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HomeMy WebLinkAboutBowen Court, LP - Merit Housing Corporation - 2001-12-17OFFICIAL BUSINESS Document entitled to free recording per Government • Code Section 6103 Recording Requested by and When Recorded Mail to: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 Attn: Agency Secretary Rccoc�.lrr! irr Offic:i01 Rr`Orcls'"111ty of 0"119e U:rrler•r Blouru, 111ti.,i1r, Clerk -Recorder ►ip Il!j►F EE 20020,908413 01.08pm 00120102 130 11 A17 4 U.00 U.C)o 0.00 0 i!0 0 00 Goo0 00 O.U(1 Space above this line for recording use AMENDMENT NO. 1 TO THE AGREEMENT CONTAINING COVENANTS FOR BOWEN COURT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND BOWEN COURT, L.P. THIS AMENDMENT NO. 1 (the "Amendment") is made and entered into this 8th day of August , 2002, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and BOWEN COURT, L.P., a California limited partnership ("Developer"). WHEREAS, Agency and Developer have entered into that certain "Disposition and Development Agreement for Bowen Court" (the "DDA"), executed by Agency on June 7, 2001, regarding the development of a twenty (20) unit affordable senior housing project in the City of Huntington Beach (the "Project"); and As Attachment 6 to the DDA, Agency and Developer entered into that certain "Agreement Containing Covenants," recorded in the Official Records of the County of Orange as Document No. 20010385889, on June 12, 2001; and Section 3 of the Agreement Containing Covenants states as follows: "Maximum Incomes. All of the Units shall be restricted to Eligible Very Low Income Tenants with incomes not exceeding fifty percent (50%) of the area median income, adjusted for family size appropriate for the Unit. The maximum incomes of eligible tenants shall be determined on the basis of the area median income for Orange County Metropolitan Statistical Area, issued approximately annually by HUD and published by the California Department of Housing and Community Development ("HCD");" and Agency and the California Housing Finance Authority have entered into that certain "Loan Agreement Housing Enabled by Local Partnership CHFA Loan No. HELP-080101-09 (the "CHFA Loan Agreement")," executed by Agency on March 29, 2002, for Five Hundred Thousand Dollars ($500,000.00) to assist in the financing of the construction of the Project, which amount is to be used by Agency to fund $500,000 of the Nine Hundred Thousand Dollars ($900,000.00) to be funded by Agency to Developer under the DDA; and Page 1 of 2 02 agree/jmf/Bowen Ct Agmt Containing Covenants 1 st Amend/8/8/02/jn Section 2 of Exhibit "B" to the CHFA Loan Agreement states, in pertinent part, as follows: "Affordability covenants shall be recorded on the properties being financed which shall restrict occupancy and rents of the multifamily units for a minimum of the term of the HELP. Loan so that 9 of the units shall be restricted to and affordable to persons at or below 45% of area median income as defined in California Health and Safety Code Section 50079.5 (the "AMP") and 11 of the units shall be restricted to and affordable to persons at or below fifty 50% of the AMI;" and The term of the CHFA Loan Agreement is ten (10) years, NOW, THEREFORE, on the basis of the foregoing recitals and for other valuable consideration, the receipt and adequacy of which is hereby acknowledged, Agency and Developer hereby agree as follows: 1. Developer hereby acknowledges and agrees that, for the entire term of the CHFA Loan Agreement, Section 3 of the Agreement Containing Covenants shall be amended to read as follows: "Developer shall require and record affordability covenants on the Project stating that 9 units of the Project be restricted to and affordable to persons at or below 45% of area median income as defined in California`Health and Safety Code Section 50079.5 (the "AMP') and 11 of the units shall be restricted to and affordable to persons at or below fifty 50%0' of the AMI." 2. Except for the change to the affordability covenants set forth herein, Agency represents and warrants to Developer that the funding by Agency to Developer of the CHFA Loan Agreement funds 'shall not impose upon Developer or the Project any additional construction or operational conditions not already set forth in the DDA and/or other agreements entered into between Agency and Developer regarding the Project. I . Except as specifically modified herein, all other terms and conditions of the Agreement. Containing Covenants shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by and through their authorized offices the day, month and year first above written. BOWEN COURT, L.P., a California limited REDEVELOPMENT AGENCY OF THE CITY partnership ("Developer") OF HUNTINGTON BEACH, a public body, corporate and politic By: MERIT HOUSING, INC., a California` nonprofit corporation; its general partner Execut' e Director ATTEST: By: Eunice BobJft Agency Clerk Chief Executive Officer APPROVED S TO FPO": Agency General Counsel 8���dpz g SoZ Page 2 of 2 02 agree/jmf/Bowen Ct Agmt Containing Covenants 1 st Amend/8/8/02/jn CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of O!s� An 9 +- On 1 002 before me, l l� kiciF/ I'S akl pool, /1/O'4ya �DQ Date _ and Title of Offer (e.g., "Jane Doe, otary Public") personally appeared L'Gf /r1 f C GG ID P R Name(s) of Signer(s) PTftAICtA KAY SMOOT Commission # 1351522 Z zQPMVComm.ExpimsApr15 Notary Public - California i Orange County , 20t)8 ;personally known to me ❑ proved to me on the basis of satisfactory evidence to be the persona whose name(s) is{a subscribed to the within instrument and acknowledged to me that he/sii� executed the same in hisf"#tI-r it authorized capacity{iesj, and that by hisAier tH& signatureo it on the instrument the personK, or the entity upon behalf of which the person) acted, executed the instrument. SS my hand and 9fticial s al. sitre;fAtary`ftblic OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attac Title or Type of Document Document Date: %g U G u --,4 X __2jj 00 2 Number of Pages: Signer(s) Other Than Named Above: ma f iJG piE'ec�r c4,n74/ n94-o+ C�>%4 Capacity(ies) Claimed by Signer Signer's Name: lifiWISMiM ❑ Individual /J�f n Top of thumb here ir" Corporate Officer— Title(s)t l& c-!' ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: mL� 2 f U 510 g ._,C17ev1_ . L 0 1999 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.nationalnotary.org Prod. No. 5907 Reorder: Call Toll -Free 1-800-876-6827 FORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On September 6, 2002 before me --------- Laura A. Nelson, Notary Public ------- Date Name and Title of Officer (e.g., "Jane Doe, Notary Public") personally appeared --------------------- Ray silver and Liz Ehring -------------------------- Name(s) of Signers) ❑ personally known to me i2l proved to me on the basis of satisfactory evidence to be the perso (s) whose nam (s are �Auru�a NEisoN subscribed to th within instrument a Commission # 1226066 acknowledged to me that hem/they executed Z NotaryPublic- California the same in i�1e hei authorized orange COi1niy capacit qVD and that by NW hei My Comm.8tpiresJul23,2M3 signaturn the instrument the perso (s the entitn behalf of which the perso (s) acted, executed the instrument. WITNESS my hand and official seal. Place Notary Seal Above Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: AmendmentV to the Agreement containing Covenants for Bowen Courtbetween the Redeveh Agency of the City of Huntington Beach and Bowen Court, L.P. Document Date: 818102 Signer(* Other Than Named Above: Eunice BobertGail Hutton Capacity(i") Claimed by Signer Number of Pages: 2 + notarization Signer's Name: Ray Silver and Liz Ehring ❑ Individual Top of thumb here C( Corporate Officer — Title(s): Executive Director and Deputy Agency Clerk ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Redevelopment Agency of the City of Huntington Beach Thumbprints in book 0 1999 National Notary Association - 9350 Do Soto Ave.. P.O. Box 2402 - Chatsworth, CA 91313.2402 - www.netianetrrotary org Prod. No. 5907 Reorder: Cell Tdl-Free 1400-8764W OFFICIAL BUSINESS Document entitled to free recording per Government Code Section 6103 Recording Requested by and When Recorded Mail to: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 Attn: Agency Secretary 1rQa0 LE1P` Ito S. No_ 32s tie- �� Space above this line for recording use AMENDMENT NO. 1 TO THE AGREEMENT CONTAINING COVENANTS FOR BOWEN COURT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND BOWEN COURT, L.P. THIS AMENDMENT NO. 1 (the "Amendment") is made and entered into this 8th day of august , 2002, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and BOWEN COURT, L.P., a California limited partnership ('.'Developer"). WHEREAS, Agency and Developer have entered into that certain "Disposition and Development Agreement for Bowen Court" (the "DDA"), executed by Agency on June 7, 2001, regarding the development of a twenty (20) unit affordable senior housing project in the City of Huntington Beach (the "Project"); and As Attachment 6 to the DDA, Agency and Developer entered into that certain "Agreement Containing Covenants," recorded in the Official Records of the County of Orange as Document No. 20010385889, on June 12, 2001; and Section 3 of the Agreement Containing Covenants states as follows: "Maximum Incomes. All of the Units shall be restricted to Eligible Very Low Income Tenants with incomes not exceeding fifty percent (50%) of the area median income,, adjusted for family size appropriate for the Unit. The maximum incomes of eligible tenants shall be determined on the basis of the area median income for Orange County Metropolitan Statistical Area, issued approximately annually by HUD and published by the California Department of Housing and Community Development ("HCD");" and Agency and the California Housing Finance Authority have entered into that certain "Loan Agreement Housing Enabled by Local Partnership CHFA Loan No. HELP-080101-09 (the "CHFA Loan Agreement")," executed by Agency on March 29, 2002, for Five Hundred Thousand Dollars ($500,000.00) to assist in the financing of the construction of the Project, which amount is to be used by Agency to fund $500,000 of the Nine Hundred Thousand Dollars ($900,000.00) to be funded by Agency to Developer under the DDA; and Page 1 of 2 02 agree/jmf/Bowen Ct Agmt Containing Covenants 1st Amend/8/8/02/jn Section 2 of Exhibit "B" to the CHFA Loan Agreement states, in pertinent part, as follows: "Affordability covenants shall be recorded on the properties being financed which shall restrict occupancy and rents of the multifamily units for a minimum of the term of the HELP Loan so that 9 of the units shall be restricted to and affordable to persons at or below 45% of area median income as defined in California Health and Safety Code Section 50079.5 (the "AMP') and 11 of the units shall be restricted to and affordable to persons at or below fifty 50% of the AMI;" and The term of the CHFA Loan Agreement is ten (10) years, NOW, THEREFORE, on the basis of the foregoing recitals and for other valuable consideration, the receipt and adequacy of which is hereby acknowledged, Agency and Developer hereby agree as follows: 1. Developer hereby acknowledges and agrees that, for the entire term of the CHFA Loan Agreement, Section 3 of the Agreement Containing Covenants shall be amended to read as follows: "Developer shall require and record affordability covenants on the Project stating that 9 units of the Project be restricted to and affordable to persons at or below 45% of area median income as defined in California Health and Safety Code Section 50079.5 (the "AMP') and 11 of the units shall be restricted to and affordable to persons at or below fifty 50% of the AMI." 2. Except for the change to the affordability covenants set forth herein, Agency represents and warrants to Developer that the funding by Agency to Developer of the CHFA Loan Agreement funds shall not impose upon Developer or the Project any additional constructionor operational conditions not already set forth in the DDA and/or other agreements entered into between Agency and Developer regarding the Project. 3. Except as specifically modified herein, all other terms and conditions of the Agreement Containing Covenants shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by and through their authorized offices the day, month and year first above written. BOWEN COURT, L.P., a California limited REDEVELOPMENT AGENCY OF THE CITY partnership ("Developer") OF HUNTINGTON BEACH, a public body, corporate and politic � By: MERIT HOUSING, INC., a California — nonprofit corporation, its general partner Execut' e Director By: —,5 Eunice BobJrt Chief Executive Officer ATTEST: � �=Lz.• O , � o , Cc'a�. Agency Clerk APPROVED S TO FO . 11,4Agency General Counsel 01/0 I., JP Sot Page 2 of 2 02 agree/jmfBowen Ct Agmt Containing Covenants 1st Amend/8/8/02/jn ❑ Individ I . Corpo ❑ Partne ❑ Attorn ❑ Truste ❑ Guardi ❑ Other: Signer Is tt CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County ofC- On ! 00.2 before me, 1 fifiPlC/g !S At1 OctN071 a Date N e and Ttle of Offer (e.g.. 'Jane Doe, tictary Publics personally appeared L'!.!r? I C e Rn P�2 (2 Name(s) of Signer(s) 'personally known to me ❑ proved to me on the basis of satisfactory E evidence PATRIC1AKAY SMOOT Commisalon t 13515221Z Notary Public - California Z Orange County My Comm. Ejirm Apr 15, 2= to be the person)6 whose name(s) is4Fe subscribed to the within instrument and acknowledged to me that he/eheAgiey executed the same in hisMer{their authorized capacityf ies), and that by hisAte#ftrir signature on the instrument the personX or the entity upon behalf of which the personX acted, executed the instrument. SS my hand and icial s I. -- Sign re ;f4taryPUSC - - OPTIONAL Though the information below is not required bylaw, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document-- /91Y7 / � Title or Type of Document: Document Date: PUG U r,4 c-1D 2 Number of Pages: Signer(s) Other Than Named Above:,e u)� lia bile, C-13 1-- CP_,h1W G--P Capacity(ies) Claimed by Signer ual � Top of thumb here rate Officer — Title(s),, ,!Af c-P X C�/TIJe -k IC�� r — Cl Limited ❑ General ey-in-Fact e an or Conservator Representing: t'�R 0 1999 National Notary Association - 9350 De Scio Ave.. P.O. Box 2402 - Chatsworth, CA 91313.2402 • w .nationalnotary.org Prod. No. 5907 Reorder. Call Toll -Free 1.600-876-6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On September 6, 2002 , before me, -------- Laura A. Nelson, Notary Public ------- Date Name and Title of officer (e.g., 'Jane Doe, Notary Public") personally appeared ----- Ray Silver and Liz Ehring ----------------------- Name(s) of Signer(s) LAURA a NELSON Commission # 1226066 NotaryPublic- Caffarnla Orange County My Comm. Expim Ju123, 2M3 Place Notary Seal Above ❑ personally known to me ,16 proved to me on the basis of satisfactory evidence to be the perso (s whose nam (s are subscribed to th within instrument a acknowledged to me that hem/they executed the same inNei authorized capacitWV0 and that by �isl hei signaturn the instrument the perso (s rthe ention behalf of which the perso (s) acted, executed the instrument. WITNESS my hand and official seal. / Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Amendment#1 to the Agreement containing Covenants for Bowen Court between the Redevelop Agency of the City of Huntington Beach and Bowen Court, L.P. Document Date: 818102 Number of Pages: 2 + notarization Signer(o) Other Than Named Above: Eunice Bobert, Gail Hutton Capacity(ioc) Claimed by Signer Signer's Name: Ray Silver and Liz Ehring ❑ Individual Top of thumb here L1 Corporate Officer — Title(s): Executive Director and Deputy Agency Clerk ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact Thumbprints ❑ J rustee in ❑ Guardian or Conservator book ❑ Other: Signer Is Representing: Redevelopment Agency of the City of Huntington Beach 0 1999 National Notary Auociabon • 9= De Som Ave, P.O. Box 24M • Chatsworth, CA 91313.2402 • www.natmnakwtary.org Prod. No. S907 Reader. Call Tat -Free 1400-8768827 Hughes, Jeffrey From: Hughes, Jeffrey Sent: Wednesday, February 13, 2002 10:34 AM To: D'Alessandro, Paul Subject: FW: Memo Re: Bowen Court Amendments Hi Paul - Just my bi-weekly friendly reminder. Thank you Sirl -----Original Message ----- From: Hughes, Jeffrey Sent: Wednesday, January 30, 2002 8:56 AM To: D'Alessandro, Paul Subject: FW: Memo Re: Bowen Court Amendments Hi Paul - Just my weekly friendly reminder. Thank you... -----Original Message ----- From: Hughes, Jeffrey Sent: Wednesday, January 23, 2002 12:40 PM To: D'Alessandro, Paul Subject: Memo Re: Bowen