATTACHED ("Rider"), is made as o 0312009, by JHC — OAKVIEW, LLC, a California limited liability company ("Trustor"), and CITY OF HUNTINGTON BEACH ("City"), a municipal corporation of the State of California (`Beneficiary"), as follows: 1. Part of Deed of Trust. This Rider is made a part of that certain Subordinated Deed of Trust With Assignment of Rents ("Deed of Trust"), of even date hereof, to which this Rider is attached. 2. Conflict. In the event of any conflict between the terms of this Rider and the terms of the Deed of Trust, the terms of this Rider shall control. 3. Priority; Subordination. Trustor and the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic ("Agency"), entered into that certain Affordable Housing Agreement, dated March 2, 2009, as amended by that certain First Amendment To Affordable Housing Agreement dated on or about the date hereof (the "Agreement"), pursuant to which Agency agreed to subordinate this Deed of Trust to the liens of the deeds of trust identified in the Agreement as the Conventional Lender's deed of trust, and to such other and further documents as such lenders may be required including but not limited to regulatory agreements, not to exceed an indebtedness in an amount to be determined by the Beneficiary. The lien of this Deed of Trust therefore shall be junior and subordinate to the lien of the foregoing listed deed of trust and such other and further documents as such lenders may require. Beneficiary agrees to execute such subordination agreements, in the form attached as Exhibit "I" to the Agreement, as are necessary to effect such subordination of the lien of this Deed of Trust. 4. Condemnation. Section B.1 of the Fictitious Deed of Trust incorporated into the Deed of Trust shall be modified to provide that Beneficiary shall not be entitled to any awards or damages payable directly or indirectly by reason of a condemnation or proposed condemnation affecting all or any part of, or any interest in, the Property, brought by or pursuant to the direction of Beneficiary. 5. Default. The term "default" as used in the Deed of Trust shall mean a "Material Default" as defined in the Agreement and/or and "Event of Default" as defined in the Amended and Restated Regulatory Agreement and Declaration of Covenants and Restrictions [HOME Funds]. 6. Equal Priority. Without regard to the recording order of the Agency Deed of Trust and the HOME Deed of Trust, the Agency Loan Documents shall be of equal priority to the HOME Loan Documents, and the Agency and the City agree to share foreclosure proceeds as follows. If there is a foreclosure, or any other action, judicial or nonjudicial, under the Agency Deed of Trust and/or the HOME Deed of Trust (including without limitation the giving of a deed in lieu of foreclosure), the Agency and the City shall be entitled to share based on sixty-three and three tenths percent (63.3%) for the Agency Loan and thirty-six and seven tenths percent (36.7%) for the HOME Loan ("Pro Rata Percentages") in any proceeds which shall ensue from such action, after payment of all reasonable expenses of the Agency and/or the City incurred in connection with the action. The Agree: Jamboree-17442 Koledo HOME Deed of Trust Agency Deed of Trust shall be of equal priority to the HOME Deed of Trust. As among those two deeds of trust, if either deed of trust is otherwise determined to be senior to the other, then notwithstanding the otherwise applicable effects of the California Civil Code and the California Code of Civil Procedure, upon foreclosure of the senior deed of trust and the elimination of the security created by the junior deed of trust, the holder of the foreclosing senior deed of trust shall share the foreclosure sale proceeds with the holder of the junior deed of trust based on the Pro Rata Percentages set forth above, unless otherwise mutually agreed by the Agency and the City. IN WITNESS WHEREOF, Trustor and Beneficiary have executed this Rider to Subordinated Deed of Trust With Assignment of Rents as of the date of Trustor's acknowledgement herembelow, to be effective for all purposes as of the day and year first set forth above. "TRUSTOR" JHC-OAKVIEW, LLC a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: aura Arc Meta Its: President [signatures continue on following page] 10 Agree: Jamboree-17442 Koledo HOME Deed of Trust Agree: Jamboree-17442 Koledo F� "BENEFICIARY" THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor'-'.,' ATTEST: . City Clerk., r P VED AS TO FORM':? a City Attorne �/31 "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic Chairperson ATTEST: a KATIE, BALLMI Agency Special C 11 HOME Deed of Trust STATE OF CALIFORNIA ) )ss. COUNTY OF ®r ayi z ) On 30 before me, f—�YYt i ! U 1-4 ZLi I d -P—, , a Notary Public, personally appeared L LIM A2rC)At,tIe_4Z, , who proved to me on the basis of satisfactory evidence to be the personK whose name(. is/fie subscribed to the within instrument and acknowledged to me that lyE/she/rkey executed the same in Jlis/herr authorized capacity(, and that by ki-97her/theirsignature�gJ on the instrument the person, or the entity upon behalf of which the person' acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. EMILY l� DE - Commission # 1838993 Notary Public - California zZ Orange County Signature (Seal) Comm. Expires Feb 28, 2013 STATE OF CALIFORNIA ) )ss. COUNTY OF ) On�C�GLS'T 05 . �Dy' before me, fJ L _ �5P6�- 2A , a Notary Public, personally appeared �Ei77,- A4,4, , who proved to me on the basis of satisfactory evidence to be the personal whose name('. > afe subscribed to the within instrument and acknowledged to me that l)shey executed the same in > -1=he1r authorized capacity(o.), and that b is r signature(K) on the instrument the person, or the entity upon behalf of which the personP acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 12 Agree: Jamboree-17442 Koledo HOME Deed of Trust P. L. ESPARZA Commission # 1857021 Z : `m . Notary Public - California Z Z ' Orange County (Seal) M Comm. Expires Aug 4, 2013 STATE OF CALIFORNIA ) )ss. COUNTY OF 0/e4, 6 ) On >! LtL UU7 65', d-p0 y before me, f . L - EsPA h 2.,+ , a Notary Public, personally appeared �(�14^/ 2, . �yA-k-J , who proved to me on the basis of satisfactory evidence to be the person(k) whose name(*Sift subscribed to the within instrument and acknowledged to me that RG>40y executed the same in er authorized capacityp<1 and that by-hi�t4eir signatures on the instrument the person, or the entity upon behalf of which the personp acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. f. L. [JrAMLA [ Commission # 1857021 z Ili Notary Public - California z Z ' Orange County D Signature (Seal) My Comm. Expires AugA, 2013 13 Agree: Jamboree-17442 Koledo HOME Deed of Trust EXHIBIT "A" TO DEED OF TRUST LEGAL DESCRIPTION OF REAL PROPERTY Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: LOT 43 OF TRACT NO. 4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO. 4301, AS ABANDONED BY THAT CERTAIN RESOLUTION NO. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN, UNDER AND/OR THAT MAY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH V. MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, DATED OCTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, OFFICIAL RECORDS, RECORDS OF ORANGE COUNTY, CALIFORNIA, WHICH DEED FURTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTITLE THE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIGHTS IN OR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPTH OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, OR THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED TO CITY OF HUNTINGTON BEACH RECORDED IN BOOK 6511, PAGE 679, OFFICIAL RECORDS. APN: 165-232-08 14 Agree: Jamboree-17442 Koledo HOME Deed of Trust EXHIBIT "D" HOME REGULATORY AGREEMENT [BEHIND THIS PAGE] This Document was electronically recorded by First American National Commercial 4 t-5- Sb4-5`H FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City -'Clerk Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder II IIIII IIIII IIIII 111111111111111111111111111111111111111111111111 NO F E E 2009000427445 02:54pm 08/07/09 105 59 Al2 D02 25 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code § 6103 & 27383) APN: 165-232-08 AMENDED AND RESTATED REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS [HOME FUNDS] THIS AMENDED AND RESTATED REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ,�,�I�O�VIE Funds] ("Regulatory Agreement") is made and entered into this day of 09, by and among THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") and JHC - OAKVIEW, LLC, a California limited liability company ("Owner"). RECITALS: A. Agency is responsible for the use of certain low- and moderate -income housing funds pursuant to California's Community Redevelopment Law [California Health & Safety Code §§33000, et seq.] ("Set Aside Funds"). B. City is responsible for the use of certain funds ("HOME Funds") made available to the City of Huntington Beach by the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program"). C. Agency and Owner ("Developer" therein) have entered into that certain Affordable Housing Agreement, dated March 2, 2009, as amended by that certain First Amendment To Affordable Housing Agreement dated on or about the date hereof (the "Housing Agreement"), concerning Owner's acquisition and rehabilitation of that certain real property, to be owned in fee by Owner, more particularly described in Exhibit No. 1 attached hereto and incorporated by reference herein (the "Site"). The Housing Agreement describes the "Project" REGULATORY AGREEMENT HOME Regulatory Agreement.4 which generally consists of Owner's acquisition of the existing apartment building consisting of a total of five (5) two -bedroom dwelling units on the Site and subsequent rehabilitation and management thereof as an affordable rental housing complex, each of the dwelling units to be restricted to Very Low Income Households. The Housing Agreement is hereby incorporated herein by this reference as though fully set forth herein. Any capitalized terms not defined herein shall have the meanings ascribed to such terms in the Housing Agreement. D. Owner has executed that certain promissory note (the "Agency Note") dated on or about March 10, 2009, pursuant to which Agency has provided Owner with a loan of Set Aside Funds in the principal amount of One Million Three Hundred Ninety -One Thousand Six Hundred Forty -Two and No/100s Dollars ($1,391,642.00) ("Agency Loan"), which amount was subsequently reduced to Eight Hundred Eighty Thousand Three Hundred Forty -Five and 91/100s Dollars ($880,345.91) by that certain Agency Loan Modification Agreement dated on or about the date hereof. The Agency Note is secured by a Deed of Trust With Assignment of Rents dated March 10, 2009, and recorded in the Official Records of Orange County, California on March 10, 2009, as Document No. 2009000111406, naming Agency as beneficiary ("Agency Deed of Trust"). E. Owner has executed that certain promissory note (the "City Note") dated on or about the date hereof, pursuant to which City has provided Owner with a loan of HOME Funds in the principal amount of Five Hundred Eleven Thousand Two Hundred Ninety -Six and 9/100s Dollars ($511,296.09) ("City Loan"). The City Note is secured by a Deed of Trust With Assignment of Rents dated on or about the date of the Note, naming City as beneficiary ("City Deed of Trust"). In consideration of the City Loan and in satisfaction of HOME Program requirements, three (3) of the Units are designated as HOME Units. F. Agency, City and Owner now desire to place restrictions upon the use and operation of the Project, in order to ensure that the Project shall be operated continuously as an affordable housing project available for rental to Very Low Income Households in accordance with the terms set forth below for the term of this Regulatory Agreement. G. This Regulatory Agreement supersedes and replaces in its entirety that certain Regulatory Agreement and Declaration of Covenants and Restrictions by and between the Agency and Owner dated March 2, 2009 and recorded in the Official Records of Orange County, California on March 10, 2009 as Instrument No. 2009000111402. EX91114"NaI"015 NOW, THEREFORE, the Owner, Agency and City declare, covenant and agree, by and for themselves, their heirs, executors, administrators and assigns, and all persons claiming under or through them, that the Site, for the term of this agreement, shall be held transferred, encumbered, used, sold, conveyed, leased and occupied, subject to the covenants and restrictions hereinafter set forth: REGULATORY AGREEMENT HOME Regulatory Agreement.4 1. DEFINITIONS. 1.1 Affordable Unit. As used in this Regulatory Agreement, the term "Affordable Unit" shall mean one of the five (5) rental dwelling units in the Project restricted to occupancy by Very Low Income Households. The term "Affordable Unit" and "Affordable Units" shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. 1.2 Affordable Very Low Income Unit. As used in this Regulatory Agreement, the term "Affordable Very Low Income Unit" shall mean one of the five (5) Affordable Units restricted to occupancy by Very Low Income Households at Affordable Rent. The term "Affordable Very Low Income Unit" and "Affordable Very Low Income Units" shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. 1.3 Affordable Very Low Income HOME Unit. As used in this Regulatory Agreement, the term "Affordable Very Low Income HOME Unit" shall: mean one of the three (3) Affordable Very Low Income Units designated hereby as a HOME Unit in satisfaction of HOME Program requirements. The Affordable Very Low IncomeHOWUnits are designated as "floating" units pursuant to 24 C.F.R. 92.2520). 1.4 Affordable Rent. As used in this Regulatory Agreement, the term "Affordable Rent" shall mean: a. for Affordable Very Low Income Units, rental rates not to exceed "affordable rent" for very low income households as defined by California Health & Safety Code Section 50053(b)(2), or its successor. b. for Affordable Very Low Income HOME Units, rental rates not to exceed, subject to the provisions of Section 3.3 herein, the lesser of (1) "affordable rent" for very low income households as defined by California Health & Safety Code Section 50053(b)(2), or its successor, and (2) the rent limits set forth by the HOME Program in 24 C.F.R. 92.252(b)(1) and 24 C.F.R. 92.252(b)(2), or its successor. Affordable Rent shall include a reasonable utility allowance for tenant -paid utilities based on the Orange County Housing Authority's published utility schedules. 1.5 Eligible Tenant. As used in this Regulatory Agreement, the term "Eligible Tenant" shall mean any person entitled to rent an Affordable Unit as set forth in this Regulatory Agreement. 1.6 Median Income or Orange County Median Income. For purposes of this Regulatory Agreement, the terms "Median Income" and "Orange County Median Income" shall mean the median income for the Orange County Primary Metropolitan Statistical Area, with adjustment for household size, as estimated annually by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of REGULATORY AGREEMENT HOME Regulatory Agreement.4 1937 as amended and published by California's Housing and Community Development Department pursuant to Health and Safety Code section 50093. 1.7 Very Low Income Household. As used in this Regulatory Agreement, the term "Very Low Income Household" shall have meaning given in Health and Safety Code section 50105(a). 2. TERM OF AGREEMENT; PRIORITY OF AGREEMENT; USE OF PROPERTY. This Regulatory Agreement supersedes and replaces in its entirety that certain Regulatory Agreement and Declaration of Covenants and Restrictions by and between the Agency and Owner dated March 2, 2009 and recorded in the Official Records of Orange County, California on March 10, 2009 as Instrument No. 2009000111402. As required by California Health and Safety Code Section 33334.3 and in satisfaction of 24 CFR 92.252(e), this Regulatory Agreement shall commence upon its execution and shall remain in effect for the longest feasible period but not less than the period terminating sixty (60) years following the date on which a Release of Construction Covenants is recorded for the Project. This Regulatory Agreement shall remain in effect throughout its 60-year term, notwithstanding the payment in full of the Agency Loan or the City Loan. This Regulatory Agreement is secured by the Agency Deed of Trust and the City Deed of Trust and Owner shall not be entitled to a reconveyance of either the Agency Deed of Trust or the City Deed of Trust prior to the expiration of the 60-year term of this Regulatory Agreement. Owner hereby agrees that the Project is to be owned, managed, and operated as a project for Eligible Tenants for the term of this Regulatory Agreement. To that end, and for the term of this Regulatory Agreement, the Owner hereby represents, covenants, warrants and agrees as follows: 2.1 Compliance With HOME Regulations. Owner, its successor and assigns, covenant and agree that the Project shall at all times during the term of this Regulatory Agreement comply with applicable requirements set forth in Subpart F of Part 92 of Title 24 of the Code of Federal Regulations. It is the intent of the parties that, notwithstanding any other provisions of this Agreement, Owner's obligation exists only to the extent that a particular statute or regulation referenced herein or in the Affordable Housing Agreement applies to the Project. 2.2 Purpose; Disbursement and Use of HOME Funds. The Site is being acquired and the Project developed for the purposes of providing Eligible Tenants affordable rental housing. The amount of the City Loan of HOME Funds shall not exceed the per unit dollar limits established by HUD pursuant to section 221(d)(3)(ii) of the National Housing Act, as implemented in regulations issued by HUD, 24 CFR 221.514(b)(1) and (c). Owner shall not request disbursement of HOME funds until the funds are needed to pay eligible costs. The amount of each disbursement request shall be limited to the amount needed. The City shall have the right to disapprove any request if the City determines the request is for an ineligible item or is otherwise not in compliance with or inconsistent with the Housing Agreement and this Regulatory Agreement. 2.3 Schedule. The Project activities shall be accomplished within the time provided in the Schedule of Performance, which is attached to the Housing Agreement. REGULATORY AGREEMENT HOME Regulatory Agreement.4 2.4 Tasks and Budget. The Project Costs are indicated in the Project Budget attached to the Housing Agreement. 2.5 Construction Covenant. Owner hereby covenants and agrees on behalf of itself and its successors and assigns in the Site or any portion thereof or any improvements thereon or any interest therein that Owner and such successors and assigns shall rehabilitate the Units in accordance with the Housing Agreement (including but not limited to the Scope of Development), the Redevelopment Plan for the Huntington Beach Redevelopment Project, this Regulatory Agreement, and plans approved by the City of Huntington Beach. 2.6 Facilities. All of the Units in the Project shall contain facilities adequate for living, sleeping, eating, cooking and sanitation in accordance with all applicable federal, state and local laws and codes. The rehabilitation and maintenance of the Units shall comply with the City's building code and all other applicable local codes, rehabilitation standards, ordinances and zoning ordinances in effect, and the Units shall be decent, safe and sanitary and shall conform to the building, electrical, plumbing, mechanical and energy codes that have been adopted by the City of Huntington Beach. To the extent applicable, the Project shall comply with the accessibility requirements at 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and, if applicable, the design and construction requirements at 24 CFR 100.205 for covered multifamily dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act (42 U.S.C. 3601-3619). 2.7 Residential Use. None of the Units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, or any other use that is inconsistent or incompatible with this Regulatory Agreement. 2.8 Faith -Based Activities. Owner covenants that it will comply with all terms and provisions contained in 24 CFR 92.257. Owner further certifies that HOME funds will not be used for the acquisition, construction or rehabilitation of structures to the extent that those structures are used for inherently religious activities. 2.9 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation nor shall the Owner take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership without prior written approval by both Agency and City. Any such conversion shall comply with the requirements of 24 C.F.R. Section 92.255. 2.10 Tenant Preference. All of the Affordable Units will be made available to Eligible Tenants for rental in accordance with the terms of this Regulatory Agreement, and the Owner shall not give preference to any particular class or group in renting the Affordable Units, except to the extent that the Affordable Units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.6 below. REGULATORY AGREEMENT HOME Regulatory Agreement.4 2.11 Tenant Protections. Owner shall comply with the tenant protections provisions of 24 C.F.R. Section 92.253, including but not limited to: a. The lease of an Affordable Unit must be for not less than one year, unless by mutual agreement between tenant and Owner. b. The lease may not contain any of the following provisions: (1) Agreement by the tenant to be sued, to admit guilt or to a judgment in favor of Owner in a lawsuit brought in connection with the lease; (2) Agreement by the tenant that the Owner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the Unit after the tenant has moved out of the Unit. The Owner may dispose of this personal property in accordance with state law. (3) Agreement by the tenant not to hold the Owner or the Owner's agents legally responsible for any action or failure to act, whether intentional or negligent; (4) Agreement by the tenant that the Owner may institute a lawsuit without notice to the tenant; (5) Agreement by the tenant that the Owner may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; (6) Agreement by the tenant to waive any right to a trial by jury; (7) Agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and (8) Agreement by the tenant to pay attorney's fees or other legal costs if the tenant wins in a court proceeding by the Owner against the tenant. The tenant, however, may be obligated to pay costs if the tenant loses. As required by 24 C.F.R. 92.303, Owner shall adhere to a fair lease and grievance procedure approved by the City and provide a plan for and follow a program of tenant participation in management decisions. 2.12 Termination of Tenancy. Owner, its successors or assigns, may not terminate the tenancy or refuse to renew the lease of a tenant, except (i) for serious or repeated violation of the terms and conditions of the lease; (ii) for violation of applicable federal, state, or local law; (iii) violation of occupancy rules as described in Section 3 below; or (iv) for other good cause. Pursuant to 24 C.F.R. 92.253(c), any termination or refusal to renew must be REGULATORY AGREEMENT HOME Regulatory Agreement.4 preceded by not less than 30 days by the Owner's service upon the tenant of a written notice specifying the grounds for the action. 3. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS. Owner hereby represents, warrants, and covenants as follows: 3.1 Income Restrictions. Except as expressly provided herein, throughout the term of this Regulatory Agreement, the Affordable Units shall be rented only to, and occupied only by, Eligible Tenants. 3.2 Rental Rates. Owner shall rent the Affordable Units to Eligible Tenants at no more than the allowable Affordable Rents for a household size appropriate to the unit, which is the number of bedrooms plus one. Therefore, a two -bedroom Affordable Unit shall be rented at no more than the applicable Affordable Rent for a three -person household. The rental rates for the Affordable Units shall be adjusted annually based upon annual updates of the applicable income and rent standards, including but not limited to updates published by the California Housing and Community Development Department and the United States Department of Housing and Urban Development. Subject to the provisions of Section 3.3 below, in no event shall any of the Affordable Units be rented at a rate greater than the applicable Affordable Rent. Failure to comply with the affordability requirements of this Regulatory Agreement is an event of default under the terms of both the Agency Loan and the City Loan. Subject to the right to cure, the Agency Loan of Set Aside Funds and the City Loan of HOME Funds will each be due and payable immediately if the Affordable Units do not meet the requirements of this Regulatory Agreement. 3.3 Occupancy By Eligible Tenant. An Affordable Very Low Income Unit initially occupied by an Eligible Tenant shall be deemed occupied by an Eligible Tenant until such Affordable Unit is vacated, even if the tenant's household income subsequently increases to an amount that exceeds the maximum allowable income level for a Very Low Income Household, so long as satisfactory actions are taken to ensure that all vacancies are filled in accordance with this Regulatory Agreement until the noncompliance is corrected. If at any time a tenant's household income increases, resulting in disqualification of such tenant as a Very Low Income Household, then the Owner shall, for each of category (i) and (ii) below, take the following actions in the priority set forth as follows in order to restore the number of HOME units to three (3) as soon as is possible: (i) if such tenant's household income is greater than that of a Very Low Income Household, but less than that of a "Lower Income Household" (as defined in Health and Safety Code section50079.5(a)), then (1) Owner shall designate a non -HOME unit as a HOME unit, if such unit is occupied by a Very Low Income Household; REGULATORY AGREEMENT HOME Regulatory Agreement.4 (2) If no such unit is available to be designated a HOME unit, then the next available unit to be rented shall be rented as a HOME unit to a Very Low Income Household; (3) While the unit is occupied by a tenant whose household income is greater than that of a Very Low Income Household but is less than that of a Lower Income Household, the Owner shall increase the rent for such tenant, to no greater than 30% times 60% of Area Median Income, adjusted for household size. (ii) if such tenant's household income is greater than that of a Lower Income Household, then (1) Owner shall designate a non -HOME unit as a HOME unit, if such unit is occupied by a Very Low Income Household; (2) If no such unit is available to be designated a HOME unit, then Owner shall designate a non -HOME unit as a HOME unit, if such unit is occupied by a Lower Income Household; (3) If no such units are available to be designated a HOME unit, then the next available unit to be rented shall be rented as a HOME unit to a Very Low Income Household; (3) While the unit is occupied by a tenant whose household income is greater than that of a Lower Income Household, the Owner shall increase the rent for such tenant to the lesser of the following: (a) market rate rent for comparable, unassisted units in the neighborhood; and (b) 30% of such household's income. In the event that a unit, which is occupied by a tenant who no longer qualifies as a Very Low Income Household, is no longer designated as a HOME unit, then such tenant shall have a period of ninety (90) days -to relocate from the Site. The disqualified tenant shall be fully responsible for the costs and expenses related to the relocation. Should such tenant face extraordinary hardship in relocating from the Site, the tenant may submit a written appeal to the City requesting an extension of the time period within which the tenant must relocate. If the City's Director of Economic Development determines in his or her sole discretion that a hardship exception is justified by the circumstances, he or she may extend the relocation period for up to a maximum of ninety (90) additional days. The provisions set forth in this Section 3.3 shall apply only to the extent such provisions are not in conflict with any applicable federal or state law or any regulatory agreement affecting the Project that is recorded in superior priority to this Regulatory Agreement. REGULATORY AGREEMENT HOME Regulatory Agreement.4 3.4 Maximum Occupancy. The maximum number of persons residing in a two -bedroom unit may not exceed five persons. Owner shall be responsible for enforcing this maximum occupancy limit. Upon discovery of a violation of this Section 3.4, Owner shall immediately notify the Eligible Tenant of record in writing ("Occupancy Violation Notice"). In the Occupancy Violation Notice, Owner shall inform the Eligible Tenant of the occupancy violation and provide the Eligible Tenant with an opportunity to cure the violation within thirty (30) days from the date of the Notice. It shall not be a violation of this Regulatory Agreement if a household occupying a Unit in the Project prior to Initial Rehabilitation (as defined in Section 3.6(a)) exceeds the maximum occupancy limit of five persons in a two -bedroom unit; provided that, any subsequent increase in the size of such a household or any change in the composition of such a household that results in a household size that continues to exceed the maximum occupancy limit of five persons shall be a violation of this Regulatory Agreement. 3.5 Income Computation. Immediately prior to a prospective tenant's occupancy of an Affordable Unit, Owner shall obtain and maintain on file an income computation and certification form from such prospective tenant dated immediately prior to the date of initial occupancy of an Affordable Unit by such prospective tenant. Owner shall verify that the income information provided by an applicant is accurate by following all applicable City or Agency policies and procedures and by taking one or more of the following steps as a part of the verification process: (i) obtain two (2) pay stubs from the most recent pay periods; (ii) obtain a written verification of income and employment from applicant's current employer; (iii) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant's income as is reasonably satisfactory; or (v) obtain such other information as may be reasonably required. Owner shall update the foregoing records annually and shall provide copies of updated tenant eligibility records and monthly rental records to City for review. Upon review of such records, City may at its option perform an independent audit of the tenant eligibility records in order to verify compliance with the income and affordability requirements set forth herein. Costs for such an audit performed by the City shall be deemed a Project Operating Expense, deductible from the Project's Revenue (as such term is defined in the City Note). Owner shall retain the records described in this Section, including the documentation submitted pursuant to 24 C.F.R. 92.203(a)(1), for a period of five (5) years after the date the respective records were created. 3.6 Rental Priority. Subject to Owner's policies and procedures for screening potential tenants, which must be approved by the City and Agency, the Affordable Units shall be rented according to the following priorities: a. Tenants living in the Project prior to Owner's rehabilitation of the Units under the Housing Agreement ("Initial Rehabilitation") who are Eligible Tenants meeting the applicable income restrictions of the Affordable Units shall be given first priority in re- leasing Affordable Units in the Project following completion of the Initial Rehabilitation. REGULATORY AGREEMENT HOME Regulatory Agreement.4 b. When an Affordable Unit becomes available as a result of a tenant vacation, Owner shall give first priority in renting the Affordable Unit to an Eligible Tenant who has been displaced by .activities of the City or the Agency, pursuant to California Health & Safety Code Section 33411.3. Except as otherwise set forth above, Affordable Units shall be rented to Eligible Tenants on a first -come, first -served basis; provided, however, that Owner shall maintain an "interest list" or "eligibility list" of potential tenants; provided, however, that Owner shall not be liable under this Agreement to Agency or any person, firm, or entity in the event an Affordable Unit is rented to a person who is not on any such list or is on such list but is listed lower than another person on such list. 3.7 Maintenance of Records. Owner shall maintain complete and accurate records pertaining to the Affordable Units, and shall permit any duly authorized representative of the City or the Agency to inspect the books and records of Owner pertaining to the Project including, but not limited to, those records pertaining to tenant eligibility and occupancy of the Affordable Units. Records pertaining to the Project and Affordable Units shall be retained for a period of five (5) years after the termination of this Regulatory Agreement; records pertaining to tenant eligibility shall be retained for the period set forth in Section 3.5. To assist the City in meeting its HOME Program recordkeeping and reporting requirements and to assist the Agency in meeting its reporting requirements under California's Community Redevelopment Law, Owner shall prepare, maintain and submit to the City and the Agency, as appropriate, the following records and reports: a. Records which demonstrate that the Site meets the property standard specified in 24 CFR 92.251 and the lead -based paint requirements of 24 CFR 92.355; b. Records which demonstrate that each family occupying a HOME Unit is income eligible in accordance with 24 CFR 92.203; C. Records which demonstrate that the Site meets the affordability and income targeting requirements of California Health and Safety Code Sections 50079.5, 50105 and 50053 and 24 CFR 92.252 for the duration of this Regulatory Agreement. Records shall be kept for each family occupying an Affordable Unit; d. Records which demonstrate that each lease complies with the tenant and participant protections, as specified in 24 CFR 92.253. Records shall be kept for each family occupying an Affordable Unit; e. Equal opportunity and fair housing records, including, as applicable: (1) data on the extent to which each racial and ethnic group and single -headed household (by gender of household head) have applied for, participated in, or benefited from, any program or activity funded in whole or in part with HOME funds; REGULATORY AGREEMENT HOME Regulatory Agreement.4 (2) documentation of actions undertaken to meet the requirements of 24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u); (3) documentation of the actions the Owner has taken to affirmatively further fair housing; f. Affirmative Marketing and MBE/WBE records, including, as applicable: (1) if applicable, records documenting compliance with the affirmative marketing procedures and requirements of 24 CFR 92.351; (2) if applicable, documentation and data on the steps taken by Owner to implement the City's outreach programs as set forth in applicable City policies and procedures including data indicating the racial/ethnic or gender character of each business entity receiving a contract or subcontract of $25,000 or more paid, or to be paid, with HOME funds; the amount of the contract or subcontract, and documentation of the Owner's affirmative steps to assure that minority business and women's business enterprises have an equal opportunity to obtain or compete for contracts and subcontracts as sources of supplies, equipment, construction and services; g. if applicable, records which demonstrate compliance with the requirements of 24 CFR 92.353 relating to displacement, relocation and real property acquisition, including project occupancy lists identifying the name and address of all persons occupying or moving into the Site on and after the date on which Owner obtained site control; h. if applicable, records demonstrating compliance with the labor requirements of 24 CFR 92.354, including contract provisions and payroll records; records demonstrating compliance with the lead -based paint requirements of 24 CFR 92.355; j. if applicable, records which support any exceptions to the conflict of interest prohibition pursuant to 24 CFR 92.356; k. debarment and suspension certifications required by 24 CFR Parts 24 and 91; and Owner shall retain all books and records relevant to the Housing Agreement for a minimum of five (5) years after the project completion date, except that records of individual tenant income verifications, project rents and project inspections shall be retained for the most recent five-year period until five (5) years after the affordability period terminates, or until the conclusion or resolution of any and all audits or litigation relevant to the Housing Agreement, whichever is later. The Agency, the City, HUD and the Comptroller General of the United States, and any of their representatives, shall have the right of access to any pertinent books, documents, papers or other records of the Owner, in order to make audits, examinations, excerpts and transcripts. REGULATORY AGREEMENT HOME Regulatory Agreement.4 3.8 Reliance on Tenant Representations: Each tenant lease shall contain a provision to the effect that Owner has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of an Affordable Unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. 4. MAINTENANCE 4.1 Maintenance Covenant. (a) Owner agrees to maintain all interior and exterior improvements, including landscaping, on the Site in good condition and repair (and, as to landscaping, in a healthy condition), reasonable wear and tear excepted, and in accordance with all applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction (including, but not limited to, Federal Housing Quality Standards as set forth in 24 C.F.R. 982.401). In addition, Owner shall keep the Site free from all graffiti and any accumulation of debris or waste material. Owner shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable materials. The maintenance covenant contained in this Section shall remain in effect for the term of this Regulatory Agreement. (b) The Project shall comply with the lead -based paint standards in 24 C.F.R. §92.355. Housing assisted with HOME Program funds constitutes HUD -associated housing for the purpose of Lead -Based Paint Poisoning Prevention Act (42 U.S.C. Section 4821, et sea.) and is, therefore, subject to 24 Code of Federal Regulations Part 35. Accordingly, and pursuant to Section 92.355 of the Regulations, the Owner hereby agrees to and shall be responsible for testing and abatement activities specified in the Lead -Based Paint Poisoning Prevention Act and the regulations set forth at 24 Code of Federal Regulations Part 35 with respect to the rehabilitation of the Site. 4.2 City and Agenc�Rights. City and Agency shall each have the right to enter upon the Site to inspect the Site and both the interiors and exteriors of the Units, upon seventy-two (72) hours notice to Owner. City and Agency may, but are not obligated to, perform or cause to be performed the maintenance necessary to cure any default of these maintenance covenants and, Owner shall be liable for payment of reasonable costs to perform such required maintenance; provided, however, that Owner first be given written notice of the actions required to cure any default, and Owner, after receipt of such notice, shall have thirty (30) days to cure such defaults, but Owner shall not be deemed in default of the foregoing maintenance covenant if such default cannot reasonably be cured within the thirty (30) day period referenced above so long as Owner has commenced to cure such default within the same thirty (30) day period and is diligently proceeding with the work to cure such default. Notwithstanding the foregoing, if any property conditions are reasonably identified by City or Agency after a property inspection attended by a representative of Owner that pose an immediate danger to life or limb, Owner shall REGULATORY AGREEMENT HOME Regulatory Agreement.4 have three (3) days to effect corrections of such condition(s) to City's and Agency's reasonable satisfaction. 