Court Amendments Hi Paul: Just-a_friend!y reminder that the City Clerk's Office is still in need of an "official" memo re:. your (the City-Attorney's office) o.k. not to record the following two amendments relating to Bowen Court: D-3. (City Council/Redevelopment Aaencv) Joint Public Hearina to Consider Aooroval of Amendments to the Bowen Court Senior Apartments (1982-1986 Lake Street) Affordable Housina Proiect: (1) Disposition and Development Agreement and (2) Ground Lease and (3) Approve a Building Fee Agreement between the City and Bowen Court. L.P. (600.30) Redevelopment Agency Actions: Approve Amendment No. 1 to the Disposition and Development Agreement for Bowen Court between the Redevelopment Agency of the City of Huntington Beach and Bowen Court, L.P. and authorize the Agency Chairperson, Executive Director, and Agency Clerk to execute and Fecerd the DDA Amendment and other necessary related documents when advised by Agency General Counsel; and Approve Amendment No. 1 to the Lease for the Bowen Court Property between the Redevelopment Agency of the City of Huntington Beach and Bowen Court, L.P. and authorize the Agency Chairperson, Executive Director, and Agency Clerk to execute and FeseFd the Ground Lease Amendment and other necessary related documents when advised by Agency General Counsel. Thank youll Jeffrey Hughes Deputy City Clerk x5260 Hughes, Jeffrey From: Hughes, Jeffrey Sent: Wednesday, January 30, 2002 8:56 AM To: D'Alessandro, Paul Subject: FW: Memo Re: Bowen Court Amendments Hi Paul - Just my weekly friendly reminder. Thank you... =-- Original Message ----- From: Hughes, Jeffrey Sent: Wednesday, January 23, 2002 12:40 PM To: D'Alessandro, Paul Subject: Memo Re: Bowen Court Amendments Hi Paul: Just a friendly reminder that the City Clerk's Office is still in need of an "official" memo re: your (the City Attorney's office) o.k. not to record the following two amendments relating to Bowen Court: D-3. (City Council/Redevelopment Aaencv) Joint Public Hearina to Consider ADproval of Amendments to the Bowen Court Senior Apartments (1982-1986 Lake Street) Affordable Housina Proiect: (1) Disposition and Development Agreement and (2) Ground Lease and (31 Approve a Building Fee Agreement between the City and Bowen Court, L.P. (600.30) Redevelopment Agency Actions: Approve Amendment No. 1 to the Disposition and Development Agreement for Bowen Court between the Redevelopment Agency of the City of Huntington Beach and Bowen Court, L.P. and authorize the Agency Chairperson, Executive Director, and Agency Clerk to execute and FeseFd< the DDA Amendment and other necessary related documents when advised by Agency General Counsel; and Approve Amendment No. 1 to the Lease for the Bowen Court Property between the Redevelopment Agency of the City of Huntington Beach and Bowen Court, L.P. and authorize the Agency Chairperson, Executive Director, and Agency Clerk to execute and ranord the Ground Lease Amendment and other necessary related documents when advised by Agency General Counsel. Thank youll Jeffrey Hughes Deputy City Clerk x5260 7 ME : 10 RX Is A Ot Fsol Cl�i s of � s•I�- N0`1 To %W PCs� — see Tog — 0.4 J& CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK LETTER OF TRANSMITTAL OF ITEM APPROVED BY THE CITY COUNCIL/ REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH DATE: February 6, 2002 TO: Merit Housing, Inc. ATTENTION: Eunice Bobert Name 414 East Chapman Avenue DEPARTMENT: Street Orange, CA 92866 REGARDING: Between the City & City, State, Zip Bowen Court, L.P. for Payment of Building Fees See Attached Action Agenda Item D-3 Date of Approval 12/ 17/01 Enclosed For Your Records Is An Executed Copy Of The Above Referenced Agenda Item. Remarks: Connie Brockway City Clerk Attachments: Action Agenda Page x Agreement x Bonds Insurance RCA Deed Other CC: D. Biggs Econ. Dev. x x Name Department RCA Agreement Insurance Other S. Holtz Econ. Dev. x x Name Department RCA Agreement Insurance Other Name Department RCA Agreement Insurance Other Name Department RCA Agreement Insurance Other Name Department RCA Insurance I(Telephone: 714-536-5227) FO CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALI FOR NIA 92648 OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK LETTER OF TRANSMITTAL OF ITEM APPROVED BY THE CITY COUNCIL/ REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH DATE: January 22, 2002 TO: Merit Housing, Inc. ATTENTION: Eunice Bobert Name 414 East Chapman Avenue DEPARTMENT: .Street Orange, CA 92866 REGARDING: Amend. No. 1 to DDA for City, State, Zip Bowen Court & Amend. No. 1 to the Bowen Court Ground lease. See Attached Action Agenda Item D-3 Date of Approval 12/ 17/ O1 Enclosed For Your Records Is An Executed Copy Of The Above Referenced Agenda Item. Remarks: Connie Brockway City Clerk Attachments: Action Agenda Page x Agreement 2x Bonds Insurance RCA Deed Other CC: D. Biggs Econ. Dev. x Name Department RCA. S. Holtz Econ. Dev. x Name Department RCA. Name Department RCA Name Department RCA Name Department RCA. 2x _ Agreement Insurance Other 2x Agreement Insurance Other Agreement Insurance Other Agreement Insurance Other Insurance (Telephone: 714-536-5227 ) al iz D. RM5, tO"- A�1- 11 . oI)22 � s. fi�, 4oN. �— Council/Agency Meeting Held: Deferred/Continued to: A roved ElConditi nally Approv d ❑ ed M DO' Clerk Signature Council Meeting Date: 12/17/01 Department ID Number: ED 01-37 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION -,- CZD SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL MEMBERS/REDEVELOPMENT AGENCY MEMBERS � , =f SUBMITTED BY: RAY SILVER, City Administrator/Executive Director eeW `�`"'`` Ca'J PREPARED BY: DAVID C. BIGGS, Director of Economic Development/Depuy Executive Director _ o n SUBJECT: Approve Amendments to the Bowen Court Senior Apartments Affordable Housing Project Disposition and Development Agreement and Ground Lease and Approve a Building Fee Agreement between the City and Bowen Court, L.P. Statement of Issue,'Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: A Disposition and Development Agreement (DDA) between the Agency and Bowen Court, L.P. was, approved on June 4, 2001. This agreement provides for the lease of Agency owned land and a loan of $900,000 of Agency Housing Set Aside funds for the construction of Bowen Court Senior Apartments. At this time, the Developer and Agency staff have negotiated two amendments to the executed agreements in order to, among other things, facilitate the other financing sources. In addition a Building Fee Agreement is submitted for approval. Fundinq Source: Not Applicable, Recommended Action: Motion to: Joint City Council/Redevelopment Agency Action: 1. Open the public hearing, take testimony, and close the public hearing on the proposed Amendment to the Bowen Court Disposition and Development Agreement. City Council Action: Approve the draft Building Fee Agreement between the City of Huntington Beach and �vp Bowen Court, L.P. in substantially the same form as the attached agreement, and bt-A'0 authorize its execution by the Mayor and 'City REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 12/17/01 DEPARTMENT ID NUMBER: ED 01-37 Redevelopment Agency Actions: 1. Approve Amendment No. 1 to the Disposition and Development Agreement for Bowen Court between the Redevelopment Agency of the City of Huntington Beach and Bowen Court, L.P. and authorize the Agency Chairperson, Executive Director, and Agency R b Clerk to execute SHEI-F88OF the DDA Amendment and other necessary related documents when advised by Agency General Counsel. ol-IS 2 Approve Amendment No. 1 to the Bowen Cour(Ground Lease between the Redevelopment Agency of the City of Huntington Beach and Bowen Court, L.P. and authorize the Agency Chairperson, Executive Director, and Agency Clerk to execute 8Rd-reser the Ground Lease Amendment and other necessary related documents when advised by Agency General Counsel. Alternative Action(s): Do not approve the proposed amendments or the Building Fee Agreement for the Bowen Court project. Analysis: On June 4, 2001, the City Council and the Redevelopment Agency approved a Disposition and Development Agreement (DDA) for the Bowen Court Senior Apartments affordable housing project (Attachment 1). Since that time, staff has worked with the developer to secure financing for the project, which, together with the Agency's Housing Set Aside loan of $900,000 will include Tax Credit proceeds of approximately $1.8 million and mortgage financing of $750,000. The Redevelopment Agency has leased the site to the developer, grading permits have been issued, and the construction drawings are in plan check. Grading will commence shortly, with construction scheduled to begin in January. Although the DDA specifically allows for the Agency's Deed of Trust and Agreement Containing Covenants to be subject and subordinate to the developer's approved mortgage, it specifically disallows subordination of the ground lease between the Agency and the developer. Through our attempts to find mortgage financing for the project, staff learned that due to various current market conditions, such financing cannot be obtained without the Agency agreeing to subordinate its ground lease along with its Deed of Trust and Agreement Containing Covenants. This situation was confirmed by the Agency's economic advisor, Keyser Marston Associates. Agency General Counsel has prepared an amendment to the Bowen Court DDA (Attachment 2), which changes the DDA subordination language allowing for the subordination of the ground lease. Concurrently, Keyser Marston Associates has prepared a revised Section 33433 Summary Report for the project (Attachment 3). Due to the nature of the DDA Amendment, Redevelopment law requires the Council and Agency to hold a joint public hearing and allow for public comments on the subject matter. Legal notice of the public hearing was published in the Independent and, together with a project status letter, was mailed to all residential properties within a half -mile radius of the project site two weeks prior to the hearing date. RCA for Bowen Court DDA Amendment -2- 12/7101 3:54 PM REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 12/17/01 DEPARTMENT ID NUMBER: ED 01-37 Separate recommended actions of the City Council and Redevelopment Agency include approval of a Building Fee Agreement (Attachment 6) and an amendment to the Ground Lease (Attachment 5). The City Council is asked to approve a Building Fee Agreement that was requested by the developer and is recommended by staff for the purpose of calculating project costs for tax credits. Under recent Internal Revenue Service (IRS) opinions, City development fees are considered eligible project costs for tax credits only if such fees are linked specifically to the project being constructed. These new opinions by the IRS may make some City fees ineligible, such as park and recreation fees, sewer and sanitation fees, and street fees. Although these fees are significant, and the City requires payment in order to build in Huntington Beach, the developer's tax attorneys are concerned that the IRS may consider them land -based and not project -based. With the proposed Building Fee Agreement, all fees collected by the City related to construction of Bowen Court will be clarified to be project -based fees and, therefore, eligible tax credit costs. Keyser Marston Associates conducted an economic analysis of the project and determined that this agreement is appropriate. The Building Fee Agreement submitted for approval was prepared by the City Attorney. There is no cost or risk to the City for entering into this agreement. Lastly, the Redevelopment Agency requests an amendment to the ground lease (Attachment 4) adding indemnification and insurance requirements. Agency General Counsel recommends adding a provision for worker's compensation,_ employer's liability insurance; and property insurance during the term of the lease. In addition, an indemnity clause is recommended to protect the Agency from future lawsuits. Copies of the DDA, Amendment No. 1 to the DDA, Section 33433 Summary Report, Ground Lease, Amendment No. 1 to the Ground Lease, and Building Fee Agreement are attached for review. Environmental Status: This project has complied with the California Environmental Quality Act (CEQA) as part of Conditional Use Permit Number 94-39 and Negative Declaration Number 94-39, both of which were approved on June 2, 1997. Attachment(s): Bowen Court DDA 2. 1 Amendment No. 1 to the Bowen Court DDA with the RDA. 3. 1 Section 33433 Summary Report. 4. 1 Bowen Court Ground Lease with the RDA. 5. Amendment No. 1 to the Bowen Court Ground Lease with the RDA. 6. 1 Building Fee Agreement with the City. RCA Author: HOLTZ (5901) RCA for Bowen Court DDA Amendment -3- 12/7/01 3:54 PM Bowen Court Disposition and Development Agreement ATTACHMENT #1' d 9 C DISPOSITION AND DEVELOPMENT AGREEMENT FOR BOWEN COURT by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, and BOWEN COURT, L.P., AGENCY, DEVELOPER. TABLE OF CONTENTS Page I. [§ 100] DEFINITIONS 8 A. [§ 101] Defined Terms 8 H. [§ 200] SUBJECT OF AGREEMENT 15 A. [§ 201 ] Purpose of the Agreement. 15 B. [§ 202] The Redevelopment Plan/General Plan. .15 C. [§ 2031 The Project Area 15 D. [§ 204] Property 15 E. [§ 205] Parties to the Agreement. 16 1. [§ 206] Agency. 16 2. [§ 207] The Developer. 16 F. [§ 2081 Prohibition Against Change in Ownership Management and Control of Developer. 16 III. [§ 300] DISPOSITION OF THE PROPERTY. 18 A [§ 301] Representations and Warranties of Developer. 18 B. [§ 302] Representations and Warranties of Agency 20 C. [§ 303] Lease 22 D. [§ 304] Escrow. 22 E. [§ 305] Condition of Title 26 F. [§ 306] Title Insurance 27 G. [§ 307] Taxes and Assessments 27 H. [§ 308] Occupants of the Property 27 I. [§ 309] Condition of the Property 27 J. [§ 310] Deposit of the Purchase Price and Agreement Containing Covenants and Recordation of the Grant Deed and Agreement Containing Covenants 28 K. [§ 311] Preliminary Work by the Developer 28 L. [§ 312] Submission of Evidence of Financing 29 M. [§ 313] Agency Financing 30 IV. 0 400] DEVELOPMENT OF THE PROPERTY. 30 A. [§ 401 ] Development of the Property.. 30 1. [§ 402] Agreement to Design and Construct 30 2. [§ 403] Scope of Development 31 3. [§ 404] Approval of Development and Management Teams 31 4. [§ 404] Basic Concept Drawings 31 5. [§ 405] Landscaping and Finish Grading Plan 32 6. [§ 406] Construction Drawings and Related Documents for the Property . 32 2 SF-2001 Agree: Bowen Court: DDA 6/6/01 - 4:00 PM 7. [§ 407] Agency Approval of Plans, Drawings and Related Documents 33 8. [§ 408] Cost of Development 34 9. [§ 409] Schedule of Performance 34 10. [§ 410] Indemnification; Bodily Injury and Property Damage Insurance 34 11. [§ 411] Anti -discrimination during Construction 39 12. [§ 412] Local, State and Federal Laws 39 13. [§ 413] City and Other Governmental Agency Permits 39 14. [§ 414] Rights of Access, Inspections and Meetings 39 15. [§ 415] Books, Records and Audits 40 16. [§ 416] Reports 40 17. [§ 417] Required Notifications 41 18. [§ 418] Payment of Claims, Costs and Taxes . 42 19. [§ 419] Additional Documents 42 20. [§ 420] Replacement of Third Parties. 42 21. [§ 421 ] Correction of Defects . 43 22. [§ 422] Storage of Materials 43 23. [§ 423] Signs and Publicity 43 B. [§ 424] Subdivision of Property 43 C. [§ 425] Taxes, Assessments and Liens 43 D. [§ 426] Maintenance of Property Security .44 E. [§ 427] Security Financing; Right of Holders. 44 1. [§ 428] No Encumbrances except Mortgages, Deeds of Trust, Conveyances and Leases -Back or Other Conveyance for Financing for Development 44 2. [§ 429] Holder Not Obligated to Construct Improvements . 45 3. [§ 430 Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders; Right to Cure 45 4. [§ 431] Failure of Holder to Complete Development 46 5. [§ 432] Right of Agency to Cure Mortgage, Deed of Trust or Other Security Interest Default 47 F. [§ 433] Rights of Agency to Satisfy Other Liens on the Property After Title Passes. 47 G. [§ 434] Certificate of Completion. 48 H. [§ 435] Subordination of Agency Deed of Trust, Agreement Containing Covenants, and this Agreement 48 I. [§ 436] Estoppel Certificates 49 J. [§ 437] Tolling of Time Periods for Benefit of Holder 49 3 SF-2001 Agree: Bowen Court: DDA 6/6/01 - 4:00 PM V. [§ 500] USE OF THE PROPERTY 49 A. [§ 501 ] Uses 49 B. [§ 502] Maintenance of the Property.. 49 C. [§ 503] Obligation to Refrain from Discrimination. 50 D. [§ 504] Form of Nondiscrimination and Nonsegregation Clauses. 50 E. [§ 505] Effect and Duration of Covenants. 51 F. [§ 506] Rights of Access — Public Improvements and Facilities 51 G. [§ 507] Operation of Project 52 H. [§ 508] Lead -Based Paint 52 I. [§ 509] Barriers to the Disabled 52 J. [§ 510] Maintenance of the Property 52 K. [§ 511] Term of Residual Receipts Loan 52 1. [§ 512] Amount 52 2. [§ 513] Term 52 3. [§ 514] Repayment 52 4. [§ 515] Definition of Net Operating Income 53 5. [§ 516] Reserved 53 L. [§ 517] Financial Statements 53 VI. [§ 600] DEFAULTS, REMEDIES AND TERMINATION 53 A. [§ 601] Default. 53 B. [§ 602] Notice . 53 C. [§ 603] Cure Period 54 D. [§ 604] Rights and Remedies 54 E. [§ 605] Legal Actions . 55 1. [§ 606] Institution of Legal Actions 56 2. [§ 607] Service of Process 55 3. [§ 608] Applicable Law 55 F. [§ 609 ] Damages 55 G. [§ 610] Specific Performance . 55 H. [§ 6111 Rights of Termination 56 1. [§ 612] Termination by Developer 56 2. [§ 613] Termination by Agency 56 I. [§ 614] Agency's Rights of Reentry 56 VII. [§ 700] GENERAL PROVISIONS 58 A. [§ 701] Notices, Demands and Communications between the Parties 58 B. [§ 702] Conflict of Interest 59 C. [§ 703] Nonliability of Agency Officials and Employees 59 D. [§ 704] Enforced Delay; Extension of Time of Performance . 59 E. [§ 705] Inspection of Books and Records 60 F. [§ 706] Real Estate Commissions 60 4 SF-2001 Agree: Bowen Court: DDA 6/6/01 - 4:00 PM G. [§ 7071 Plans and Data. 60 H. [§ 708] Not a Joint Venture or Partnership Agreement 60 VIII. [§ 800] SPECIAL PROVISIONS 60 A. [§ 801] Agreement Containing Covenants 60 IX. [§ 900] ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS 61 X. [§ 1000] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY; OF AGREEMENT DATE 61 ATTACHMENTS ATTACHMENT NO. 1 - LEGAL DESCRIPTION OF PROPERTY ATTACHMENT NO. 2 - PROPERTY MAP ATTACHMENT NO. 3. - SCHEDULE OF PERFORMANCE ATTACHMENT NO. 4 - SCOPE OF DEVELOPMENT ATTACHMENT NO. 5 - LEASE ATTACHMENT NO. 6 - AGREEMENT CONTAINING COVENANTS ATTACHMENT NO. 7 - AGENCY NOTE ATTACHMENT NO. 8 - AGENCY DEED OF TRUST ATTACHMENT NO. 9 - CERTIFICATE OF COMPLETION 5 SF-2001 Agree: Bowen Court: DDA 616/01 - 4:00 PM DISPOSITION AND DEVELOPMENT AGREEMENT FOR BOWEN COURT This Disposition and Development Agreement ("Agreement") is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (the "Agency"), and BOWEN COURT, L.P., a California limited partnership (the "Developer"). The Agency and the Developer agree as follows: RECITALS A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (California Health and Safety Code Section 33000 et seq). B. Agency is the owner of that certain real property in the City of Huntington Beach (the "Property"), described in the Legal Description attached hereto as Attachment No. 1 and depicted in the Property Map attached hereto as Attachment No. 2, which exhibits are incorporated herein by this reference. C. Agency wishes to facilitate the development of a twenty (20) unit affordable senior housing project on the Property (the "Project") by.taking the following actions, subject to all of the terms and conditions of this Agreement: (1) lease the Property to Developer; and (2) provide limited construction and permanent financing for the Project as provided in this Agreement. D. The Property is located inside the boundaries of the Huntington Beach Redevelopment Project Area ("Project Area") in the City of Huntington Beach ("City"), State of California, and is to be redeveloped in furtherance of the provisions of (1) 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 area; (2) this Agreement; and (3) the General Plan of the City of Huntington Beach. . E. The purpose of this Agreement is to effectuate the Redevelopment Plan by providing for the disposition of the Leasehold Estate and development of the Project. The accomplishment of the Project, and the fulfillment generally of this Agreement, are in the vital and best interests of the City of Huntington Beach and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state, and local laws and requirements. Further, Agency desires to meet its affordable housing goals pursuant to the Redevelopment Law by assisting Developer in the acquisition and construction of a 20-unit senior rental housing project on the Property. 6 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM F. The Agency will lease the Property to Developer for sixty (60) years. The fair market value of the Property is Eight Hundred and Eighty-five Thousand Dollars ($885,000). G. Developer will obtain (i) tax credit financing, and (ii) conventional financing of approximately $725,000, which together with the (iii) Agency's loans and any (iv) County Loan will be used for construction of the Project on the Property. Developer will obtain tax credit financing in such an amount that, when added to the Agency Loan, and conventional financing, and the County Loan or alternative financing, if any, will be sufficient to complete construction of the project. The Agency will provide Nine Hundred Thousand Dollars ($900,000) to Developer in the form of a 60-year Agency Construction Loan secured by a trust deed. There will be an annual 3% simple interest charge applied to the outstanding loan balance during the term of the note. In addition, the Developer shall use its best effort to obtain the County Loan or alternative sources of financing up to Four Hundred Thousand Dollars ($400,000). The Agency Construction Loan shall be reduced dollar for dollar, by the amount of said financing, if any. H. If Developer does not obtain a written commitment for tax credit financing by December 31, 2002, in an amount that, when added to the Agency Construction Loan, conventional financing, and the County Loan or alternative financing, if any, will be sufficient to complete construction of the project, Agency may, upon thirty (30) days written notice to Developer, terminate this Agreement and the Lease, in which case Developer will quit claim the Leasehold Estate to the Agency. I. At the end of the third year of the Agency Construction Loan, and continuing for the duration of the Loan, Developer will make annual payments to the Agency on its Construction Loan. Such payments shall be fifty percent (50%) of the project's end -of -year net income. J. After the 60`h year of the project's required affordability period, should Developer wish to continue operating the project with income and affordability restrictions of the Property Lease, the Agency will extend the term of the Lease. 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: SF-2001 Agree: Bowen Court: DDA 6/4/01 - 12:00 PM AGREEMENT I. [§ 100] DEFINITIONS A. ] § 101 ] Defined Terms. All capitalized terms used in this Agreement and the exhibits attached hereto, and not expressly defined otherwise, have the respective meanings set forth in the following list of defined terms: "Affiliate" shall mean (1) any Person directly or indirectly controlling, controlled by or under common control with another Person; (2) any Person owning or controlling ten percent (10%) or more of the outstanding voting securities of such other Person; and (3) if that other Person is an officer, director, member or partner, any company for which such Person acts in any such capacity. The term "control' as used in the immediately preceding sentence, shall mean the power to direct the management. It shall be a presumption that control with respect to a corporation or limited liability company is the right to exercise, directly or indirectly, more than fifty percent (50%) of the voting rights attributable to the controlled corporation or limited liability company, and, with respect to any individual, partnership, trust, other entity or association, control is the possession, indirectly or directly, of the power to direct or cause the direction of the management or policies of the controlled entity. "Agency" means the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic. Unless specifically provided otherwise in this Agreement, any requirement in this Agreement that a matter is to be approved by "Agency" shall be satisfied by the written approval by the Director (defined below). "Agency Construction Loan" shall mean the loan to be made by the Agency to the Developer pursuant to the Schedule of Performance, in a principal amount not to exceed Nine Hundred Thousand Dollars ($900,000), which shall be reduced, dollar for dollar, by the amount of the County Loan or alternative loan, if any. "Agency Construction Loan Closing" shall mean the closing of the Agency Construction Loan as evidenced by the recording of the Agency Deed of Trust. "Agency Deed of Trust" shall mean the deed of trust securing the Agency Construction Loan substantially in the form attached hereto as Exhibit No. 8. "Agency Note" shall mean the promissory note evidencing the Agency Construction Loan, substantially in the form attached hereto as Exhibit No. 7. "Agreement Containing Covenants" shall mean the Agreement Containing Covenants substantially in the form attached to this Agreement as Attachment No.6. "Approved Exceptions" shall mean those title matters shown as exceptions to title on the PTR which are approved by Developer under Section 305 of this Agreement SF-2001 Agree: Bowen Court: DDA 6/4/01 - 12:39 PM "Architect" shall mean the architect for the Project selected by Developer. "Business Day" shall mean a day which is not a Saturday or Sunday or a day on which banking institutions located in New York or California are authorized or required to remain closed. "Certificate of Completion" means the certificate to be issued by Agency upon its determination that Developer has completed the Project in satisfaction of all requirements of this Agreement, substantially in the form attached hereto as Attachment No. 9, which is incorporated herein by this reference, as provided in Section 434 of this Agreement. "City" shall mean the City of Huntington Beach, California. "Completion" shall mean the point in time when all of the following shall have occurred: (1) issuance of a permanent certificate of occupancy for the Project by the City; (2) recordation of a Notice of Completion by Developer or Developer's contractor for the Project; (3) the Architect certifies that construction of the Project has been completed in a good and workmanlike manner and substantially in accordance with the approved plans and specifications; (4) the expiration of the statutory period(s) within which valid mechanic's liens, materialman's liens and/or stop notices may recorded and/or served by reason of the construction of the Project, or, alternatively, Agency's receipt of valid, unconditional releases thereof from all persons entitled to record said liens or serve said stop notices, or, alternatively, Agency's receipt of notice of recordation of lien release bonds pursuant to Civil Code Section 3143 relating to all mechanic's liens, materialman's liens and/or stop notices which may have been recorded and/or served by reason of the construction of the Project and which have not been released; and (5) Agency issues the Certificate of Completion pursuant to Section 434 of this Agreement. "Construction Contract" shall mean a general contract for the construction of the Project. "Construction Period" shall mean the period of time between the Closing and the Completion. "County" shall mean the Orange County Housing and Community Development Department. "County Loan" shall mean the loan, if any, made by the County to Developer to cover a portion of the cost of developing the Project. "County Deed of Trust" shall mean the deed of trust securing repayment of all amounts, if any, disbursed under the County Loan. "Conventional Construction Loan" shall mean the construction loan made by a conventional lender to Developer to cover a portion of the cost of developing the Project. 9 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM "Conventional Construction Loan Closing" shall mean the closing of the Conventional' Construction Loan, as evidenced by the recording of the deed of trust securing repayment of all amounts disbursed under the Conventional Construction Loan. "DDA" or "Agreement" shall mean this document fully executed by Agency and Developer. "Debtor Relief Law" shall mean any applicable liquidation, conservatorship, bankruptcy, moratorium, insolvency, reorganization, or other similar laws, domestic or foreign, including but not limited to those in Title 11 of the United States Code, as amended from time to time, affecting the rights and remedies of creditors generally, as in effect from time to time§ "Default" shall have the meaning set forth in Section 601 of this Agreement. "Defect" means any defect or deficiency in siting, design, layout, suitability, construction, installation, materials, workmanship or operation of or relating to the Project.. "Developer" shall mean Bowen Court, L.P., a California limited partnership, or any assignee permitted by this Agreement. "Development Costs" means costs incurred by Developer in connection with the Project to the extent set forth in the approved Project Budget. "Director" means the City Administrator and Executive Director of the Redevelopment Agency of the City of Huntington Beach. "Escrow Agent" shall mean Chicago Title Insurance Company, or another escrow agent mutually acceptable to Agency and Developer. "Force Majeure" or "Force Majeure Event" shall mean the following events, provided that any one or more of such event(s) actually delays or interferes with the timely performance of the matter to which it would apply and despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such interference: war, insurrection, strikes, lock -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, material or tools, delays of any contractor, sub -contractor or supplier, acts of the other party, acts or failure to act of the City of Huntington Beach or any other public or governmental agency or entity (except that acts or failure to act of Agency shall not excuse performance of Agency), or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Event unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within fifteen (15) 10 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM days after it obtains actual knowledge of the event and reasonably determines that such event shall result in a delay. "Force Majeure Delay" shall mean any delay in commencing construction of the work of Improvement or in completion of such construction by the Scheduled Completion Date, proximately caused by the occurrence of any Force Majeure Event. "Governmental Approval" shall mean any and all special use permits, general plan amendments, zoning approvals or changes, required approvals and certifications under the California Environmental Quality Act and any other applicable laws and regulations relating to environmental conditions, tentative and final tract maps, variances, conditional use permits, special use permits, demolition permits, excavation/foundation permits, grading permits, building permits, inspection reports and approvals, certificates of occupancy, and other approvals, permits, certificates, authorizations, consents, orders, entitlements, filings or registrations, and actions of any nature whatsoever required from any Governmental Authority in order to commence construction, construct the Project, occupy the completed Project and operate the Project therein. "Governmental Authority" means the United States of America, the State of California, the County of Orange, the City of Huntington Beach, or any other political subdivision in which the Project is located, and any court or political subdivision, agency or instrumentality having jurisdiction over the Project or the Work of Improvement. "Gross Income" shall mean the gross rental income received by Developer from its operation of the Property, and any other income to the Developer derived from the ownership, operation and management of the Property. "Hazardous Materials" shall mean (i) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any laws as a "hazardous waste," "extremely hazardous substance," "extremely hazardous waste," "acutely hazardous waste," "hazardous substance," "hazardous material," "radioactive waste," "infectious waste," "biohazardous waste," "pollutant," "toxic pollutant," "contaminant" or "toxic substance," as well as any formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity," or "TCLP toxicity"; (ii) petroleum, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas) and ash produced by a resource recovery facility utilizing a municipal solid waste stream, and drilling fluids, produced waters and other waters associated with the exploration, development or production of crude oil, natural gas, or geothermal resources; (iii) "hazardous substance" as defined in Section 25281(f) of the California Health and Safety