4.3 Annual & Quarterly Reports. Owner covenants and agrees to submit to the City and the Agency an annual report (the "Annual Report"), which shall include the information required by Section 3.5 of this Regulatory Agreement and by California Health & Safety Code Section 33418. The Annual Report shall include for each Affordable Unit the rental rate and the income and family size of the occupants, and shall also include the records described in Section 3.5 herein and the financial statements required by Section 503 of the Housing Agreement. The income information shall be supplied by the tenant in a certified statement in a form that is acceptable to the City. The Owner shall submit the Annual Report on or before April 30 of the year following the year covered by the Annual Report. The Owner shall provide for the submission of household information and certification in its leases with tenants. 4.4 Management Plan. Within the time set forth in the Schedule of Performance attached to the Housing Agreement, Owner shall prepare and submit to Agency and to City for approval a management plan in accordance with the following ("Management Plan"): (a) The Management Plan, including such amendments as may be approved in writing by the City, shall remain in effect for the term of this Regulatory Agreement. Owner shall not amend the Management Plan or any of its components without the prior written consent of the City. The components of the Management Plan shall include: (1) Management Agent. The name and qualifications of the proposed management agent, which may include but shall not be limited to Jamboree Housing Corporation. The City shall approve or disapprove the proposed management agent, if other than Jamboree Housing Corporation, in writing based on the experience and qualifications of the management agent. The management agent shall have demonstrated experience in operating affordable housing comparable to the Project. (2) Management Program. A description of the proposed management, maintenance, tenant selection and occupancy policies and procedures for the Affordable Units. (3) Management Agreement. A copy of the proposed management agreement specifying the amount of the management fee and the relationship and division of responsibilities between Owner and management agent. (4) Tenant Lease or Rental Agreement. A copy of the proposed tenant lease or rental agreement to be used in renting the Affordable Units. (5) Annual Operating Budget. Within the time set forth in the Schedule of Performance attached to the Housing Agreement and annually thereafter not later than fifteen (15) days prior to the beginning of the next fiscal or calendar year of the Project, Owner shall submit a projected operating budget to the City for review and approval. REGULATORY AGREEMENT HOME Regulatory Agreement.4 The Agency shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder, and such matter shall be deemed approved unless the Agency provides to Owner its written disapproval within thirty (30) days after receipt of a request for approval, provided Owner includes with its request, a written notice, in capital letters and at least 12-point typeface, stating as follows: NOTICE: PURSUANT TO SECTION 4.4 OF THE REGULATORY AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND JHC — OAKVIEW, LLC, FAILURE BY THE AGENCY TO APPROVE OR DISAPPROVE THE MATTER SUBMITTED WITH THIS REQUEST WITHIN 30 DAYS SHALL BE DEEMED AN APPROVAL. Any disapproval shall be in writing and contain the Agency's reasons for disapproval. (b) Owner hereby covenants and agrees the City and City shall have the right, at any time and from time to time, to give notice to Owner if•the City or Agency determines that the Project is not being managed or maintained in accordance with the Management Plan. The City or Agency may require the Owner to change management practices or to terminate the management agent and retain a different management agent, approved by the City or Agency. The City and Agency agree that prior to requiring the Owner to change its management agent or the management practices the City or Agency shall informally consult with Owner, in an attempt to resolve the dispute. If the City or Agency determines that such an attempt at informal resolution has been unsuccessful, it shall give the Owner thirty (30) days written notice to change the management agent or practice, as the case may be. If Owner fails to do as requested by the City or Agency in the written notice, the City or Agency may then require the immediate change of the management practice or agent, as the case may be. The management agreement shall provide that it is subject to termination by the Owner without penalty, upon thirty (30) days prior written notice. Within ten (10) business days following a direction of the City or Agency to replace the management agent, the Owner shall select another management agent or make other arrangements satisfactory to the City or Agency for continuing management of the Project. The Owner shall notify the City and Agency upon learning that there is a voluntary change in the management or control of the management agent, and, if the change is unsatisfactory to the City or Agency, the City or Agency shall be entitled to require the Owner to change the management agent in accordance with the terms of this paragraph. 4.5 Other HOME Program Requirements. Owner shall comply with all applicable federal requirements set forth in Subpart H of the HOME regulations, including the following: a. Other Federal Requirements and Nondiscrimination. 24 CFR 92.350. Owner acknowledges that 24 CFR 92.350 provides that the Federal requirements set forth in 24 CFR REGULATORY AGREEMENT HOME Regulatory Agreement.4 Part 5, subpart A, are applicable to participants in the HOME program, and that these Federal requirements include the following: (i) Nondiscrimination and Equal Opportunity. (1) Civil Rights, Fair Housing, and nd Age and Disability Discrimination Acts Assurances: During the performance of the Housing Agreement, Owner assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, national origin, sex, age, handicap, religion, or religious preference, under any program or activity funded by this Regulatory Agreement, as required by the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR part 100 et seq.; Executive Order 11063, as amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing Programs) and implementing regulations at 24 CFR part 107; title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d- 2000d-4) (Nondiscrimination in Federally Assisted Programs) and implementing regulations at 24 CFR part 1; the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and implementing regulations at 24 CFR part 146; section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8;Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 U.S.C. 3601- 20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations. (2) Training, Employment, and Contracting Opportunities Assurance of Compliance: The Project Activities to be performed under the Housing Agreement are on a project assisted under a program providing direct federal financial assistance from HUD which is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 170lu ("Section 3"), and the regulations issued by HUD to implement Section 3 (24 CFR Part 135) (the "Section 3 Regulations"). Pursuant to 24 CFR §135.3, the requirements of the Section 3 Regulations apply to the recipient of such financial assistance only where the amount of federal assistance exceeds $200,000, and apply to a contractor or subcontractor of such recipient only where the amount of assistance exceeds $200,000 and the amount of the contract or subcontract exceeds $100,000. Owner shall provide, to the greatest extent feasible, training, employment and contracting opportunities generated by the financial assistance to low- and very -low income persons and business concerns owned by low- or very -low income persons, or which employ low- or very -low income persons. (3) MBE/WBE Affirmative Action Outreach Program: Owner hereby agrees to comply with the City's minority and women business outreach program to the extent required by Executive Order 11625, as amended by Executive Order 12007 (3 CFR, 1971-1975 Comp., p. 616 and 3 CFR, 1977 Comp., p. 139) (Minority Business Enterprises); Executive Order 12432 (3 CFR, 1983 Comp., p. 198) (Minority REGULATORY AGREEMENT HOME Regulatory Agreement.4 Business Enterprise Development); and Executive Order 12138, as amended by Executive Order 12608 (3 CFR, 1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women's Business Enterprise). (ii) Disclosure Requirements. The disclosure requirements and prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 CFR Part 87; and the requirements for funding competitions established by the Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3531 et seq.). (iii) Debarred, Suspended or Ineligible Contractors. The prohibitions at 24 CFR Part 24 on the use of debarred, suspended or ineligible contractors. (iv) Drug -free Workplace. The Drug -Free Workplace Act of 1988 (41 U.S.C. 701 et seq.) and HUD's implementing regulations at 24 CFR Part 24. b. Affirmative Marketing. 24 CFR 92.351. Owner shall comply with the City's Affirmative Marketing requirements. C. Displacement, Relocation and Acquisition. 24 CFR 92.353. Owner shall prepare a project -specific relocation plan and shall certify that, to the extent applicable, it will comply or has complied with the federal relocation, displacement and acquisition rules governing the HOME Program, which are contained in the Uniform Relocation Act, 49 CFR Part 24, and applicable program regulations. 24 CFR Section 92.353 requires that tenants who are displaced from housing units demolished or converted as a result of HOME -funded activities be provided with relocation assistance. d. Labor. 24 CFR 92.354. Does not apply to this Project. e. Lead -based Paint. 24 CFR 92.355. The Project shall comply with the lead -based paint standards in §92.355. f. Conflict of Interest. 24 CFR 92.356. (1) Interest of Employees, Officers and Officials. No employee, agent, consultant, officer or elected official or appointed official of the City, or employee, agent, consultant or officer of Owner, and no other public official of the City who exercises any functions or responsibilities with respect to the activities assisted with HOME funds or who are in a position to participate in a decision making process or gain inside information with regard to these activities, during their tenure and for one year thereafter, may obtain a financial interest or benefit from a HOME assisted activity or have an interest in any contract or subcontract, or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties. Owner shall incorporate, or cause to be incorporated, in all such contractors or subcontracts a provision prohibiting such interest pursuant to the purposes of this Section. Fulfillment of "sweat equity" obligations as defined in Section 8201 of the HOME regulations shall not be considered a violation of this prohibition. REGULATORY AGREEMENT HOME Regulatory Agreement.4 (2) Prohibition Against Occupying HOME -Assisted Units. No officer, employee, agent, official or consultant of Owner may occupy the Site. g. Consultant Activities. 24 CFR 92.358. No person providing consultant services in an employer -employee type relationship shall receive more than a reasonable rate of compensation for personal services paid for with HOME funds. In no event, however, shall such compensation exceed the limits in effect under the provisions of any applicable statute (e.g., annual HUD appropriations acts which have set the limit at the equivalent of the daily rate paid for Level IV of the Executive Schedule). Such services shall be evidenced by written agreements between the parties which detail the responsibilities, standards and compensation. Consultant services provided under an independent contractor relationship are not subject to the compensation limitation of Level IV of the Executive Schedule. 5. ENFORCEMENT. In the event Owner defaults in the performance or observance of any covenant, agreement or obligation of Owner pursuant to this Regulatory Agreement, and if such default remains uncured for a period of thirty (30) days after written notice thereof (or such longer period as may apply to the specific alleged default) shall have been given by City or Agency, or, in the event said default cannot be cured within said time period, Owner has failed to commence to cure such default within said thirty (30) days and diligently prosecute said cure to completion, then City or Agency shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: (a) By mandamus or other suit, action or proceeding at law or in equity, require Owner to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of this Regulatory Agreement; or (b) Take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants and agreements of participant hereunder, including foreclosure of the Deed of Trust. Except as otherwise expressly stated in this Regulatory Agreement, the rights and remedies of the parties are cumulative, and the exercise by any parry of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. 6. NONDISCRIMINATION. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, age, class, income, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, or in the awarding of contracts for the Project, nor shall participant, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof, or in the awarding of contracts for the Project (except as permitted by this Regulatory Agreement). REGULATORY AGREEMENT HOME Regulatory Agreement.4 Owner shall comply with all applicable federal, state and local nondiscrimination, fair housing, and equal opportunity requirements. In addition, Owner shall conduct affirmative marketing and minority outreach activities as required by federal regulations. 6.1 Form of Nondiscrimination and Nonsegregation Clauses. The Owner shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, age, class, income, religion, sex, sexual orientation, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises 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 through him or her, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself 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 of the land." REGULATORY AGREEMENT HOME Regulatory Agreement.4 7. COVENANTS TO RUN WITH THE LAND. Owner hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Regulatory Agreement. City, Agency and Owner hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land and shall pass to and be binding upon the Owner's successors in title to the Site; provided, however, that on the termination of this Regulatory Agreement said covenants, reservations and restrictions shall expire, except the nondiscrimination covenants contained in Section 6 and Section 6.1 shall remain in perpetuity. All covenants without regard to technical classification or designation shall be binding for the benefit of the City and Agency, and such covenants shall run in favor of the City and Agency for the entire term of this Regulatory Agreement, without regard to whether the City or Agency is or remains an owner of any land or interest therein to which such covenants relate. 8. ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any covenant in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other reasonable attorneys' fees and costs. Attorneys' fees shall include attorneys' fees on any appeal, and in addition a party entitled to attorneys' fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery, and expert witness fees. 9. AMENDMENTS. This Regulatory Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Orange. 10. NOTICE. Any notice required to be given hereunder shall be made in writing and shall be given by (i) personal delivery, (ii) courier service that provides a receipt showing date and time of delivery, or (iii) certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: City: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Director of Economic Development Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Secretary With a copy to: City Attorney's Office City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 REGULATORY AGREEMENT HOME Regulatory Agreement.4 Owner: JHC — Oakview, LLC c/o Jamboree Housing Corporation 17701 Cowan Avenue, Ste 200 Irvine, CA 92614 Attn: Laura Archuleta, President Notices personally delivered or delivered by courier shall be effective upon receipt. Mailed notices shall be effective on the earlier of receipt or Noon on the second business day following deposit in the United States mail. Notices, requests and submittals that are required to be given to both the Agency and the City shall be deemed given if such notices, requests and submittals are given to either the Agency or the City and, with regard to notices and requests, a copy is provided to the City Attorney's Office. 11. SEVERABILITY/WAIVER/INTEGRATION. 11.1 Severability. If any provision of this Regulatory Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 11.2 Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Regulatory Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 11.3 Integration. This Regulatory Agreement contains the entire agreement between the parties and neither parry relies on any warranty or representation not contained in this Regulatory Agreement. 12. GOVERNING LAW. This Regulatory Agreement shall be governed by the internal laws of the State of California. 13. COUNTERPARTS. This Regulatory Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. This Regulatory Agreement may be executed by each party on a separate signature page, and when the executed signature pages are combined, shall constitute one single instrument. 14. SUBORDINATION. Agency may agree to subordinate this Agreement to superior deeds of trust, regulatory agreements and other related documents including but not limited to those required by the Conventional Lender, if satisfactory written commitments are obtained from such Conventional Lender to protect the Agency's investments in the event of a default by Owner. Any such Subordination Agreement shall provide for: (i) A right of the Agency to cure a default on the Conventional Lender's First Deed(s) of Trust; (ii) A right of the Agency to negotiate with any lenders after notice of default from the lender; (iii) An agreement REGULATORY AGREEMENT HOME Regulatory Agreement.4 that if prior to foreclosure of any lenders' loans, the Agency takes title to the Site and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan by reason of the transfer of title to the Agency; and (iv) A right of the Agency to purchase the Site from the Developer at any time after a default on the loan that remains uncured after expiration of the applicable cure period. If, from time to time and at one or more times, Owner chooses to refinance the loan secured by any deed of trust which is superior to this Agreement, Agency agrees to subordinate this Agreement to the refinancing lender's deed of trust under the same terms and conditions as set forth herein on the condition that the amount of the new loan is no greater than the original principal balance of the refinanced note. IN WITNESS WHEREOF, the City, Agency and Owner have executed this Regulatory Agreement by duly authorized representatives on the date first written hereinabove. [SIGNATURES APPEAR ON NEXT PAGE] REGULATORY AGREEMENT HOME Regulatory Agreement.4 "OWNER" JHC — OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: '. CA,�L L Laura Archuleta Its: President HOME Regulatory Agreement.4 "CITY" THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor ATTEST: City Clerk APPROVED AS TO FORM: City Attorney "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic Chairperson ATTEST: Agency Secretary APPROVED AS TO FORM: General Counsel KANE, BALLMER & BERKMAN Agency Special Counsel REGULATORY AGREEMENT "OWNER" JHC — OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member "CITY" THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California G� Mayor ATTEST: By: Laura Archuleta Its: President City Clerk AP aVED AS TO FORM: COUNTERPART rj'v <A_, � P'-�City Attorney FEW;WWA REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON. BEACH, a public body, corporate.and politic Chairperson ATTEST: Agency Secretary AP P VED AS TO FORM: � eneral'Counsel zl--� KANE, BALLMERA B Agency Special Co nse; REGULATORY AGREEMENT HOME Regulatory Agreement.4 State of California County of Orange On J u (L/, 151 a c of before me, S<Sa,, IQ, a Notary Public, personally appeared (,ltt, ,r �Y chid {- , who proved tome on the basis of satisfactory evidence to be the person(-9) whose name(x) is/af-e subscribed to the within instrument and acknowledged to me that -he/she/they executed the same in4+is/her/their authorized capacity(ies), and that by-his/her/their signature(,} on the instrument the personal, or the entity upon behalf of which the personf4 acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. SUSAN R. HANCHIN Commission # 1754968 Notary Public - California Signature (Seal) I Orange County My Comm. Expires Ad 2, 2011 State of California County of Orange On &AU ST 06- , =aOO2 before me,?—, L • L:iPAez4, a Notary Public, personally appeared r lR c A IL. Ey„VJ, who proved to me on the basis of satisfactory evidence to be the person(D whose name('s -is re subscribed to the within instrument and acknowledged to me that+ef�4 fey xecuted the same in eir authorized capacity(g and that by ki-, thei ignaturaos, on the instrument the perso—nTsi or the entity upon behalf of which the personas acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) REGULATORY AGREEMENT HOME Regulatory Agreement.4 P. L ESPARZA Commission # 1857021 z . `� Notary Public - California i z Orange County NIComm. Expires Aug4, 2013 EXHIBIT NO. 1 LEGAL DESCRIPTION OF SITE Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: LOT 43 OF TRACT NO. 4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO. 4301, AS ABANDONED BY THAT CERTAIN RESOLUTION NO. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN, UNDER AND/OR THAT MAY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH V. MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, DATED OCTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, OFFICIAL RECORDS, RECORDS OF ORANGE COUNTY, CALIFORNIA, WHICH DEED FURTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTITLE THE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIGHTS IN OR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPTH OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, OR THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED TO CITY OF HUNTINGTON BEACH RECORDED IN BOOK 6511, PAGE 679, OFFICIAL RECORDS. APN: 165-232-08 REGULATORY AGREEMENT HOME Regulatory Agreement 4 EXHIBIT "E" HOME SUBORDINATION AGREEMENT [BEHIND THIS PAGE] 4 RECORDING REQUESTED BY FIRST AMERICAN TITLE COMPANY NATIONAL/OOMMERCIAL SERVICES COMMERCIAUINDUSTRIAL DIVISION WHEN RECORDED RETURN TO: JHC — Oakview, LLC c/o Jamboree Housing Corporation 17701 Cowan Avenue, Ste 200 Irvine, CA 92614 Attn: President i�s•4ab�l� •�1 This Document was electronically recorded by First American National Commercial Recorded In Official Records, Orange County Tom Daly, Clerk -Recorder 1111111111IIV IIJIUVM111IUIIJill39.00 2009000427448 02:54pm 08/07/09 105 59 S1312 0.00 0.00 0.00 0.00 33.00 0.00 0.00 0.00 HOME LOAN SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. Au6wr THIS SUBORDINATION AGREEMENT ("Agreement") is entered into this day of 4*, 2009, by and among City of Huntington Beach, a municipal corporation of the State of California (the "City"); JHC — OAKVIEW, LLC, a California limited liability company ("Developer"); and CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION ("Lender"). RECITALS A. Developer owns fee title to the real property described on Attachment No. "1" (the "Property") attached hereto and incorporated herein by reference. The Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic ("Agency"), and Developer entered into that certain Affordable Housing Agreement dated as of March 2, 2009, as amended by that certain First Amendment To Affordable Housing Agreement dated on or about the date hereof (the "Housing Agreement"). Pursuant to the terms of the Housing Agreement, Developer has executed a Note in favor of the City (the "HOME Note") in the amount of FIVE HUNDRED ELEVEN THOUSAND TWO HUNDRED NINETY-SIX and 9/100s DOLLARS ($511,296.09) ("HOME Loan") to assist Developer in the rehabilitation of the Property as an affordable housing complex. The HOME Loan is to be secured by a Subordinated Deed of Trust With Assignment of Rents With Rider Attached encumbering the Property and naming the City as Beneficiary (the "HOME Deed of Trust"). The Housing Agreement is hereby incorporated by reference as though fully set forth herein. All capitalized terms not defined herein shall have the meanings ascribed to them in the Housing Agreement. HOME Subordination Agreement.3 B. City and Developer have also entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions recorded against the Property ("HOME Regulatory Agreement"), which HOME Regulatory Agreement contains, among other terms, certain use restrictions affecting the Property. C. Developer has obtained a loan from Lender in the amount of One Hundred Ninety Seven Thousand Dollars ($197,000.00) (the "Lender Loan"). To repay the Lender Loan, Developer has executed a deed of trust encumbering the Property to secure a promissory note in the sum of the Lender Loan, payable upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). Developer has also executed an Assignment of Leases and Rents in favor of Lender ("Lender Assignment of Leases and Rents"). In connection with the Lender Loan, Developer may also be required by Lender to execute a regulatory agreement to be recorded against the Property, which may contain among other terms, use restrictions affecting the Property (the "Lender Regulatory Agreement"). D. The Lender Deed of Trust has been recorded against the Property in the Official Records of Orange County, California on March 10, 2009 as Instrument No. 2009000111404. The Lender Assignment of Leases and Rents has been recorded against the Property in the Official Records of Orange County, California on March 10, 2009 as Instrument No. 2009000111495 E. Lender was willing to make the Lender Loan provided the Lender Deed of Trust, Lender Assignment of Leases and Rents and Lender Regulatory Agreement would be a lien or charge upon the Property prior and superior to the lien or charge of any deed of trust from the Agency or City. F. The Lender Loan is of mutual benefit to the Lender, City, and Developer; and the City has agreed that the Lender Deed of Trust and Lender Regulatory Agreement shall constitute a lien or charge upon the Property which is prior and superior to the lien or charge of the HOME Deed of Trust and HOME Regulatory Agreement subject to and conditioned upon the specific terms and provisions of this Subordination Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the City, Lender and Developer, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: 1. Subordination by City. 1.1 Subordination of HOME Deed of Trust and Regulatory Agreement to Lender Deed of Trust. Lender Assignment of Leases and Rents and Lender Reilulaim Agreement. The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder), the Lender Assignment of Leases and Rents and the Lender Regulatory Agreement (and any amendments or modifications thereto) (except amendments which increase the loan amount) shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior to (i) the lien or charge of (a) the HOME Deed of Trust, (b) the HOME Regulatory Agreement, (c) Section 2.5 of the Housing Agreement and (d) all options, HOME. Subordination Agreement.3 2 rights of first refusal, rights of reverter and termination and construction obligations set forth in the Housing Agreement, (ii) all present and future indebtedness and obligations secured thereby, and (iii) all rights and privileges of City thereunder, provided that the indebtedness secured by the Lender Deed of Trust does not exceed an outstanding principal balance of One Hundred Ninety -Seven Thousand Dollars ($197,000.00) plus accrued interest, late charges, advances made to protect Lender's security, foreclosure costs and attorney's fees. If Developer chooses to refinance the Lender Loan, City agrees to subordinate the HOME Deed of Trust and the HOME Regulatory Agreement to the refinancing Lender's Deed of Trust under the same terms and conditions as set forth in this Agreement, on the condition that the amount of the new loan is no greater than the original principal balance of the Lender Loan. 1.2 Covenants of City. The City declares, agrees and acknowledges that: (a) The City consents to all provisions of the Lender Note and the Lender Deed of Trust, (ii) the Lender Assignment of Leases and Rents and (iii) all provisions of the Lender Regulatory Agreement. (b) To City's actual knowledge, there is no breach, event of default or default existing under the HOME Deed of Trust or any circumstances, event, omission or failure of condition which would constitute such a breach, default or event of default after notice or lapse of time, or both. 2. Reliance by Lender and City. The Lender would not have made the Lender Loan and the City would not have agreed to subordinate the HOME Deed of Trust without this Subordination Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this waiver, relinquishment and subordination. 3. Notice to City. In the event of a breach or default by Developer under the terms of the Lender Deed of Trust, Lender shall provide the City with written notice of such breach or default concurrently with providing such notice to Developer. Upon receipt of such notice of breach or default, the parties hereto agree that City shall have each of the following rights so long as the HOME Deed of Trust encumbers any portion of the Property or interest therein: (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or any lien under the Lender Regulatory Agreement. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not nonjudicially foreclose Lender Deed of Trust or other lien prior to the date that is thirty (30) days after the date that the Lender would otherwise be legally entitled to conduct a foreclosure sale under the Lender Deed of Trust and (h) in the event of a nonmonetary default, the Lender shall not nonjudicially foreclose its Lender Deed of Trust or other lien prior to the date that is one hundred twenty (120) days after the date that the Lender would otherwise be legally entitled to conduct a foreclosure sale under the Lender Deed of Trust. HOME Subordination Agreement.3 (b) To negotiate with the Lender in good faith regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien (without any party having an obligation to continue or enter into any final agreement). (c) To negotiate with the Developer in good faith to purchase the Property from Developer, subject to the Lender Deed of Trust without the consent of the holder of the Lender Deed of Trust or enforcing party under the Lender Regulatory Agreement (without any party having an obligation to continue or enter into any final agreement). The Lender agrees that the exercise of any of the rights set forth in this Section by City shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan. 3.1 Foreclosure of HOME Deed of Trust. The Lender hereby agrees that in the event that City forecloses the HOME Deed of Trust, said foreclosure shall not, in and of itself, give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan. 3.2 Disbursements. Lender, in making disbursements of the proceeds of the Lender Loan, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing the Lender Loan shall not defeat the subordination herein made in whole or in part. 4. Miscellaneous 4.1 Entire Agreement. This Subordination Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and Lender Regulatory Agreement on the one hand, and the HOME Deed of Trust and the Regulatory Agreement on the other hand, any prior agreement as to such subordination including, but not limited to, those provisions, if any contained in the HOME Deed of Trust and the Regulatory Agreement, which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assigns. This Subordination Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law. This Subordination Agreement shall be construed according to the internal laws of the State of California. 4.4 Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or HOME Subordination Agreement.3 4 which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice. Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by (i) personal delivery, (ii) by courier service that provides a receipt showing date and time of delivery, or (iii) by registered or certified mail, return receipt requested, postage prepaid. Notices shall be directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be deemed given upon receipt if by personal delivery or courier service, or if by mail the earlier or (x) actual receipt or (y) forth -eight (48) hours after deposit in the United States mail. If to City: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Director of Economic Development If to Developer: JHC — Oakview, LLC c/o Jamboree Housing Corporation 17701 Cowan Avenue, Ste 200 Irvine, CA 92614 Attention: President If to Lender: Clearinghouse Community Development Financial Institution 23861 El Toro Road, Suite 401 Lake Forest, CA 92630 Attention: Kristy 011endorff 4.6 Attorney's Fees. In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Counterparts. This Subordination Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. [Remainder of Page Intentionally Left Blank] HOME Subordination Agreement.3 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "DEVELOPER" "CITY" JHC-OAKVIEW, LLC THE CITY OF HUNTINGTON BEACH, a a California limited liability company municipal corporation of the State of California By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member Mayor By: Laura Arc uleta ATTEST: Its: President City Clerk COUNTERPART APPROVED AS TO FORM: City Attorney "LENDER" CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION By: Its: HOME Subordination Agreetnent.3 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above, NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "DEVELOPER" "CITY" JHC-OAKVIEW, LLC THE CITY OF HUNTINGTON BEACH, a a California limited liability company municipal corporation of the State of California By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member Mayor By: Laura Archuleta Its: President COUNTERPART "LENDER" CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION By: Its: HOME Subordination Agreement.3 6 ATTEST: APPROVED AS TO FORM: ity Attorney IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "DEVELOPER" JHC-OAKVIEW, LLC a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: Laura Archuleta Its: President "LENDER" CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION �.VV —ri►a, r HOME Subordination Al ment.3 6 "CITY" THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ATTEST: Mayor City Clerk APPROVED AS TO FORM: i STATE OF CALIFORNIA ) )SS. COUNTY OF CC t ) On `ju l 15 r W'q before me, lxt`1U\ 1Q. �ar\C h t n , a Notary Public, personall appeared 1 Ei�sYlt 1k1'chcc�C who proved to me on the basis of satisfactory evidence to be the personKwhose name(s} is/are subscribed to the within instrument and acknowledged to me that .44e/she/t4ey executed the same in hiss/her/their authorized capacity(ies), and that by-4is/her/their signature(d) on the instrument the person($), or the entity upon behalf of which the persona acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. SUSAN R. HANCHIN Commission # 1764968 i n f. Notary Public California Signature C Ly��' y�/ �2 i� �` (Seal) Orange County My Comm. Expires Jul 2, 2011 STATE OF CALIFORNIA ) )Ss. COUNTY OF 6V� d_} On f fL(GL��T OS', .2c�� before me, [... ~" , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to bete person0 4 whose name(g)t�sy 'are subscribed to the within instrument and acknowledged to me that Ee,>heAhey executed the same it ii 1erft� authorized capacityo PQ, and that b is terftheir signatureoO on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 7 - (j " HOME Subordination Ageement.3 P. L. ESPARIA Comm181110 * 1857021 •� Notary Public - California Orange County (Seal) M Comm. Expires Aua 4 2013 STATE OF CALIFORNIA } )SS. COUNTY OF Or a.�� } I' - On dwl 1151 before me, Sty tr' P. qar'C,I n a Notary Public, personaul appeared L.&Vk Aychu.( , who proved to me on the basis of satisfactory evidence to be the personWwhose name(4 is/are subscribed to the within instrument and acknowledged to me that .he/she/dwy executed the same in •his/her/their authorized capacity(ies), and that by-llis/her/their signature(a) on the instrument the person($), or the entity upon behalf of which the person(4 acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. SUSAN IMM814IN Commlalan N 17d496d Notary Public • callfornla Signature)G t "X' (Seal) Orange county MyCMM OPM uz, 2011 STATE OF CALIFORNIA } COUNTY OF 2 )ss.) On � J L A/ 1, ZC� before me, Kdgft S. 011mdorR , a Notary Public, personally Appeared Q-7�Q b U NS J - S who proved to me on the basis of satisfactory evidence to be the person(s) whose n me(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. - 4KRISTEN S. OLLEN00RFF TAME a116WFO 032 KCTutr rwei�c-uuro�u � Signature ) Mr CoYrErl. Ott. 2f, 20t0 HOME Subordination AgrcemenQ F i 7 STATE OF CALIFORNIA } }ss. COUNTY OF E^ } On S 2b:) before me, /,*J• L - AFsoon -2 4- , a Notary Public, personally appeared /itU L . AtYAAwho proved to me on the basis of satisfactory evidence to be the personK whose name is are subscribed to the within instrument and acknowledged to me that she executed the same in er their authorized capacity{*), and that by -' he i%gr signature on the instrument the person04 or the entity upon behalf of which the personX acted, executed the instrument. 1 certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. rA P. 1. ESPARIA Com01185104 #r 1857021 Notary Public • Celifomil Onnp� County Signature {Seal) 0M Comm. E Ira AMD 4 201 HOME Subordination Agreement 3 8 ATTACHMENT 1 LEGAL DESCRIPTION OF SITE Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: LOT 43 OF TRACT NO.4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO. 4301, AS ABANDONED BY THAT CERTAIN RESOLUTION NO. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN, UNDER AND/OR THAT MAY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH V. MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, DATED OCTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, OFFICIAL RECORDS, RECORDS OF ORANGE COUNTY, CALIFORNIA, WHICH DEED FURTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTITLE THE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIGHTS IN OR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPTH OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, OR THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED TO CITY OF HUNTINGTON BEACH RECORDED IN BOOK 6511, PAGE 679, OFFICIAL RECORDS. APN: 165-232-08 HOME Subordination Agreement.3 9 Instructions for National UCC Financing Statement (Form UM) Please type or laser -print this form. Be sure it is completely legible. Read all Instructions, especially Instruction 1; correct Debtor name is crucial. Follow Instructions completely. Fill inform very carefully; mistakes may have important legal consequences. If you have questions, consult your attorney. Filing office cannot give legal advice. Do not insert anything in the open space in the upper portion of this form; it is reserved for filing office use. When properly completed, send Filing Office Copy, with required fee, to filing office. If you want an acknowledgment, complete item Band, if filing in a filing office that returns an acknowledgment copy furnished byfiler, you may also send Acknowledgment Copy; otherwise detach. Ifyou want to make a search request, complete item 7 (after reading Instruction 7 below)and send Search Report Copy, otherwise detach. Always detach Debtor and Secured Party Copies: _ If you need to use attachments, use 8-1/2 X 11 inch sheets and put at the top of each sheet the name of the first Debtor, formatted exactly as it appears in item 1 of this form; you are encouraged to use Addendum (Form UCC 1Ad). A. To assist filing offices that might wish to communicate with filer, filer may provide information in item A. This item is optional. B. Complete item B if you want an acknowledgment sent to you. If filing in a filing office that returns an acknowledgment copy furnished by filer, present simultaneously with this form a carbon or other copy of this form for use as an acknowledgment copy. Debtor name: Enteronly one Debtor name in item 1, an organization's name (1a)or an individual's name (1b). Enter Debtor's exact full legal name. Don't abbreviate. la. Organization Debtor. "Organization" means an entity having a legal identity separate from its owner. A partnership is an organization; a sole proprietorship is not an organization, even if it does business under a trade name. If Debtor is a partnership, enter exact full legal name of partnership; you need not enter names of partners as additional Debtors. If Debtor is a registered organization (e.g., corporation, limited partnership, limited liability company), it is advisable to examine Debtor's currentfiled charter documents to determine Debtor's correct name, organization type, andjurisdiction of organization. 