Code; (iv) "waste" as defined in Section 13050(d) of the California Water Code; (v) asbestos in any form; (vi) urea formaldehyde foam insulation; (vii) polychlorinated biphenyl ("PCBs"); (viii) radon; and (ix) any other chemical, material, or substance that, because of its quantity, concentration, or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any Governmental Authority, or which poses a SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM significant present or potential hazard to human health and safety, or to the environment, if released into the work place or the environment. "HUD" shall mean the U.S. Department of Housing and Urban Development. "Insurance Policies" shall have the meaning set forth in Section 410 of this Agreement. "Lease" means the instrument by which Agency shall convey 1'easehold title to the Property to the Developer, substantially in the form attached hereto as Attachment No. 5. "Lease Closing" or "Lease Close of Escrow" shall mean the point in time when Agency conveys possession if the leasehold interest in the Property to Developer, as evidenced by the recording of the Memorandum of Ground Lease. "Legal Description" shall mean the legal description of the Property attached to this Agreement as Attachment No. 1 which is incorporated herein by this reference. "Memorandum of Lease" shall mean the memorandum of lease attached as an exhibit to the Lease. "Operating Expenses" shall mean actual, reasonable and customary costs, fees and expenses directly attributable to the operation, leasing, repair, maintenance, taxes and . management of the Property, expressly including, without limitation: payment of principal and interest, all periodic fees and costs attributable to any Permitted Financing; onsite administrative costs (including salaries and benefits and overhead costs); maintenance costs (including materials and labor); reasonable payments to an operating reserve account; reasonable payments to a replacement reserve account; painting, cleaning, repairs and alterations; landscaping; utilities; rubbish removal; certificates, permits and licenses; sewer charges; real and personal property taxes and assessments; insurance; security; advertising, promotion and publicity; office, janitorial, cleaning and building supplies; cable television, satellite and similar facilities; recreational amenities, supplies and services; reasonable fees payable to a property manager, not to exceed five percent (5%) of Gross Income; developer fees as permitted by the California Tax Credit Allocation Committee; fees payable to the general partners and/or limited partners, not to exceed five percent (5%) of Gross Income; purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishings (other than from reserves); fees and expenses of accountants, attorneys, consultants and other professionals, including annual audits and tax return preparation costs payable to a third party; and the amortized value of tenant improvements. The calculation of Operating Expenses shall be subject to the reasonable approval of the Agency.. "Owner's Title Insurance Policy" shall mean any title insurance policy requested to be issued to Developer at the Closing as provided in Section 306 of this Agreement. "Permitted Financing" shall mean any construction loan or take-out loan, secured by a Permitted Mortgage. 12 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 11:10 AM "Permitted Mortgage" means a conveyance of a security interest in the Leasehold Estate and/or works of Improvement to a lender (a "Permitted Lender"), or the conveyance of the Leasehold Estate and/or works of Improvement to the lender or its assignee in connection with a foreclosure or a deed in lieu of foreclosure of such loan, all of which shall be subject, prior to Completion, to the terms and conditions set forth in Section 428 of this Agreement. "Permitted Transfer" means any of the following: a. An assignment of this Agreement and all of Developer's interests in any of the Leasehold Estate to an Affiliate; b. The inclusion of equity participation in Developer by transfer of partnership interests, shares of stock or limited liability shares or addition of additional partners, shareholders or members to Developer or similar mechanism; C. Any Permitted Mortgage; d. The leasing of any apartment units for occupancy; e. Any transfer of the Leasehold Estate permitted under the Lease; and f. Any transfer of the Leasehold Estate to any of the general partners (or their Affiliates) in Developer pursuant to the terms and conditions of the Developer's agreement of limited partnership following the expiration of the fifteen (15) year tax credit compliance period under Section 42 of the Internal Revenue Code. Any Transfer described in clauses a, b, c, e, and f shall be subject to the reasonable approval of the Director, which shall be granted if the applicable conditions for approval described in this Agreement are satisfied. "Person" means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company or other entity, domestic or foreign. "Plans" means the final working drawings and specifications in the form of reproducible masters setting forth all details, requirements, standards and materials for the siting, physical layout and construction of the Project prepared by the Architect and as modified or supplemented from time to time and approved by the Executive Director, the City, and to the extent necessary, by each Governmental Authority which approval shall not be unreasonably withheld or delayed. The Plans shall be consistent with the Scope of Development, and any plans previously approved by the City planning department or planning commission, and shall be prepared according to best industry practice. The Plans shall include as necessary, but not be limited to, site plans, demolition plans, excavation and foundation plans, structural plans with all elevations, building floor plans, building roof plans, building exterior plans, electrical plans, plumbing plans, mechanical plans, floor and ceiling plans, furniture plans, lighting plans, parking landscaping and 13 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 11:11 AM irrigation plans, sign plans and all other plans and detailed information necessary to obtain a Construction Contract and all necessary building permits for the Work of Improvement. "Project" shall mean the senior affordable housing residential apartment including approximately 20 one-bed/one-bath units as reflected in the plans and drawings delivered to Agency as of the date of this Agreement (as such plans and drawings may be amended from time to time in accordance with this Agreement). "Property" shall mean the real property described and depicted in the Legal Description and the Property Map. "Property Map" means the document which is attached to this Agreement as Attachment No. 2 and is incorporated herein by this reference. "PTR" mean the preliminary title report dated May 22, 2001, issued by Chicago Title Insurance Company.. "Redevelopment Law" means the Community Redevelopment Law of the State of California, set forth in Division 24, Part 1 of the California Health and Safety Code, beginning at Section 33000. "Schedule of Performance" shall mean the schedule. attached to this Agreement as Attachment No.3, which is incorporated herein by this reference. "Scheduled Lease Closing Date" shall mean June 11, 2001. "Scheduled Completion Date" shall mean the date that is eighteen (18) months after the Conventional Construction Loan Closing, subject to Force Majeure Delays. "Scope of Development" shall mean the document by that name attached to this Agreement as Attachment No. 4. "Title Company" shall mean Chicago Title Insurance Company, or another title insurance company mutually acceptable to Agency and Developer. . "Title Policies" shall mean the Owner's Title Insurance Policy insuring title to the Leasehold Estate, Agency's Title Insurance Policy insuring the lien of the Agency Deed of Trust, and Lender's Title Insurance Policy insuring the lien of the deed of trust securing the Conventional Construction Loan. "Transfer" shall mean any assignment or attempt to assign this Agreement or any right herein, or any total or partial sale, transfer, conveyance or assignment of the Property, any portion thereof or interest therein. "Work of Improvement" shall mean the preparation of the Plans and construction of the Project, including all on -site and off -site improvements, but excluding the Property. 14 SF-2001 Agree: Bo -en Court: DDA 6/1/01 - 1 1:12 AM H. [§ 200] SUBJECT OF AGREEMENT A. [§ 2011 Purpose of the Agreement The purpose of this Agreement is to effectuate the Redevelopment Plan for Huntington Beach Redevelopment Project Area (the Yorktown Subarea) by providing for the disposition of certain real property (the "Property) and the redevelopment of the Property as an affordable senior housing project consisting of approximately twenty (20) for -rent dwelling units (the "Project") pursuant to the Schedule of Performance and Scope of Development, attached hereto as Attachment No. 3 and Attachment No. 4, respectively. As part of the Project, the Developer shall also provide all parking on -site, as necessary and appropriate for the proposed Project. along with all appropriate landscaping. The Project is more particularly described in this Agreement and its attachments. The redevelopment and operation of the Property for such uses pursuant to this Agreement, and the fulfillment generally of this Agreement, are in the vital and best interests of the City of Huntington Beach ("City") and the health, safety and welfare of its residents and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements. B. [§ 202] The Redevelopment Plan/General Plan This Agreement is made in accordance with the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project") which was approved by adoption of Ordinance No. 3343 on December 16, 1996, and which merged together four different, previously approved project areas. The Property is within 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). This Agreement is also subject to the provisions of that certain General Plan for the City of Huntington Beach (the "General Plan"). Any amendment hereinafter to the Redevelopment Plan and/or the General Plan which changes the uses or development permitted on the Property as required by this Agreement or the restrictions or controls which apply to the Property shall require the prior written consent of the Developer. Except as provided in this paragraph, no other amendments to the Redevelopment Plan and/or the General Plan shall require the consent of the Developer. C. [§ 203] The Project Area The Huntington Beach Redevelopment Project Area (the "Project Area") is located in the City of Huntington Beach, County of Orange, California. The exact boundaries of the Project area are specifically and legally described in the Redevelopment Plan. D. [§ 204] Pr pertv The Property is that certain real property located at 1968-82 Lake Street in the City of Huntington Beach, California. The Property is comprised of approximately .75 acres in land 15 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM area. The Property is located within the Project Area and is designated and illustrated as such on the Property Map which is attached hereto as Attachment No. 2 and incorporated herein by this reference and is legally described as set forth in the Description of the Property which is attached hereto as Attachment No. 1 and incorporated herein by this reference. E. [§ 205] Parties to the Agreement [§ 2061 Agency The Agency is a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California (California Health and Safety Code §§ 33000, et seq.). The address of the Agency for purposes of this Agreement is Economic Development Department, City of Huntington Beach, 2000 Main Street, Huntington Beach, California 92648, Attention: Executive Director. "Agency" as used in this Agreement, includes the Redevelopment Agency of the City of Huntington Beach, and any public body that is an assignee of or successor to its rights, powers and responsibilities. 2. [§ 207] The Developer The Developer is Bowen Court, L.P., a California limited partnership.. The principal office of the Developer for purposes of this Agreement is Merit Housing, Inc., 414 East Chapman Avenue, Orange, California 92866, Attention Eunice Bobert. Wherever the term "Developer" is used herein, such term shall include any permitted nominee, assignee or successor in interest as herein provided. F. [§ 2081 Prohibition against Change in Ownership Management and Control of Developer 1. The Developer represents and agrees that its lease of the Leasehold Estate and its other undertakings pursuant to this Agreement are, and will be used, for the purpose of redevelopment of the Property and not for speculation in landholding. The Developer further recognizes that, in view of: (a) the importance of the redevelopment of the Property to the general welfare of the community; (b) the public aid that has been made available by law and by the government for the purpose of making such redevelopment possible; and 16 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 11:13 AM (c) the fact that a significant change in identity of the Developer, excepting the substitution of a purchaser at a foreclosure sale, is for practical purposes a transfer or disposition of the Leasehold Estate; the qualifications and identity of the Developer is of particular concern to the community and the Agency. The Developer further recognizes that it is because of such qualifications and identity that the Agency is entering into the Agreement with the Developer. Accordingly, except pursuant to a Permitted Transfer, no voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. For the reasons cited above, the Developer represents and agrees that prior to issuance by the Agency of a Certificate of Completion for the Property pursuant to Section 434 hereof, except pursuant to a Permitted Transfer the Developer shall not assign or transfer or attempt to assign or transfer all or any part of this Agreement, or any rights herein, without the express written consent of the Agency. 2. After the issuance of the Certificate of Completion pursuant to Section 434 of this Agreement: (a) Except in connection with a Permitted Transfer, the Developer shall not assign all or any part of this Agreement without the prior written approval of the Agency. (b) - 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, except for a Permitted Transfer 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. (c) The Developer shall promptly notify the Agency of any and all changes whatsoever in the identity of the parties 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 if there is any significant change (voluntary or involuntary) in membership, management or control of the Developer (other than such changes occasioned by the death or incapacity of any individual or occasioned by a Permitted Transfer). (d) Developer shall not, except as permitted by this Agreement and except pursuant to a Permitted Transfer, assign or attempt to assign this Agreement or any right herein, nor except pursuant to a Permitted Transfer, make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the 17 SF-2001 Agee: Bowen Court: DDA 6/1/01 - 10:38 AM Leasehold Estate (referred to hereinafter as a "Transfer"), without prior written approval of the Agency, except as expressly permitted by this Agreement. Consent to a Transfer shall not result in acceleration of the Agency Note. Consent to one such Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers. Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Agency, to fulfill the obligations undertaken in this Agreement by the 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 successor and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Developer in this Agreement as of the date of such assumption, 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 effect any such Transfer, and if approved by the Agency its approval shall be indicated to the Developer in writing. (e) 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. (fJ The provisions of this Section 208 shall be of no force or effect as of the expiration or earlier termination of the Regulatory Agreement. III. [§ 300] DISPOSITION OF THE LEASEHOLD ESTATE A. [301] Representations and Warranties of Developer As an inducement to Agency to enter into this Agreement and perform all of the Agency's obligations under this Agreement, Developer hereby represents and warrants to Agency, which representations and warranties are true and correct as of the date of this Agreement and which shall survive the Lease Closing: 1. Developer has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby; 2. This Agreement and all documents required hereby to be executed by Developer are, and shall be, valid, legally binding obligations of and enforceable against 18 SF-2001 Agree: Bowen Court: DDA 6/1101 - 10:38 AM Developer in accordance with their terms, subject only to applicable Debtor Relief Laws or equitable principles affecting or limiting the rights of contracting parties generally; 3. There is no charter, bylaw, or capital stock provision of Developer, and no provision of any indenture, instrument, or agreement, written or oral, to which Developer is a party or which governs the actions of Developer or which is otherwise binding upon Developer or Developer's property, nor is there any statute, rule or regulation, or any judgment, decree, or order of any court or agency binding on Developer or Developer's property which would be contravened by the execution, delivery or performance of this Agreement or any documents required hereby to be executed by Developer; 4. There is no action, suit, or proceeding at law or in equity or by or before any governmental instrumentality or other agency now pending, or, to the knowledge of Developer, threatened against or affecting Developer, or any properties or rights of Developer, which, if adversely determined, would materially impair the right of Developer to execute or perform its obligations under this Agreement or any documents required hereby to be executed by Developer, or would materially adversely affect the financial condition of Developer; 5. Neither the execution and delivery of this Agreement and documents referenced herein, nor the incurrence of the obligations set forth herein, nor the consummation of the transactions herein contemplated, nor compliance with the terms of this Agreement and the documents referenced herein conflict with or result in the material breach of any terms, conditions or provisions of, or constitute a default under, any bond, note or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreements or instruments to which Developer is a party; 6. To the best of Developer's knowledge, there are no pending, threatened or contemplated actions, suits, arbitrations, claims or proceedings, at law or in equity, in which Developer or and Affiliate is, or to the best of Developer's knowledge will be, a party, including, but not limited to, judicial, municipal or administrative proceedings in eminent domain, unlawful detainer or tenant evictions, collections, alleged building code, health and safety or zoning violations, employment discrimination or unfair labor practices, breach of contract, or workers' compensation, personal injuries or property damages; 7. No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against Developer, nor are any of such proceedings contemplated by Developer; 8. All reports, documents, instruments, information and forms of evidence delivered to Agency by Developer concerning or required by this Agreement are accurate, correct and sufficiently in all material respects complete to give Agency true and accurate knowledge of their subject matter, and do not contain any material misrepresentation or material omission; 19 SF-2001 Agree: Bowen Court: DDA 611101 - 10:38 AM 9. No representation, warranty or statement of Developer in this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements or facts contained therein not misleading; and 10. If Developer receives any notice that any representation or warranty made herein is false or misleading, Developer shall immediately notify Agency in writing. 11. Whenever a statement concerning the factual matters herein is qualified by the phrase "to the best of Developer's knowledge" or similar words, it is intended to indicate that no information that would give the Developer current actual knowledge of the inaccuracy of such factual statement has come to the attention of the Developer. The Developer has not undertaken any independent investigation to determine the accuracy of any such factual statement, and any limited inquiry undertaken by the Developer should not be regarded as such an investigation. B. [302] Representations and Warranties of Aeency As an inducement to Developer to enter into this Agreement, accept a conveyance of title to the Leasehold Estate from Agency and develop the Project thereon, Agency hereby represents and warrants to Developer, which representations and warranties are true and correct as of the date of this Agreement and which shall survive the Lease Closing: 1. Agency has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby; 2. This Agreement and all documents required hereby to be executed by Agency are, and shall be, valid, legally binding obligations of and enforceable against Agency in accordance with their terms, subject only to applicable Debtor Relief Laws; 3. There is no provision of any indenture, instrument, or agreement, written or oral, to which Agency is a party of which governs the actions of Agency or which is otherwise binding upon Agency or Agency's property, nor is there any statute, rule or regulation, or any judgment, decree, or order of any court or agency binding on Agency or Agency's property which would be contravened by the execution, delivery or performance of this Agreement or any documents required hereby to be executed by Agency. 4. There is no action, suit, or proceeding at law or in equity or by or before any governmental instrumentality or other agency now pending, or, to the knowledge of Agency, threatened against or affecting Agency, or any properties or rights of Agency, which, if adversely determined, would materially impair the right of Agency to execute or perform its obligations under this Agreement or any documents required hereby to be executed by Agency; with the exception of eminent domain actions which may be filed, as contemplated by this Agreement; 5. Neither the execution and delivery of this Agreement and documents referenced herein, nor the incurrence of the obligations set forth herein, nor the consummation of the transactions herein contemplated, nor compliance with the terms of this Agreement and the 20 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM documents referenced herein conflict with or result in the material breach of any terms, conditions or provisions of, or constitute a default under, any bond, note or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreements or instruments to which Agency is a party; 6. To the best of Agency's knowledge, there are no pending, threatened or contemplated actions, suits, arbitrations, claims or proceedings, at law or in equity, in which Agency is, or to the best of Agency's knowledge will be, a party, including, but not limited to, judicial, municipal or administrative proceedings in eminent domain (except as contemplated by this Agreement), unlawful detainer or tenant evictions, collections, alleged building code, health and safety or zoning violations, employment discrimination or unfair labor practices, breach of contract, or workers' compensation, personal injuries or property damages, which may or will materially affect the Property or the Leasehold Estate or Agency's ability to perform its obligations hereunder; 7. No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against Agency, nor are any of such proceedings contemplated by Agency; 8. All reports, documents, instruments, information and forms of evidence delivered to Developer concerning or required by this Agreement are accurate, correct and sufficiently complete to give Developer true and accurate knowledge of their subject matter, and do not contain any misrepresentation or omission; 9. Subject to all applicable Governmental Approvals, and without prejudice to the rights of the City to exercise its discretion with respect to any land use approval, the use of the Property for the Project is an allowable land use, and complies with all of the provisions of, the Redevelopment Plan; 10. To the best of Agency's knowledge, Agency has not received written notice from any Governmental Authority that Agency or any of the Property (or any portion thereof) is or are in violation of any governmental or other legal requirements including, without limitation, legal requirements relating or pertaining to Hazardous Materials; 11. To the best of Agency's knowledge, Agency owns the Property free and clear of all liens and encumbrances (except for the matters shown on the PTR delivered to Developer) and there are no claims pending, or to the best of Agency's knowledge, threatened, which would result in the creation of any lien against any of the Property or the Leasehold Estate, including without limitation, mechanic's liens and liens of water, sewer, street or electrical power improvements in progress or contemplated; 12. To the best of Agency's knowledge, all water, sewer, gas and electric and other utilities necessary to service the Property are to will be at the Closing located in the streets adjoining the Property, ready for tap in by Developer, subject to payment of all applicable hook- up fees; 21 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM 13. Agency has not received any written notice of and has no actual knowledge of any violation of any law, ordinance, regulation, order or requirement applicable to the Property, including without limitation, requirements imposed under any recorded covenants, conditions, restrictions, easements or other rights affecting the Property; 14. No representation, warranty or statement of Agency in this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements or facts contained therein not misleading; and 15. If Agency receives any notice that any representation or warranty made herein is false or misleading, Agency shall immediately notify Developer in writing. Whenever a statement concerning factual matters herein is qualified by the phrase "to the best of Agency's knowledge" or similar words, it is intended to indicate that no information that would give Agency current actual knowledge of the inaccuracy of such factual statements has come to the attention of Agency. Agency has not undertaken any independent investigation to determine the accuracy of any such factual statement, and any limited inquiry undertaken by Agency should not be regarded as such an investigation. 16. To the best of Agency's knowledge, Agency has delivered to Developer copies of all environmental notices from .governmental agencies, environmental reports, and environmental assessments in Agency's possession or control and the Property is not in violation of any law, ordinance, regulation, order or requirement relating to Hazardous Materials. 17: Other than the issuance of a subdivision or parcel map and building permits, all discretionary entitlements necessary for the development and construction of the Project have been obtained. 18. No assessment for street lighting or downtown maintenance has been imposed on the Property. C. [§ 3031 Lease In accordance with and subject to all the terms, covenants, and conditions of this Agreement, the Agency agrees to lease to the Developer and the Property pursuant to the Lease set forth in Attachment No. 5. The Developer shall pay to the Agency One Dollar ($1.00) per year as the rent for the lease of the Property. The first rent payment shall be paid by the Developer at or prior to the Lease Closing. D. [§304] Escrow 1. The Agency agrees to open an escrow for conveyance of the Leasehold Estate with Chicago Title Company and its escrow department, or another escrow company acceptable to both the Agency and the Developer, which acceptance shall not be unreasonably 22 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM withheld, as escrow agent (the "Escrow Agent"), within the time provided in the Schedule of Performance which is attached hereto as Attachment No. 3 and incorporated herein by this reference. This Agreement constitutes the joint escrow instructions of the Agency and the Developer, and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the escrow. The Agency and the Developer shall provide such additional escrow instructions consistent with this Agreement as shall be necessary. The Escrow Agent hereby is empowered to act under such instructions, and upon indicating its acceptance thereof in writing, delivered to the Agency and to the Developer within five (5) days after the opening of the escrow, the Escrow Agent shall carry out its duties as Escrow Agent hereunder. (a) Closing Date. On or before the date established in the Schedule of Performance, the parties shall satisfy the conditions described below and complete the Lease Closing. If, for any reason, the Lease Closing has not occurred by the Scheduled Lease Closing Date, either party may terminate this Agreement, by providing notice of termination to the other party. (b) Delivery of Documents and Funds by Developer. On or before twelve noon on the last business day prior to the Scheduled Lease Closing Date, Developer shall deposit or cause to be deposited with the Escrow Agent the following: (i) the Lease and the Memorandum of Ground Lease; (ii) the Agreement Containing Covenants, executed and acknowledged by Developer; and (iii) all funds, documents, and deposits Developer is required to deposit with Escrow Agent in order to close the Escrow conveying the Leasehold Estate to Developer. (iv) Developer shall deliver copies of formation documents relating to Developer and its general partner(s), including, without limitation and as applicable: limited partnership agreement and any amendments thereto; articles of incorporation; State of California Limited Liability Company Articles of Incorporation (LLC-1), Statement of Information (including any amendments thereto); copies of all resolutions or other necessary actions taken by such entity to authorize the execution of this Agreement and related documents; a certificate of status issued by the California Secretary of State; and a copy of any Fictitious Business Name Statement, if any, as published and filed with the Clerk of Orange County. 23 SF-2001 Agree: Bowen Court: DDA 6/P01 - 10:38 AM (c) Delivery of Documents by Agency. On or before twelve noon on the last business day prior to the Scheduled Lease Closing Date, Agency shall deposit or cause to be deposited with the Escrow Agent the following: (i) the Lease and the Memorandum of Lease; (ii) the Agreement Containing Covenants, executed and acknowledged by Agency. 2. Upon delivery of the Rent, the Agreement Containing Covenants (Attachment No. 6), the Lease and the Memorandum of Lease attached thereto (Attachment No. 5) for the Property (the "Closing Documents") to the Escrow Agent in compliance with this Section, the Escrow Agent shall record the Memorandum of Lease and Agreement Containing Covenants in accordance with these escrow instructions, provided that title to the Leasehold Estate can be vested in the Developer in accordance with the terms and provisions of Section 305 of this Agreement. The Escrow Agent shall pay, affix and cancel any transfer stamps required by law. 3. The Developer shall pay in escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified the Developer of the amount of such fees,, charges and costs, but not earlier than five (5) days prior to the Scheduled Lease Closing Date: (a). the escrow fees; (b) costs necessary to place the title to the Leasehold Estate in the condition for conveyance required by the provisions of this Agreement; (c) the premium for all title insurance policies to be purchased by the Developer with respect to the Leasehold Estate as set forth in Section 305 of this Agreement; and (c) any State, County or City documentary stamps or transfer tax imposed respect to the Property; provided however that the Agency agrees to use its reasonable best efforts to obtain a waiver of any such transfer taxes. 4. The Agency shall timely and properly execute, acknowledge and deliver a Memorandum of Lease for the Property in substantially the form established in Section 303 of this Agreement, leasing the Property to the Developer in accordance with the requirements of Section 303 of this Agreement. 24 SF-2001 Aeree: Boxven Court: DDA 6/1/01 - 16.38 AM 5. The Escrow Agent is authorized to: (a) Pay and charge the Developer for any fees, charges and costs payable under this Section 304. Before such payments are made, the Escrow Agent shall notify the Agency and the Developer of the fees, charges and costs necessary to clear title and close the escrow. (b) Disburse the Rent and deliver the Memorandum of Lease, Agreement Containing Covenants and other Closing Documents to the parties entitled thereto when the conditions of this escrow have been fulfilled by the Agency and the Developer with respect to the Leasehold Estate. (c) Record the Memorandum of Lease and any other instruments delivered through this escrow if necessary or proper to vest title in the Developer in accordance with the terms and provisions of the escrow instructions. 