1b. Individual Debtor. "Individual" means a natural person; this includes a sole proprietorship, whether or not operating undera trade name. Don't use prefixes (Mr., Mrs., Ms.). Use suffix box only fortitles of lineage (Jr., Sr., III) and not for other suffixes or titles (e.g., M.D.). Use married woman's personal name (Mary Smith, not Mrs. John Smith). Enter individual Debtor's family name (surname) in Last Name box, first given name in First Name box, and all additional given names in Middle Name box. For both organization and individual Debtors: Don't use Debtor's trade name, DBA, AKA, FKA, Division name, etc. in place of or combined with Debtor's legal name; you may add such other names as additional Debtors if you wish (but this is neither required nor recommended). 1c. An address is always required for the Debtor named in 1 a or 1 b. 1d. Debtor's taxpayer identification number (tax ID #) — social security number or employer identification number —maybe required in some states. 1e,f,g. "Additional information re organization Debtor" is always required. Type of organization andjurisdiction of organization as well as Debtor's exact legal namecan bedetennined from Debtor's currentfiled charter document. Organizational ID #, if any, is assigned by the agency where the charter document was filed; this is different from tax ID #; this should be entered preceded by the 2-character U.S. Postal identification of state of organization if one of the United States (e.g., CA12345, for a California corporation whose organizational ID # is 12345); if agency does not assign organizational ID #, check box in item 1 g indicating "none." Note: If Debtor is a trust or a trustee acting with respect to property held intrust, enter Debtor's name in item 1 and attach Addendum (Form UCC1Ad) and check appropriate box in item 17. If Debtor is a decedent's estate, enter name of deceased individual in item 1 b and attach Addendum (Form UCC 1 Ad) and check appropriate box in item 17. If Debtor is a transmitting utility or this Financing Statement is filed in connection with a Manufactured -Home Transaction or a Public -Finance Transaction as defined in applicable Commercial Code, attach Addendum (Form UCC 1Ad) and checkappropriate box in item 18. If an additional Debtor is included, complete item 2, determined and formatted per Instruction 1. To include further additional Debtors, or one or more additional Secured Parties, attach either Addendum (Form UCC 1 Ad) or other additional page(s), using correct name format. Follow Instruction 1 for determining and formatting additional names. Enter information for Secured Party or Total Assignee, determined and formatted per Instruction 1. If there is more than one Secured Party, see Instruction 2. If there has been a total assignment of the Secured Party's interest prior to filing this form, you may either (1) enter Assignor S/P's name and address in item 3 and file an Amendment (Form UCC3) [see item 5 of that form]; or (2) enter Total Assignee's name and address in item 3and, if you wish, alsoattaching Addendum (Form UCC1Ad)giving Assignor S/P's name and address in item 12. 4. Use item 4 to indicate the collateral covered by this Financing Statement. If space in item 4 is insufficient, put the entire collateral description or continuation of the collateral description on either Addendum (Form UCC1Ad) or other attached additional page(s). If filer desires (at filer's option) to use titles of lessee and lessor, or consignee and consignor, or seller and buyer (in the case of accounts or chattel paper), or bailee and bailor instead of Debtor and Secured Party, check the appropriate box in item 5. If this is an agricultural lien (as defined in applicable Commercial Code) filing or is otherwise not UCC security interest filing (e.g., a tax lien, judgment lien, etc.), check the appropriate box in item 5, complete items 1-7 as applicable and attach any other items required under other law. If this Financing Statement is filed as a fixture filing or if the collateral consists of timber to be cut or as -extracted collateral, comp] ete items 1- 5, check the box in item 6, and complete the required information (items 13,14 and/or 15) on Addendum (Form UCC 1Ad). This item is optional. Check appropriate box in item 7 to request Search Report(s) on all or some ofthe Debtors named in this Financing Statement. The Reportwill list all Financing Statements on file against the designated Debtor on the date of the Report, including this Financing Statement. There is an additional fee for each Report. If you have checked a box in item 7, file Search Report Copy together with Filing Officer Copy (and Acknowledgment Copy). Note: Not all states do searches and not all states will honor a search request made via this form; some states require a separate request form. This item is optional and is for filer's use only. For filer's convenience of reference, filer may enter in item 8 any identifying information (e.g., Secured Party's loan number, law firm file number, Debtor's name or other identification, state in which form is being filed, etc.) that filer may find useful. Instructions for National UCC Financing Statement Addendum (Form UCC1Ad) 9. Insert name of first Debtor shown on Financing Statement to which this Addendum is related, exactly as shown in item 1 of Financing Statement. 10. Miscellaneous: Under certain circumstances, additional information not provided on Financing Statement maybe required. Also, some states have non -uniform requirements. Use this space to provide such additional information or to comply with such requirements; otherwise, leave blank. 11. If this Addendum adds an additional Debtor, complete item 11 in accordance with Instruction 1 on Financing Statement. To add more than one additional Debtor, either use an additional Addendum form for each additional Debtor or replicate for each additional Debtorthe formatting of Financing Statement -item 1 on an 8-1/2 X 11 inch sheet (showing at the top of the sheet the name ofthe first Debtor shown on the Financing Statement) and in either case give complete information for each additional Debtor in accordance with Instruction 1 on Financing Statement. All additional Debtor information, especially the name, must be presented in proper format exactly identical to the format of item 1 of Financing Statement. 12. If this Addendum adds an additional Secured Party, complete item 12 in accordance with Instruction 3 on Financing Statement. In the case of a total assignment of the Secured Party's interest before the filing of this Financing Statement, if filer has given the name and address of the Total Assignee in item 3 of the Financing Statement, filer may give the Assignor S/P's name and address in item 12. 13-15. If collateral is Umberto be cut or as -extracted collateral, or if this Financing Statement is filed as a fixture filing, check appropriate box in item 13; provide description of real estate in item 14; and, if Debtor is not record owner of the described real estate, also provide, in item 15, the name and address of a record owner. Also provide collateral description in item 4 of Financing Statement. Also check box 6 on Financing Statement. Description of real estate must be sufficient under the applicable law of the jurisdiction where the real estate is located. 16. Use this space to provide continued description of collateral, if you cannot complete description in item 4 of Financing Statement. 17. If Debtor is a trust or a trustee acting with respect to property held in trust or is a decedent's estate, check the appropriate box. 18. If Debtor is a transmitting utility or if the Financing Statement relates to a Manufactured -Home Transaction ora Public -Finance Transaction as defined in the applicable Commercial Code, check the appropriate box. UCC FINANCING STATEMENT NAME & PHONE OF CONTACT AT FILER foptionan SEND ACKNOWLEDGMENT TO: - (Name and Address) F City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Administrator THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1 a or lb) - do not abbreviate or combine names 1a. ORGANZZATIONAS NAME JHC — OAKVIEW, LLC, a California limited liability company OR 1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX tc. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 17701 Cowan Avenue, #200 Irvine CA I 92614 US 1d. TAX ID #: SSN OR EIN ADD'L INFO RE Ile. TYPE OF ORGANIZATION 1f. JURISDICTION OF ORGANIZATION 1g. ORGANIZATIONAL ID #, if any ORGANIZATON LLC California DEBTOR NONE 2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b) - do not abbreviate or combine names 2a. ORGANIZATION'S NAME OR 2b. INDIVIDUAL'S LAST NAME FIRSTNAME MIDDLE NAME SUFFIX 2c. MAILING ADDRESS CITY STATE IPOSTALCODE COUNTRY 2d. TAX ID #: SSN OR EIN JADULINFORE 2e. TVPE OF ORGANIZATION 2f. JURISDICTION OF ORGANIZATION 2q. ORGANIZATIONAL ID #, if any ORGANIZATN DEBTOR NONE 3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/PI - insert only one secured oartv name 13a or 3b) 3a.ORGANIZATION'S NAME City of Huntington Beach, California, a municipal corporation OR 3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 2000 Main Street Huntington Beach CA 92648 US 4. 1 his FINANGING S I A 1 EMEN I covers the following collateral: Debtor's interest in all property located on or used or acquired in connection with the rehabilitation, operation and maintenance of the real estate described in the attached Exhibit "A", including, without limitation, the collateral described on Schedule "A" attached hereto and made part hereof. 5. ALTERNATIVE DESIGNATION [if applicable] ILESSEE/LESSOR uCONSIGNEE/CONSIGNOR I BAILEE/BAILOR L_ ISELLER/BUYER I [AG. LIEN NON-UCC FILING 8, OPTIONAL FILER REFERENCE DATA FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT (FORM UCC 1) (REV. 07/29/98) UCC FINANCING STATEMENT ADDENDUM 9. NAME OF FIRST DEBTOR (1a or 1b) ON RELATED FINANCING STATEMENT 9a. ORGANIZATION'S NAME OR INDIVIDUAL'S LAST NAME IFIRST NAME 10. MISCELLANEOUS: THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 11. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME- insert only Qng name (11 a or 11b) - do not abbreviate or combine names 11a. ORGANIZATION'S NAME OR 11b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 11c. MAILING ADDRESS CITY STATE 1POSTALCODE COUNTRY 11d. TAX ID 8: SSN OR FIN 1 1le. TYPE OF ORGANIZATION 11f. JURISDICTION OF ORGANIZATION 11a. ORGANIZATIONAL ID #. if anv JADD'ILINFORE ORGANIZATION DEBTOR I I I NONE 12. ADDITIONAL SECURED PARTY'S g, Lj ASSIGNORS/P'S NAME -insert onlyonename(12a or 12b) 12a. ORGANIZATION'S NAME OR 12b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 12c. MAILING ADDRESS CITY STATE IPOSTALCODE COUNTRY 13. This FINANCING STATEMENT covers 1jtimber to be cut or 0as-extracted 16. Additional collateral description: collateral, or is filed as'a� fixture filing. 14. Description of real estate. 15. Name and address of a RECORD OWNER of above -described real estate (if Debtor does not have a record interest): 17. Check QOIy if applicable and check Qft one box. Debtor is a rust or Trustee acting with respect to property held in trust or Decedent's Estate 18. Check mLy. if applicable and check Qnly one box. eDebtor is a TRANSMITTING UTILITY Filed in connection with a Manufactured -Home Transaction — effective 30 years Filed in connection with a Public -Finance Transaction — effective 30 years FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT ADDENDUM (FORM UCC1Ad) (REV. 07/29/98) 1� RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Approve First Amendment to Affordable Housing Agmt with Jamboree Housing Corp -17442 Koledo Lane COUNCIL MEETING DATE: August 3, 2009 RCA ATTACHMENTS : : ` STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Ap licable Contract/Agreement (w/exhibits if applicable) Attached Signed in full by the City Attorney) Not Applicable ❑ Subleases, Third Party Agreements, etc. Attached ❑ Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached ❑ Not Applicable Bonds (If applicable) Attached ❑ Not Applicable Staff Report (If applicable) Attached ❑ Not Applicable Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable EXPLANATION FOR MISSING ATTAC NTS - Signed documents coming Tuesday afternoon REVIEWED - RETURNED FOR A DED Administrative Staff Deputy City Administrator Initial City Administrator Initial City Clerk ( ) EXPLANATION O. RETURN OF ITEM: (Below Space For City Clerk's Use Only) AIM O �" w RCA Author: o CITY OF HUNTINGTON BEACH Interdepartmental Memo TO: Honorable Mayor / Chairman and Members of the City Council / Agency VIA: Fred A. Wilson, City Administrator FROM: Stanley Smalewitz, Director of Economic Development �64 DATE: August 3, 2009 SUBJECT: Late Communication — Consent Calendar Item 10 ED-09-36 — Approve First Amendment to Affordable Housing Agreement with Jamboree Housing Corporation for 17442 Koledo Lane Attached is a revised, executed HOME Deed of Trust, Exhibit "C" to the First Amendment to Affordable Housing Agreement. Please remove the existing Exhibit "C" HOME Deed of Trust from the First Amendment to Affordable Housing Agreement to be considered at the August 3, 2009 City Council / Agency meeting as Consent Item #10, and replace it with the attached revised Exhibit "C". The revisions made (all of which occurred in the Rider to Subordinated Deed of Trust with Assignment of Rents) include the following: Correction to the Beneficiary signature block; Correction to the date and title of the document, as referenced (pages 9 and 10, Section 6); and Insertion of appropriate "Pro-rata Percentages" (page 9, Section 6) If you have any questions, please call me at extension 5909. ED 09-36 Late Communication fV 0 d 'y Y �V � � , V I C� V f V � � OO • ' V -1- 8/3/2009 11:02:00 AM Order No. Escrow No. Loan No. WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Secretary SPACE ABOVE T � LINE FOR RECORDER'S USE] EXEMPT FROM RECORD ' G FEE PER GOV. CODE § 6103] [HOME LOAN] SUBORDINATED DEED OF TR ST WITH ASSIGNMENT OF RENTS WITH RIDERS TTACHED HERETO NOTICE: THIS SUBORDINATED DEED OF TRUST /1TH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SABORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IYTHE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SpJME OTHER OR LATER SECURITY INSTRUMENT. / This SUBORDINATED DEED OF TR T WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO ("Deed of Tr st"), made July , 2009, between JHC — OAKVIEW, LLC, a California limited liabi 'ty company, herein called TRUSTOR, whose address is 17701 Cowan Avenue, Suite 20 , Irvine, California 92614; and THE CITY OF HUNTINGTON BEA ("City"), a municipal corporation of the State of California, herein called TRUSTEE, nd THE CITY OF HUNTINGTON EACH ("City"), a municipal corporation of the State of California, herein called BENE CIARY, WITNESSETH: That Trust r grants to Trustee in trust, with power of sale, that property in the City of Huntington Beach, ounty of Orange, State of California, described as: SEE EXHIBIT "A" ATTACHED HERETO together with the re s, issues and profits thereof, subject, however, to the right, power and authority hereinaftel given to and conferred upon Beneficiary to collect and apply such rents, issues and profits or the purpose of securing (1) payment of the sum of FIVE HUNDRED ELEVEN THOU AND TWO HUNDRED NINETY-SIX and 9/100s DOLLARS ($511,296.09) with interest thereon, according to the terms of that certain promissory note of even date 1 . Agree: Jamboree-b7442 Koledo HOME Deed of Trust �I vACTION herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof, (2) the performance of Trustor's obligations under that certain "Affordable Housing Agreement" by and between Trustor ("Developer" therein) and the Redevelopment Agency of the City of Huntington Beach ("Agency") dated March 2, 2009, as amended by that certain/First Amendment To Affordable Housing Agreement dated on or about the date he eof (the "Agreement"); (3) the performance of Trustor's obligations under that certa� "Amended and Restated Regulatory Agreement and Declaration of Covenants and Restri 1?ions [HOME Funds]", by and among Trustor ("Owner" therein), Agency, and Beneficiary ("Ci ?' therein) dated on or about the date hereof, (4) the performance of each agreement of Trust f incorporated by reference or contained herein; and (5) payment of additional sums an interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, whe evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth�in subdivision A, and it is mutually agreed that each and all of the terms and provisions set fofth in subdivision B of the fictitious deed of trust recorded in Orange County September 17,/1964, and in all other counties September 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is locatecj/noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK P�A'GE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 566 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 Los Angeles T-3 78 874 Sacramento 5039 124 Sonoma 2067 427 Calaveras 185 338 Madera 1 136 San Benito 300 405 Stanislaus 1970 56 Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocin 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Mod 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 M o 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 onterey 357 239 Santa Clara 6625 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and biV the parties hereto, with respect to the property above described. Said agreements, terms d provisions contained in said subdivisions A and B (identical in all counties, and printed on pag s 4, 5 and 6 hereof) are by the within reference thereto, incorporated herein and made a part of thi Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may harge for a statement regarding the obligation secured hereby, provided the charge therefor does no exceed the maximum allowed by law. 2 ` ACTION Agree: Jamboree- 17442 Koledo HOME Deed of Trust The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BE N G SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LAT. R SECURITY INSTRUMENT. Trustor JHC ./OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation a California nonprofit corporation Its: Manag' g Member By: ( 11 0Q., O-L Laura Archuleta Its: President STATE OF CALIFORNIA ) )ss. COUNTY OF OraYl ) On 31\A before me, �--YYI'Il L.1 "-2,A ICj? , a Notary Public, personal appeare , 1-a uya A- r hake , who proved to me on the basis of satisfactory evid ce to be the person(a) whose name;(9) ism subscribed to the within instrument and acknow edged to me that he/she/awy executed the same in his/her/their authorized capacity( and that by liiis/her/tkeif signature(.a) on the instrument the person(SI, or the entity upon behalf which the person') acted, executed the instrument. I certify under PIVNALTY OF PERJURY under the laws of the State of California that the foregoing paragr h is true and correct. WITNESS my/hand and official seal. Signature 3 Agree: Jamboree-17442 Koledo HOME Deed of Trust EMILY� L� AZALOE Commission #E 1838993 Notary Public - California (Seal)i I@ My Orange County Comm. Ex ires Feb 28, 2013 DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: / 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release/shall not cure or waive any default or notice of default hereunder to invalidate any act done pursuant to such notice. 3) To appear in and defend any/action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's�fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessmon ents appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on sai roperty or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but/without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same is such manner and,to such extent as eiph"er may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding rurporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either, appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expens s, employ counsel and pay his reasonable fees. 5) TKO pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and topay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. NO Ao" 4 .. Agree: Jamboree-17442 Koledo HOME Deed of Trust B. It is mutually agreed: 1) That any award in connection with any condemnation for publ'c use of or injury to said property or any part thereof is hereby assigned and shall be paid to B en e/ficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition or proceeds of fire or other insurance. 2) That by accepting payment of any sum secured herebyits due date, Beneficiary does not waive his right either to require prompt payment when dueof all other sums so secured or to declare default for failure so to pay. �,i 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent nsent to the making of any map or plat thereof, join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid and that all other obligations secured hereljy, including but not limited to Trustor's obligations under the Regulatory Agreement and Declaration of Covenants and Restrictions [HOME Funds], have been performed as agreed, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matter/or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and pro ts as they become due and payable. Upon any such default, Beneficiary may at any time Without notice, either in person, by agent, or be a receiver to the appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the, same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and 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 also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. notice of Agree: Jamboree-17442 Koledo ie lapse of such time as may then be required by law following the recordation of said It, and notice of sale"having been given as then required by law, Trustee, without 5 NO ACTION'. HOME Deed of Trust demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcemen at such time and place of sale, and from time to time thereafter may postpone such sale by public adnouncement 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 recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of. all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof, all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute//a successor or successors to any Trustee named herein or acting hereunder, which instrume .'executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof ofyroper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed 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 pledges, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or net (ter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as prov�6ed 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 sharll be a party unless brought by Trustee. 6 b ACTI ")NI,. Agree: Jamboree-17442 Koledo HOME Deed of Trust TAKEN DO NOT RECORD TO TRUSTEE: The undersigned is the legal owner and holder of the note or notes of all indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all,o her indebtedness secured by said Deed of Trust, have been fully paid and satisfied and all other obligations secured by the foregoing Deed of Trust, including but not limited to Trustor's obligations under the Regulatory Agreement and Declaration of Covenants and Restrictions [HOME Funds], have been performed as agreed; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, and all other evidences of indebtedness secured by said Deed of Trust;delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty,4o the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note.and Reconveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. NO ACTIG;t% I T '�,E-N Agree: Jamboree-17442 Koledo HOME Deed of Trust DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTArCHED REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH public body, corporate and politic TRUSTEE AP"' C T L K ti° y AKEN Agree: Jamboree-17442 Koledo HOME Deed of Trust RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS RIDER TO SUBORDINATED DEED OF TRUST WITH RIDER ATTACHED ("Rider"), is made as of April , 2009, by JHC — OAKVIEW, LLC,/a California limited liability company ("Trustor"), and CITY OF HUNTINGTON BEACH ("City"'), a municipal corporation of the State of California ("Beneficiary"), as follows: 1. Part of Deed of Trust. This Rider is made a pareof that certain Subordinated Deed of Trust With Assignment of Rents ("Deed of Trust"), of even date hereof, to which this Rider is attached. 2. Conflict. In the event of any conflict between the terms of this Rider and the terms of the Deed of Trust, the. terms of this Rider shall control. 3. Priority; Subordination. Trustor anthe Redevelopment Agency of the City of Huntington Beach, a public body, corporate andAolitic ("Agency"), entered into that certain Affordable Housing Agreement, dated March f2, 2009, as amended by that certain First Amendment To Affordable Housing Agreement dated onior about the date hereof (the "Agreement"), pursuant to which Agency agreed to subordinate this Deed of Trust to the liens of the deeds of trust identified in the Agreement as the Conventional Lender 's deed of trust, and to such other and further documents as such lenders may be required including but not limited to regulatory agreements, not to exceed an indebtedness in an amount to be determined by the Beneficiary. The lien of this Deed of Trust therefore shall be junior and subordinate to the lien of the foregoing listed deed of trust and such other and further documents as such lenders may require. Beneficiary agrees to execute such subordination agreements, in thee form attached as Exhibit "I" to the Agreement, as are necessary to effect such subordination of the lien of this Deed of Trust. 4. Condemnation. Section B.1 of the Fictitious Deed of Trust incorporated into the Deed of Trust shall be modified to provide that Beneficiary shall not be entitled to any awards or damages payable directly or indirectly by reason of a condemnation or proposed condemnation affecting all or any part/of, or any interest in, the Property, brought by or pursuant to the direction of Beneficiary. 5. Default. The term "default" as used in the Deed of Trust shall mean a "Material Default" as defined in the Agreement and/or and "Event of Default" as defined in the Amended and Restated Regulatory Agreement and Declaration of Covenants and Restrictions [HOME Funds]. 6. `Equal Priority. Without regard to the recording order of the Agency Deed of Trust and the HOME Deed of Trust, the Agency Loan Documents shall be of equal priority to the HOME Loan Documents, and the Agency and the City agree to share foreclosure proceeds as follows. If there is a foreclosure, or any other action, judicial or nonjudicial, under the Agency Deed of Trust and/or the City Deed of Trust (including without limitation the giving of a deed in lieu of foreclosure), the Agency and the City shall be entitled to share based on the Pro Rata Percentages in any proceeds which shall ensue from such action, after payment of all reasonable expenses of the Agency/and/or the City incurred in connection with the action. The Agency Deed of Trust shall be of equal priority to the City Deed of Trust. As among those two deeds of trust, if either deed of trust 9 Agree: Jamboree-17442 Koledo HOME Deed of Trust REV, is otherwise determined to be senior to the other, then notwithstanding the otherwise applicable effects of the California Civil Code and the California Code of Civil Procedure, upon foreclosure of the senior deed of trust and the elimination of the security created by the junior deed of trust, the holder of the foreclosing senior deed of trust shall share the foreclosure sale proceeds with the holder of the junior deed of trust based on the Pro Rata Percentages set forth above,/unless otherwise mutually agreed by the Agency and the City. IN WITNESS WHEREOF, Trustor and Beneficiary have execdted this Rider to Subordinated Deed of Trust With Assignment of Rents as of the date of Trustor' acknowledgement hereinbelow, to be effective for all purposes as of the day and year first set forth above. [end — signature page fo l ioC, N A e: t Agree: Jamboree-17442 Koledo HOME Deed Of Trust TAKtN ' "TRUSTOR" JHC-OAKVIEW, LL a California limite liability company By: Jamboree Housing Corporation, a Califor na nonprofit corporation, Its: Managing Member COUNTERPART By; ATTEST: By:. Agency Secretary REVIEWED AND APPROVED AS TO FORM: By Genera2,4 Cousel tit b� 0 Agency Special Laura Archuleta President "BENEFICIARY" THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic . Chairperson t� T11 Agree: Jamboree-17442 Koledo HOME Deed of Trust n "'ON AKk ATTEST: By: Agency REVIEWED AND AS TO FORM: By General VED KANEPALLMER & BERKMAN Agency Special Counsel Agree: Jamboree-]7442 Koledo "TRUSTOR" JHC-OAKVIEW, LLC a California 11 liability company By: Jambor- ee Housing Corporation, a California nonprofit corporation, Its: Managing Member By: 0 LauraAeta Its: President "BENEFICIARY" THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic IN 11 HOME Deed of Trust Chairperson v STATE OF CALIFORNIA ) )ss. COUNTY OF 0! ant ) On '5uT, .2001 before me, S(d,san le• h4 i'eN , a Notary Public, personally appeared l- A.1 trii ATchtt (ark - w`ho proved to me on the basis of satisfactory evidence to be the person(s) whose name(4 is/ate subscribed to the within instrument and acknowledged to me that he/she/thff executed the same in his/her/their authorized capacity(4es), and that by lai-R/her/tleif signature(s) on/the instrument the personkg), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature STATE OF CALIFORNIA COUNTY OF On Public, personally appeared basis of satisfactory evidence instrument and acknowledge authorized capacity(ies), and 1 the entity upon behalf of whit I certify under PENAL foregoing paragraph is t1 WITNESS my hand Signature Agree: Jamboree-17442 Koledo 'of the State of California that the SUSAN R. HANCHIN Commission # 1754968 Notary Public - California r� Orange County (Seal) MyComm. Expires Jul 2, 2011 %J before me, , a Notary who proved to me on the , be the person(s) whose name(s) is/are subscribed to the within �j to me that he/she/they executed the same in his/her/their at by his/her/their signature(s) on the instrument the person(s), or the person(s) acted, executed the instrument. OF PERJURY under the laws of the State of California that the and correct. official seal. (Seal) NO hril-% � s 12 T� HOME Deed of Trust ��F, T K ! EXHIBIT "A" TO DEED OF TRUST LEGAL DESCRIPTION OF REAL PROPERTY Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: LOT 43 OF TRACT NO. 4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO. 4301, AS ABANDONED BY THAT CERTAIN RESOLUTION&O. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING/BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN, UNDER AND/OR THAT MANY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, D/TS CTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, AL RECORDS, RECORDS OF ORANGE COUNTY, CALIFORNIA, WHICH DRTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIOR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPT OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGRO WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, O 1THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SEIFORTH IN DEED TO CITY OF HUNTINGTON BEACH RECORDED 1N BOOK 6511,/PAGE 679, OFFICIAL RECORDS. APN: 165-232-08 0 A C T1 0 13 TA ` Agree: Jamboree-17442 Koledo HOME Deed of Trust K Council/Agency Meeting Held: ,� o Deferred/Continued to: XApprov d ❑ C ndi Tonal A pp roved T 0 Denned �t �' City' lerk's'Signatur Council Meeting Date: 3/2/2009 Department ID Number: ED 09-11 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEV OPMENT AGENCY MEMBERS SUBMITTED BY: FRED A. WILSON, EXECUTIVE DIRE R PREPARED BY: STANLEY SMALEWITZ, DEPUTY EX CUTIVE DIRECTORY SUBJECT: APPROVE AFFORDABLE HOUSING AGREEMENT WITH JAMBOREE HOUSING CORPORATION FOR 17442 KOLEDO LANE Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: An Affordable Housing Agreement between the Redevelopment Agency and Jamboree Housing Corporation (Jamboree) is submitted for approval. This agreement provides for a loan in the amount of $1,391,642 of Agency Housing Set Aside funds for the acquisition and rehabilitation of a five -unit apartment property at 17442 Koledo Lane in the Oakview neighborhood (A breakdown of the costs and fees covered by the proposed Agency loan is included in the Analysis section of this report). Funding Source: $1,391,642 from Agency Housing Set Aside funds account 30680301 ($50,000 of which will only be used for relocation costs, if needed) as budgeted in FY 2008/09. Recommended Action: Motion to: 1. Approve the Affordable Housing Agreement with JHC-Oakview, LLC for $1,391,642 using Agency Housing Set Aside funds for the acquisition and rehabilitation of 17442 Koledo Lane. 2. Authorize execution and recordation of the Affordable Housing Agreement, all attachments, and other necessary related documents by the Agency Chairperson, Executive Director, and Secretary when advised by the Agency Legal Counsel. 3. Authorize the wire transfer of $1,391,642 of Agency Housing Set Aside funds to affect the closing of the acquisition escrow. REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 3/2/2009 DEPARTMENT ID NUMBER: ED 09-11 Analysis: Staff receives proposals from experienced, reputable, nonprofit housing developers for the acquisition and rehabilitation of existing apartment properties in the Oakview neighborhood on an ongoing basis. The affordable housing proposals received by Jamboree have consistently met the needs of the Oakview area, reflecting a commitment to provide high -quality on -site property management, tenant services, and property maintenance to Oakview residents. Over the last twenty years,Jamboree has partnered with 29 cities throughout California to create and manage affordable housing for lower -income families. Jamboree currently owns 42 apartment complexes, providing high quality housing to more than 4,700 families. Since December of 2006, Jamboree has acquired three multifamily apartment buildings (17372 and 17362 Koledo Lane and 17362 Jacquelyn Lane) with City and Agency assistance. Jamboree is now ready to proceed with the fourth acquisition, a five -unit apartment building located at 17442 Koledo Lane (See Attachment 1 "Site map"). Being located close to other Jamboree properties, residents will benefit from the same onsite management and tenant services currently offered by Jamboree. The decline in the housing market over the last few years has allowed Jamboree to purchase the subject property for $1,000,000 (or $200,000 per unit). This is 20% less than the price paid in 2006 by Jamboree for its first five -unit apartment building in the Oakview area. The terms for the proposed Jamboree Affordable Housing Agreement for the 17442 Koledo Lane property (See Attachment 2 "Affordable Housing Agreement") (Agreement) are nearly identical to the terms negotiated for the purchase of Jamboree's other Huntington Beach properties. These terms include a zero interest loan from the Agency using Housing Set Aside funds in the amount of $1,391,642. The Agency loan includes payment of the following fees and charges: Purchase Price $ 1,000,000.00 Relocation Costs $ 50,000.00 Rehabilitation Costs (remainder paid with conventional loan funds) $ 90,088.00 Developer Fee $ 100,000.00 Other Soft Costs $ 146,555.00 Financing Costs $ 4,999.00 Total Agency Loan Costs $ 1,391,642.00 In addition to the Agency loan, Jamboree will obtain a conventional mortgage in the approximate amount of $196,912 to assist with remaining rehabilitation costs. In September of 2008 Jamboree hired EMG Corporation to inspect the property and prepare a Physical Needs Assessment. The report revealed significant deferred maintenance. Staff, Jamboree, and the City's economic consultant, Keyser Marston Associates, have reviewed the scope of work and rehabilitation budget to ensure that the property's critical needs, as reported, have been addressed. The Agreement is based upon deferred maintenance repair costs of approximately $57,400 per unit. It was recently confirmed that these costs are in line with the actual charges currently being encountered on other affordable housing projects in the Oakview area. It was also found that, in order to provide and maintain quality affordable -2- 2/18/2009 8:22 AM REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 3/2/2009 DEPARTMENT ID NUMBER: ED 09-11 housing for a sufficient amount of time, all of the repairs identified in the scope of work need to be completed. In return for the Agency's financial assistance, for a period of not less than 60 years, all five units in the property will be subject to tenant household income and rent affordability restrictions as provided in the following schedule: Unit Size Tenant Income Level Number of Units Current Restricted Rent Current Market Rent Per Unit Savings 2 bedroom 50% 5 $946 $1200 $254 As with their other projects, the proposed Agreement requires Jamboree to make annual loan payments to the Agency in the amount of 50% of the project's net operating income. In the event that Jamboree fully prepays these loans prior to the 60-year term, all affordable housing requirements will remain in place for the duration of the 60-year term. Other significant project deal terms include: 1. The Agency will be providing a portion of the funds needed to bring the property into compliance with City, State and Federal codes. Jamboree will maintain the property accordingly; 2. Jamboree will maintain an adequate capital improvement reserve account; 3. Jamboree will certify tenant income eligibility on an annual basis; 4. Jamboree will submit annual compliance reports to the Agency and will cooperate with Agency inspections and audits; and 5. The Agency will have the first right of refusal to purchase the property should Jamboree choose to sell the property. If the Agency elects not to exercise this option, it will have the right to approve any buyer of the property. This residential acquisition and rehabilitation project is an opportunity for the Agency to improve and preserve five units of existing housing. This project will enhance the quality of life in the Oakview neighborhood through partnerships between the Agency and affordable nonprofit housing developers, such as Jamboree, that are committed to the Agency's goals of improving the quality of housing for very low-income residents, keeping rents affordable, eliminating overcrowding, and building livable neighborhoods. The deal points for this project were reviewed and approved by the Council's Economic Development Committee (EDC) on February 2, 2009. They were additionally reviewed and endorsed by the City`s economic development consultant, Kathe Head of Keyser Marston Associates. The Affordable Housing Agreement was prepared by the City Attorney and Agency Legal Counsel's Office. The acquisition and rehabilitation of additional affordable units in the Oakview area by Jamboree is part of a current City of Huntington Beach "Housing Strategy" (Affordable Housing Component of the AB1290 Implementation Plan for the Huntington Beach Project (Merged) and Southeast Coastal Redevelopment Project). -3- 2/18/2009 8:22 AM REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 3/2/2009 DEPARTMENT ID NUMBER: ED 09-11 Strategic Plan Goal: This project will help meet the city of Huntington Beach Strategic Plan Goal L-3, "Preserve the quality of our neighborhoods..." by enhancing the quality of existing housing and providing affordable housing in the Oakview neighborhood. Environmental Status: Categorically excluded under the National Environmental Protection Act (NEPA). Categorically exempt under the California Environmental Quality Act (CEQA), Section 15061 (b)(3). Attachment(s): -4- 2/18/2009 8:22 AM ATTACHMENT #1 a �C ATTACHMENT #2 AFFORDABLE HOUSING AGREEMENT By and Among REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, and JHC — OAKVIEW, LLC, a California limited liability company (17442 Koledo Lane) TABLE OF CONTENTS Page SECTION 1. DEFINITIONS.................................................................................................. 