6. All funds received in this escrow shall be deposited by the Escrow Agent in a separate interest bearing account acceptable to the Developer and the Agency with any state or national bank doing business in the State of California and reasonably approved by the Developer and the Agency, and all interest accruing on the account shall be payable to the Developer. 7. If this escrow is not in condition to close on or before the time for conveyance established in the Schedule of Performance (Attachment No. 3) of this Agreement, either party who then has fully performed the acts to be performed before the conveyance of title may, in writing, demand the return of its money, papers and/or documents from the Escrow Agent. No demand for return shall be recognized until twenty (20) days after the Escrow Agent (or the party making such demand) shall have mailed copies of such demand to the other party or parties at the address of its principal place of business. Objections, if any, shall be raised by written notice to the Escrow Agent and to the other party within the twenty- (20) day period, in which event the Escrow Agent is authorized to hold all money, papers and documents with respect to the Property, as the case may be, until instructed by a mutual agreement of the parties or, upon failure thereof, by a court of competent jurisdiction. If no such demands are made, the escrow shall be closed as soon as possible. 8. If objections are raised as above provided for, the Escrow Agency shall not be obligated to return any such money, papers, or documents except upon the written instructions of both Agency and Developer, or until the party entitled thereto has been determined by a final decision of a court of competent jurisdiction. If no such objections are made within said 10-day period the Escrow Agency shall immediately return the demanded money, papers, or documents. 25 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:33 AM 9. The parties understand they may be required to execute additional standard form escrow instructions required by the Escrow Agency ("General Instructions"). In the event of a conflict between this Agreement and any such General Instructions, this Agreement shall control. The parties agree, however, that they will refuse to sign General Instructions which (1) purport to relieve the Escrow Agency of liability for negligence or intentional wrong -doing; (2) excuse the Escrow Agent from strict compliance with each and all of the provisions of this document and the General Instructions; or (3) purport to authorize the Escrow Agency to follow the instructions or directive of any person not a direct signatory party to this Agreement. 10. Any amendment to the escrow instructions shall be in writing and signed by both the Agency and the Developer. At the time of any amendment the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. 11. All communications from the Escrow Agent to the Agency or the Developer shall be directed to the addresses and in the manner established in Section 701 of this Agreement for notices, demands, and communications between the Agency and the Developer. E. [§ 305] Condition of Title The Agency shall lease the Property to the Developer free and clear of all liens, encumbrances, assessments, easements, leases and taxes; except those which are otherwise consistent with this Agreement; provided however that no covenants, conditions, restrictions or equitable servitudes shall prohibit or limit the development permitted by the Scope of Development (Attachment No..3), the development set forth in the Lease (Attachment No. 5), and Agreement Containing Covenants (Attachment No. 6) and by plans that have been approved by the Agency. The Developer hereby shall take possession to the Leasehold Estate subject to the following exceptions (the "Approved Exceptions")" (1) The Redevelopment Plan; (2) The lien of any non -delinquent property taxes and assessments (to be prorated at the Close of Escrow); (3) all taxes for the period subsequent to the conveyance of title; (4) title exceptions set forth in the PTR and not specifically disapproved by Developer, which disapproved exceptions shall be the responsibility of the Agency; and (5) any other exceptions which are otherwise consistent with this Agreement and which are accepted in writing by Developer. Title to the Leasehold. Estate shall be subject to the exclusion therefrom (to the extent now or hereafter validly excepted and reserved by the parties named in deeds, leases and other documents of record, other than reservations made by the Agency) of all oil, gas, hydrocarbon 26 SF-2001 Agree: Bowen Court: DDA 61l01 - 10:38 AM substances and minerals of every kind and character lying more than 500 feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Property lying more than 500 feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from the Property, but without, however, any right to use or disturb either the surface of the Property or any portion thereof within 500 feet of the surface for any purpose or purposes whatsoever. . In the event the Agency tenders possession as herein provided, the Developer shall deposit the Rent in escrow in accordance with the provisions of Section 304, accept the right of possession to the Leasehold Estate and proceed with the redevelopment of the Property in accordance with the Scope of Development (Attachment No. 4).. F. [§ 306] Title Insurance Concurrent with the recordation of the Memorandum of Lease or instruments conveying possession to the Property and the Agreement Containing Covenants, Chicago Title Insurance Company ("Title Company") shall provide and deliver to the Developer a CLTA owner's title insurance policy issued by Title Company insuring that fee title to the Leasehold Estate is vested in the Developer subject only to the Approved Exceptions. The Title Company shall provide the insurance policy in the amount of Eight Hundred Eighty -Five Thousand Dollars ($885,000). The Developer shall be responsible for the payment of all title insurance premiums pursuant to Section 306. In addition, the Developer shall pay for all other premiums for title insurance requested by Developer, including those for any extended coverage or special endorsements which it may request. G. [§ 307] Taxes and Assessments Ad valorem taxes and assessments, if any, on the Property, and taxes upon -this Agreement or any rights hereunder, levied, assessed or imposed for any period, commencing after conveyance of title or possession of the Leasehold Estate, shall be borne by the Developer. H. [§ 3081 Occupants of the Property The Agency agrees that the Property shall be conveyed free of any possession or right of possession except that of the Developer, unless waived by the Developer in writing. I. [§ 309] Condition of the Property The Leasehold Estate, and any improvements thereon, shall be conveyed in an "as is" condition, with no warranty, express or implied, by the Agency as to the condition of the soil, its geology or the presence of known or unknown faults other than the representations and warranties set forth in this Agreement. The Developer further acknowledges receipt of the "Supplemental Geotechnical Investigation, Bowen Court Senior Apartments, Yorktown -Lake Redevelopment Project Subarea, Southeast Corner of Lake Street and Yorktown Avenue, City of Huntington Beach, California," prepared by Petra Engineering, dated August 30, 2000. The parties acknowledge this Report indicates a "stain" of hydrocarbons on the Property. The Agency agrees to initiate, complete and provide 27 SF-2001 Agree: Bowen Court: DDA 6 1;01 - 11:15 AM to Developer, a Phase 2 environmental assessment (the "Phase II Report") of the Property within 90 days following the date of this Agreement to determine the extent of environmental hazards. Developer shall have the right, exercisable by the delivery of written notice to Agency, to terminate this Agreement and the Lease if Developer fails to approve (in Developer's sole and absolute discretion) the Phase II Report. Agency hereby agrees to defend, indemnify and hold harmless Developer, its constituent partners, shareholders, officers, employees and consultants from and against any and all claims, actions, liability, fines, penalties, charges, damages and costs whatsoever (including attorneys' fees) now or hereafter arising out of or in connection with the Hazardous Materials; provided, however the foregoing indemnity shall be void and shall be of no force or effect if Developer approves (in Developer's sole and absolute discretion) the Phase II Report. Notwithstanding anything stated to the contrary in this Agreement, Agency's indemnity obligations in this paragraph shall survive the termination of this Agreement. Except as to hazardous materials and/or hazardous substances situated on or under the Property ("Hazardous Materials"), it shall be the sole responsibility of the Developer, at the Developer's expense, to investigate and determine the soil conditions of the Property, and any portion thereof, for the development to be constructed by the Developer. If the soil conditions of the Property (excluding Hazardous Materials), or any part thereof, are not in all respects entirely suitable for the use or uses to which the Property will be put, then it is the sole responsibility and obligation of the Developer to take such action or cause such action to be taken by others as may be necessary to place the Property, or any portion thereof, and the soil conditions (excluding Hazardous Materials) thereof in all respects in a condition entirely suitable for the development thereof as described in the Scope of Development (Attachment No. 3), and this Agreement. J. [§ 310] Deposit of the Rent and Agreement Containing Covenants and Recordation of the Memorandum of Lease and Agreement Containing Covenants The Developer shall promptly deposit the Rent and Agreement Containing Covenants (Attachment No.6) with the Escrow Agent upon or prior to the date for the Lease Closing Date, provided that Escrow Agent shall have notified the Developer in writing that the Lease, properly executed and acknowledged by the Agency, has been delivered to the Escrow Agent and that possession is in condition to be conveyed in conformity with the provisions of Section 305 of this Agreement. The Escrow Agent shall deliver the Rent to the Agency immediately following the delivery to the Developer of the title insurance policy set forth in Section 304 of this Agreement and the filing of the Memorandum of Lease and Agreement Containing Covenants for recordation among the land records in the Office of the County Recorder for Orange County. K. [§311 ] Preliminary Work by the Developer 1. Prior to the conveyance of title of the Leasehold Estate, representatives of the Developer shall have the right of access to and entry upon the Property, at all reasonable times, for the purposes of obtaining data and making surveys and tests necessary to carry out this Agreement. 28 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM 2. Investigations may be performed by Developer on and beneath the Property and all improvements thereon for the presence of hazardous, toxic and/or contaminating materials. Developer agrees to pay the entire costs of such investigations. L. [§312] Submission of Evidence of Financing Not later than December 31, 2002, Developer shall demonstrate to Agency that Developer has obtained a binding commitment of the tax credit and conventional financing necessary for the development of the Property as described in the Recitals, as well as having used its best efforts to obtain the Orange County or alternative financing, provided, that if the financing commitments are not obtained by September 30, 2001, either party may terminate this Agreement and the Lease upon thirty (30) days written notice. The Agency shall approve or disapprove such evidence of tax credit financing within the time established in the Schedule of Performance. Such approval shall not be unreasonably withheld, conditioned or delayed. If Agency shall disapprove any such evidence of financing, Agency shall do so by written notice to Developer stating the reasons for such disapproval. The Developer shall promptly obtain and submit to the Agency new evidence of financing in the same manner and within the same times established in this Section 312 for the approval or disapproval of the evidence of financing as initially submitted to the Agency. Such evidence of financing shall include the following: 1. True and correct copies of the commitment or commitments obtained by the Developer for California Tax Credit Allocation Committee financing in the amount that, when added to the Agency Construction Loan, conventional financing in the amount of $725,000 and the Orange County Housing and Community Development or alternative financing, if any, will be collectively sufficient to finance Project construction. The commitments for financing shall be in such form and content acceptable to the Agency as reasonably evidences a legally binding, firm and enforceable commitment; provided however, such commitments may be subject to standard and customary conditions (including, but not limited to, conditions regarding the status of title, receipt of all required consents, licenses, and permits and approvals of plans, specifications and studies); and 2. A copy of the contract between the Developer and a California licensed general contractor containing a cost estimate of the construction costs for the Development, certified by the Developer to be a true and correct copy thereof; 3. A financial statement as evidence of other sources of capital sufficient to demonstrate that the Developer has adequate funds to cover the difference, if any, between construction cost minus financing authorized by mortgage loans. The Agency shall approve the financial statement as evidence of sources of equity capital if such is approved by the lender making the mortgage loan and the Agency approves such mortgage lender; and 29 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 11:16 AM M. [§ 313]' Agency Financing. By no later than the Agency Construction Loan Closing, the Executive Director shall establish and fund disbursement accounts (which may include use of a disbursement agent) for disbursing the Agency Construction Loan to the Developer to finance the construction of the Works of Improvement. The Agency may establish predevelopment, off -site, on -site and contingency disbursement accounts. Developer will, if requested by Agency, as a condition precedent to the disbursement of any of the funds from said disbursement accounts, furnish Agency with receipted bills, invoices or other evidences of expenditures equal to the total funds then disbursed from said accounts, and also furnish releases of lien rights covering work performed and materials furnished for said improvements. All funds disbursed by Agency from said accounts will be received in trust for the purpose of fully paying all contractors, subcontractors, materialmen, laborers and others engaged in the construction of improvements. Agency may defer making any disbursement from said Accounts (i) until it receives evidence that the work being performed conforms with the plans and specifications approved by Agency in accordance with good construction practices, and in any event in compliance'with all laws and regulations of local, federal or state authorities relating thereto; (ii) until its appraiser or authorized representative certifies in writing that the construction required for the making of such disbursement has been completed; (iii) until any default existing under the provisions of this Agreement shall have been cured; (iv) so long as any conflicting claims based upon assignments, or otherwise, are being made to any of the funds in said accounts; (v) so long as any notice to withhold served upon Agency remains unsatisfied, or any lien or claim of mechanics, materialmen or others affecting said real property appears and remains of record, or any suit upon any such notice to withhold or for the foreclosure of any such lien or claim is pending; and (vi) so long as any levy or service of any process affecting or appearing to affect the funds in said accounts or any part thereof remains in force. IV. [§ 4001 DEVELOPMENT OF THE PROPERTY A. [§ 401] Development of the Property (402] Agreement to Design and Construct. (a) Developer shall cause the design and construction of the Project in accordance with this Agreement, the Scope of Development and the Basic Concept Drawings approved by Agency and any changes thereto that are approved by Agency, the Schedule of Performance and all Governmental Approvals and applicable requirements of any Governmental Authority. (b) Developer shall perform or cause to be performed all such design and construction work diligently, continuously and without interruption strictly in accordance with the Schedule of Performance, subject, however, to any Force Majeure Delay specified hereunder. Developer shall commence or cause the Project to be commenced within the time 30 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 1 1:19 AM provided therefor in the Schedule of Performance. Developer shall perform or cause to be performed all such design and construction work in a good and workmanlike manner and in accordance with sound engineering and construction practices. Developer shall not cause or permit cessation of work for a period in excess of ten (10) consecutive Business Days, except cessation caused by Force Majeure Events, without the prior written consent of the Agency. 