1 SECTION 2. SUBJECT OF THIS AGREEMENT.............................................................. 5 2.1 Purpose of the Agreement.............................................................................................. 5 2.2. The Redevelopment Plan................................................................................................ 6 2.3 Developer........................................................................................................................6 2.4 Term of Agreement......................................................................................................... 6 2.5 Prohibition Against Transfers; Right of First Refusal .................................................... 6 SECTON 3. FINANCING AND ACQUISITION OF THE SITE ..................................... 8 3.1 Ownership of the Site..................................................................................................... 8 3.2 Agency Financial Assistance.......................................................................................... 8 3.3 Disbursement of Agency Loan....................................................................................... 8 3.4 Form of Agency Financial Assistance; Purpose of Note and Security ........................... 9 3.5 Escrow............................................................................................................................9 3.6 Agency's Conditions to Closing................................................................................... 11 3.7 Developer's Conditions To Closing............................................................................. 12 3.8 Broker's Fees................................................................................................................ 13 3.9 Use of Excess Proceeds of Conventional Loan............................................................ 13 3.10 Subordination Agreement............................................................................................. 13 SECTION 4. ACQUISITION AND REHABILITATION OF THE SITE ....................... 13 4.1 General..........................................................................................................................13 4.2 Rehabilitation of the Units............................................................................................ 14 4.3 Insurance....................................................................................................................... 14 4.4 Indemnification ............................................................................................................. 15 4.5 Hazardous Materials..................................................................................................... 15 4.6 Security Financing; Right of Holders........................................................................... 16 4.7 Refinancing of Senior Loans........................................................................................ 16 4.8 Developer Fee............................................................................................................... 16 4.9 Legal Requirements...................................................................................................... 17 4.10 Release of Construction Covenants................................................................................. 18 SECTION 5. USE OF THE SITE......................................................................................... 19 5.1 No Inconsistent Uses.................................................................................................... 19 5.2 Regulatory Agreement.................................................................................................. 19 5.3 Relocation..................................................................................................................... 19 5.4 Maintenance of the Site................................................................................................ 20 5.5 Nondiscrimination........................................................................................................20 5.6 Form of Nondiscrimination and Nonsegregation Clauses ............................................ 20 5.7 Effect and Duration of Covenants................................................................................ 21 5.8 Creation of Capital Reserve Account........................................................................... 22 5.9 Capital Reserves........................................................................................................... 22 5.10 Payment of Portion of Residual Receipts..................................................................... 22 5.11 Financial Statements..................................................................................................... 23 5.12 Operation of Project...................................................................................................... 23 5.13 Lead -Based Paint.......................................................................................................... 23 5.14 Barriers to the Disabled................................................................................................ 23 SECTION 6. DEFAULTS AND REMEDIES..................................................................... 24 6.1 Developer Defaults....................................................................................................... 24 6.2 Agency Defaults........................................................................................................... 24 6.3 Notice of Default.......................................................................................................... 25 6.4 Agency's Remedies...................................................................................................... 25 6.5 Developer's Remedies.................................................................................................. 25 6.6 Rights and Remedies are Cumulative........................................................................... 25 SECTION 7. GENERAL PROVISIONS........................................................................... 25 7.1 Developer's Warranties................................................................................................ 25 7.2 Governing Law............................................................................................................. 26 7.3 Attorneys' Fees.............................................................................................................26 7.4 Notices, Demands, and Communications Between the Parties .................................... 26 7.5 Acceptance of Service of Process................................................................................. 27 7.6 Conflicts of Interest...................................................................................................... 27 7.7 Titles and Captions....................................................................................................... 27 7.8 Gender...........................................................................................................................27 7.9 Modifications................................................................................................................27 1.10 Merger of Prior Agreements and Understandings........................................................ 27 7.11 No Third Parties Benefited........................................................................................... 27 7.12 Assurances to Act in Good Faith; Approvals by Both Agency and City ..................... 27 7.13 Warranty Against Payment of Consideration for Agreement ....................................... 27 7.14 Nonliability of City Officials and Employees.............................................................. 27 7.15 Interpretation................................................................................................................. 28 7.16. Counterparts..................................................................................................................28 7.17 Severability...................................................................................................................28 7.18. Extension of Times of Performance............................................................................. 28 7.19 Inspection of Books and Records................................................................................. 28 7.20 Waivers......................................................................................................................... 28 SECTION 8. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE ........... 28 Exhibits Exhibit A Legal Description Exhibit B Site Map Exhibit C Scope of Development Exhibit D Project Budget Exhibit E Schedule of Performance Exhibit F Promissory Note Exhibit G Deed of Trust Exhibit H Regulatory Agreement Exhibit I Subordination Agreement Exhibit J Release of Construction Covenants Exhibit K Notice of Affordability Restrictions Exhibit L Disbursement Agreement to AFFORDABLE HOUSING AGREEMENT THIS AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as of IA, 2009 ("Effective Date") by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and JHC — OAKVIEW, LLC, a California limited liability company ("Developer"). RECITALS A. Developer has entered into a Purchase and Sale Agreement to acquire the "Site" (as such term is defined herein) from Thuy Pham and Hong Pham (collectively, "Seller") and intends to implement the "Project" (as such term is defined herein) on the Site in accordance with the terms of this Agreement. B. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (California Health and Safety Code Section 33000 et seq.). C. Pursuant to the California Redevelopment Law, Agency has established a Housing Set Aside Fund and has deposited therein certain tax revenues made available to the Agency exclusively for the purpose of increasing and improving the community's supply of affordable low and moderate income housing, including very low income housing ("Set Aside Funds"). D. Agency desires to meet its affordable housing goals pursuant to the California Community Redevelopment Law by making a loan of Set Aside Funds in the amount of ONE MILLION THREE HUNDRED NINETY-ONE THOUSAND SIX HUNDRED FORTY-TWO AND NO/100S DOLLARS ($1,391,642.00) (the "Agency Loan") to assist Developer in funding the acquisition and rehabilitation of the Site, which will be maintained for not less than 60 years as five affordable rental housing units for very low income persons and families, more specifically, the Project as hereinafter defined. NOW, THEREFORE, in consideration of the promises and covenants contained herein, the above recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: AGREEMENT SECTION 1. DEFINITIONS The following terms, as used in this Agreement, shall have the meanings given unless expressly provided to the contrary: The term "Affordable Rent" shall mean, for Affordable Very Low Income Units, rental rates not to exceed the "very low income" affordable rent as defined by California Health & Agree: Jamboree — 17442 Koledo Safety Code Section 50053(b)(2), or its successor. Affordable Rent shall include a reasonable utility allowance for tenant -paid utilities based on the Orange County Housing Authority's published utility schedules. The term "Affordable Very Low Income Unit" shall mean one of the five (5) rental dwelling units in the Project restricted to occupancy by Very Low Income Households. The term "Affordable Very Low Income Unit" and "Affordable Very Low Income Units" shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. The term "Agency" shall mean the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to, the rights, powers, and responsibilities of Agency. The term "Agency Deed of Trust" shall mean the Deed of Trust attached as Exhibit "G" hereto. The term "Agency Executive Director" shall mean the individual duly appointed to the position of Executive Director of the Agency, or authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or an authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved under California law wholly for determination by the Agency's governing body. The term "Agency Loan" shall mean the Agency's loan to Participant in the amount of ONE MILLION THREE HUNDRED NINETY-ONE THOUSAND SIX HUNDRED FORTY- TWO AND NO/1005 DOLLARS ($1,391,642.00) of Set Aside Funds, as evidenced by the Agency Note and secured by the Agency Deed of Trust. The term "Agency Note" shall mean that certain Promissory Note attached here to as Exhibit "F." The term "Agency Subordination Agreement" shall mean the form of Subordination Agreement attached hereto as Exhibit "I." The term "Agreement" or any reference to this "Agreement" shall mean this Affordable Housing Agreement executed by and between Agency and Developer, including all exhibits attached hereto, which exhibits are incorporated herein by this reference and all other documents incorporated herein by reference. The term "City" shall mean the City of Huntington Beach, a municipal corporation of the State of California, having its offices at 2000 Main Street, Huntington Beach, CA 92648. The term "City Administrator" shall mean the individual duly appointed to the position of City Administrator of the City, or authorized designee. Whenever an administrative action is 2 Agree: Jamboree— 17442 Koledo required by City to implement the terms of this Agreement, the City Administrator, or an authorized designee, shall have authority to act on behalf of City, except with respect to matters reserved under California law or the City's Charter wholly for City Council determination. The term "Conventional Lender" shall mean one or more lenders providing funds for Developer's implementation of the Project. The term "Conventional Loan" shall mean the loan provided to Developer by the Conventional Lender for implementation of the Project. Developer shall endeavor to maximize the amount of the Conventional Loan, but such amount shall not be less than the amount set forth in the Project Budget attached as Exhibit "D" without prior written approval by the Agency. The term "Days" shall mean calendar days and the statement of any time period herein shall be calendar days and not working days, unless otherwise specified. The term "Developer" shall mean JHC — OAKVIEW, LLC, a California limited liability company, whose address is 17701 Cowan Avenue, Suite 200, Irvine, CA 92614. The term "Disbursement Agreement" shall mean the Disbursement Agreement to be recorded upon the Close of Escrow in the form attached hereto as Exhibit "L" (with such changes as are approved by the Agency Executive Director), . The term "Effective Date" shall mean the date the governing body of the Agency approves this Agreement and authorizes its execution; which date shall be inserted into the preamble of this Agreement. The term "Eligible Tenant" shall mean any person entitled to rent an Affordable Very Low Income Unit as set forth in the Regulatory Agreement. The term "Escrow" shall mean that certain escrow with [First American Title Insurance Company], which has been established to convey the Site from the Seller to Developer, and into which Agency shall deposit the Agency Loan finds described in Sections 3.2 in accordance with the terms of this Agreement. The term "First Deed of Trust" shall mean a deed of trust securing the Conventional Loan. The term "Force Majeure" shall mean any war; insurrection; strike; lock -out; labor dispute; riot; flood; earthquake; fire; casualty; Act of God; act of the public enemy; epidemic; quarantine; restriction; freight embargo; unavoidable lack of transportation; governmental restriction; unusually severe weather; inability to secure necessary labor, materials, or tools; delay of any contractor, subcontractor or supplier; economic or market conditions; lack of tenant commitments or tenant changes; inability to secure satisfactory financing; act of the other party including act or failure to act of any public or governmental agency or entity (except that any act or failure to act of City or Agency shall not excuse performance by City or Agency unless Agree: Jamboree— 17442 Koledo otherwise provided herein); or any other cause beyond the control or without the fault of the party claiming an extension of time to perform. The term "Grant Deed" shall mean that certain Grant Deed that conveys the Site from the current owner, the Seller, to Developer. The term "Hazardous Materials" means any hazardous or toxic substances, materials, wastes, pollutants, or contaminants, which are defined, regulated, or listed as "hazardous substances," "hazardous wastes," "hazardous materials," "pollutants," "contaminants," or "toxic substances," under federal or state environmental and health and safety laws and regulations, including without limitation petroleum and petroleum byproducts, flammable explosives, area formaldehyde insulation, radioactive materials, asbestos, and lead. Hazardous Materials do not include substances that are used or consumed in the normal course of developing, operating, or occupying a housing project, to the extent and degree that such substances are stored, used, and disposed of in the manner and in amounts that are consistent with normal practice and legal standards. The term "Lease" means the lease entered into between Developer and an Eligible Tenant of an Affordable Very Low Income Unit in the Project. The term "Median Income" shall mean the area median income of the Orange County metropolitan statistical area (PMSA), with adjustments for household size, as estimated annually by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937 as amended and published by California's Housing and Community Development Department pursuant to Health and Safety Code section 50093. The term "Notice of Affordability Restrictions" shall mean the Notice of Affordability Restrictions on Transfer of Property to be recorded upon the Close of Escrow attached hereto as Exhibit "K." The term "Project" shall mean generally the acquisition, rehabilitation and operation of the existing apartment building on the Site, consisting of five Units, and the subsequent rental of the five (5) Affordable Very Low Income Units to Eligible Tenants, all at Affordable Rent for a period of not less than 60 years, pursuant to the procedures set forth herein and more particularly described in the Scope of Development and Regulatory Agreement. The term "Project Budget" shall mean the sources and uses of funds for acquisition of the Site and the rehabilitation and operation of the Units as set forth in Exhibit "D." The Project Budget and Developer's proposed method of financing shall be subject to change from time -to - time, subject to the prior written approval of Developer and the Agency Executive Director and subject to and conditioned on such further review and approval by the Agency's governing board as is needed to satisfy applicable law, policies and procedures, upon which approval the Project Budget shall be replaced by the approved revised Project Budget. 4 Agree: Jamboree— 17442 Koledo The term "Project Costs" shall mean those costs and expenses incurred or to be incurred in connection with the acquisition, rehabilitation and operation of the Project, as set forth in the Project Budget, which is hereby approved by the Agency. The term "Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions attached hereto as Exhibit "H." The term "Sale Price" shall mean the sale price for the Site set forth in the Purchase and Sale Agreement between Seller and Developer, being the amount of ONE MILLION DOLLARS ($1,000,000.00). The term "Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit "E" setting forth the times upon which performance by the parties under this Agreement is due. The term "Scope of Development" shall mean that certain exhibit attached hereto as Exhibit "C." The term "Seller" shall mean Thuy Pham and Hong Pham, collectively. The term "Site" shall mean that certain real property located in the City of Huntington Beach, County of Orange, State of California, commonly known as 17442 Koledo Lane, Huntington Beach, California, and legally described in Exhibit "A" and depicted on the Site Map attached hereto as Exhibit "B". The term "Subordination Agreement" shall mean the Agency Subordination Agreement. The term "Units" shall mean the five (5) two -bedroom dwelling units comprising the Project. The term "Very Low Income Households" shall have the meaning given in Health and Safety Code section 50105(a), that is, a household whose income does not exceed 50% of Median Income adjusted for family size. SECTION 2. SUBJECT OF THIS AGREEMENT 2.1 Purpose of the Agreement (a) The purpose of this Agreement is to promote affordable housing by providing the Agency Loan in the amount of ONE MILLION THREE HUNDRED NINETY- ONE THOUSAND SIX HUNDRED FORTY-TWO AND NO/100S DOLLARS ($1,391,642.00), as evidenced by the Agency Note secured by the Agency Deed of Trust, to assist Developer in the acquisition, rehabilitation and operation of affordable housing in the City of Huntington Beach. Agree: Jamboree— 17442 Koledo (b) This Agreement is intended to facilitate Developer's acquisition of the Site and existing five -unit apartment building located thereon for rehabilitation and rental to Very Low Income Households for a period of not less than 60 years. The Project pursuant to this Agreement and the fulfillment generally of this Agreement are in the best interests of the City and the welfare of its residents, and are in accordance with the public purposes and provisions of applicable federal, state, and local laws and requirements under which the Project has been undertaken and is being assisted. (c) The Project will be used and operated for not less than sixty (60) years as rental housing, with all five of the Units restricted to occupancy by Very Low Income Households in accordance with the Regulatory Agreement. 2.2. The Redevelopment Plan. This Agreement conforms to the Redevelopment Plan for the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project") which was approved by adoption of Ordinance No. 3343 on December 16, 1996, and which merged together four different, previously approved project areas. The Site is located inside of the Merged Redevelopment Project. Agency intends this Agreement to meet its obligations pursuant to Health and Safety Code Sections 33413, 33334.2 and 33413(b)(2)(A)(ii). 2.3 Developer. The Developer is JHC — OAKVIEW, LLC, a California limited liability company, whose address is 17701 Cowan Avenue, Suite 200, Irvine, CA 92614. 2.4 Term of Agreement. In accordance with the formula set forth in 24 CFR 92.252(e) and as required by California Health and Safety Code Section 33334.3, this Agreement shall remain in effect for not less than sixty (60) years from the date on which a Release of Construction Covenants for the Project is issued by the Agency. 2.5 Prohibition Against Transfers; Right of First Refusal. (a) The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. No voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. (b) Developer agrees that Developer shall not sell the Site during the term of this Agreement, unless and until Developer has given to Agency notice in writing of its intent to sell, specifying the identity of the prospective buyer and the price and terms of the contemplated sale. Within ninety (90) days after Developer gives Agency written notice of Developer's intent to sell, Agency shall have the right to purchase the Site at the same price and on the same terms and conditions set forth in Developer's written notice of intent to sell. To exercise this right, Agency must, within the same ninety (90) day period, deposit in escrow with any escrow company in Orange County, California, all moneys and instruments required by the terms of the Developer's notice of intent to sell to be paid or delivered to Developer on close of escrow and shall also give Developer written notice of the deposit. If Agency does not exercise the right in accordance with the provisions of this Section, Developer may sell the Site to the prospective Agree: Jamboree— 17442 Koledo buyer for the price and on the terms contained in the notice; provided, however, that Developer has made every reasonable effort to sell the Site to another nonprofit housing corporation with Developer's similar experience and reputation in the field of low-income housing (including the management of properties with income and affordability restrictions), and provided further that Agency has approved such prospective buyer in advance in writing. If at any time during the term of this Agreement Developer receives from any third party a bona fide offer to purchase the Site on terms acceptable to Developer, Developer shall give written notice of the offer to Agency. Within ninety (90) days after Developer gives Agency written notice of the third -party offer, Agency shall have the right to purchase the Site at the same price and on the same terms and conditions set forth in the third -party offer. To exercise its right, Agency must, within the same ninety (90) day period, deposit in escrow with any escrow company in Orange County, California, all moneys and instruments required by the terms of the offer to be paid or delivered to Developer on close of escrow and shall also give Developer written notice of the deposit. In the event Agency does not exercise its right to purchase in accordance with the provisions of this Section, Developer may sell the Site to the third party making the offer on the same terms and conditions set forth in that offer; provided, however, that Developer has made every reasonable effort to sell the Site to another nonprofit housing corporation with Developer's similar experience and reputation in the field of low- income housing (including the management of properties with income and affordability restrictions), and provided further that Agency has approved such prospective buyer in advance in writing. If for any reason the Site is not sold to the party making the offer, Developer shall give Agency the same right to purchase the Site on receiving any subsequent offer from any third party that is acceptable to Developer. (c) For the reasons cited above, the Developer represents and agrees for itself and any successor in interest that without the prior written approval of the Agency, there shall be no significant change in the ownership of the Developer or in the relative proportions thereof, or with respect to the identity of the parties in control of the Developer or the degree thereof, by any method or means. (d) The Developer shall promptly notify the Agency of any and all changes whatsoever in the identity of the parties in ownership and/or in control of the Developer or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by the Agency and the Agency may exercise any and all available remedies, if there is any significant change (voluntary or involuntary) in membership, ownership, management or control, of the Developer (other than such changes occasioned by the death or incapacity of any individual). (e) Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Site (referred to hereinafter as a "Transfer"), without prior written approval of the Agency Executive Director, except as expressly permitted by this Agreement. Consent to a Transfer shall not result in acceleration of the Agency Note. Any proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Agency, to fulfill 7 Agree: Jamboree— 17442 Koledo the obligations undertaken in this Agreement by the Developer. Any such proposed transferee, by instrument in writing satisfactory to the Agency and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Developer under this Agreement and agree to be subject to all conditions and restrictions applicable to the Developer in this Agreement. There shall be submitted to the Agency for review all instruments and other legal documents proposed to affect any such Transfer, and if approved by the Agency Executive Director, its approval shall be indicated to the Developer in writing. (f) In the absence of specific written agreement by the Agency, no unauthorized Transfer, or approval thereof by the Agency, shall be deemed to relieve the Developer or any other party from any obligations under this Agreement. (g) Consent to any Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers. (h) The provisions of this Section 2.5 shall be of no force or effect as of the expiration of the Regulatory Agreement. SECTION 3. FINANCING AND ACQUISITION OF THE SITE. 3.1 Ownership of the Site. As of the Effective Date of this Agreement, Developer is in escrow to acquire the Site from the Seller. 3.2 Agency Financial Assistance. The Agency, pursuant to the terms of this Agreement, shall provide to Developer the Agency Loan. Upon satisfaction of all conditions precedent (or waiver by Agency) to Agency's obligation to deposit the Agency Loan into Escrow under this Agreement, Agency shall deposit ONE MILLION THREE HUNDRED NINETY- ONE THOUSAND SIX HUNDRED FORTY-TWO AND NO/100S DOLLARS ($1,391,642.00) of the Agency Loan funds into Escrow. A portion of the Agency Loan in the amount of FIFTY THOUSAND DOLLARS ($50,000) (the "Relocation Funds") will be retained by the Agency for disbursement as needed to pay for relocation costs that are incurred after the Close of Escrow. 3.3 Disbursement of Agency Loan. Upon Close of Escrow, the Escrow Agent shall disburse the Sale Price to the Seller by disbursing the amount of the Sale Price from the Agency Loan. The Escrow Agent shall pay from the Agency Loan the Developer's share of closing costs, the Developer's pro -rated taxes and assessments on the Site, and the cost of the Agency's Lender's Title Policy. The Escrow Agent shall reimburse to Developer from the Agency Loan other Project Costs included in the attached Project Budget that were previously incurred and paid by Developer in advance of the Close of Escrow, provided that such reimbursement of Project Costs has been approved in writing by the Agency. The Escrow Agent shall also disburse to Developer the initial payout on the Developer Fee described in Section 4.8 in the amount of THIRTY THREE THOUSAND THREE HUNDRED THIRTY-FOUR DOLLARS ($33,334) from the Agency Loan. The remaining balance of the Agency Loan ("Agency Loan Balance") shall be refunded to the Agency. The Agency shall subsequently disburse to Developer such portion of the Agency Loan Balance as provided in the Disbursement 8 Agree. Jamboree — 17442 Koledo Agreement between the Agency, the Developer and the Conventional Lender attached hereto as Exhibit "L". The Agency will make all reasonable efforts to approve of and disburse loan proceeds within 30 days of receipt of a draw request from the developer. The Agency's subsequent disbursement of any portion of the Agency Loan Balance to Developer will be conditioned upon (1) the Agency's prior review and approval of an updated Project Budget, (2) Agency review and approval of the final signed loan documents for the Conventional Loan (3) Agency approval of an application for disbursement of funds that sets forth the amount requested and the specific expenses to be paid and provides accompanying documentation reasonably acceptable to the Agency, and (4) will be further conditioned upon Developer remaining in full compliance with the terms and conditions of this Agreement and all documents and instruments referred to herein or executed by Developer in furtherance of this Agreement. The Relocation Funds will be disbursed by the Agency directly to, or for the benefit of, those persons who meet the eligibility requirements of the Uniform Relocation Act and the California Relocation Assistance Act and the guidelines promulgated in connection therewith. 3.4 Form of Agency Financial Assistance; Purpose of Note and Security. In the event Developer is in Material Default of any of its obligations hereunder or under the Regulatory Agreement, the entire principal balance of the Agency Loan plus any default interest due thereon shall immediately become due and payable, and Agency shall have the right, at its sole option, to: (a) demand full payment of the principal balance of the Agency Loan plus all default interest; (b) take over ownership and management of the Site; and/or (c) foreclose on the Site under the Deed of Trust. 3.5 Escrow. This Agreement, once deposited in Escrow, shall constitute joint escrow instructions of Agency and Developer. The Escrow agent is hereby empowered to act under the Agreement and upon indicating its acceptance in writing to Agency and Developer within five (5) days after receipt of this Agreement; provided, however, that any undertaking by the Escrow agent of any of the acts or services set forth in this Agreement shall constitute acceptance of the obligation to perform as Escrow agent under this Agreement. Any amendment to the Escrow instructions contained herein shall be in writing and signed by Agency and Developer. (a) Closing Date. On or before the date established in the Schedule of Performance, the parties shall satisfy the conditions described in Sections 3.5(b) and 3.6 and complete the Close of Escrow. If, for any reason, the Close of Escrow has not occurred by the date provided therefor in the Schedule of Performance, any party may terminate this Agreement, by providing written notice of termination to the other parties. (b) Delivery of Documents and Funds by Developer. On or before twelve noon on the last business day prior to the scheduled Closing Date, Developer shall deposit or cause to be deposited with the Escrow agent the following: (i) the Grant Deed executed in recordable form by the Seller; (ii) the Agency Note, executed by Developer; 9 Agree- Jamboree — 17442 Koledo (iii) The Agency Deed of Trust, including the Rider thereto, executed in recordable form by Developer; (iv) the Regulatory Agreement, executed in recordable form by Developer; (v) the Disbursement Agreement executed by Developer and Conventional Lender; and (vi) all funds, documents, and deposits Developer is required to deposit with Escrow agent in order to close the Escrow conveying the Site to Developer. (c) Delivery of Documents and Funds by Agency. On or before twelve noon on the last business day prior to the scheduled Closing Date, Agency shall deposit or cause to be deposited with the Escrow agent the following: (i) the Agency Deed of Trust, including the Rider thereto, executed in recordable form by Agency; (ii) the Regulatory Agreement, executed in recordable form by Agency; (iii) the Agency Loan funds described in Section 3.2; and (iv) the Agency Subordination Agreement; (v) the Notice of Affordability Restrictions; and (vi) the Disbursement Agreement executed by Agency. (d) Recordation. Escrow agent is directed, on the Closing Date, to record against the Site the following documents in the following order of priority: (i) the Grant Deed; (ii) the Regulatory Agreement; (iii) the Notice of Affordability Restrictions; (iv) any First Deed of Trust and then any other documents required to be recorded by the Conventional Lender; and (v) the Agency Deed of Trust. A Subordination Agreement, if required to effectuate the approved priority of the foregoing deeds of trust and Regulatory Agreement, shall be recorded at the direction of the Agency and Developer in accordance with the terms of this Agreement. (e) Escrow Agent Duties. The Escrow agent shall (i) record the documents as provided in subparagraph (d); and (ii) at Closing, deliver the original Agency Note to Agency and a copy of same to Developer, and upon recordation deliver to Agency and Developer conformed copies of the Grant Deed, Agency Deed of Trust, any First Deed of Trust and any other documents required to be recorded by the Conventional Lender, the Regulatory Agreement and the Notice of Affordability Restrictions. 10 Agree: Jamboree— 17442 Koledo (f) Interest Bearing Accounts. Escrow agent shall hold all funds received in an interest bearing account with the interest accrued paid at Closing to the party depositing such funds. (g) Title Insurance. Escrow agent shall deliver to Agency at Closing an ALTA standard form lender's policy of title insurance in the amount of ONE MILLION THREE HUNDRED NINETY-ONE THOUSAND SIX HUNDRED FORTY-TWO AND NO/100S DOLLARS ($1,391,642.00), issued by First American Title Insurance Company, insuring in favor of Agency the priority of the Agency Deed of Trust and Regulatory Agreement in accordance with the priority established by this Agreement. 3.6. Agency's Conditions to Closing. Agency's obligations to deposit the Agency Loan funds described in Section 3.2 in Escrow for disbursement at Closing shall be conditioned and contingent upon satisfaction or Agency's waiver of each of the following conditions precedent (collectively, the "Agency's Conditions to Closing"): (a) Agency shall have in its account ONE MILLION THREE HUNDRED NINETY-ONE THOUSAND SIX HUNDRED FORTY-TWO AND NO/100S DOLLARS ($1,391,642.00) of readily available Set Aside Funds. (b) Developer shall have completed the inspection of the Site for lead -based paint and asbestos hazards as required by Section 4.5(a) and shall have delivered the inspection report to the Agency; (c) The Conventional Lender shall have deposited into Escrow the amount of the Conventional Loan or Developer shall have delivered to Agency evidence satisfactory to Agency that Developer has obtained a binding loan commitment for the Conventional Loan from a lender satisfactory to Agency; (d) Developer shall have deposited in Escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow; (e) Developer shall have delivered to Agency and Agency shall have approved the Purchase and Sale Agreement between Developer and Seller and any amendments thereto; (f) Developer shall have delivered evidence acceptable to the Agency that Developer has obtained the insurance policies required by Section 4.3 of this Agreement; (g) " Developer shall have delivered to the Agency a current certificate of good standing issued by the California Secretary of State's office and shall have delivered to the Agency a certified resolution of Jamboree Housing Corporation's Board of Directors authorizing Developer's execution and implementation of this Agreement; and Agree: Jamboree— 17442 Koledo (h) The Agency shall have determined that Developer is in full compliance with the terms and conditions of this Agreement and all documents and instruments referred to herein or executed by Developer in furtherance of this Agreement. In the event any of the Agency's Conditions to Closing are not satisfied (or waived by Agency), Agency may cancel the Escrow and terminate this Agreement by delivering ten (10) days prior written notice to Developer and the Escrow agent. Developer may nullify Agency's notice to terminate if, within such ten (10) day period Developer (at no cost to Agency) cures any unsatisfied Agency Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds deposited by Agency shall be returned to it with any interest earned on such funds; (ii) Developer shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. 3.7 Developer's Conditions To Closing. Developer's obligations to close Escrow shall be conditioned and contingent upon satisfaction or Developer's waiver of each of the following conditions precedent (collectively, the "Developer's Conditions to Closing"): (a) The Seller shall have executed the Grant Deed in recordable form and shall have deposited same in Escrow; (b) Agency shall have deposited in Escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow, including but not limited to the Agency Loan funds described in Section 3.2, the Agency Deed of Trust, Regulatory Agreement, Notice of Affordability Restrictions and such Subordination Agreement as may be required to effect the priority required by this Agreement; (c) The Conventional Lender has deposited in escrow all of the funds and instruments required of it to effect Close of Escrow; (d) All conditions to Closing set forth in (i) the Purchase and Sale Agreement and any amendments thereto between Developer and the Seller for conveyance of the Site; and (ii) agreements and financing documents pertaining to Developer's financing of the acquisition of the Site, including as pertaining to financing by the Conventional Lender, have been satisfied (or waived by the appropriate party). In the event any of the Developer's Conditions to Closing are not satisfied (or waived by Developer), and provided Developer has fully performed its obligations hereunder, Developer may cancel the Escrow and terminate this Agreement by delivering ten (10) days prior written notice to Agency and the Escrow agent. Agency may nullify Developer's notice to terminate if, within such ten (10) day period Agency (at no cost to Developer) cures any unsatisfied Developer's Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds deposited by Developer shall be returned to it with any interest earned on such funds; (ii) Agency shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (iii) this 12 Agree: Jamboree — 17442 Koledo Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. 3.8 Broker's Fees. Developer and Agency shall each indemnify, defend, and hold harmless the other from any claims or damages for payment of any real estate commissions or broker's fees or finder's fees arising out of the acts or representations of the other with respect to any of the transactions contemplated by this Agreement. 3.9 Use of Excess Proceeds of Conventional Loan. The proceeds of the Conventional Loan must be used exclusively for the payment of Project Costs pursuant to this Agreement; provided that, if the Conventional Loan is in an amount that, when added to the Agency Loan, exceeds Project Costs, then Developer shall either deposit such excess proceeds into the Capital Reserve Account or shall, if directed by the Agency, apply such excess proceeds to repayment of the Agency Loan. Developer acknowledges and agrees that the Agency Loan is intended to be gap financing and Developer must endeavor to maximize the amount of the Conventional Loan. If the First Deed of Trust is recorded after the Close of Escrow for conveyance of the Site to Developer, then Developer shall provide to Agency copies of the note evidencing the Conventional Loan and conformed copies of the First Deed of Trust and any other documents required to be recorded by the Conventional Lender. 3.10 Subordination Agreement. Pursuant to Section 33334.14 of the Health and Safety Code, Agency is permitted to subordinate the Agency Deed of Trust and the Regulatory Agreement to superior deeds of trust, regulatory agreements and other related documents including but not limited to those required by the Conventional Lender, if certain findings are made and certain written commitments are obtained from such Conventional Lender. Therefore, upon receiving a written request from the Conventional Lender, the Agency may subordinate, in the form of the Subordination Agreement attached as Exhibit I, the Agency Deed of Trust and the Regulatory Agreement to the Conventional Lender's First Deed of Trust and such other related documents as Conventional Lender may require, in the amount the Agency determines was reasonably necessary to implement the Project. Developer may apply to the Agency to increase said indebtedness, setting forth with specificity reasons for such a request, which approval the Agency shall not unreasonably withhold. The priority of such deeds of trust shall be affected through the order of recordation of documents as set forth in Section 3.5(e). Such Subordination Agreement shall provide for: (i) A right of the Agency to cure a default on the Conventional Lender's First Deed(s) of Trust; (ii) A right of the Agency to negotiate with any lenders after notice of default from the lender; (iii) An agreement that if prior to foreclosure of any lenders' loans, the Agency takes title to the Site and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan by reason of the transfer of title to the Agency; and (iv) A right of the Agency to purchase the Site from the Developer at any time after a default on the loan. SECTION 4. ACQUISITION AND REHABILITATION OF THE SITE. 4.1 General. The Project shall consist of the acquisition of the existing apartment building containing a total of five (5) units on the Site and the use of the Site as an 13 Agree: Jamboree— 17442 Koledo affordable rental apartment complex in accord Agreement. It is anticipated that Developer will including but not limited to activities such management of the Units. Such contracts shall obligations under this Agreement. nce with this Agreement and the Regulatory contract for performance of specific activities, is relocation services, site inspections, and iot in any way diminish or waive Developer's 4.2 Rehabilitation of the Units. Developer shall obtain all necessary entitlements and permits and shall commence rehabilitation of the Units within the time set forth in the Schedule of Performance. Developer shall diligently prosecute its work so as to achieve completion of rehabilitation and rent up of the Project within the time set forth in the Schedule of Performance. Rehabilitation of the Units shall be planned and performed in a manner that will bring the Units into compliance with all applicable federal, state and local laws and requirements and in conformance with a Rehabilitation Plan approved by the Agency. 4.3 Insurance. Developer shall procure and maintain, during the term of this Agreement, at its sole cost and expense, until the date that Agency or City waives any such insurance requirement or requirements in writing, the following policies of insurance on a Project specific basis: (a) Workers' Compensation Insurance. Pursuant to California Labor Code Section 1861, Developer acknowledges awareness of Section 3700 et seq. of said code, which requires every employer to be insured against liability for workers' compensation. Developer covenants that it will comply with such laws and provisions prior to commencing any work of construction or rehabilitation on the Site. Developer shall maintain such Workers' Compensation Insurance in an amount not less than the statutory requirements in California for bodily injury and disease and must maintain employer's liability coverage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00). Developer shall require all contractors to provide such Workers' Compensation Insurance for all of the subcontractor's employees. Developer shall furnish Agency and City with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Developer shall similarly require all subcontractors to waive subrogation. (b) General Liability and Auto Insurance. Developer shall carry general commercial liability insurance, including coverage for bodily injury, property damage, products/completed operations and blanket contractual liability in an amount not less than TWO MILLION DOLLARS ($2,000,000.00) per occurrence and FOUR MILLION DOLLARS ($4,000,000.00) annual aggregate, combined single limit for bodily injury and property damage. All such insurance shall be provided by insurance companies admitted in California, or if not admitted in California, then reasonably acceptable to Agency and City. Such insurance shall name the City and Agency and their officers, agents, and employees acting in their official capacity, as additional insureds. Developer shall carry automobile insurance, including liability coverage for bodily injury and property damage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00) per occurrence. Developer shall require its insurer to waive its subrogation rights against Agency and City and shall provide certificates of insurance evidencing same. 14 Agree Jamboree— 17442 Koledo (c) Property Insurance. Developer shall obtain and maintain in force, all - perils (to include fire and vandalism protection) property insurance with extended coverage endorsements thereon, on the Site, in an amount equal to the full replacement costs and/or value thereof; this policy shall contain a replacement cost endorsement naming Agency as the insured and shall not contain a coinsurance penalty provision. The policy shall contain a lender's loss payable endorsement that such proceeds shall be used to repair or rebuild any Units or other improvements situated on the Site so damaged or destroyed; and, if not so used, such proceeds shall be paid to Agency. The proceeds of any such insurance payable to Agency shall be used for rebuilding or repair as necessary to restore the site at the sole discretion of Agency. The policy shall name Agency and City, officers, agents and employees acting in their official capacity as additional insureds. (d) Certificate of Insurance; Additional Insured Endorsements. Prior to the close of escrow, Developer shall furnish to Agency and City certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement. Such certificates and endorsements shall be subject to the reasonable approval of the City Attorney and shall provide the name and policy number of each carrier and policy and shall state that the policy is currently in force and shall promise to provide that such policies will not be cancelled without thirty (30) days prior written notice to Agency and City. 4.4 Indemnification. During the term of this Agreement, Developer agrees to and shall protect, defend, indemnify and hold the Agency and City harmless from and against all liability, loss, damage, cost or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of (i) Developer's failure to perform any obligations as and when required by this Agreement or any document referred to herein, and (ii) the death of any person or any accident, injury loss, or damage whatsoever caused to any person or to the property of any person which shall occur on the Site and which shall be directly or indirectly caused by the acts of, or any errors or omissions of, the Developer or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Developer shall not be responsible for, and the Agency shall protect, defend, hold harmless and indemnify Developer against any liability, loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result of the active concurrent negligence, sole negligence or sole willful misconduct of the Agency or its members, officers, officials, employees, agents, representatives, servants, or contractors. 4.5 Hazardous Materials (a) Lead -Based Paint and Asbestos Containing_ Materials. Developer shall inspect the Site for lead -paint and asbestos hazards in accordance with Title X of the 1992 Housing and Community Development Act. Any lead -paint and asbestos hazards identified must be abated as part of the rehabilitation of the Site. In the event the full abatement cost for such hazards causes the rehabilitation costs in the Project Budget to increase in an amount that exceeds the sum of the available Agency Loan Balance and the Deferred Developer Fee, Developer may request additional Set Aside funds to pay for such additional cost. The Agency Board of Directors, as the case may be, in its sole discretion, shall approve or disapprove any such loan request based upon the recommendation of the Agency Executive Director. 15 Agree: Jamboree— 17442 Koledo (b) Indemnification. Developer, from and after the Close of Escrow, and until a transfer, sale, or assignment of the Site upon which the following covenant shall then be the obligation of the transferee, purchaser, or assignee, shall indemnify, defend, and hold harmless Agency and City and their respective officers, employees, agents and representatives (collectively, the "Indemnified Parties") from and against any and all liabilities (including penalties, fines and monetary sanctions) arising from a violation of state or federal law pertaining to (i) the storage of Hazardous Materials on the Site or (ii) contamination of the Site by a release of Hazardous Materials. Developer, prior to the Closing Date, shall provide to Agency and City a copy of any notices, orders, or reports concerning the presence of any Hazardous Materials on or affecting the Site that is in Developer's possession. 4.6 Security Financing; Right of Holders (a) Permitted. Encumbrances. Developer shall be permitted to enter into mortgages, deeds of trust, conveyances, and leases -back or any other form of conveyance in which the Site is used as security for the purpose of securing loans of funds to be used for the implementation of the Project provided such conveyance (i) is for the purposes permitted herein and (ii) is given to a financial or lending institution or other acceptable person or entity capable of performing or causing to be performed Developer's obligations under this Agreement, including without limitation a pension fund, insurance company, or real estate investment trust. Any and all such loan amounts and security conveyances shall be subject to the prior approval of the Agency's Executive Director, which approval shall not be unreasonably withheld. (b) Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders; Right to Cure. Whenever Agency shall deliver any notice or demand to Developer with respect to any breach by Developer in performance of this Agreement, it shall at the same time deliver a copy of such notice or demand to each approved holder of record of any mortgage, deed of trust, or other security interest which has previously requested such notice in writing. Each such holder shall (insofar as the rights of Agency are concerned) have the right, at its option within ninety (90) days after the receipt of the notice, to commence and thereafter to diligently proceed to cure or remedy such default and add the cost thereof to the security interest debt and the lien on its security interest. Any holder completing the improvements in accordance with this Agreement shall be entitled to a Release of Construction Covenants upon written request made to Agency. 4.7 Refinancing of Senior Loans. Developer shall have the right to refinance the senior loan from the Conventional Lender, provided that Agency previously approves such refinancing in writing, which approval shall not be unreasonably withheld. Developer shall not obtain, and Agency shall have no obligation to approve, a new loan in an amount greater than $197,000. Any net proceeds obtained as a result of a refinancing must be used exclusively to implement physical improvements to the Site. 4.8 Developer Fee. Developer shall be entitled to receive a fee of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) to be earned and paid as follows: (1) $33,334.00 upon close of Escrow for acquisition of the Site, (2) $33,333.00 upon 100% qualification and 16 Agree: Jamboree— 17442 Koledo acceptance of Eligible Tenants for the Affordable Very Low Income Units, and (3) $33,333.00 upon recordation of the Release of Construction Covenants. Developer agrees to defer any unpaid portion of its Developer Fee to the extent needed to pay for any cost overruns not funded and contingencies not otherwise funded by the sources of funds as described herein (the "Deferred Developer Fee"). The Deferred Developer Fee will be payable from Net Operating Income as described in Section 5.10 of this Agreement. 4.9 Legal Requirements. Developer hereby agrees to carry out acquisition, rehabilitation, construction (as defined by applicable law) and operation of the Project on the Site, including, without limitation, any and all public works (as defined by applicable law), in conformity with all applicable local, state and federal laws, including, without limitation, all applicable federal and state labor laws (including, without limitation, any requirement to pay state prevailing wages). It is the intent of the parties that, notwithstanding any other provisions of this Agreement, Developer's obligation applies only to the extent that a particular statute or regulation referenced herein or in the Regulatory Agreement applies to the Project. Developer hereby expressly acknowledges and agrees that neither the Agency nor the City has ever previously affirmatively represented to the Developer or its contractor(s) for the Project in writing or otherwise, in a call for bids or otherwise, that the work to be covered by the bid or contract is not a "public work," as defined in Section 1720 of the Labor Code. Developer hereby agrees that it shall have the obligation to provide any and all disclosures, representations, statements, re -bidding, and/or identifications to the extent the Project triggers a requirement under Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer hereby agrees that it shall have the obligation to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which to the extent the Project triggers a requirement under the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer hereby agrees that it shall have the obligation, at its sole cost, risk and expense, to obligate any party to the extent the Project triggers a requirement under Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer shall indemnify, protect, defend and hold harmless Agency and City and their respective officers, employees, contractors and agents, with counsel reasonably acceptable to Agency and City, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs" (including labor costs, penalties, reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in direct connection with the acquisition, construction (as defined by applicable law) and/or operation of the Project, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (1) the noncompliance by Developer of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (2) the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (3) failure by Developer to provide any required disclosure, representation; statement, re -bidding and/or identification which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; (4) failure by Developer to provide and maintain any and all bonds to secure the payment of contractors (including the payment of 17 Agree: Jamboree— 17442 Koledo wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; and/or (5) failure by Developer to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. It is agreed by the parties that, in connection with the acquisition, construction (as defined by applicable law) and operation of the Project, including, without limitation, any public work (as defined by applicable law), Developer shall bear all risks of payment or non-payment of state prevailing wages and/or the implementation Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs" as used in this Section shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing indemnity shall survive termination of this Agreement. 4.10 Release of Construction Covenants. (a) Promptly after completion of the rehabilitation of the Units, as generally and specifically required by this Agreement and in particular the Scope of Development, the Agency shall furnish Developer with a Release of Construction Covenants in the form of Exhibit "J" to this Agreement upon written request therefor by Developer. Completion of the rehabilitation of the Units is understood and agreed to mean the point in time that: (1) the entire rehabilitation work, including all minor corrective items, is fully and finally complete, including full and final completion of the work of the general contractor and all subcontractors on the Project; (2) all approvals, inspections and certificates required to be issued by governmental authorities for the full occupancy and use of the Project have been issued; (3) all clean up at the Site is complete; and (4) the Project has been accepted by the City and the Agency as having been completed in accordance with the approved Rehabilitation Plan. The Agency shall not unreasonably withhold such Release of Construction Covenants and such Release of Construction Covenants shall be issued so long as Developer has rehabilitated the Units in accordance with this Agreement and the Rehabilitation Plan approved by the Agency pursuant hereto. Such Release of Construction Covenants shall be, and shall so state, conclusive determination of satisfactory completion of all of the construction required by this Agreement. (b) The Release of Construction Covenants shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. A Release of Construction Covenants for construction of less than the completed rehabilitation of all of the Units in the Project shall not be recorded. (c) If the Agency refuses or fails to furnish a Release of Construction Covenants after written request from Developer, the Agency shall, within twenty (20) working days of the written request, provide Developer with a written statement of the reasons the Agency refused or failed to furnish a Release of Construction Covenants. The statement shall also contain the Agency's opinion of the action Developer must take to obtain a Release of Construction Covenants. If the reason for such refusal is confined to the immediate availability of specific items or materials for landscaping, and/or minor items, the Agency will issue its Release of Construction Covenants upon the posting of a bond by Developer in an amount representing the 18 Agree: Jamboree— 17442 Koledo fair value of the work not yet completed. If the Agency shall have failed to provide such written statement within said 20-working-day period, the Agency shall be deemed to have furnished the Release of Construction Covenants and, notwithstanding the last sentence of Section 4.10(b), shall execute same for recordation. (d) Such Release of Construction Covenants shall not constitute evidence of compliance with, or satisfaction of any obligation of Developer to the beneficiary of any Deed of Trust securing third party financing of the Project. A Release of Construction Covenants is not a notice of completion under Section 3093 of the California Civil Code. SECTION 5. USE OF THE SITE. 5.1 No Inconsistent Uses. Developer covenants and agrees, for itself, its successors, its assigns, and every successor in interest to the Site, or any part thereof, that for the period beginning on the Close of Escrow and ending on the expiration date of the Regulatory Agreement, Developer and such successors shall not devote the Site to uses inconsistent with the applicable zoning restrictions, this Agreement, and the Regulatory Agreement; provided that, in the event of any inconsistency, the provisions of the Regulatory Agreement shall prevail over this Agreement. 5.2 Regulatory Agreement. At the Close of Escrow the Regulatory Agreement and the Notice of Affordability Restrictions shall be recorded against the Site in the Priority set forth in the Section 3.5(d). 5.3 Relocation (a) Relocation Plan. Developer shall use reasonable efforts to avoid displacing any existing tenants and/or persons residing in or on the Site. In the event, however, that off -Site relocation of existing tenants and/or persons residing in or on the Site becomes necessary as a result of Developer's implementation of the Project, Developer, prior to such off - Site relocation, shall submit a relocation plan to Agency for review and approval ("Relocation Plan"). The Relocation Plan shall comply with the requirements of the Uniform Relocation Act and the California Relocation Assistance Act and any guidelines promulgated in connection therewith and shall also include the name, gender, age, ethnicity, household income, and amount of relocation payment to be paid; provided, however, that Developer shall not be obligated to provide any of the foregoing referenced personal information about relocatees if such relocatees refuse to provide such information or the gathering or provision of such information is contrary to applicable law. Developer shall comply with the requirements of all applicable relocation laws, including, but not limited to, the Uniform Relocation Act and the California Relocation Assistance Act, and shall comply with related tenant notice requirements and shall provide the City and Agency with true and correct copies of such notices to tenants. Developer shall also retain all required records and the originals and/or copies of tenant notices in its files as mandated by applicable law. The relocation requirements of this Section do not apply to any tenants who qualify as Eligible Tenants (as such term is defined in the Regulatory Agreement) at the initiation of their tenancy but who are later required to move as a result of an increase in such tenant's household income. 19 Agree: Jamboree— 17442 Koledo (b) Relocation Cost. Developer shall endeavor to relocate existing tenants who do not qualify as Eligible Tenants to units in Developer's or Jamboree Housing Corporation's other properties. Developer shall submit an application for disbursement of relocation payments supported by documentation acceptable to the Agency supporting the amount and use of such funds. The Agency will work with Developer to ensure that.an adequate budget is provided for temporary or permanent relocation benefits as required by applicable relocation laws, including but not limited to, the Uniform Relocation Act and the California Relocation Assistance Act. The Agency will make all reasonable efforts to fund relocation draws within 30 days of receipt of a draw request from the developer. 5.4 Maintenance of the Site. After acquisition and rehabilitation of the Site and for the remaining term of this Agreement, all Units must be maintained in compliance with Federal Housing Quality Standards (24 CFR § 982.401) and other applicable state and local laws and codes. In addition, Developer shall maintain the Site in accordance with the terms of the Regulatory Agreement. The Agency shall have the right at all reasonable times to enter and inspect the Site in order to ensure compliance with the foregoing requirements. In the event Developer fails to maintain the Site as required by this Section, Developer shall, within thirty (30) days after Agency's notification or Developer's own discovery of any deficiency, take all necessary steps to correct such deficiency, provided that, if such deficiency is not reasonably capable of being cured within thirty (30) days, Developer shall commence to cure said deficiency within thirty (30) days and diligently and in good faith continue to take all necessary steps to correct such deficiency. 5.5 Nondiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, age, class, income, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, or in the awarding of contracts for the Project, nor shall Developer, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof, or in the awarding of contracts for the Project. Developer shall comply with all applicable federal, state and local nondiscrimination, fair housing, and equal opportunity requirements. In addition, Developer shall conduct affirmative marketing and minority outreach activities as required by Federal regulations. 5.6 Form of Nondiscrimination and Nonsegregation Clauses. The Developer shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, age, class, income, religion, sex, sexual orientation, 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 clause: (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 20 Agree: Jamboree— 17442 Koledo through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises 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 through him or her, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself 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 of the land." 5.7 Effect and Duration of Covenants. The Developer has, concurrently with the execution of this Agreement, executed in recordable form the Regulatory Agreement. Every covenant and condition and restriction contained in the Regulatory Agreement shall remain in effect for sixty (60) years from the Effective Date of this Agreement (regardless of whether the Agency Loan has been repaid prior to the end of such 60-year period), except that the covenants against discrimination set forth in Sections 5.5 and 5.6 shall remain in effect in perpetuity. If, at the end of the 60-year period, an unpaid balance remains on the Agency Loan, Developer may choose to do either of the following: (a) Developer may choose to continue to maintain the covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement, in which case the Agency shall not require repayment of the balance of the Agency Loan and the Agency Loan shall not accrue any interest for the period during which said covenants, conditions 21 Agree: Jamboree— 17442 Koledo and restrictions are maintained; or (b) Developer may choose not to maintain the covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement, in which case the entire principal balance of the Agency Loan plus all accrued interest on such loans shall immediately become due and payable. 5.8 Creation of Capital Reserve Account. No later than thirty (30) days after the Close of Escrow, Developer shall create a "Capital Reserve Account" in the initial amount shown on the Project Budget. No later than thirty (30) days after the Capital Reserve Account has been created, Developer shall provide to Agency a pro forma statement concerning the account, for review and approval. At any time thereafter during the term of this Agreement, Agency, on ten (10) days prior written notice to Developer, may request that Developer submit to it updated, revised Capital Reserve Account statement. Agency, at its own expense, may audit any updated, revised Capital Reserve Account statement submitted to it by Developer. 5.9 Capital Reserves. Commencing with calendar year 2009, and every succeeding year during the term of this Agreement, Developer shall deposit a minimum of ONE THOUSAND FIVE HUNDRED DOLLARS ($1,500.00) (subject to annual adjustments not to exceed three percent (3%) per year) to the extent available from Net Operating Income (defined below) into the Capital Reserve Account for repairs to the Site. The Capital Reserve Account shall only be used to fund the cost of repairs and improvements to the Site and to maintain the Site in compliance with the requirements of Section 5.4. Developer shall exhaust funds in the Capital Reserve Account prior to utilizing operating revenues to pay for repairs and improvements to the Site. Interest earned on the Capital Reserve Account shall remain in said account and be used as Capital Reserves. 5.10 Payment of Portion of Residual Receipts. (a) Payment to Agency. Commencing on the third anniversary of the Effective Date of this,Agreement, and every succeeding year during the term of this Agreement, Developer must utilize FIFTY PERCENT (50%) of Net Operating Income for the previous one- year period ("Available Net Operating Income") to repay the Agency Loan. However, Developer may first utilize 100% of Available Net Operating Income to make payment of any theretofore unpaid portion of the Deferred Developer Fee, until paid in full. if a payment on the Agency Note is required by Developer pursuant to the terms hereof, Developer shall make such ,payment no later than one hundred twenty (120) days following the end of the applicable calendar year. (b) Definition of Net Operating Income. As used herein, the term "Net Operating Income" shall mean, for any reporting period (typically a calendar year), all income derived from the Site, including without limitation all tenant rent, fees and charges (excepting tenants' security deposits but including deposits forfeited by tenants), any rental subsidy payments received for the Units, the proceeds of business interruption and similar insurance, and the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project but excluding any interest income earned on the Capital Reserve Account and the tenant security deposits, less (i) payments of principal and interest, if any, required to be paid in such year by Developer with respect to any note, mortgage, or deed of trust (excepting the Agency Note) with 22 AEree: Jamboree— 17442 Koledo respect to the Site or Project, (ii) all reasonable and customary expenses actually incurred (or to be incurred if accounted for on an accrual basis) in leasing, managing, operating, maintaining, and repairing the Site, (iii) all capital expenses incurred pertaining to the Site excepting those to be paid from the Capital Reserve Account, (iv) the required deposits into the Capital Reserve Account, and (v) reasonable and customary property management fees, social services and resident services fees, administrative costs, salaries, benefits, overhead costs, and such other and further reasonable and customary operating and management expenses incurred in operating the Site. Depreciation expenses shall not be a reduction against Net Operating Income. 5.11 Financial Statements. On a yearly basis, Developer shall submit copies of its annual tax return and copies of Jamboree Housing Corporation's annual audit. Developer shall also submit to Agency, on a yearly basis, a true and correct copy of Developer's financial statements for the Project clearly identifying the Project revenues, operating expenses, deposits to and withdrawals from the Project's Capital Reserve Account, and cash flow available for residual receipts payments. Before such statements are submitted, they must be reviewed and certified by Developer to have been prepared in accordance with Generally Accepted Accounting Principles. In addition, during such time as Developer, or Developer and any affiliate of Developer, owns a total of at least thirty (30) residential rental units in the Oakview community, the annual statements required by this Section 5.11 must be reviewed and certified by an independent accounting or auditing firm to have been prepared in accordance with Generally Accepted Accounting Principals. After receipt of financial statements for the Project, Agency may request additional financial analyses or obtain a third party review at Agency's own expense, of financial statements for the Project to verify the accuracy of the payments by Developer on the Agency Note pursuant to Section 5.10 or the deposits into the Capital Reserve Account pursuant to Section 5.9. 5.12 Operation of Project. Borrower shall lease, operate and manage the Project in full conformance with the terms of this Agreement and specifically the Regulatory Agreement. Further, all of the Units in the Project shall be designated as Affordable Very Low Income Units. Rents for the Affordable Very Low Income Units shall not exceed the applicable Affordable Rents. Not later than sixty (60) days after Close of Escrow, and for every year thereafter during this Agreement's term, Developer shall submit an annual, proposed budget to Agency for review and approval. 5.13 Lead -Based Paint. Developer shall ensure that it and its contractors and subcontractors shall not use lead -based paint in the construction or maintenance of the Project. Developer shall insert this provision in all contracts and subcontracts for work performed on the Project which involves the application of paint. 5.14 Barriers to the Disabled. Developer shall ensure that the Project shall be rehabilitated and operated to comply with all federal, state, and local requirements for access for disabled persons that apply to the acquisition and rehabilitation of existing multi -family rental units. 23 Agree: Jamboree— 17442 Koledo SECTION 6. DEFAULTS AND REMEDIES. 6.1 Developer Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Developer hereunder if, after receiving written notice from Agency as provided in Section 6.4 below identifying such event, Developer fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within thirty (30) days, it shall not be a Material Default if Developer commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default: (a) Developer has failed to Close Escrow to acquire fee title to the Site within sixty (60) days after the time set forth in the Schedule of Performance; (b) Developer fails to complete rehabilitation of the Units within the time set forth in the Schedule of Performance, as such time may be extended pursuant to this Agreement; (c) Developer fails to observe or perform any material term of this Agreement or any agreement incorporated hereunder by reference including, but not limited to, the Regulatory Agreement, the Agency Note, the Agency Deed of Trust, or the Subordination Agreement (if applicable), within the time set forth in this Agreement or any of the documents referred to herein; or (d) Developer knowingly and intentionally makes or delivers to Agency any statement, report, or certificate that is not true or correct in any material respect. In no event shall Agency be precluded from exercising remedies if the default is not cured within one hundred twenty (120) days, or Agency's rights under this Agreement become or are about to become materially jeopardized by any failure to cure a default. 6.2 Agency Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Agency hereunder if, after receiving written notice from Developer as provided in Section 6.4 below identifying such event, Agency fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within thirty (30) days, it shall not be a Material Default if Agency commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default: (a) Agency fails to observe or perform any material term of this Agreement within the time set forth in this Agreement, including but not limited to timely deposit into Escrow of the required portion of Agency Loan funds; or (b) Agency knowingly and intentionally makes or delivers to Developer any statement, report, or certificate that is not true or correct in any material respect. 24 Agree: Jamboree— 17442 Koledo In no event shall Developer be precluded from exercising remedies, if the default is not cured within one hundred twenty (120) days, or Developer's rights under this Agreement become or are about to become materially jeopardized by any failure to cure a default. 6.3 Notice of Default. The non -defaulting party shall give written notice of any default under this Section to the defaulting party, clearly specifying the default. Copies of any notice of default given to the defaulting party shall also be given to any permitted lender requesting such notice. Any failure or delay in giving such notice or in asserting any of any party's rights and remedies as to any default shall not constitute a waiver of any default, nor shall it change the time of default, nor shall it deprive any party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 6.4 Agency's Remedies. (a) The Agency, at its option, may terminate this Agreement prior to the Close of Escrow in the event of any Material Default that the Developer fails to cure within the time set forth in Section 6.1 (subject to the right of notice and expiration of applicable cure periods). (b) Following the Close of Escrow, in the event of any Material Default that the Developer fails to cure within the time set forth in Section 6.1 (subject to the right of notice and expiration of applicable cure periods), the entire principal balance of the Agency Loan including all interest shall immediately become due and payable, and Agency shall have the option to: (a) demand full payment of the principal balance of the Agency Loan including all interest; (b) take over ownership and management of the Site; or (c) foreclose on the Site under the Agency Deed of Trust. 6.5 Developer's Remedies. Subject to any applicable cure periods and the general right to notice provided for in this Agreement, upon a default or breach of this Agreement by Agency, Developer may bring an action for specific performance of this Agreement or any term or provision hereof, or, if prior to the Close of Escrow, may terminate this Agreement. Developer may not sue for monetary damages. 6.6 Riahts and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties hereto are cumulative, and the exercise by any party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. SECTION 7. GENERAL PROVISIONS 7.1 Developer's Warranties. Developer represents and warrants (1) that it has access to professional advice and support to the extent necessary to enable Developer to fully comply with the terms of this Agreement; (2) that it is duly organized, validly existing and in good standing under the laws of the State of California; (3) that it has the full power and authority to undertake the Project and to execute this Agreement; (4) that the persons executing 25 Agree: ,Jamboree— 17442 Koledo and delivering this Agreement are authorized to execute and deliver such documents on behalf of Developer; (5) except as disclosed to the Agency in writing, there are no actions or proceedings pending or, to the best of the Developer's knowledge, threatened against the Developer before any court or administrative agency in any way connected with the Site or the Project which could adversely affect the Developer's ability to perform the activities contemplated hereunder; (6) neither this Agreement nor anything provided to be done hereunder violates or shall violate any contract, agreement or instrument to which the Developer is a party or which affects the Project or any part thereof; (7) the Developer is not in default in respect of any of its obligations or liabilities pertaining to this Agreement, nor is there any state of facts or circumstances or conditions or events which, after notice, lapse of time, or both, would constitute or result in any such default under this Agreement; and (8) the Developer has not entered into any agreements which will adversely affect the title to the Project or the Developer's right to develop and use the Project as provided in this Agreement, and the Developer will not enter into any such agreements after the date hereof. 