2. [§ 403] Scope of Development The Property shall be developed by the Developer in accordance with and within the limitations established in this Agreement, including, but not limited to the Scope of Development (Attachment No. 4), and in accordance with and pursuant to all plans approved by the Agency pursuant to this Agreement. [§ 404] Approval of Development and Management Teams Within the time set forth in the Schedule of Performance (Attachment No. 3), the Developer shall provide to the Agency, in detail satisfactory to the Agency, information relative to the construction management for the redevelopment of the Property and the general contractor, who shall be properly licensed by the State of California. Said information shall include, but not be limited to, a description of the entities having responsibility for the management of rehabilitation and construction and the general contracting, a description of previous developments of a size and scope at least comparable to the redevelopment contemplated by this Agreement which have been successfully completed by such entities, arid copies of contracts for the management of the rehabilitation and construction and the general contracting which each of the entities are prepared to enter into. Within thirty (30) days of receipt of such information, the Agency shall either approve or disapprove such entities; provided however, that the Agency shall not disapprove any contractor or construction manager demonstrating the proper credentials (i.e., contractor's license) and successful experience in the rehabilitation and construction of a senior affordable housing project of a similar size and in a similar location as the redevelopment provided for in the Scope of Development (Attachment No. 4). In the event of disapproval, the Developer shall submit comparable information for another entity within thirty (30) days after such disapproval which information shall be reviewed by the Agency in accordance with the provisions of this Section 304 relating to the original submission of information. 4. [§404] Basic Concept Drawings Within the time set forth in the Schedule of Performance (Attachment No. 3), the Developer shall cause the architect to prepare and submit Basic Concept Drawings and related documents for the development of the Property to the Agency for review and written approval or disapproval. The Basic Concept Drawings and related documents shall include: (1) a site plan showing the placement and number of square feet of the Development to be constructed on the Property, the uses of the improvements thereon, parking area and capacity, and general landscaping treatment and location; (2) rough elevations from each of the streets abutting the Property and from properties abutting the Property; (3) a general description of the architectural 31 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM theme of the improvements; and (4) a description of the devices to be used to reduce the impact of the development on nearby residences. The parties intend that the Plans shall contain sufficient detail so that, on the basis of such Plans, Developer will be able to obtain complete bids for all of the Project Improvement to be performed by a Contractor, and all necessary permits for the Project. The Property shall be developed as established in the Basic Concept Drawings and related documents except as changes may be approved in writing by both the Developer and the Agency. Any such changes shall be within the limitations of the Scope of Development (Attachment No. 4). 5. [§ 405] Landscaping and Finish GradingPlans Within the time set forth in the Schedule of Performance (Attachment No. 3), the Developer shall prepare and submit to the Agency for its approval preliminary and final landscaping and preliminary and finish grading plans for the Property. The landscaping plans shall be prepared by a professional landscape architect and the grading plans shall be prepared by a licensed civil engineer. Such landscape architect and/or civil engineer may be the same firm as the Developer'. s architect provided that such landscape architect and/or civil engineer are appropriately licensed by the State of California to perform such work. Within the times established in the Schedule of Performance (Attachment No. 3), the Developer shall submit to the Agency for approval or disapproval the names and qualifications of its architect, landscape architect and civil engineer. 6. [§ 4061 Construction Drawings and Related Documents for the Property Within the time set forth in the Schedule of Performance (Attachment No. 3), the Developer shall prepare and submit construction drawings and related documents (collectively called "Drawings") for the Development to the Agency for reasonable architectural review and written approval as set forth in the Schedule of Performance (Attachment No. 3). Such construction drawings and related documents shall be submitted in two states: preliminary and final working drawings. Preliminary drawings are hereby defined as design for development drawings. Final construction drawings are hereby defined as those in sufficient detail to obtain a building permit. Approval of progressively more detailed drawings and specifications will be promptly granted by the Agency if developed as a logical evolution of drawings or specifications theretofore approved. Any items so submitted and approved by the Agency shall not be subject to subsequent disapproval. During the preparation of all drawings and plans, the Agency and the Developer shall hold regular progress meetings to coordinate the preparation of, submission to, and review of, construction plans and related documents by the Agency. The Agency and the Developer shall 32 SF-2001 Agree: Bowen Court: DDA 6i1/01 - 10:38 Aft communicate and consult informally as frequently as is necessary to ensure that the formal submittal of any documents to the Agency can receive prompt and speedy consideration. If any substantial revisions or corrections of plans approved by the Agency shall be required by any government official, agency, department or bureau having jurisdiction over the development of the Property, the Developer and the Agency shall cooperate in efforts to comply, obtain waiver of such requirements (whenever possible and merited under the circumstances) or to develop a mutually acceptable alternative. 7. [§ 407] Agency Approval of Plans, Drawings and Related Documents The Agency shall have the right of architectural review and approval of all plans and submissions, including any material proposed changes therein. The Executive Director of the Agency, or his designee, shall have authority to determine on behalf of the Agency if a proposed revision or change to any plans, drawings or other documents previously approved by the Agency is a material change requiring Agency approval. If the Executive Director, or his designee, determines that the proposed revision or change is not material, no approval by the Agency of such revision or change will be necessary. The Agency shall reasonably approve or disapprove the plans, drawings and related documents referred to in Section 404, 405 and 406 of this Agreement and any material revisions thereto within the times established in the Schedule of Performance (Attachment No. 3). The Agency's review is intended to insure that the plans, drawings and related documents are consistent with the Scope of Development (Attachment No. 3) and with the Basic Concept Drawings. . With respect to the foregoing approvals set forth in Sections 404, 405, 406 and 407, failure by the Agency to either approve or disapprove of the same within the times established in the Schedule of Performance (Attachment No. 3), which approval shall not be unreasonably withheld or delayed and shall be deemed an approval, if the request for such approval is in writing, delivered to Agency, and includes the following notice, in bold print and capitalized letters: NOTICE: FAILURE BY AGENCY TO DISAPPROVE THE SUBMITTED PLANS WITHIN 10 BUSINESS DAYS AFTER RECEIPT SHALL BE DEEMED APPROVAL PURSUANT TO SECTION 407OF THE DDA DATED ImL-- q t= j , BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND MERIT HOUSING CORPORATION, DEVELOPER. Any disapproval shall state in writing the reasons for disapproval and the changes which the Agency requests to be made. Such reasons and such changes must be consistent with the Scope of Development (Attachment No. 4) and any items previously approved or deemed approved hereunder. The Developer, upon receipt of a disapproval based upon powers reserved by the Agency hereunder, shall revise the plans, drawings and related documents, and shall resubmit to the Agency as soon as possible after receipt of the notice of disapproval; provided 33 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM that in no case shall the Agency be entitled to require changes which are inconsistent with the Scope of Development, or inconsistent with the most recently applicable previously approved or deemed approved items. [§ 408] Cost of Development (a) The parties anticipate the sources and use of funds for the Project to be as set forth in the Project Budget, which shall be submitted to the Agency for approval pursuant to the Schedule of Performance, which approval shall not be unreasonably withheld or delayed. As delineated in the Project Budget, the Development Costs consist of "Construction Costs" and "Soft Costs." On the basis of actual bids received that relate to Construction Costs, and on the basis of actual Soft Costs, Developer shall update, as necessary, and submit to the Director for approval any proposed changes to the Project Budget, and shall demonstrate the sufficiency of sources of financing to pay all Development Costs to the reasonable satisfaction of the Director, and upon the approval of the Director, the Project Budget, as revised, shall be deemed the final Project Budget. (b) The development of the Project shall be financed with the combination of funds described in this Agreement. (c) Except as otherwise expressly provided in this Agreement to the contrary, the cost of developing the Property shall be borne by the Developer; including, but not limited to, the payment of all costs for permits and any necessary approvals, as well as those costs for demolition, clearance, grading, preparing, designing, financing and constructing on the Property all of the improvements provided in this Agreement. 9. [§ 409] Schedule of Performance (a) Within ten (10) days following the Conventional Construction Loan Closing, Developer shall begin and thereafter diligently prosecute to completion the construction of the Development, as provided in the Scope of Development (Attachment No. 4) subject to Force Majeure delays. The Developer shall begin and complete all construction and development (subject to Force Majeure delays) within the times specified in the Schedule of Performance with such reasonable extensions of said dates as may be granted by the Agency. (b) During periods of construction, the Developer shall submit to the Agency a written report of the progress of the construction when and as reasonably requested by the Agency. The report shall be in such form and detail as may be reasonably required by the Agency and shall include a reasonable number of construction photographs (if requested) taken since the last report by the Developer. For purposes of this Section only (and not for purposes of any other Section in this Agreement), construction shall be deemed to have commenced when grading has commenced on the Property pursuant to all legally required permits. 10. [§ 410] Indemnification; Bodily Injury and Property Damage Insurance; Surety Bonds 34 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM (a) The Developer agrees to and shall indemnify and hold the Agency, the City, and their officers, employees and agents harmless from and against all liability, loss, damage, costs or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss or damage whatsoever caused to any person or to the property of any person directly or indirectly caused by any acts done thereon or any errors or omissions of the Developer or its agents, servants, employees or contractors, except for the active negligence or willful misconduct of the Agency. (b) The Developer shall furnish or cause to be furnished to the Agency within the time set forth in the Schedule of Performance, duplicate originals or appropriate certificates of insurance as follows: (i) General Liability Insurance. Commercial general liability insurance, including Broad Form Property Damage, Personal Injury Liability, Product and Completed Operations Liability, Fire Legal Liability, Business Automobile Bodily Injury and Property Damage Liability extending to owned, non -owned and hired vehicles of Developer or the General Contractor used in performance of any Developer's obligations hereunder, amended as necessary to comply with Governmental Requirements. Such coverage shall insure on an occurrence basis against claims for "personal injury" and "property damage," including but not limited to bodily injury, death or property damage occurring upon, in or about the Project, including construction and staging areas, or any adjoining sidewalk, streets, and passageways. Such coverage shall take effect and afford protection on or prior to the Lease Closing. Such policy shall have an initial minimum coverage limit per occurrence of not less than $3,000,000 with respect to personal injury or death to any one or more persons or damage to property (i.e:, combined single limit), and carry a deductible per occurrence of not more than $25,000. (ii) Builder's Risk Insurance. Throughout the Construction Period, coverage of the type now known as builder's completed value risk insurance, as delineated on an All Risk Builder's Risk 100% Value Non -Reporting Form. Such insurance shall insure against direct physical loss or damage by fire, lightning, wind, storm, explosion, collapse, underground hazards, flood, vandalism, malicious mischief, glass breakage and such other causes as are covered by such form of insurance. Such policy shall include (A) an endorsement for earthquake, unless earthquake insurance is not commercially available at a reasonable cost, as 35 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 11:30 AM reasonably determined by the Director, (B) an endorsement for broad form property damage, breach of warranty, demolition costs and debris removal, and (C) a "Replacement Cost Endorsement" in amount sufficient to prevent Developer from becoming a co-insurer under the terms of the policy, but in any event in an amount not less than 100% of the then full replacement cost, to be determined at least once annually and subject to reasonable approval by the Director. The replacement cost coverage shall be for work performed and equipment, supplies and materials furnished to the Properly or any adjoining sidewalks, streets and passageways, or to any bonded warehouse for storage pending incorporation into the work, without deduction for physical depreciation and with a deductible not exceeding $25,000 per occurrence (except that earthquake coverage, if obtained, shall carry a deductible not to exceed 25% of the policy amount, or such other deductible amount