7.2 Governing Law. The internal laws of the State of California shall govern the interpretation and enforcement of this Agreement. 7.3 Attorneys' Fees. In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 7.4 Notices. Demands. and Communications Between the Parties. Formal notices, demands, and communications between Agency and Developer shall be sufficiently given if: (i) personally delivered; (ii) delivered by same day or overnight courier (acknowledged by receipt showing date and time of delivery); or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the addresses set forth below: If to Developer: JHC — Oakview, LLC c/o Jamboree Housing Corporation 17701 Cowan Avenue, Ste 200 Irvine, CA 92614 Attn: Laura Archuleta, President If to Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Executive Director Notices personally delivered or delivered by courier shall be effective upon receipt or refusal to accept delivery. Mailed notices shall be effective on the earlier of (i) receipt of refusal to accept delivery, or (ii) noon on the second business day following deposit in the United States mail. 26 Agree: Jamboree — 17442 Koledo 7.5 Acceptance of Service of Process. In the event that any legal action is commenced by Developer against Agency, service of process on Agency shall be made by personal service upon the Executive Director or the Agency Secretary, or in such other manner as may be provided by law. In the event that any legal action is commenced by Agency against Developer, service of process on Developer shall be made by in any manner provided by law, and shall be valid whether made within or without the State of California. 7.6 Conflicts of Interest. No member, official, or employee of Agency or City shall have any personal interest in this Agreement, nor participate in any decision relating to this Agreement, that is in violation of any applicable law, regulation or ordinance. 7.7 Titles and Captions. Titles and captions are for convenience only and shall not be construed to limit or extend the meaning of this Agreement. 7.8 Gender. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. 7.9 Modifications. Any amendment, alteration, change, or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. 7.10 Merger of Prior Agreements and Understandings. This Agreement and all documents incorporated herein contain the entire understanding among the parties hereto relating to the transactions contemplated herein and all prior or contemporaneous agreements, understandings, representations, and statements, oral or written. 7.11 No Third Parties Benefited. This Agreement shall create no third -party beneficiary rights or any other rights in favor of any persons, firms or corporations, except as may be expressly stated in this Agreement. This Agreement is for the sole use and benefit of the parties hereto and is not for the use or benefit of any other person or entity. 7.12 Assurances to Act in Good Faith; Approval by Agency. Developer and Agency each agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to accomplish the acquisition and rehabilitation of the Site in accordance with the provisions hereof. 7.13 Warranty Against Payment of Consideration for Agreement. Except as provided in this Agreement, Developer warrants that it has not paid or given, and will not pay or give, any person any money or other consideration for obtaining this Agreement that is in violation of any law. 7.14 Nonliability of Agencyor City Officials and Employees. No member, official, or employee of the Agency or 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 for any amount which may 27 Agree: Jamboree— 17442 Koledo become due to the Developer or to its successor, or on any obligations under the terms of this Agreement. 7.15 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against any party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 7.16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 7.17 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 7.18. Extension of Times of Performance. Notwithstanding the foregoing, in addition to the specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in default during an event of Force Majeure. An extension of time for an event of Force Majeure shall be limited to the period of such event, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause. In the event of such delay, the party delayed shall continue to exercise reasonable diligence to minimize the period of delay. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Developer. In addition, the Agency Executive Director shall have the authority on behalf of Agency to approve extensions of time not to exceed a cumulative total of one (1) year. 7.19 Inspection of Books and Records. The Agency or its designees have the right at all reasonable times to inspect the books, records and/or other documents of the Developer pertaining to the Site and/or the Project as pertinent to the purposes of this Agreement. 7.20 Waivers. The waiver by Agency or Developer of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. SECTION 8. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE This Agreement consists of twenty-nine (29) pages and twelve (12) attachments which constitute the entire understanding and agreement of the parties. 28 Agree: Jamboree— 17442 Koledo This Agreement does not take effect until executed by the Developer and Agency. This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency within thirty (30) days after the date of signature by the Developer, or this Agreement may be terminated by the Developer on written notice to the Agency. The Agency Executive Director is hereby authorized and directed to take such other and further actions, and sign such other and further agreements and documents on behalf of the Agency as may be necessary or proper to effect the terms of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. "DEVELOPER" "AGENCY" JHC — OAKVIEW, LLC, REDEVELOPMENT AGENCY OF THE a California limited liability company CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: Chairperson By: ATTEST: Laura ArcYiuleta Its: President By: Agency Secretary APPROVED AS TO FORM: M 29 Agree: Jamboree — 17442 Koledo General Counsel KANE, BALLMER & BERKMAN Agency Special Counsel California All -Purpose Acknowledgment 2008 Code Section 1189 Compliant State of California County of 610-,AT {b OnTL8f-Rf*q 11, D.009 before me, S�tSfgj k. 11kAX9-1/J, A O ley PmLi L (here insert name and title of the officer) personally appeared L-A-Af-A- A1Ccamc- i A who proved to me on the basis of satisfactory evidence to be the person0 whose name(4 is/are subscribed to the within instrument and acknowledged to me that-Mer/she/they executed the same in hjs/her/thy authorized capacity(ise), and that by kris/her/thetr signature(o) on the instrument the person(g), or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. SUSAN R. HANCHIN , Commission # 1754968 Signature aV_d X_YL) �" 1'r P f^'ll -d Notary Public - California z Orange County g My Comm. Expires Jul 2, 2011 (Seal) OPTIONAL INFORMATION Law does not require the information below. This information could be of great value to any person(s) relying on this document and could prevent fraudulent and/or the reattachment of this document to an unauthorized document(s) DESCRIPTION OF ATTACHED DOCUMENT Title or Type of Docur Document Date: o' Signer(s) if Different Than Above: Other Information: CAPACITY(IES) CLAIMED BY SIGNER(S) Signer's Name(s): ❑ Individual ❑ Corporate Officer (Title(s)) ❑ Partner ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian/Conservator ❑ Other: SIGNER IS REPRESENTING: Name of Person(s) or Entity(ies): © 2007 Notary Public Seminars www.notarypublicseminars.com Number of Pages: cl�q This Agreement does not take effect until executed by the Developer and Agency. This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency within thirty (30) days after the date of signature by the Developer, or this Agreement may be terminated by the Developer on written notice to the Agency. The Agency Executive Director is hereby authorized and directed to take such other and further actions, and sign such other and further agreements and documents on behalf of the Agency as may be necessary or proper to effect the terms of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. "DEVELOPER" "AGENCY" JHC — OAKVIEW, LLC, REDEVELOPMENT AGENCY OF THE a California limited liability company CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: Laura Archuleta Its: President L By: Chairperson ATTEST: By: Agency Secretary APPROVED AS TO FORM: By: 2 ?� .5 General Cou4el By: KANE, BALI Agency Spec 29 & BERKMAN Agree: Jamboree — 17442 Koledo EXHIBIT A Legal Description [behind this page] Legal Description Legal Description of Property Commonly Known As 17442 Koledo Lane Huntington Beach, California 92647 Legal Description Exhibit A Legal Description (17442 Koledo Lane, Huntington Beach, CA) LOT 43 OF TRACT NO. 4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO. 4301, AS ABANDONED BY THAT CERTAIN RESOLUTION NO. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON. SUBSTANCES IN, UNDER AND/OR THAT MAY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH V. MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, DATED OCTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, OFFICIAL RECORDS, RECORDS OF ORANGE COUNTY, CALIFORNIA, WHICH DEED FURTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTITLE THE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIGHTS IN OR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPTH OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, OR THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED TO CITY OF HUNTINGTON BEACH RECORDED IN BOOK 6511, PAGE 679, OFFICIAL RECORDS. APN: 165-232-08 EXHIBIT B Site Map [behind this page] Site Map —s CD C EXHIBIT C Scope of Development [behind this page] Scope of Development Page 1 of 1 EXHIBIT "C" SCOPE OF DEVELOPMENT Developer's acquisition of the existing apartment building consisting of a total of five (5) 2-bedroom units located at 17442 Koledo Lane in the City of Huntington Beach, the rehabilitation of those units in conformity with the Rehabilitation Plan approved by the Agency and applicable requirements of local, state and federal laws, rules and regulations, and the subsequent rental of the Units to Very Low Income Households at Affordable Rents for a period of not less than 60 years, as further described in the Affordable Housing Agreement and the Regulatory Agreement. Scope of Development Page 1 of 1 SOURCES Agency Loan (Set Aside Funds) Conventional Loan Total Sources USES Acquisition Costs Relocation Costs Rehabilitation Costs Financing Costs Other Soft Costs Developer Fee Total Uses EXHIBIT D PROJECT BUDGET Project Budget $1,391,642.00 197,000.00 S 1,588,642.00 $ 1,000,000.00 50,000.00 287,000.00 4,999.00 146,643.00 100,000.00 S 1,588,642.00 EXHIBIT "E" SCHEDULE OF PERFORMANCE ITEM OF PERFORMANCE TIME OF PERFORMANCE REFERENCE 1. Developer and Agency each execute all Not later than twelve noon on the § 3.5(b); § 3.5(c). documents and deposit all documents and business day immediately prior to the funds into Escrow as required by this scheduled Closing Date. Agreement. 2. Closing Date. Not later than 2009. § 3.5(a). 3. Developer obtains the Approved Project Within one hundred eighty (180) days § 4.2 Plans and Permits for the Project and after the Closing Date. commences the rehabilitation work on the Site. 4. Developer submits a Management Plan and Within ninety (90) days after the § 4.4 of Regulatory Rehabilitation Plan to the Agency. Closing Date. Agreement (Exhibit H) 5. Developer completes rehabilitation of the Within one year after commencement of § 4.2 improvements on the Site and achieves rent the rehabilitation work on the Site. up of the Units. 6. Developer submits annual financial Within one hundred twenty (120) days § 5.11 statements and rent records/tenant eligibility after the end of each calendar year. certifications to the Agency. It is understood that this Schedule of Performance is subject to all of the terms and conditions of the text of the Agreement. The summary of the items performance in this Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any conflict or inconsistency between this Schedule of Performance and the text of the Agreement, the text shall govern. The time periods set forth in this Schedule of Performance may be altered or amended only by written agreement signed by the Developer and the Agency. The Agency Executive Director shall have the authority to approve extensions of time without action of the Agency's governing board, not to exceed a cumulative total extension of one (1) year. Schedule of Performance Page 1 of 1 LOINIII.3win Promissory Note [behind this page] Promissory Note [AGENCY LOAN] PROMISSORY NOTE SECURED BY DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED THERETO DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust securing same, must be surrendered to Trustee for cancellation before reconveyance will be made. PROMISSORY NOTE SECURED BY DEED OF TRUST Principal Loan Amount: $1,391,642.00 Interest: 0% Huntington Beach, California Note Date: !' )O�W Q2 , 2009 FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic ("Holder"), at a place designated by Holder, the principal sum of ONE MILLION THREE HUNDRED NINETY-ONE THOUSAND SIX HUNDRED FORTY-TWO AND NO/1005 DOLLARS ($1,391,642.00) or such portion thereof as is advanced from Holder to Maker pursuant to an Affordable Housing Agreement (the "Agreement") dated as of ,jO / 0 # O dN , 2009 by and between Maker ("Developer" therein) and Holder ("Agency" therein), plus interest at the rate of ZERO PERCENT (0%) simple interest. The Agreement is hereby incorporated by reference as though fully set forth herein. Any capitalized terms not defined herein shall have the meanings ascribed to them in the Agreement. The obligation of the Maker to the Holder hereunder shall be secured by a deed of trust made by the Maker encumbering the Site to be developed (the "Site") pursuant to the Agreement and the Deed of Trust and Assignment of Rents dated 02, 2009, executed by the Maker ("Trustor" therein) and recorded in the Recorder's Office of Orange County, California on j99A9C# /D. app9 , as Document No. 000J/Iq.O(o (the "Agency Deed of Trust"). The obligation "of set forth in this Note is subject to acceleration as set forth in the Agreement. The Agreement and the Agency Deed of Trust are public records on file in the offices of the Holder. 1. Agency Loan. This Note evidences the obligation of the Maker to the Holder for the repayment of Set Aside Funds loaned to the Maker by the Holder (the "Agency Loan") to finance the acquisition of the Site and implementation of the Project pursuant to the Agreement. The Maker shall not make any sale, assignment or conveyance, or transfer in any other form, of the Site, or any part thereof, or interest therein without the express written consent of the Holder as set forth in Section 2.5 of the Agreement. 2. Payment of Obligation. Commencing on the third anniversary of the Effective Date of the Agreement, and every succeeding year during the 60-year term of this Note, Maker must utilize FIFTY PERCENT (50%) of Net Operating Income for the previous one-year period ("Available Net Operating Income") to repay the Agency Loan. However, Agency Promissory Note Page 1 of 3 Agree: Jamboree-17442 Koledo Maker may first utilize 100% of Available Net Operating Income to make payment of any theretofore unpaid portion of the Deferred Developer Fee, until paid in full. If a payment on this Note is required by Maker pursuant to the terms hereof, Maker shall make such payment no later than one hundred (120) days following the end of the applicable calendar year. The term "Net Operating Income" shall mean all income derived from the Site, including without limitation all tenant rent, fees and charges (excepting tenants' security deposits but including deposits forfeited by tenants), any rental subsidy payments received for the Units, the proceeds of business interruption and similar insurance, and the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project, but excluding any interest income earned on the Capital Reserve Account and on the tenant security deposits, less (i) payments of principal and interest, if any, required to be paid in such year by Maker with respect to any note, mortgage, or deed of trust (excepting this Note) with respect to the Site or Project, (ii) all reasonable and customary expenses actually incurred (or to be incurred if accounted for on an accrual basis) in leasing, managing, operating, maintaining, and repairing the Site, (iii) all capital expenses incurred pertaining to the Site excepting those to be paid from the Capital Reserve Account, (iv) the required deposits into the Capital Reserve Account, and (v) reasonable and customary property management fees, social services and resident services fees, administrative costs, salaries, benefits, overhead costs, and such other and further reasonable and customary operating and management expenses incurred in operating the Site. Depreciation expenses shall not be a reduction against Net Operating Income. 3. Prepa ent (a) Penalties. Maker may prepay the principal balance of this Note at any time without penalty. In the event Maker prepays the entire balance of this Note including all accrued interest, the covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement shall remain in full force and effect for the full 60-year term as specified therein. (b) Effect on Covenants. If, at the end of the 60-year term of this Note, an unpaid balance remains on this Note, Maker may choose to do either of the following: (a) Maker may choose to continue to maintain the covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement, in which case the Holder shall not require repayment of the balance of this Note and the Agency Loan shall not accrue any interest for the period during which said covenants, conditions and restrictions are maintained; or (b) Maker may choose not to maintain the covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement, in which case the entire principal balance of the Agency Loan plus all accrued interest on the Agency Loan shall immediately become due and payable. 4. Acceleration of Obli ation. Upon the occurrence of a uncured Material Default of Maker under this Note, the Agency Deed of Trust or any obligation secured thereby (including the obligations in the Agreement and the Regulatory Agreement), or in any other instrument now or hereafter securing the obligations evidenced hereby, then, and in any of such events, Holder may, at its option, declare this Note and all the obligations hereby evidenced to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity. Agency Promissory Note Page 2 of 3 Agree: Jamboree-17442 Koledo 5. Default Interest. If any event occurs giving Holder the right to accelerate this Note pursuant to Section 4 above, the entire unpaid and unforgiven principal owing hereunder shall, as of the date of such default, commence to accrue interest at a rate equal to two percentage points above the reference rate published by Bank of America N.A., or the maximum non -usurious interest rate permitted by law, whichever is less. 6. Collection Costs; Attorneys' Fees. If any attorney is engaged by Holder because of any event of an uncured Material Default under this Note or the Agency Deed of Trust or to enforce any provision of either instrument, whether or not suit is filed hereon, Holder shall bear its own attorney's fees and costs. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. 9. Usury. Notwithstanding any provision in this Note, Agency Deed of Trust or other document securing same, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. 10. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above written. "MAKER" JHC — OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: t Ua _1&a Laura Archule a Its: President Agency Promissory Note Page 3 of 3 Agree: Jamboree-17442 Koledo EXHIBIT G Deed of Trust [behind this page] Deed of Trust RECORDING REQUESTED BY. Recorded in Official Records, Orange County FIRST AM4RICAN TITLE COMPANY, COMMERCIALIINDUSTRIAL DIVISION Tom Daly, Clark -Recorder IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII NO FEE Order No. 5(a 4soZ -I t , ) 2009000111406 03:06prn 03/10/09 213 92 D11 A36 15 Escrow No. ) 0.00 0.00 0.00 0-00 o.00 0.00 o.00 0.00 Loan No. 1 1:I:i�l�i T�K�777�1�71�%�I�IIC�7 Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Secretary NC! 5.3(,Q SPACE ABOVE THIS LINE FOR RECORDER'S USE] EXEMPT FROM RECORDING FEE PER GOV. CODE § 6103] [AGENCY LOAN] SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. This SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO ("Deed of Trust"), made M9 tip, I u , 2009, between JHC — OAKVIEW, LLC, a California limited liability company, herein called TRUSTOR, whose address is 17701 Cowan Avenue, Suite 200, Irvine, California 92614; and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, herein called TRUSTEE, and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, herein called BENEFICIARY, WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Huntington Beach, County of Orange, State of California, described as: SEE EXHIBIT "A" ATTACHED HERETO together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of ONE MILLION THREE HUNDRED NINETY-ONE THOUSAND SIX HUNDRED FORTY-TWO AND NO/100S DOLLARS ($1,391,642.00) with interest thereon, according to the terms of that certain Agree: Jamboree-17442 Koledo Agency Deed of Trust promissory note of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof; (2) the performance of Trustor's obligations under that certain "Affordable Housing Agreement" by and among Trustor ("Developer" therein), the City of Huntington Beach, and Beneficiary ("Agency" therein) dated L') q C.* D,-, 2009; (3) the performance of Trustor's obligations under that certain "Regulatory Agreement and Declaration of Covenants and Restrictions", by and among Trustor ("Owner" therein), the City of Huntington Beach, and Beneficiary ("Agency" therein) dated 3 —1 L- , 2009; (4) the performance of each agreement of Trustor incorporated by reference or contained herein; and (5) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County September 17, 1964, and in all other counties September 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 566 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 I24 Sonoma 2067 427 Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanistaus 1970 56 Colusa 323 391 Maria 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6625 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 4, 5 and 6 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. 2 Agree: Jamboree-17442 Koledo Agency Deed of Trust The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. Signature of Trustor JHC — OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation a California nonprofit corporation Its: Man a ' g Membe By:Aka Laura rchu leta Its: President STATE OF CALIFORNIA } )ss. COUNTY OF of?AT\1btJ ) On 1q .2Qo1 before me, C-ASA16 j.A(\;`K fnl , a Notary Public, personally appeared L-AtikA WKNALiL ,A who proved to me on the basis of satisfactory evidence to be the person' whose named) is/afe subscribed to the within instrument and acknowledged to me that he/she/they executed the same in Jiis/her/their authorized capacity(ios), and that by his/her/ter signatures) on the instrument the persono, or the entity upon behalf of which the person(6 acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. SUSAN 1;. NANCHIN WITNESS my hand and official seal. cornmtsalon # 1 764988 Notary 9ub1h . Calitornlcl Orange County /J ,I MVC . EViN Ad2.2011 Signature }�f c d d.�' L iu�7C,,�� vi, (Seal) Agree: Jamboree-17442 Kolalo Agency Deed of Trust DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder to invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same is 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; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. Agree: Jamboree-17442 Kole& Agency Deed of Trust B. It is mutually agreed: I ) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition or proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid and that all other obligations secured hereby, including but not limited to Trustor's obligations under the Regulatory Agreement and Declaration of Covenants and Restrictions, have been performed as agreed, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons Iegally entitled thereto." 5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or be a receiver to the appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and 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 also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the Agree: Jamboree-17442 Koledo Agency Deed of Trust highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of 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 recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of. all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof, all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed 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 pledges, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to 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. Agree: Jamboree-1 7442 Koledo Agency Deed of Trust DO NOT RECORD REQUEST FOR FULL RECQNVEVANCE TO TRUSTEE: The undersigned is the legal owner and holder of the note or notes of all indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied and all other obligations secured by the foregoing Deed of Trust, including but not limited to Trustor's obligations under the Regulatory Agreement and Declaration of Covenants and Restrictions, have been performed as agreed; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, and all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note and Reconveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. Agree: Jamboree-17442 Koledo Agency Deed of Trust DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH a public body, corporate and politic TRUSTEE Agree: Jamboree-17442 Koledo Agency Deed of Trust RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS RIIDER TO SUBORDINATED BEEF OF TRUST WITH RIDER ATTACHED ("Rider"), is made as of I+'►'1 r Lk-- t 3 , 2009, by JHC — OAKVIEW, LLC, a California limited liability company ("Trustor"), and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Beneficiary"), as follows: l . Part of Deed of Trust. This Rider is made a part of that certain Subordinated Deed of Trust With Assignment of Rents ("Deed of Trust"), of even date hereof, to which this Rider is attached. 2. Conflict. In the event of any conflict between the terms of this Rider and the terms of the Deed of Trust, the terms of this Rider shall control. 3. Priority; Subordination. Trustor, the City of Huntington Beach, and Beneficiary entered into that certain Affordable Housing Agreement, dated OMA&cg poi, 2009 (the "Agreement"), pursuant to which Beneficiary (referred to as "Agency" in the Agreement) agreed to subordinate this Deed of Trust to the liens of the deeds of trust identified in the Agreement as the Conventional Lender's deed of trust, and to such other and further documents as such lenders may be required including but not limited to regulatory agreements, not to exceed an indebtedness in an amount to be determined by the Beneficiary. The lien of this Deed of Trust therefore shall be junior and subordinate to the lien of the foregoing listed deed of trust and such other and further documents as such lenders may require. Beneficiary agrees to execute such subordination agreements, in the form attached as Exhibit "J" to the Agreement, as are necessary to effect such subordination of the lien of this Deed of Trust. 4. Condemnation. Section B.1 of the Fictitious Deed of Trust incorporated into the Deed of Trust shall be modified to provide that Beneficiary shall not be entitled to any awards or damages payable directly or indirectly by reason of a condemnation or proposed condemnation affecting all or any part of, or any interest in, the Property, brought by or pursuant to the direction of Beneficiary. 5. Default. The term "default" as used in the Deed of Trust shall mean a "Material Default" as defined in the Agreement or Regulatory Agreement. IN WITNESS WHEREOF, Trustor and Beneficiary have executed this Rider to Subordinated Deed of Trust With Assignment of Rents as of the date of Trustor's acknowledgement hereinbelow, to be effective for all purposes as of the day and year first set forth above. [end — signature page follows] Agree: Jamboree-17442 Koledo Agency Deed of Trust "TRUSTOR" JHC-OAKVIEW, LLC a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: A I I I a , LL,� Laura Archuleta Its: President "BENEFICIARY" THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic M Chairperson ATTEST: Agency Secretary REVIEWED AND APPROVED AS TO FORM: LEI I: General Counsel KANE BALLMER & BERKMAN Agency Special Counsel to Agree: Jamboree-17442 KoWo Agency Deed of Trust "TRUSTOR" JHC-OAKVIEW, LLC a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: Laura Archuleta Its: President "BENEFICIARY" THE REDEVELOPMENT AGENCY OF COUNTERPART THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ATTEST: By: LK �'`2— (4&.f Agency Secretary ROBIN L AR REVIEWED AND APPROVED AS TO F By General Counsel 271Q� Agency Special 14 By: ------ Chairperson KEITH BOHR Agree: Jamboree-17442 Koledo Agency Deed of Trust STATE OF CALIFORNIA ) )Ss. COUNTY OF OCAN16C ) On 1Q, ID09 before me, SkSAO R. "Pn 3c-A10 , a Notary Public, personally appeared L.AttkA Prti�C u(�.� ft who proved to me on the basis of satisfactory evidence to be the person(,s'f whose named Wive subscribed to the within instrument and acknowledged to me that --he/she/they executed the same in 44s/her/their authorized capacity(ies , and that by-his/her/weir signature(4 on the instrument the person(&}; or the entity upon behalf of which the persorllko acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. S1ttACea . ttnntettltd commmsion o t 7t3446� 22� / Notary 9ub8c - California Signature �-` %�"� ��e4t,4 (Seal) orange county MVComm. Bow A92. 2011 STATE OF CALIFORNIA } )ss. COUNTY OF ) On before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of. the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 11 Agree: Jamboree-17442 Koiedo Agency Deed of Trust (Seal) STATE OF CALIFORNIA ) )ss. COUNTY OF;jW6e5-- ) On .5, :�a) j before me, f. L n— to44L-ZA , a Notary Public, personally appeared j2n '9ta Ro&,J &ee;A2 , who proved to me on the basis of satisfactory evidence to be the persono whose named is subscribed to the within instrument and acknowledged to me that 4}� executed the same in *isA a eir authorized capacity ie , and that b}4tia,%e thei signaturcO on the instrument the persora, or the entity upon behalf of which the persoroacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. TL• VAM WITNESS my hand and official seal. CQMMMkM # 18"1179 "cloy Kaft • cam ra'My co m. Aug 4.24 Signature_��X (Seal) STATE OF CALIFORNIA ) )ss. COUNTY OF ) On before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature a! Ague: Jamboree-17442 Koledo Agency Deed of Trust (Seal) EXHIBIT "A" TO DEED OF TRUST LEGAL DESCRIPTION OF REAL PROPERTY [behind this page] 12 ngree! Jamboree-17442 xoledo Agency Deed of Trust Exhibit A Legal Description (17442 Koledo Lane, Huntington Beach, CA) LOT 43 OF TRACT NO. 4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO. 4301, AS ABANDONED BY THAT CERTAIN RESOLUTION NO. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN, UNDER AND/OR THAT MAY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH V. MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, DATED OCTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, OFFICIAL RECORDS, RECORDS OF ORANGE COUNTY, CALIFORNIA, WHICH DEED FURTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTITLE THE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIGHTS IN OR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPTH OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, OR THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED T"O CITY OF HUNTINGTON BEACH RECORDED IN BOOK 6511, PAGE 679, OFFICIAL RECORDS. APN: 165-232-08 THIS IS A TRUE CERTIFIED COPY OF THE RECORD 1F IT BI:M S Till: SEAL, I NIPRINTED IN i=l r I'LI:, OF THE ORANGE k, OUNTY CLERK -RECORDER. DATE:.. CERTIFICATION FEES-,-. GLERy-.5� COUNTY CLERK -RECORDER Ir`4+ ' ORANGE COUNTY STATE OF CALIFORNIA EXHIBIT H Regulatory Agreement [behind this page] Regulatory Agreement RECU,..DING REQUESTED 195E FIRST AMI:RICAN TITLE COMPANY, COMMERCIALJINDUSTRIAL D1VIS1Otf FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Secretary I'.S•3(6a4S`,),•.5At. (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code § 6103) Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder IIIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIII1111111111111111111 NO FEE 2009000111402 03:06 pram 03/10/09 213 92 Al 22 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into thisD day of 2009, by and among THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and JHC — OAKVIEW, LLC, a California limited liability company ("Owner"). RECITALS: A. Agency is responsible for the use of certain low- and moderate -income housing funds pursuant to California's Community Redevelopment Law [California Health & Safety Code §§33000, et seq.] ("Set Aside Funds"). B. Agency and Owner (`Developer" therein) have entered into that certain Affordable Housing Agreement, dated ^%�Y�.,,o� Q,A , 2009 (the "Housing Agreement"), concerning Owner's acquisition and rehabilitation of that certain real property, to be owned in fee by Owner, more particularly described in Attachment No. I attached hereto and incorporated by reference herein (the "Site"). The Housing Agreement describes the "Project" which generally consists of Owner's acquisition of the existing apartment building consisting of a total of five (5) two -bedroom dwelling units on the Site and subsequent rehabilitation and management thereof as an affordable rental housing complex, each of the dwelling units to be restricted to Vcry Low income Households. The Housing Agreement is hereby incorporated herein by this reference as though fully set forth herein. Any capitalized terms not defined herein shall have the meanings ascribed to such terms in the Housing Agreement. C. Owner has executed that certain promissory note (the "Agency Note") dated /M^'cA_ 16 , 2009, pursuant to which Agency has provided Owner with a loan of Set Aside Funds in the principal amount of ONE MILLION THREE HUNDRED NINETY-ONE THOUSAND SIX HUNDRED FORTY-TWO AND NO/100S DOLLARS ($1,391,642) Regulatory Agreement Page 1 of 17 THIS DOCUMENT WAS SIGNED IN COUNTERPART AND 1S TO BE Agree: Jamboree - 17442 Koledo CONSIDERED AS ONE RECORDABLE DOCUMENT. s ("Agency Loan"). The Agency Note is secured by a Subordinated Deed of Trust With Assignment of Rents With Rider Attached dated on or about the date of the Note, naming Agency as beneficiary ("Agency Deed of Trust"). D. Agency and Owner now desire to place restrictions upon the use and operation of the Project, in order to ensure that the Project shall be operated continuously as an affordable housing project available for rental to very low households in accordance with the terms set forth below for the term of this Agreement. AGREEMENT: NOW, THEREFORE, the Owner and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators and assigns, and all persons claiming under or through them, that the Site, for the term of this agreement, shall be held transferred, encumbered, used, sold, conveyed, leased and occupied, subject to the covenants and restrictions hereinafter set forth: DEFINITIONS. 1.1 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall mean, for Affordable Very Low Income Units, rental rates not to exceed "very low income" affordable rent as defined by California Health & Safety Code Section 50053(b)(2), or its successor. Affordable Rent shall include a reasonable utility allowance for tenant -paid utilities based on the Orange County Housing Authority's published utility schedules. 1.2 Affordable Unit and Affordable Units. As used in this Agreement, the term "Affordable Unit" shall mean one of the five (5) Affordable Very Low Income Units, and the term "Affordable Units" shall mean two or more of the Affordable Very Low Income Units. The term "Affordable Unit" and "Affordable Units" shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. 1.3 Affordable Very Low Income Unit. As used in this Agreement, the term "Affordable Very Low Income Unit" shall mean one of the five (5) rental dwelling units in the Project restricted to occupancy by Very Low Income Households, and the term "Affordable Very Low Income Units" shall mean two or more of the five (5) rental dwelling units in the Project restricted to occupancy by Very Low Income Households. The term "Affordable Very Low Income Unit" and "Affordable Very Low Income Units' shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. 1.4 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall refer to Eligible Very Low Income Tenants and Eligible Low Income Tenants. 1.5 Eligible Very Low Income Tenant. As used in this Agreement, the term "Eligible Very Low Income Tenant" shall mean a Very Low Income Household entitled to rent an Affordable Very Low Income Unit as set forth herein. Regulatory Agreement Page 2 of 17 Agree: Jamboree- 11442 KoWo 1.6 Median Income or Orange County Median Income. For purposes of this Agreement, the terms "Median Income" and "Orange County Median Income" shall mean the median income for the Orange County Primary Metropolitan Statistical Area, with adjustment for household size. 1.7 Unit and Units. As used in this Agreement, the term "Unit" shall mean one of the five (5) dwelling units in the Project, and the term "Units" shall mean two or more of the five (5) dwelling units in the Project. The term "Unit" and "Units" shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. 1.8 Very Low Income Households. As used in this Agreement, the term "Very Low Income Household" shall mean a family or individual whose annual income, determined pursuant to 24 C.F.R. Section 92.203, does not exceed fifty percent (50%) of Median Income. 2. TERM OF AGREEMENT; USE OF PROPERTY. In accordance with the formula set forth in 24 CFR 92.252(e) and as required by California Health and Safety Code Section 33334.3, this Agreement shall remain in effect for not less than sixty (60) years from the date on which a Release of Construction Covenants for the Project is issued by the Agency. Owner hereby agrees that the Project is to be owned, managed, and operated as a project for Eligible Very Low Income Tenants for the term of this Agreement. To that end, and for the term of this Agreement, the Owner hereby represents, covenants, warrants and agrees as follows: 2.1 Purpose, Disbursement and Use of Set Aside Funds.The Site has been acquired and the Project developed for the purposes of providing Eligible Tenants affordable rental housing. a. Schedule. The Project activities shall be accomplished within the time provided in the Schedule of Performance, which is attached to the Housing Agreement. b. Tasks and Budget. The tasks to be performed with the use of the Set Aside Funds, and the Project Budget, which specifies the line items for which Set Aside Funds will be used, are set forth in the Project Budget attached to the Housing Agreement. C. Compliance With Regulations. Owner, its successor and assigns, covenant and agree that the Project shall at all times during the 60-year term of this Agreement comply with applicable requirements set forth in Subpart F of Part 92 of Title 24 of the Code of Federal Regulations. It is the intent of the parties that, notwithstanding any other provisions of this Agreement, Owner's obligation exists only to the extent that a particular statute or regulation referenced herein or in the Affordable Housing Agreement applies to the Project. Owner certifies that it is not a primarily religious organization subject to 24 C.F.R. Section 92.257. Regulatory Agreement Page 3 of 17 Agree: Jamboree - 17442 Koledo d. Construction Covenant. Owner hereby covenants and agrees on behalf of itself and its successors and assigns in the Site or any portion thereof or any improvements thereon or any interest therein that Owner and such successors and assigns shall rehabilitate the Units in accordance with the Housing Agreement (including but not limited to the Scope of Development), the Redevelopment Plan for the Huntington Beach Redevelopment Project, this Agreement, and plans approved by the City of Huntington Beach, 2.2 Facilities. All of the Units in the Project shall contain facilities adequate for living, sleeping, eating, cooking and sanitation in accordance with all applicable federal, state and local laws and codes. The rehabilitation and maintenance of the Units shall comply with the City's building code, as applicable, and all other applicable local codes, rehabilitation standards, ordinances and zoning ordinances in effect, and the Units shall be decent, safe and sanitary and shall conform to the building, electrical, plumbing, mechanical and energy codes that have been adopted by the City of Huntington Beach. To the extent applicable, the Project shall comply with the accessibility requirements at 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and, if applicable, the design and construction requirements at 24 CFR 100.205 for covered multifamily dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act (42 U.S.C. 3601-3619). 2.3 Residential Use. None of the Units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, or any other use that is inconsistent or incompatible with this Regulatory Agreement. 2.4. Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation nor shall the Owner take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership without prior written approval by Agency. Any such conversion shall comply with the requirements of 24 C.F.R. Section 92.255. 2.5 Tenant Preference. All of the Affordable Units will be made available to Eligible Tenants for rental in accordance with the terms of this Agreement, and the Owner shall not give preference to any particular class or group in renting the Affordable Units in the Project, except to the extent that the Affordable Units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.6 below. 2.6 Tenant Protections. Owner shall comply with the tenant protections provisions of 24 C.F.R. Section 92.253, including but not limited to: a. The lease of an Affordable Unit must be for not less than one year, unless by mutual agreement between tenant and Owner. Regulatory Agreement Page 4 of 17 Agree: Jamboree - 17442 Koledo b. The lease may not contain any of the following provisions: (1) Agreement by the tenant to be sued, to admit guilt or to a judgment in favor of Owner in a lawsuit brought in connection with the lease; C. Agreement by the tenant that the Owner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the Unit after the tenant has moved out of the Unit. The Owner may dispose of this personal property in accordance with state law. d. Agreement by the tenant not to hold the Owner or the Owner's agents legally responsible for any action or failure to act, whether intentional or negligent; e. Agreement by the tenant that the Owner may institute a lawsuit without notice to the tenant; f. Agreement by the tenant that the Owner may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; g. Agreement by the tenant to waive any right to a trial by jury; h. Agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and i. Agreement by the tenant to pay attorney's fees or other legal costs if the tenant wins in a court proceeding by the Owner against the tenant. The tenant, however, may be obligated to pay costs if the tenant loses. 2.7 Termination of Tenancy. Owner, its successors or assigns, may not terminate the tenancy or refuse to renew the lease of a tenant, except (i) for serious or repeated violation of the terms and conditions of the lease; (ii) for violation of applicable federal, state, or local law; (iii) [intentionally omitted; or (iv) for other good cause. Pursuant to 24 C.F.R. 92.253(c), any termination or refusal to renew must be preceded by not less than 30 days by the Owner's service upon the tenant of a written notice specifying the grounds for the action. 3. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS. Owner hereby represents, warrants, and covenants as follows: 3.1 Income Restrictions. Except as expressly provided herein, throughout the term of this Agreement, the Affordable Units shall be rented only to, and occupied only by, Eligible Very Low Income tenants. Each Affordable Unit shall be rented at a rate not to exceed the applicable Affordable Rent. Regulatory Agreement Page 5 of 17 Agree: Jamboree - 17442 Koledo 3.2 Rental Rates. Owner shall rent the Affordable Units to Eligible Tenants at no more than the allowable Affordable Rents for a household size appropriate to the unit, which is the number of bedrooms plus one. Therefore, a two -bedroom Affordable Unit shall be rented at no more than the Affordable Rent for a three -person household. The rental rates for the Affordable Units shall be adjusted annually based upon annual updates of the applicable income and rent standards, including but not limited to the California Housing and Community Development Department and the office of Housing and Urban Development. In no event shall any of the Affordable Units be rented at a rate greater than the Affordable Rent. Failure to comply with the affordability requirements of this Agreement is an event of default under the terms of the Agency Loan. Subject to the right to cure, the Agency Loan of Set Aside Funds will be due and payable immediately if the Affordable Units do not meet the affordability requirements of this Agreement. 3.3 Occupancy By Eligible Tenant. An Affordable Unit initially occupied by an Eligible Tenant shall be deemed occupied by an Eligible Tenant until such Affordable Unit is vacated, even if the Eligible Tenant's household income subsequently increases to an amount that exceeds the maximum allowable income level under this Agreement. While an increase in an Eligible Tenant's household income may, after initially qualifying, subsequently exceed allowable income levels, such a subsequent increase in household income shall not exceed 80% of Area Median Income adjusted for household size. An Affordable Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until reoccupied, so long as Owner is using its best efforts to re -rent such Affordable Unit to another Eligible Tenant. If at any time a tenant's household income increases, resulting in disqualification of such tenant as an Eligible Very Low Income Tenant, such tenant shall have a period of ninety (90) days to relocate from the Site. The disqualified tenant shall be fully responsible for the costs and expenses related to the relocation. Should such tenant face extraordinary hardship in relocating from the Site, the tenant may submit a written appeal to the Agency requesting an extension of the time period within which the tenant must relocate. If the Agency's Executive Director or authorized designee detennines in his or her sole discretion that a hardship exception is justified by the circumstances, he or she may extend the relocation period for up to a maximum of ninety (90) additional days. 3.4 Maximum Occupancy. The maximum number of persons residing in a single residential (two -bedroom) unit may not exceed five persons. Owner shall be responsible for enforcing this maximum occupancy limit. Upon discovery of a violation of this Section 3.4, Owner shall immediately notify the Eligible Tenant of record in writing ("Occupancy Violation Notice"). In the Occupancy Violation Notice, Owner shall inform the Eligible Tenant of the occupancy violation and provide the Eligible Tenant with an opportunity to cure the violation within thirty (30) days from the date of the Notice. 3.5 Income Computation. Immediately prior to a prospective Eligible Tenant's occupancy of an Affordable Unit, Owner shall obtain and maintain on file an income computation and certification form from each such prospective Eligible Tenant dated Regulatory Agreement Page 6 of 17 Agree; Jamboree - 17442 Koledo immediately prior to the date of initial occupancy of an Affordable Unit by such prospective Eligible Tenant. Owner shall use reasonable efforts to verify that the income information provided by an applicant is accurate by taking one or more of the following steps as a part of the verification process: (i) obtain two (2) pay stubs from the most recent pay periods; (ii) obtain a written verification of income and employment from applicant's current employer; (iii) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant's income as is reasonably satisfactory; or (v) obtain such other information as may be reasonably required. Owner shall update the foregoing records annually and shall provide copies of updated tenant eligibility records and monthly rental records to Agency for review. Upon a review of such records, Agency may at its option and at its own expense perform an independent audit of the tenant eligibility records and monthly rental records submitted to Agency for review. Upon review of such records, Agency may at its option and at its own expense perform an independent audit of the tenant eligibility records in order to verify compliance with the income and affordability requirements set forth herein. Owner shall retain the documentation submitted pursuant to 24 C.F.R. 92.203(a)(1) in addition to the records described in this Section for a period of three years after the date the respective records were created. 3.6 Rental Priority. Tenants living in the Project prior to Owner's rehabilitation of the Units as contemplated by the Housing Agreement ("Initial Rehabilitation") who are Eligible Tenants meeting the income restrictions of the Affordable Units as set forth in Section 3.1 shall be given first priority in re -leasing Affordable Units in the Project following completion of the Initial Rehabilitation. Except as otherwise set forth below, Affordable Units shall be rented to Eligible Tenants on a first -come, first -served basis; provided, however, that Owner shall maintain an "interest list" or "eligibility list" of potential tenants; provided, however, that Owner shall not be liable under this Agreement to Agency or any person, firm, or entity in the event an Affordable Unit is rented to a person who is not on any such list or is on such list but is listed lower than another person on such list. 3.7 Renting Vacant Affordable Units. Subject to Owner's policies and procedures for screening potential tenants, which must be approved by the Agency, when an Affordable Unit becomes available as a result of a tenant vacation, Owner shall rent the Affordable Unit to an Eligible Tenant who otherwise meets Owner's approved screening and prequalifi cation criteria in accordance with the following procedure: (a) First, Owner shall rent the Affordable Unit to persons who have been displaced by activities of the Agency, pursuant to California Health & Safety Code Section 33411.3, provided that Agency provides Owner with reasonable notice. (b) Second, Owner shall rent any vacant Affordable Unit in the order of priority as set forth in Section 3.5. Regulatory Agreement Page 7 of 17 Agree: Jamborac - 17442 Koledo 3.8 Maintenance of Records. Owner shall maintain complete and accurate records pertaining to the Affordable Units, and shall permit any duly authorized representative of the Agency to inspect the books and records of Owner pertaining to the Project including, but not limited to, those records pertaining to tenant eligibility and occupancy of the Affordable Units. Records pertaining to the Project and Affordable Units shall be retained for a period of five (5) years after the termination of this Agreement; records pertaining to tenant eligibility shall be retained for the period set forth in Section 3.5. To assist the Agency in meeting its recordkeeping and reporting requirements, Owner shall prepare, maintain and submit to the Agency, as appropriate, the following records and reports: a. Records which demonstrate that the Site meets the property standard specified in 24 CFR 92.251 and the lead -based paint requirements of 24 CFR 92.355; b. Records which demonstrate that each family occupying a unit is income eligible in accordance with 24 CFR 92.203; C. Records which demonstrate that the Site meets the affordability and income targeting requirements of 24 CFR 92.252 for the duration of this Agreement. Records shall be kept for each family occupying a unit; d. Records which demonstrate that each lease complies with the tenant and participant protections, as specified in 24 CFR 92.253. Records shall be kept for each family; C. Equal opportunity and fair housing records, including, as applicable: (1) data on the extent to which each racial and ethnic group and single -headed household (by gender of household head) have applied for, participated in, or benefited from, any program or activity funded in whole or in part with Agency funds; (2) documentation of actions undertaken to meet the requirements of 24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u); (3) documentation of the actions taken to affirmatively further fair housing; f. Affirmative Marketing and MBE/WBE records, including, as applicable: (1) if applicable, records documenting compliance with the affirmative marketing procedures and requirements of 24 CFR 92.351; (2) if applicable, documentation and data on the steps taken by Owner to implement the Agency's outreach programs as set forth in applicable Agency policies and procedures; Regulatory Agreement Page 8 of 17 Agree: Jamboree - 17442 Koledo g. if applicable, records which demonstrate compliance with the requirements of 24 CFR 92.353 relating to displacement, relocation and real property acquisition, including project occupancy lists identifying the name and address of all persons occupying or moving into the Site on and after the date on which Owner obtained site control; h. if applicable, records demonstrating compliance with the labor requirements of 24 CFR 92.354, including contract provisions and payroll records; i. records demonstrating compliance with the lead -based paint requirements of 24 CFR 92.355; j. if applicable, records which support any exceptions to the conflict of interest prohibition pursuant to 24 CFR 92.356; debarment and suspension certifications required by 24 CFR Parts 24 and 91. Owner shall retain all books and records relevant to the Housing Agreement for a minimum of five years after the project completion date, except that records of individual tenant income verifications, project rents and project inspections shall be retained for the most recent five year period until five years after the affordability period terminates, or until the conclusion or resolution of any and all audits or litigation relevant to the Housing Agreement, whichever is later. The Agency, and any of its representatives, shall have the right of access to any pertinent books, documents, papers or other records of the Owner, in order to make audits, examinations, excerpts and transcripts. 3.9 Reliance on Tenant Representations: Each tenant lease shall contain a provision to the effect that Owner has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of an Affordable Unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. 3.10 Conflicts. The rental priority provision set forth in Section 3.6 shall apply only in the event, and to the extent, such provisions are not in conflict with any applicable federal or state law or any regulatory agreement affecting the Project that is recorded in superior priority to this Agreement. 3.11 Prohibition Against Occupying Agency -Assisted Units. No officer, employee, agent, official or consultant of Owner may occupy the Site. 4. MAINTENANCE 4.1 Maintenance Covenant. Owner agrees to maintain all interior and exterior improvements, including landscaping, on the Site in good condition and repair (and, as to landscaping, in a healthy condition), reasonable wear and tear excepted, and in accordance Regulatory Agreement Page 9 of 17 Agree: Jamboree - 17442 Koledo with all applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction (including, but not limited to, Federal Housing Quality Standards as set forth in 24 C.F.R. 982.401). In addition, Owner shall keep the Site free from all graffiti and any accumulation of debris or waste material. Owner shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable materials. The maintenance covenant contained in this Section shall remain in effect for the term of this Agreement. The Project shall comply with the lead -based paint standards in 24 C.F.R. §92.355. Pursuant to Section 92.355 of the Regulations, the Owner hereby agrees to and shall be responsible for testing and abatement activities specified in the Lead -Based Paint Poisoning Prevention Act and the regulations set forth at 24 Code of Federal Regulations Part 35 with respect to the rehabilitation of the Site. 4.2 Agency Rights. Agency shall have the right to enter upon the Site to inspect the Site and both the interiors and exteriors of the Units, upon seventy-two (72) hours notice to Owner. Agency may, but are not required to, each perform or cause to be performed the maintenance necessary to cure any default of these maintenance covenants and Owner shall be liable for payment of reasonable costs (excluding staff salaries and overhead and other similar costs) to perform such required maintenance; provided, however, that Owner first be given written notice of the actions required to cure any default, and Owner, after receipt of such notice, shall have thirty (30) days to cure such defaults, but Owner shall not be deemed in default of the foregoing maintenance covenant if such default cannot reasonably be cured within the thirty (30) day period referenced above so long as Owner has commenced to cure such default within the same thirty (30) day period and is diligently proceeding with the work to cure such default. Notwithstanding the foregoing, if any property conditions are reasonably identified by City or Agency after a property inspection attended by a representative of Owner that pose an immediate danger to life or limb, Owner shall have three (3) days to effect corrections of such condition(s) to Agency's reasonable satisfaction. 4.3 Annual Report. Owner covenants and agrees to submit to the Agency an annual report (the "Annual Report"), which shall include the information required by Section 3.4 of this Agreement and by California Health & Safety Code Section 33418. The Annual Report shall include for each Affordable Unit the rental rate and the income and family size of the occupants, and shall also include the records described in Section 3.5 herein and the financial statements described in Section 5.11 of the Housing Agreement. The income information shall be supplied by the tenant in a certified statement on a form provided by the Agency. The Owner shall submit the Annual Report on or before April 30 of the year following the year covered by the Annual Report, The Owner shall provide for the submission of such information in its leases with tenants. 4.4 Management Plan. Owner shall prepare, submit to Agency within ninety (90) days after recordation of this Agreement and maintain in effect a management plan in accordance with the following ("Management Plan"): Regulatory Agreement Page 10 of 17 Agree: Jamboree - 17442 Koledo (a) The Management Plan, including such amendments as may be approved in writing by the Agency, shall remain in effect for the term of this Agreement. Owner shall not amend the Management Plan or any of its components without the prior written consent of the Agency. The components of the Management Plan shall include: (1) Management Agent. The name and qualifications of the proposed management agent, which may include but shall not be limited to Jamboree Housing Corporation. The Agency shall approve or disapprove the proposed management agent, if other than Jamboree Housing Corporation, in writing based on the experience and qualifications of the management agent. The management agent shall have demonstrated experience in operating affordable housing comparable to the Project. (2) Management Program. A description of the proposed management, maintenance, tenant selection and occupancy policies and procedures for the Affordable Units. (3) Management Agreement. A copy of the proposed management agreement specifying the amount of the management fee and the relationship and division of responsibilities between Owner and management agent. (4) Tenant Lease or Rental Agreement. A copy of the proposed tenant lease or rental agreement to be used in renting the Affordable Units. (5) Annual Operating Budget. Prior to the completion of rehabilitation of the Units and annually thereafter not later than fifteen (15) days prior to the beginning of the next fiscal or calendar year of the Project, Owner shall submit a projected operating budget to the Agency for review and approval. The Agency shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder, and such matter shall be deemed approved unless the Agency provides to Owner its written disapproval within thirty (30) days after receipt of a request for approval, provided Owner includes with its request, a written notice, in capital letters and at least 12-point typeface, stating as follows: NOTICE: PURSUANT TO SECTION 4.4 OF THE REGULATORY AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND JHC — OAKVIEW, LLC, FAILURE BY THE AGENCY TO APPROVE OR DISAPPROVE THE MATTER SUBMITTED WITH THIS REQUEST WITHIN 30 DAYS SHALL BE DEEMED AN APPROVAL. Any disapproval shall be in writing and contain the Agency's reasons for disapproval. Regulatory Agreement Page 11 of 17 Agree: Jamboree - 17442 Koledo (b) Owner hereby covenants and agrees the Agency shall have the right, at any time and from time to time, to give notice to Owner if the Agency determines that the Project is not being managed or maintained in accordance with the Management Plan. The Agency may require the Owner to change management practices or to terminate the management agent and retain a different management agent, approved by the Agency. The Agency agrees that prior to requiring the Owner to change its management agent or the management practices the Agency shall informally consult with Owner, in an attempt to resolve the dispute. If the Agency determines that such an attempt at informal resolution has been unsuccessful, it shall give the Owner thirty (30) days written notice to change the management agent or practice, as the case may be. If Owner fails to do as requested by the Agency in the written notice, the Agency may then require the immediate change of the management practice or agent, as the case may be. The management agreement shall provide that it is subject to termination by the Owner without penalty, upon thirty (30) days prior written notice. Within ten (10) business days following a direction of the Agency to replace the management agent, the Owner shall select another management agent or make other arrangements satisfactory to the Agency for continuing management of the Project. The Owner shall notify the Agency upon learning that there is a voluntary change in the management or control of the management agent, and, if the change is unsatisfactory to the Agency, the Agency shall be entitled to require the Owner to change the management agent in accordance with the terms of this paragraph. 5. ENFORCEMENT. In the event Owner defaults in the performance or observance of any covenant, agreement or obligation of Owner pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) days after written notice thereof (or such longer period as may apply to the specific alleged default) shall have been given by Agency, or, in the event said default cannot be cured within said time period, Owner has failed to commence to cure such default within said thirty (30) days and diligently prosecute said cure to completion, then Agency shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: (a) By mandamus or other suit, action or proceeding at law or in equity, require Owner to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of this Agreement; or (b) Take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants and agreements of participant hereunder, including foreclosure of the Deed of Trust. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. 6. NONDISCRIMINATION. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, age, class, income, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, Regulatory Agreement Page 12 of 17 Agree. hunhowc - 17442 Koledo lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, or in the awarding of contracts for the Project, nor shall participant, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof, or in the awarding of contracts for the Project (except as permitted by this Agreement). Owner shall comply with all applicable federal, state and local nondiscrimination, fair housing, and equal opportunity requirements. In addition, Owner shall conduct affirmative marketing and minority outreach activities as required by federal regulations. 6.1 Form of Nondiscrimination and Nonsegregation Clauses. The Owner shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, age, class, income, religion, sex, sexual orientation, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises 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 through him or her, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, 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." Regulatory Agreement Page 13 of 17 Agice. Jamboree - 17442 Koledo (c) In contracts: There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself 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 of the land." 7. COVENANTS TO RUN WITH THE LAND. Owner hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Owner hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land and shall pass to and be binding upon the Owner's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire, except the nondiscrimination covenants contained in Section 6 and Section 6.1 shall remain in perpetuity. All covenants without regard to technical classification or designation shall be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. 8. ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any covenant in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other reasonable attorneys' fees and costs. Attorneys' fees shall include attorneys' fees on any appeal, and in addition a party entitled to attorneys' fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery, and expert witness fees. 9. AMENDMENTS. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Orange. 10. NOTICE. Any notice required to be given hereunder shall be made in writing and shall be given by (i) personal delivery, (ii) courier service that provides a receipt showing date and time of delivery, or (iii) certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Secretary Regulatory Agreement Page 14 of 17 Agrec: Jamborce - 17442 Koledo Owner: JHC — Oakview, LLC c/o Jamboree Housing Corporation 17701 Cowan Avenue, Ste 200 Irvine, CA 92614 Attn: President Notices personally delivered or delivered by courier shall be effective upon receipt. Mailed notices shall be effective on the earlier of receipt or Noon on the second business day following deposit in the United States mail. 11. SEVERABILITY/WAIVER/INTEGRATION. 11.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 11.2 Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 11.3 Integration. This Agreement contains the entire Agreement between the parties and neither party relies on any warranty or representation not contained in this Agreement. 12. GOVERNING LAW. This Agreement shall be governed by the internal laws of the State of California. 13. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. 14. SUBORDINATION. Agency may agree to subordinate this Agreement to superior deeds of trust, regulatory agreements and other related documents including but not limited to those required by the Conventional Lender, if satisfactory written commitments are obtained from such Conventional Lender to protect the Agency's investments in the event of a default by Owner. Any such Subordination Agreement shall provide for: (i) A right of the Agency to cure a default on the Conventional Lender's First Deed(s) of Trust; (ii) A right of the Agency to negotiate with any lenders after notice of default from the lender; (iii) An agreement that if prior to foreclosure of any lenders' loans, the Agency takes title to the Site and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan by reason of the transfer of title to the Agency; and (iv) A right of the Agency to purchase the Site from the Developer at any time after a default on the loan that remains uncured after expiration Regulatory Agreement Page 15 of 17 Agree: Jamboree - 17442 Koledo of the applicable cure period. If, from time to time and at one or more times, Owner chooses to refinance the loan secured by any deed of trust which is superior to this Agreement, Agency agrees to subordinate this Agreement to the refinancing lender's deed of trust under the same terms and conditions as set forth herein on the condition that the amount of the new loan is no greater than the original principal balance of the refinanced note. [SIGNATURES APPEAR ON NEXT PAGE] Regulatory Agreement Page 16 of 17 Agree: Jamboree - 17442 Koledo IN WITNESS WHEREOF, the Agency and Owner have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. "OWNER" JHC — OAKVIEW, LLC a California limited liability company Its: Jamboree Housing Corporation, a California nonprofit corporation, Managing Member By: Laura Archuleta Its: President Agree: Jamboree - 17442 Koledo "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic SIGNED IN COUNTERPART ATTEST: Chairperson SIGNED IN COUNTERPART Agency Secretary APPROVED AS TO FORM: SIGNED IN COUNTERPART General Counsel SIGNED IN COUNTERPART KANE, BALLMER & BERKMAN Agency Special Counsel Regulatory Agreement Page 17 of 17 IN WITNESS WHEREOF, the Agency and Owner have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. "OWNER" JHC — OAKVIEW, LLC a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic By: SIGNED IN COUNTERPART Chairperson KEITH BOHR Laura Archuleta ATTEST: Its: President Cal Agency Secretary RO N LUGAR COUNTERPART APPROVED AS TO FORM: k� 1- Og Gneral Couns1n �101 X1514- KANE, BALLMER Agency Sp' Regulatory Agreement Page 17 of 17 Agree: Jamboree - 17442 Koledo STATE OF CALIFORNIA } )ss. COUNTY OF OR K16 ) On F C,8?4i/ *-V � �j, w before me, Susi� `I:. A -A K C ff/� , a Notary Public, personally appeared L �tteA AP-c+j u L-e. f k , who proved to me on the basis of satisfactory evidence to be the person whose name(4 is/are subscribed to the within instrument and acknowledged to me that Jie/she/they executed the same in his/herMiair authorized capacity(ies), and that by his/her/their signature(son the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. s7mL CHtty COMSlon 0 4 764968 n tdotouWL, . Collfor Signature f Z ��t;' `� �4 Ite t t _ (Seal p�yCo01*V° County j.$ 2011 STATE OF CALIFORNIA ) )ss. COUNTY OF ) On before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) STATE OF CALIFORNIA ) )ss. COUNTY OF (ate ) On % [46y �5-, c�OOZ before me, f' Z_ . �St K Z , a Notary Public, personally appeared KEZZ2f 69#-,Q. /9, �jL'y�J�1cG,�q�> who proved to me on the basis of satisfactory evidence to be the person whose nametq).is(osubscribed to the within instrument and acknowledged to me that .lash the ' executed the same in t of authorized capacity of s ,and that by-hiLluwr ear )signature(Don on the instrument the person or the entity upon behalf of which the persor s(' )acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. eonana o SMWB"179 Natay Now' Ca�Domia Signature (Seal) STATE OF CALIFORNIA ) )ss. COUNTY OF ) On before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) ATTACHMENT I LEGAL DESCRIPTION OF SITE Legal Description (17442 Koledo Lane, Huntington Beach, CA) LOT 43 OF TRACT NO. 4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO. 4301, AS ABANDONED BY THAT CERTAIN RESOLUTION NO. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN, UNDER AND/OR THAT MAY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH V. MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, DATED OCTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, OFFICIAL RECORDS, RECORDS OF ORANGE COUNTY, CALIFORNIA, WHICH DEED FURTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTITLE THE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIGHTS IN OR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPTH OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, OR THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED TO CITY OF HUNTINGTON BEACH RECORDED IN BOOK 6511, PAGE 679, OFFICIAL RECORDS. APN: 165-232-08 THIS IS A TRUE CERTiFlFD COPY OF THE RECORD IF IT BEARS -I H L SEAL, IMPRINTED IN PURPLE, OF THE ORANGE COUNTY CLERK -RECORDER. DATE EP 112002 CERTIFICATION FEML�M-plj COUNITY CLE RK-RECORDER oll,,ANCir-, COUNTY ST,%!-L oF CALIFORNIA EXHIBIT I Subordination Agreement [behind this page] Subordination Agreement �.l RECORDING REQUESTED BY FIRST AMERICAN TITLE COMPANY CQMMERCIALJINDUSTRIAL DIVISIOP! WHEN RECORDED RETURN TO: JHC — Oakview, LLC c/o Jamboree Housing Corporation 17701 Cowan Avenue, Ste 200 Irvine, CA 92614 Attn: President Recorded In Official Records, Orange County Tom Daly, Clerk -Recorder IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 42.00 2009000111407 03:06pm 03/10/09 213 92 S13 13 0.00 0.00 0.00 D.00 36.00 0.00 0.00 0.00 AGENCY LOAN SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT ("Agreement') is entered into this I) day of M� & co� , 2009, by and among THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (the "Agency"); JHC — OAKVIEW, LLC, a California limited liability company ("Developer"); and CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION ("Lender"), RECITALS A. Developer owns fee title to the real property described on Attachment No. "I" (the "Property") attached hereto and incorporated herein by reference. The Agency, the City of Huntington Beach ("City"), and Developer have entered into that certain Affordable Housing Agreement dated as of "ti0- Z , 2009 (the "Housing Agreement'). Pursuant to the terms of the Housing Agreement, Developer has executed a Note in favor of the Agency in the amount of ONE MILLION THREE HUNDRED NINETY-ONE THOUSAND SIX HUNDRED FORTY-TWO AND NO/I OOS DOLLARS ($1,39I,642.00) ("Agency Loan") to assist Developer in the acquisition and rehabilitation of the Property as an affordable housing complex. The Agency Loan is to be secured by a Subordinated Deed of Trust With Assignment of Rents With Rider Attached encumbering the Property and naming the Agency as Beneficiary (the "Agency Deed of Trust'). The Housing Agreement is hereby incorporated by reference as though fully set forth herein. All capitalized terms not defined herein shall have the meanings ascribed to them in the Housing Agreement. B. City, Agency and Developer have also entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions recorded against the Property THIS DOCUMENT WAS SIGNER IN COUNTERPART AND IS TO BE CONSIDERED AS ONE RECORDABLE DOCUMENT. ("Regulatory Agreement"), which Regulatory Agreement contains, among other terms, certain use restrictions affecting the Property. C. Developer has obtained a loan from Lender in the amount of One Hundred Ninety Seven Thousand Dollars ($197,000.00) (the "Lender Loan"). To repay the Lender Loan, Developer has executed or is about to execute a deed of trust encumbering the Property to secure a promissory note in the sum of the Lender Loan, payable upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). In connection with the Lender Loan, Developer may also be required by Lender to execute a regulatory agreement to be recorded against the Property, which may contain among other terms, use restrictions affecting the Property (the "Lender Regulatory Agreement"). D. Lender is willing to make the Lender Loan provided the Lender Deed of Trust and Lender Regulatory Agreement are a lien or charge upon the Property prior and superior to the lien or charge of the Agency Deed of Trust and provided that the Agency will subordinate the lien or charge of the Agency Deed of Trust to the lien or charge of the Lender Deed of Trust and the Lender Regulatory Agreement. E. It is to the mutual benefit of the Lender, Agency, and Developer that the Lender make the Lender Loan to Developer; and the Agency has agreed that the Lender Deed of Trust and Lender Regulatory Agreement shall, when recorded, constitute a lien or charge upon the Property which is prior and superior to the lien or charge of the Agency Deed of Trust subject to and conditioned upon the specific terms and provisions of this Subordination Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the Agency, Lender and Developer, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: Subordination by Agency 1.1 Subordination of Agency Deed of Trust and Regulatory Agreement to Lender Deed of Trust and Lender Regulatory Agreement. The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder), and the Lender Regulatory Agreement (and any amendments or modifications thereto) (except amendments which increase the loan amount) shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior to (i) the lien or charge of (a) the Agency Deed of Trust, (b) the Regulatory Agreement, (c) Section 2.5 of the Housing Agreement and (d) all options, rights of first refusal, rights of reverter and termination and construction obligations set forth in the Housing Agreement, (ii) all present and future indebtedness and obligations secured thereby, and (iii) all rights and privileges of Agency thereunder, provided that the indebtedness secured by the Lender Deed of Trust does not exceed One Hundred Ninety -Seven Thousand Dollars ($197,000.00). If Developer chooses to refinance the Lender Loan, Agency agrees to subordinate the Agency Deed of Trust and the Regulatory Agreement to the refinancing Lender's Deed of Trust under the same terms and conditions as set forth in this Agreement, on the condition that the amount of the new loan is no greater than the original principal balance of the Lender Loan. 1.2 Covenants of Agency. The Agency declares, agrees and acknowledges that: (a) The Agency consents to all provisions of the Lender Note and the Lender Deed of Trust, and (ii) all provisions of the Lender Regulatory Agreement. (b) To Agency's actual knowledge, there is no breach, event of default or default existing under the Agency Deed of Trust or any circumstances, event, omission or failure of condition which would constitute such a breach, default or event of default after notice or lapse of time, or both. 2. Reliance by Lender and Agency. The Lender would not make the Lender Loan and the Agency would not have agreed to subordinate the Agency Deed of Trust without this Subordination Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this waiver, relinquishment and subordination. 3. Notice to Agency. In the event of a breach or default by Developer under the terms of the Lender Deed of Trust, Lender shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Developer. Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall have each of the following rights so long as the Agency Deed of Trust encumbers any portion of the Property or interest therein: (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or any lien under the Lender Regulatory Agreement. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of Trust or other lien prior to the date that is thirty (30) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonmonetary default, the Lender shall not foreclose its Lender Deed of Trust or other lien prior to the date that is one hundred twenty (120) days after the date that the Lender would otherwise be legally entitled to foreclose the Lender Deed of Trust. (b) To negotiate with the Lender in good faith regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien (without any party having an obligation to continue or enter into any final agreement). (c) To negotiate with the Developer in good faith to purchase the Property from Developer, subject to the Lender Deed of Trust without the consent of the holder of the Lender Deed of Trust or enforcing party under the Lender Regulatory Agreement (without any party having an obligation to continue or enter into any final agreement). The Lender agrees that the exercise of any of the rights set forth in this Section by Agency shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan. 3.1 Foreclosure of Agency Deed of Trust. The Lender hereby agrees that in the event that Agency forecloses the Agency Deed of Trust, said foreclosure shall not, in and of itself, give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan. 3.2 Disbursements. Lender, in making disbursements of the proceeds of the Lender Loan, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing the Lender Loan shall not defeat the subordination herein made in whole or in part. 4. Miscellaneous 4.1 Entire Agreement. This Subordination Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and Lender Regulatory Agreement on the one hand, and the Agency Deed of Trust and the Regulatory Agreement on the other hand, any prior agreement as to such subordination including, but not limited to, those provisions, if any contained in the Agency Deed of Trust and the Regulatory Agreement, which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assign . This Subordination Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law. This Subordination Agreement shall be construed according to the internal laws of the State of California. 4.4 Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice. Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by (i) personal delivery, (ii) by courier service that provides a receipt showing date and time of delivery, or (iii) by registered or certified mail, return receipt requested, postage prepaid. Notices shall be directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be deemed given upon receipt if by personal delivery or courier service, or if by mail the earlier or (x) actual receipt or (y) forth -eight (48) hours after deposit in the United States mail. If to Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Executive Director If to Developer: JHC — Oakview, LLC c/o Jamboree Housing Corporation 17701 Cowan Avenue, Ste 200 Irvine, CA 92614 Attention: President If to Lender: Clearinghouse Community Development Financial Institution 23861 El Toro Road, Suite 401 Lake Forest, CA 92630 Attention: Kristy 011endorff 4.6 Attorney's Fees. In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Counterparts. This Subordination Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. [Remainder of Page Intentionally Left Blank] IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "DEVELOPER" JHC-OAKVIEW, LLC a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: aura Archuleta Its: President "LENDER" a By: SIGNED IN COUNTERPART Its: "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH a public body, corporate and politic SIGNED IN COUNTERPART Chairperson ATTEST: SIGNED IN COUNTFRPART Agency Secretary APPROVED AS TO FORM: SIGNED IN COUNTERPART General Counsel SIGNED IN COUNTERPART KANE BALLMER & BERKMAN Agency Special Counsel IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "DEVELOPER" JHC-OAKVIEW, LLC a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH a public body, corporate and politic SIGNED IN COUNTERPART Chairperson SIGNED IN COUNTERPART By: Laura Archuleta Its: President "LENDER" CLF.ARTNGBOTTF. SCOMMTTNTTY , bEVELOPMENT FINANCIAL, INSTITUTION rri ATTEST: SIGNED IN COUNTERPART Agency Secretary APPROVED AS TO FORM: SIGNED IN COUNTERPART General Counsel SIGNED IN COUNTERPART KANE BALLMER & BERKMAN Agency Special Counsel IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "DEVELOPER" "AGENCY" JHC-OAKVIEW, LLC REDEVELOPMENT AGENCY OF THE a California limited liability company CITY OF HUNTINGTON BEACH a public body, corporate and politic By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By: SIGNED IN COUNTERPART Laura Archuleta Its: President "LENDER" CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION By: SIGNED IN COUNTERPART Its: Chairperson KEITH BOHR ATTEST: (Z4-j4 Agency Secretary TWIN LUGAR APPROVED AS TO FORM: eneral Coun ei �Z?IDS r Agency Special STATE OF CALIFORNIA ) )ss. COUNTY OF DR PiKIM: ) On f &F;,WKV A ,�-009 before me, 4-5- o 'R. N:tiC -0J , a Notary Public, personally appeared ►-ftKA P*C P tii-L-TA who proved to me on the basis of satisfactory evidence to be the person whose name(s) is/aie subscribed to the within instrument and acknowledged to me that -he/she/they executed the same in his/her/their- authorized capacity(ies), and that by4i&/her/their signature($) on the instrument the personA, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. SUSAN R. HANCHIN Commission # 175496a Signature Gt.�G �\• ��"'� x �c.,U (Seal) Notary Public - California Orange County MVCM n.1DVwhd2,2011 STATE OF CALIFORNIA )ss. COUNTY OF ) On before me, , a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) STATE OF CALIFORNIA ) )ss. COUNTY OF (XCl ) Voloebefore me, n S. ovembe On , a Notary � ®Q.IIGC�d l � � 2� Public, personally as peared who proved to me on the basis of satisfactory evidence to be th person(s) whose name s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature eal) S.� KRIgTEN S. OLIE"DT tea.# 1697032 N Uv tbNY EXP. DCT. I Y016 STATE OF CALIFORNIA ) )ss. COUNTY OF ) On before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) STATE OF CALIFORNIA ) )ss. COUNTY OF ) On mq,,,9& 3 �00 '? before me, L- - 6SI'W 7,4 , a Notary Public, personally appeared v ,,1 who proved to me on the basis of satisfactory evidence to be the perso 1whose nameM is�subscribed to the within instrument and acknowledged to me that executed the same ink t ear authorized capacity(ie , and that by-W"er/ eir ignatureMon the instrument the person, or the entity upon behalf of which the persorapacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P. L ESPl ZA WITNESS my hand and official seal. _ cam�#� 15", ten► P - 00110 nio cyan" car Signature � � (Seal) AAbCo�n � STATE OF CALIFORNIA ) )ss. COUNTY OF ) On before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) ATTACHMENT I LEGAL DESCRIPTION OF SITE Legal Description (17442 Koledo Lane, Huntington Beach, CA) LOT 43 OF TRACT NO. 4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO. 4301, AS ABANDONED BY THAT CERTAIN RESOLUTION NO. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN, UNDER AND/OR THAT MAY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH V. MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, DATED OCTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, OFFICIAL RECORDS, RECORDS OF ORANGE COUNTY, CALIFORNIA, WHICH DEED FURTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTITLE THE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIGHTS IN OR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPTH OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, OR THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED TO CITY OF HUNTINGTON BEACH RECORDED IN BOOK 6511, PAGE 679, OFFICIAL RECORDS. APN: 165-232-08 THIS IS A TRUE CrpDFM9 COPY OF THE IF SEAL, ,CORD IF IT BEARS'a imPRMTED IN PURME, OF THE ORANGE ,,- OUNTY CLERK -RECORDER. DATE CERTIFICATION FEE' COUNTY CLERK -RECORDER TOMMY! ICA MW -4 ORANGE COUNTY STA 11 CALIFORNIA EXHIBIT J Release of Construction Covenants [behind this page] Release of Construction Covenants This Document was electronically recorded by City of Huntington Beach FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Clerk Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 111111111111111111111111111111111111111111111111111111111111111111 NO FEE 2010000617049 02:21 pm 11/18/10 93 401 R08 4 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code § 27383) This dooim®nt is solely for On ofkiW business of the City of Hunfttw APN: 165-232-08 Beach, as contemp lated under Government Code sec. 6103 and shoulld be reca, ded We of RELEASE OF CONSTRUCTION COVENANT'S Releasing Party: Redevelopment Agency of the City of Huntington Beach Party Released: JHC — Oakview, LLC WHEREAS, JHC — OAKVIEW, LLC, a California limited liability company (the "Developer") is the owner of that certain real property situated in the City of Huntington Beach, California described in Exhibit "A" which is attached hereto and made a part hereof (the "Site"), and has agreed to rehabilitate the existing improvements thereon (the "Improvements"); and WHEREAS, pursuant to the Affordable Housing Agreement ("Housing Agreement") entered into by and between the Redevelopment Agency of the City of Huntington Beach (the "Agency") and the Developer dated as of March 2, 2009, the Agency has agreed to furnish the Developer with a Release of Construction Covenants ("Release") upon the completion of the rehabilitation of the improvements, and such certificate is to be in such form as to permit it to be recorded in the Recorder's Office of Orange County; and WHEREAS, the Housing Agreement states that the Release shall be conclusive determination of satisfactory completion of the rehabilitation of the Improvements as required by the Housing Agreement; and WHEREAS, the Agency has each determined that the rehabilitation of the Improvements on the Site as required by the Housing Agreement has been satisfactorily completed. NOW THEREFORE, it is hereby acknowledged and agreed by the parties hereto that: 1. The Agency hereby certifies that the rehabilitation of the Improvements on the Site has been fully and satisfactorily performed and completed as required by the Housing Agreement. 2. The Redevelopment Agency of the City of Huntington Beach hereby releases Agree: Jamboree-17442 Koledo Release of Construction Covenants JHC - Oakview LLC from its obligations under the Housing Agreement to rehabilitate the Improvements on the Site. 3. Nothing contained in this instrument shall modify any provisions of the Housing Agreement or release Developer from any of its obligations under the Housing Agreement except the obligation to rehabilitate the Improvements. IN WITNESS WHEREOF, the Agency has executed this Release this day of November, 2010. "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Cha' rson APPROVED AS TO FORM: By: �-�X General Counsel p/ 1,r"ri By:�%"UfG( J "NE, BALLMER & BERKMAN Agency Special Counsel 2 Agree: Jamboree-17442 Koledo Release of Construction Covenants EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY COMMONLY KNOWN AS 17442, Koledo Lane Huntington Beach, California 92647 Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: LOT 43 OF TRACT NO. 4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO. 4301, AS ABANDONED BY THAT CERTAIN RESOLUTION NO. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO. 84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN, UNDER AND/OR THAT MAY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH V. MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, DATED OCTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, OFFICIAL RECORDS, RECORDS OF ORANGE COUNTY, CALIFORNIA, WHICH DEED FURTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTITLE THE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIGHTS IN OR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPTH OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, OR THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED TO CITY OF HUNTINGTON BEACH RECORDED IN BOOK 6511, PAGE 679, OFFICIAL RECORDS. APN: 165-232-08 Agree: Jamboree-17442 Koledo Release of Construction Covenants STATE OF CALIFORNIA COUNTY OF ORANGE On A . 0 before me, L _�fr'vet!'�7 , a Notary Public, personally appeared kL-&y Aqy Sc)tiu L., FLYA)A) who proved to me on the basis of satisfactory evidence to be the persoi s whose name) -is gD subscribed to the within instrument and acknowledged to me that .hg/ the� executed the same in-krig/-13e �ieir authorized capacity ies and that by his / signatur� s)jon the instrument the persont , or the entity upon behalf of which the persorl6j acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. P �. ESPARZA Commission # 1857021 a •'a" Notary Public - California Orange County Signature (Seal) Seal Comm. Ex Tres Aug4, 201 r /J G��_, Agree: Jamboree-17442 Koledo Release of Construction Covenants EXHIBIT K Notice of Affordability Restrictions [behind this page] Notice of Affordability Restrictions RECORDING REQUESTED BY FIRST AMERICAN TITLE COMPANY. COMMERCIALIINDUSTRIAL DIVISIO}`I. FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIVIIIIIIIIIIIIiillll NO FEE 2009000111403 03:06pm 03/10/09 213 92 NO3 5 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Secretary NO ' 4 Sa • 5At (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code § 6103) Notice of Affordability Restrictions on Transfer of Property NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f) as amended effective January 1, 2008, the Housing Authority of the Redevelopment Agency of the City of Huntington Beach is recording this Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 17442 Koledo Lane, Huntington Beach, California and more particularly described in Exhibit "A" attached hereto (the "Property"). The Property is subject to the Regulatory Agreement and Declaration of Covenants and Restrictions (the "Regulatory Agreement") recorded concurrently herewith, which restricts the use of the Property as follows: (1) All Five (5) 2-bedroom units shall be rented exclusively to Very Low Income households at an Affordable Rent as provided in California Health and Safety Code Section 50053. (2) The maximum incomes of eligible Very Low Income tenants shall be determined on the basis of the income limits for households in the Anaheim -Santa Ana -Garden Grove, CA SMSA, published approximately annually by the California Department of Housing and Community Development ("HCD"). Page I The affordability restrictions imposed on the Property by the Regulatory Agreement are scheduled to expire on the date that is sixty (60) years after the issuance of the permanent certificate of occupancy for the initial construction of the housing on the Property. This Notice is recorded for the purpose of providing notice only and it in no way modifies the provisions of the Regulatory Agreement. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic B y: Chairperson KEITH BOHR ATTEST: By: 644-i Ag ncy Secretary R N LUGAR APPROVED AS TO FORM: By:• 2 c7 G neral Counsel 21121101 KANE, BALLM AERKMAN Agency Special o sel Page 2 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT O \C/-.�C cam• : C/:��/:�c/:Sc/:��/:��•/:CS/sC✓c�</:�C/: N:�C/`.�C/CSC/:�Q/at/•.\t s\���!'.�•� •�� �\.•:\� �\�/.•.�C/•\�i'.j��:jt/:�C�:j��.-�: s�2: sjC�c\C t\���?2!':����� '\C '\�:'.\� s�C State of California County of 064-71 On0'before me, Date personally appeared 1 Here Insert Name and 0WObf the Officer who proved to me on the basis of satisfactory evidence to be the persor4o whose nam ar subscribed to the within instrument and acknowledged to me that e executed the same i ' their authorized capaci es , and that by.bisAw of signatures on the instrument the persor(@j or the entity upon behalf of which the persor(s acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS 77T, ials .Signature Place Notary Seat Above Signature of No!K Pudic OPTIONAL Though the information below is not required by taw, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Title or Type of Document: Document Date: ment %KEEnJsr-��. r�r= Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Individual I Corporate Officer — Title(s): — Partner — ❑ Limited C General C Attorney in Fact r� Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing RIGHT THUMBPRINT- OFSIGNER Number of Pages: Signer's Name: I1 Individual ❑ Corporate Officer — Title(s): Partner — C Limited rl General 71 Attorney in Fact I- Trustee C Guardian or Conservator Li Other: Signer Is Representing RIGHT THUMBPRINT' OF SIGNER" 02007 National Notary Association • 9350 De Soto Ave., PO_Box2402 • Chatsworth, CA 91313-2402- www.NatioriatNotaryorg Item #5907 Reorder; Call Toll -Free 1-800-876-6827 0 Exhibit "A" Real Property in the City of Huntington Beach, County of Orange, State of California, described as follows: EXHIBIT 'A' File No.: NCS-369452-SAI (dn) Property: 17442 Koledo Lane, Huntington Beach, CA 92647 LOT 43 OF TRACT NO.4301, AS SHOWN ON A MAP RECORDED IN BOOK 177, PAGES 11 AND 12 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF THE EASTERLY ONE-HALF OF KOLEDO LANE, 60.00 FEET WIDE, AS SHOWN ON THE MAP OF SAID TRACT NO.4301, AS ABANDONED BY THAT CERTAIN RESOLUTION NO. 5363 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED FEBRUARY 15, 1984 AS INSTRUMENT NO.84-065494 OF OFFICIAL RECORDS OF SAID COUNTY, SAID PORTION BEING BOUNDED ON THE SOUTH BY THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID LOT 43, AND ON THE NORTH BY THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID LOT. EXCEPT ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES IN, UNDER AND/OR THAT MAY BE PRODUCED BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, OR ANY PART THEREOF, AS RESERVED IN THE DEED FROM JOSEPH V. MADDEN AND WIFE, TO JOSEPH GERALD MABEY AND OTHERS, DATED OCTOBER 13, 1950, RECORDED NOVEMBER 13, 1950 IN BOOK 2100, PAGE 411, OFFICIAL RECORDS, RECORDS OF ORANGE COUNTY, CALIFORNIA, WHICH DEED FURTHER PROVIDES THAT SUCH RESERVATIONS SHALL NOT ENTITLE THE SAID GRANTORS, THEIR HEIRS AND ASSIGNS, TO ANY USE OF, OR RIGHTS IN OR TO ANY PORTION OF THE SURFACE OF SAID PROPERTY TO A DEPTH OF 150 FEET BELOW THE SURFACE THEREOF. ALSO EXCEPT ALL UNDERGROUND WATERS LYING BENEATH THE REAL PROPERTY DESCRIBED HEREIN BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE OF SAID LAND, OR THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF PRODUCING WATER AS SET FORTH IN DEED TO CITY OF HUNTINGTON BEACH RECORDED IN BOOK 6511, PAGE 679, OFFICIAL RECORDS. A.P.N. 165-23 2-08 NCS-369452-SAl 1 of 1 THIS IS A TRUE CERTIFIFD COPY OF THE RECORD IF IT BEARS T1 IE SEAL, 1WIRINTED IN PURPLE, OFTHE ORkNGE Co UNTY CLE RK-RECORDER. r. Up I T, -2009 ATE: ----- - CERTIFICATION CO -RECOR UNTY CLERK 0,,,NNGF COUNTY SIA] OF CALIFORNIA EXHIBIT L Disbursement Agreement [behind this page] Disbursement Agreement DISBURSEMENT AGREEMENT (17442 Koledo Lane) THIS DISBURSEMENT AGREEMENT ("Agreement") is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), JHC — OAKVIEW, LLC, a California limited liability company ("Borrower"), and CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION ("Conventional Lender"), as of 12009. RECITALS A. Agency and Borrower have heretofore entered into that certain Affordable Housing Agreement dated on or about �, 2009 ("Affordable Housing Agreement"), relating to that real property legally described in Exhibit A to the Affordable Housing Agreement (the "Property"). The Affordable Housing Agreement, the promissory note evidencing the Agency Loan (defined below), the deed of trust securing the Agency Loan, the Regulatory Agreement and Declaration of Covenants and Restrictions dated on or about the date hereof, and other instruments referred to in the Affordable Housing Agreement, are sometimes referred to collectively as the "Agency Loan Documents." Terms not defined herein shall have the meaning given to them in the Agency Loan Documents. B. In accordance with the Affordable Housing Agreement, Borrower intends to acquire and rehabilitate a residential development consisting of ten dwelling units, as described in the Scope of Development attached to the Affordable Housing Agreement as Exhibit C (the "Project"). The units will be rented to and occupied by Very Low and Low Income households. The costs of acquiring the Property and rehabilitating the Project are set forth in the Project Budget attached to the Affordable Housing Agreement as Exhibit D and incorporated herein by this reference (the "Project Budget"). The Project Budget shall be subject to amendment from time -to -time, subject to the prior written approval by the Conventional Lender and the Agency Executive Director or designee, upon which approval the Project Budget shall be replaced by the approved revised Project Budget. C. Pursuant to the Affordable Housing Agreement, Agency has agreed to make a loan of Set Aside Funds to Borrower in the original principal amount of $1,391,642.00 (variously referred to as the "Agency Loan" and the "Agency funds") to be used to finance a portion of the Project Costs. D. Conventional Lender and Borrower have entered into that certain [insert title of loan agreement] ("Conventional Loan Agreement"), pursuant to which Conventional Lender has agreed to lend Borrower funds in the amount of approximately $197,000.00 (variously referred to as the "Conventional Loan" and the "Conventional Lender Funds") to finance a portion of the Project Costs. The Conventional Loan Agreement, the promissory note evidencing the Conventional Loan, the deed of trust securing the Conventional Loan and other instruments referred to in the Conventional Loan Agreement are sometimes referred to collectively as the "Conventional Loan Documents." DISBURSEMENT AGREEMENT Page 1 Agree: 17442 Koledo Lane E. The Agency Funds and the Conventional Lender Funds are referred to herein individually and collectively as the "Project Funds." Agency and Conventional Lender are referred to herein individually as a "Lender" and collectively as the "Lenders." F. A portion of the Conventional Lender Funds will be used to make payments directly to, or for the benefit of, those persons who meet the eligibility requirements of the Uniform Relocation Act and the California Relocation Assistance Act and the guidelines promulgated in connection therewith, with regard to the Project. Those costs, together with the cost of preparing a Relocation Plan for the Project, shall be referred to as "Relocation Costs." G. The estimated amount of the Relocation Costs for the Project is set forth in the Project Budget. The Lenders and Borrower desire to enter into this Agreement to provide for the disbursement of the Project Funds for payment of Relocation Costs necessary to the completion of the Project in accordance with applicable law. Relocation Costs that are approved for payment pursuant to this Agreement shall be referred to as the "Approved Relocation Costs." NOW, THEREFORE, the parties agree as follows: 1. Deposit and Use of Funds a. Agency. The Agency Funds shall be held by the Agency as the Agency shall determine, to be disbursed as provided in the Agency Loan Documents and this Agreement. The Agency Funds are not pledged to the Conventional Lender or any other lender, nor shall they constitute security for the Conventional Loan or any other loan. b. Conventional Loan. The Conventional Lender Funds shall be deposited and held by the Conventional Lender as the Conventional Lender shall determine, to be disbursed as provided in the Conventional Loan Documents and this Agreement. The Conventional Lender Funds are not pledged to the Agency or any other lender, nor shall they constitute security for the Agency Loan or any other loan. 2. Disbursement. Each Lender shall disburse its respective Project Funds as follows: a. The Agency shall disburse the approximate amount of $1,065,917 of the Agency Loan to pay a portion of the acquisition and closing costs for Borrower's purchase of the Site in the estimated amount of $1,003,575 (consisting of $1,000,000 in acquisition costs and $3,575 in closing costs), the initial payment of the Developer Fee in the amount of $33,334, the cost of preparing the Relocation Plan for the Project in the amount of $5006 and reimbursement in the estimated amount of $24,002 of costs previously incurred by Developer for environmental services, Conventional Lender fees and appraisal costs. b. The Agency shall disburse to Borrower, over the course of one or more draws, the balance of the Agency Loan in the estimated amount of $325,725 for payment of approved Project Costs. DISBURSEMENT AGREEMENT Page 2 Agree: 17442 Koledo Lane C. Conventional Lender shall disburse to Borrower, over the course of one or more draws, a portion of the Conventional Lender Funds in the estimated amount of $196,912 for payment of those Approved Relocation Costs not paid with the proceeds of the Agency Loan and shall disburse the balance of the Conventional Lender Funds in accordance with the Conventional Loan Documents. d. Borrower shall be responsible to provide funds if and as needed to pay for Project Costs necessary for the completion of the Project that exceed the line item amount set forth in the approved Project Budget. To the extent Borrower fails to provide such additional funds, the Lenders shall each, in addition to their other rights and remedies, have the right (but not the obligation) to advance additional money to pay such additional Project Costs as such Lender may deem necessary to protect its collateral and complete rehabilitation of the Project. Any additional amounts advanced by a Lender to pay additional Project Costs shall be added to the stated loan amount of that Lender's loan. To the extent Borrower funds are provided to pay additional approved Relocation Costs, such funds shall be deposited with the Agency and disbursed in accordance with the terms of this Agreement. 3. Each Lender shall determine whether or not the conditions precedent to its obligation to disburse its Loan Funds have been satisfied or whether or not to waive any condition precedent to its obligation to disburse its Loan Funds which such Lender determines has not been satisfied. 4. Documentation of Relocation and Rehabilitation Costs. Relocation Costs to be paid with Project Funds shall be consistent with the Relocation Plan that was approved by the Agency for the Project. Borrower shall utilize the services of a relocation consulting firm approved in writing by the Agency. The Agency hereby approves the firm of Pacific, Overland and Cutler, Inc. Disbursements of Project Funds for the payment of approved Relocation and Rehabilitation Costs shall be conditioned upon submission of a written itemized statement or draw request substantially in the form described in Section 4 below (the "Draw Request"). In addition, Conventional Lender may impose further requirements for the form of the Draw Request to be submitted to it. 5. Submittal of Draw Requests. Each Draw Request submitted to the Agency shall consist of the following: a. A cover letter signed by Borrower and dated as of the date of the Draw Request. The letter must include the Project name and address, the period covered by the Draw Request, the amount of the draw and a request for payment. Each Draw Request shall be sequentially numbered. b. A Project spreadsheet including detailed line items and conforming to the approved Project Budget. The spreadsheet must set forth the amounts of the initial funding of the Agency Loan at Close of Escrow, as well as all subsequent loan disbursements, including the current Draw Request, and must show the remaining loan balances. DISBURSEMENT AGREEMENT Page 3 Agree: 17442 Koledo Lane C. A summary invoice for the total amount requested, with the amount of each backup invoice shown on the summary as a separate line item. Consultant fees should be shown as separate line items from tenant relocation payment expenses. Line item descriptions for tenant relocation payments should set forth the name of the tenant and the Project unit number and should indicate if the payment is for temporary or permanent relocation expenses. d. Backup invoices or such other appropriate documentation to evidence, document, justify and support each line item in the summary invoice, with each backup item approved in writing by Borrower. Requests for payment for replacement dwellings must be supported by lease term sheets for the replacement unit, setting forth the monthly rent, required deposits, utilities to be paid by the tenant and additional tenant fees. e. Conditional and unconditional lien releases as required by the Agency and such other additional backup documentation and information as may be reasonably required by the Agency to determine the appropriateness of the relocation expense for which payment is requested. The amount of each Draw Request shall, when added to the cumulative amount of previous disbursements for payment of Project Costs, be an amount that does not exceed the amount of the line item for Project Costs in the Project Budget. Borrower shall deliver copies of each Draw Request concurrently to each of the Lenders. Each Draw Request shall be subject to the approval of the Lenders in accordance with this Agreement. 6. Approval of Draw Requests; Disbursement of Funds. a. Approval of each Draw Request shall be subject to satisfaction of the requirements of this Agreement and the Agency Loan Documents or Conventional Loan Documents, as applicable. b. The Agency shall, within fifteen (15) business days after receipt of a Draw Request containing all of the items described in Sections 4 and 5 above, determine the amount of the Draw Request approved by the Agency and shall notify Borrower and the Conventional Lender of such amount (the "Approved Draw"). C. To the extent the Approved Draw is to be paid with Agency Funds pursuant to paragraph b. of Section 2, above, the Agency shall promptly disburse the Approved Draw, by check, in either of the following ways (as the Agency may determine in its sole discretion): (1) to Borrower, and Borrower shall promptly disburse such funds as provided in the Draw Request, or (ii) jointly to Borrower and to the persons entitled to payment; or (iii) to those persons entitled to payment as provided in the Draw Request. d. To the extent the Approved Draw is to be paid with Conventional Lender Funds pursuant to paragraph c. of Section 2 above, the Conventional Lender shall disburse the Approved Draw subject to Conventional Lender's disapproval rights in section 6 below. With respect to disbursements of Conventional Lender Funds, Conventional Lender and Borrower agree that Conventional Lender shall promptly disburse the Approved Draw, by check, in either DISBURSEMENT AGREEMENT Page 4 Agree: 17442 Koledo Lane of the following ways (as the Agency may determine in its sole discretion): (i) to Borrower, and Borrower shall promptly disburse such funds as provided in the Draw Request, or (ii) to the Agency and (as the Agency may determine in its sole discretion) the Agency shall promptly disburse such funds either to Borrower for disbursement as provided in the Draw Request or to those persons entitled to payment as provided in the Draw Request. 7. Disapprovals. Any item in a Draw Request that is not specifically approved by the Agency within fifteen business days shall be deemed disapproved. In addition, on the basis of the conditions precedent to making disbursements contained in their respective agreements with Borrower, either Conventional Lender or Agency may disapprove all or part of a Draw Request. If either Conventional Lender or Agency disapproves any portion of a Draw Request, such Lender shall promptly notify the other Lender and the Borrower of the disapproved amount and the reason therefor. If any Draw Request or portion thereof shall be disapproved or deemed disapproved, the representatives of the Borrower and the Lenders shall meet promptly and in good faith to attempt to resolve the matter to their mutual satisfaction. To effectuate this paragraph, the Lenders shall review each Draw Request concurrently, and notify the other Lender and the Borrower of its approval or disapproval of such request as soon as possible. Each Lender shall signify its approval of a Draw Request by signing and transmitting to the other Lender a copy of the Draw Request by hard copy or facsimile transmission. 8. Disbursement of Undisputed Amounts. If there is a dispute over a portion of a Draw Request, the Lender shall disburse the amount of the Draw Request not in dispute and fund any disputed amounts promptly upon resolution of the dispute. 9. Disbursement by Conventional Lender to Pay Disputed Amounts. Notwithstanding any provision of this Agreement requiring approval by the Agency of disbursements to be made by the Conventional Lender for payment of Relocation Costs, if the parties are unable to resolve a disputed Draw Request, the Conventional Lender shall have the right but not the obligation to disburse Conventional Lender Funds to pay Relocation Costs as provided in a Draw Request that is not approved by the Agency, including to pay Relocation Cost overruns, without regard to whether such advance would cause the outstanding principal amount of the Conventional Loan to exceed the original stated amount thereof. 10. Right to Condition Disbursements. The Agency and Conventional Lender shall each have the right to condition approval of any Draw Request upon receipt and approval of such documentation, evidence or information that such Lender may request, including, but not limited to, vouchers and invoices. 11. Reservation of Rights. Nothing contained herein shall be construed as restricting, limiting, amending or modifying the rights of the parties in the Agency Loan Documents and the Conventional Loan Documents, as they relate to defaults or remedies, including, inter alia, the right of each party under its respective security instruments to foreclose on the Property, or to seek recourse under any guaranties. 12. Integrated Agreement. This Agreement is made for the sole benefit and protection of the parties hereto and no other person or persons shall have any right of action or DISBURSEMENT AGREEMENT Page 5 Agree: 17442 Koledo Lane right to rely hereon. As this Agreement contains all the terms and conditions agreed upon between the parties with respect to the disbursement of Project Funds for the payment of Project Costs, no other agreement regarding the subject matter hereof shall be deemed to exist or bind any party unless in writing and signed by the party to be charged. 13. Termination of this Agreement. This Agreement shall terminate when all of the Lenders' Project Funds have been fully disbursed. 14. Counterparts. This Agreement may be signed by each party on a separate signature page, and when the executed signature pages are combined, shall constitute one single instrument with the same effect as if all signatories had executed the same instrument. 15. Binding_ Effect. This Agreement shall be binding on and inure to the benefit of the parties to this Agreement and their heirs, personal representatives, successors, and assigns, except as otherwise provided in this Agreement. 16. Governing Law. This Agreement has been negotiated and entered in the State of California, and shall be governed by, construed and enforced in accordance with the internal laws of the State of California, applied to contracts made in California by California domiciliaries to be wholly performed in California. 17. Titles and Captions. Titles or captions contained herein are inserted as a matter of conveniences and for reference, and in no way define, limit, extend or describe the scope of this Agreement or any provision hereof. 18. Interpretation. No provision in this Agreement is to be interpreted for or against either party because that party or his legal representatives drafted such provision. 19. Waiver; Amendments. No breach of any provision hereof may be waived unless in writing. Waiver of any one breach of any provision hereof shall not be deemed to be a waiver of any other breach of the same or any other provision hereof. This Agreement may be amended only by a written agreement executed by the parties in interest at the time of the modification. 20. Further Assurances. The parties hereto hereby agree to execute such other documents and to take such other action as may be reasonably necessary to further the purposes of this Agreement. 21. Severance. If any provision of this Agreement is determined by a court of competent jurisdiction to be illegal, invalid or enforceable, such provision will be deemed to be severed and deleted from this Agreement as a whole and neither such provision, nor its severance and deletion shall in any way affect the validity of the remaining provisions of this Agreement. 22. Attorneys' Fees. In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. DISBURSEMENT AGREEMENT Page 6 Agree: 17442 Koledo Lane IN WITNESS WHEREOF, the Agency, the Conventional Lender and the Borrower have executed this Agreement as of the date set forth above. "BORROWER" "AGENCY" JHC - OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member By:4wa-0k0aL Laura Archuleta Its: President "CONVENTIONAL LENDER" CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION Its: Agree: 17442 Koledo Lane REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Chairperson ATTEST: By: Agency Secretary APPROVED AS TO FORM: By: General Counsel By: KANE, BALLMER & BERKMAN Agency Special Counsel DISBURSEMENT AGREEMENT Page 7 California All -Purpose Acknowledgment 2008 Code Section 1189 Compliant State of California County of ORA-Kb On FC8kitAiy Irk, -Wl before me, R. /AA7\)C14_«1, /v TAw_y loud Li C_ (here insert name and title of the officer) personally appeared i -ft leA A_.C-ktL A who proved to me on the basis of satisfactory evidence to be the personA whose name(a') is/tee subscribed to the within instrument and acknowledged to me that t4ee/she/4ey executed the same in -his/her/their authorized capacity4es), and that by f} /her/#heir signature(A) on the instrument the person(g), or the entity upon behalf of which the persono) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. SUSAN R. HANCHIN Commission # 1754968 Notary Signatures '�"� �'L Public - California Z Orange County My Comm. Expires Jul 2, 2011 (Seal) OPTIONAL INFORMATION Law does not require the information below. This information could be of great value to any person(s) relying on this document and could prevent fraudulent and/or the reattachment of this document to an unauthorized document(s) DESCRIPTION OF ATTACHED DOCUMENT Title or Type of Document: "LUc<Le.9�t ��„` - ��,LeZ� % �yy� Document Date: Signer(s) if Different Than Above: Other Information: CAPACITY(IES) CLAIMED BY SIGNER(S) Signer's Name(s): ❑ Individual ❑ Corporate Officer (Title(s)) ❑ Partner ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian/Conservator ❑ Other: SIGNER IS REPRESENTING: Name of Person(s) or Entity(ies): 2007 Notary Public Seminars www.notarypublicseminars.com Number of Pages: % IN WITNESS WHEREOF, the Agency, the Conventional Lender and the Borrower have executed this Agreement as of the date set forth above. "BORROWER" "AGENCY" JHC — OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member am Laura Archuleta Its: President "CONVENTIONAL LENDER" CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION By: t � � - 61 �v7 Its: A i a L� Agree: 17442 Koledo Lane REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Chairperson ATTEST: By: Agency Secretary APPROVED AS TO FORM: By: General Counsel By: KANE, BALLMER & BERKMAN Agency Special Counsel DISBURSEMENT AGREEMENT Page 7 f IN WITNESS WHEREOF, the Agency, the Conventional Lender and the Borrower have executed this Agreement as of the date set forth above. "BORROWER" JHC — OAKVIEW, LLC, a California limited liability company By: Jamboree Housing Corporation, a California nonprofit corporation, Its: Managing Member Laura Archuleta Its: President "CONVENTIONAL, LENDER" CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION M. Its: "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Chairperson ATTEST: By: Agency Secretary APPROVED AS TO FORM: IC �j General Counsel, W2,l�� j KANE, BALLMER Agency Special Coda DISBURSEMENT AGREEMENT Page 7 Agree: 17442 Koledo Lane I INITIATING DEPARTMENT: I Economic Development Department I I SUBJECT: I Approve Affordable Housing Agreement with Jamboree I Housing Corporation for 17442 Koledo Lane COUNCIL MEETING DATE: - March 2, 2009 RCA ATTACHMENTS STATUS'. Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not A plicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached Not Applicable ❑ Contract/Agreement (w/exhibits if applicable) Attached (Signed in full by the City Attorney) Not Applicable ❑ Subleases, Third Party Agreements, etc. Attached ❑ (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached Not Applicable ❑ Bonds (If applicable) Attached ❑ Not Applicable Staff Report (If applicable) Attached ❑ Not Applicable Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable EXPLAHATlOH FOR 03SHG ATTAC HPvgi E HTS REVIEWED RETURNED. FOR A DED Administrative Staff ( ) ) Deputy City Administrator (Initial) ( ) ( Aj 11) City Administrator (Initial) ( ) ) City Clerk ( ) [EXPLANATION FOR RETURN OF ITEM: RCA Author: T. King