as Director may reasonably determine is acceptable, in light of the cost of the premium for such insurance). (iii) Worker's Compensation Insurance. Worker's compensation insurance, to be carried by Developer and the General Contractor, in an amount and form sufficient to meet all applicable Governmental Requirements, and employer's liability coverage to a limit of not less than $1,000,000, with respect to personal injury or death to any one or more persons or damage to property. Such policies shall cover all persons providing labor or services to or on behalf of Developer and the General Contractor, and all risks to such persons arising out of construction, use or occupancy of the Property or repair of or entry onto the Project, prior to Completion. (c) Each Insurance Policy required under Section 410(b) (or the particular Insurance Policies specified below) shall: (i) Be in form and substance as is then standard in California for policies of like coverage; (ii) Be issued by insurance carriers qualified and licensed to engage in the insurance business in the State of California and having a current Policyholder's Management and Financial Size Category Rating of not less than "A X" 36 SF-2001 Agree: Bowen Court: DDA 6/4/01 - 12:02 PM according to A.M. Best's Insurance Reports Key Rating Guide (unless such rating is not commercially available at a reasonable cost, as reasonably determined by the Director) or if such rating system shall cease, then of recognized financial responsibility approved by the Agency in writing; (iii) Provide coverage on an occurrence basis, except for the errors and omissions Insurance Policies; (iv) Provide that the Insurance Policy cannot be canceled, suspended, lapsed or modified upon less than 30 days' prior. written notice by registered or certified mail to the Agency; (v) with respect to the Insurance Policies described in Sections 410(b), contain either (A) a waiver by the insurer of the right of subrogation against Agency, the City, Developer and their respective board members, officers, partners, members, employees, agents and representatives or (B) a statement that the insurance shall not be invalidated should any insured waive in writing its right of recovery or right of subrogation prior to occurrence of a loss covered by the Insurance Policy; and (vi) The Insurance Policies described in subsections (b)(i), (ii) and (iii) of this Agreement shall have attached thereto a Lender's Loss Payment Endorsement (Form 438 BFU NS) or its equivalent, for and in favor of Agency; and (d) Endorsements shall be obtained for the policies described at Sections 410(b) providing the above insurance for the following three provisions: (i) Additional named insured: "The City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach, their elective and appointive boards, officers, agents and employees are added as additional name insureds with respect to this subject project and contract with the Agency." (ii) Notice: Said policy shall not terminate nor shall it be canceled or the coverage reduced until after thirty (30) days written notice is given to the City and the Agency." 37 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 11:22 AM (iii) Primary coverage: "Said policy and coverage as is afforded to the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach, their elective and appointive boards, officers, agents and employees shall be primary insurance and not contributing with any other insurance maintained by the City of Huntington Beach or the = Redevelopment Agency of the City of Huntington Beach." (e) Prior to the Lease Closing, and not less than 30 days prior to the expiration date of each Insurance Policy required under subsection (b), Developer shall cause to be delivered to Agency: (i) a complete certified copy of each such Insurance Policy or renewal or replacement Insurance Policy, provided, however, that delivery of a certificate of insurance shall be sufficient for purposes of this clause (i); (ii) satisfactory evidence of payment of the premium therefor; and (iii) a statement of noncancellation consistent with Section 410 (d); and (iv) the endorsement described at Section 410(d). If Developer has not provided Agency with the foregoing proof of coverage and payment within ten (10) Business Days after receipt of written request therefor, Agency may, in addition to any other available remedy, without obligation and without further inquiry as to whether such insurance is actually in force, and upon ten (10) days prior written notice to Developer, obtain such an Insurance Policy and Developer shall reimburse Agency for this cost thereof upon demand. (f) RESERVED (g) Developer shall observe and comply with the requirements of all Insurance Policies. Developer also shall perform and satisfy the reasonable requirements of insurance companies writing such types of Insurance Policies so that at all times companies of good standing and meeting the requirements of subsection (b) shall be willing to write or to continue such coverage. Developer shall at all times comply with all rules, regulations, orders and requirements of any recognized organization which establishes fire ratings for structures such as the improvements at the Project. (h) Any insurance coverage required in this Section 410 may be effected by a policy or policies of blanket insurance; provided that (a) the Project (or, in the case of builder's risk and errors and omissions coverage, the Work of Improvement) is specifically identified therein, by endorsement or otherwise, as included in the coverage provided; (b) the amount of the total insurance allocated to the Project (or contract) shall be such as to furnish protection equivalent to that which would be afforded by separate Insurance Policies in the amounts herein required; and (c) in all other respects any such blanket policy or policies shall comply with all other provisions of this Section 410. In any such case Developer shall delivery to Agency a certified copy of such policy or a certificate evidencing such insurance. 38 SF-2001 Agree: Bowen Court: DDA 6%4/01 - 12:38 PM (i) Neither Agency nor Developer make any representation that the limits of liability specified for the Insurance Policies to be carried pursuant to this Section 410 are adequate to protect Developer against its undertakings under this Agreement, or to protect any General Contractor, Architect, engineers or other consultants against their respective undertakings. In no event shall the limits of any coverage maintained or caused to be maintained limit the liability of any person under this Agreement or limit the liability of any General Contractor, Architect, engineer or other consultants under their respective contracts, warranties, guarantees and indemnities. Agency shall not be limited to the amount of the insurance premium not paid in the proof of any damages it may claim against any person arising out of or by reason of failure of Developer, any General Contractor, architects, engineers or other consultants to provide and keep in force the Insurance Policies required by this Section 410; but Agency shall instead be entitled to recover the full amount of damages available. 11. [§ 411] Anti -discrimination during Construction The Developer for itself and its successors and assigns agrees that in the construction of the Development on the Property, or any portion thereof, provided for in this Agreement, the Developer will not discriminate against any employee or applicant for employment because of sex, marital status, race, color, creed, religion, national origin or ancestry. 12. [§ 412] Local, State and Federal Laws The Developer shall carry out the construction of the Development on the Property in conformity with all applicable laws, including all applicable federal and state labor standards. 13. [§ 4131 Citv and Other Governmental Agency Permits Before commencement of construction or redevelopment of any buildings, structures or other work of improvement upon any portion of the Property, and within the time set forth in the Schedule of Performance (Attachment No. 3), the Developer shall, at its own expense, secure or cause to be secured, any and all permits which may be required by the City or any other governmental agency affected by such construction, development or work. It is understood that the Developer's obligation is to pay all necessary fees and to timely submit to the City final drawings with final corrections to obtain a building permit. The Agency shall provide all proper assistance to the Developer in securing these permits. 14. [§ 414] Rights of Access, Inspections and Meetings (a) Representatives of the Agency and the City shall have the reasonable right of access to the Property, with reasonable prior notice without charges or fees, at normal construction hours during the period of construction for any purpose deemed necessary by the Agency for carrying out the purposes of this Agreement, or the provisions of the Redevelopment Plan and the General Plan, including, but not limited to, the inspection of the work being performed in constructing the Development. Such representatives of the Agency and other 39 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM visitors to the Property, shall observe any reasonable rules adopted by Developer for purposes of maintaining safety on the Property, including requirements that such representatives or visitors be escorted. (b) Developer shall schedule, coordinate and attend regularly scheduled construction progress meetings and cause Architect, engineer and General Contractor to attend and cooperatively participate. Such meetings shall be scheduled at a regular time and date, to be selected by Developer. The purposes of such meetings shall include but not be limited to discussing and furthering the construction of the Project, discussing, reviewing and deciding upon budgetary matters, value engineering matters, changes, delays, and extensions, reviewing work progress in relation to the Schedule of Performance, sharing new information, reporting on progress and on any significant events or developments, and otherwise carrying out the purposes of this Agreement. Developer shall provide all parties at least 24 hours' prior notice (written or telephonic) of any changes in the time or date of each such regular meeting. 15. [§ 415] Books, Records and Audits. (a) Developer shall, and shall cause the General Contractor to, keep and maintain at the Property or at offices in Southern California, true and complete records and double -entry books of account relating to the Project in such manner as to enable a formal audit and preparation of audited financial statements therefrom and in accordance with sound accounting practices. Developer shall retain and cause the General Contractor to retain all such books, records and accounts for a period of two years after Completion. All such books, records and.accounts shall be supported by original, authenticated, receipted bills and/or invoices, checks, vouchers, tickets, bank statements, purchase orders, bills of lading, certified payrolls and other documents of entry, shall be maintained separately from books and records concerning other business or property and shall include a general ledger and journals with chronological entries. (b) Agency, at Agency's sole cost, may at any reasonable time during the term of this Agreement and for two years after Completion, upon at least five (5) Business Days' prior written notice, examine, copy and audit (or cause to be examined, copied and audited by a professional consultant it selects) such records and books of account for the purpose of verifying costs and expenses and other facts and information pertaining to the Project. In addition, Agency, or its representatives, may from time to time, upon -five (5) Business Days' prior written notice, conduct a re -audit and observe the business operations of Developer and/or the General Contractor to confirm the accuracy of books and records. After Completion, each parry's rights to examine, copy and audit shall be exercisable not more often than once every Calendar Year. Agency agrees to be reasonable in exercising its right to require audits pursuant to this provision. 16. [§ 416] Reports. Not later than 20 days after the end of each calendar month prior to Completion, Developer shall prepare and submit to Agency a narrative report on the progress of the design, financing and construction of the Project since the immediately preceding report, describing in detail all significant activities concerning design, Governmental Approvals, new contracts and 40 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM subcontracts, identifying the parties, scope and amount, construction and construction progress, and discovery and correction of Defects. Such report shall include a discussion of the Schedule of Performance and compliance therewith, of any new or continuing delays, and the causes thereof and a summary of any new Changes and shall include a reasonable number of construction photographs (if requested) taken since the last report. 17. [§ 417] Required Notifications. Each party shall promptly after obtaining knowledge thereof, notify the other party in writing of the following: (a) As to Developer, any litigation affecting Developer, any of Developer's Affiliates or the Project, and as to Agency, any litigation affecting the Project; (b) Any communication, whether written or oral, received from any Governmental Authority claiming or asserting that any aspect of the Work of Improvement fails in any respect to comply with any Governmental Requirements, or threatening to suspend or revoke any Governmental Approval; (c) Any material adverse change in the physical condition of the Property or the Project, the financial condition or operations of Developer, the financial condition of any Guarantor, or the financial condition or operations of Agency, but only to the extent such changes affect Agency's obligations to the Property pursuant to this Agreement; (d) Any material default by the General Contractor, Architect, any engineer or by any subcontractor, vendor or supplier, having a contract in excess of $100,000, any material adverse change in the financial condition or operations of Agency, but only to the extent such changes affect Agency's obligations to the Property pursuant to this Agreement; (e) Any cessation in development of the Work of Improvements in excess of twenty (20) days; (f) Any damage to or destruction of any portion of the Project where the cost to repair and restore will exceed S25,000; (g) Any defect where the cost to correct will require a change order to the construction contract or the delay that will be caused will exceed ten (10) Business Days; (h) Any fact or circumstance which may render the Project Budget inaccurate in any material respect; (i) Any lien, charge or encumbrance affecting the Project not expressly permitted hereby; 41 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM (j) Any event or condition, other than matters affecting the economy generally, which may materially adversely affect the development, leasing or operation of the Project; (k) As to Developer, any change in (i) the location of Developer's business; (ii) the legal, trade or fictitious business names used by Developer; or (iii) the nature of Developer's business; (1) The existence of any material default or failure to perform an obligation by any party under any contract relating to the Project; and (m) As to each party, the existence of any Default by such party, or of any condition or event which with the giving of notice or passage of time, or both, would constitute such Default, the nature thereof, and the corrective steps such party is taking with respect thereto. 18. [§ 418] Payment of Claims, Costs and Taxes (a) Developer shall pay or cause to be paid when due all costs and expenses relating to the Project subject to its right to contest the same.. (b) Developer shall keep title to the Leasehold Estate free and clear of any and all liens (except Permitted Mortgages), claims or charges for labor, services, materials or equipment furnished to it in connection with the Project; shall remove, or shall have removed, any levy or attachment made on the Leasehold Estate (or any portion thereof); or shall assure the satisfaction thereof within a reasonable time but in any event prior to a foreclosure subject to Developer's right to contest the same. (c) Developer shall pay prior to delinquency all real estate taxes and assessments assessed and levied on or against the Property or any portion thereof subsequent to the conveyance to Developer of the Leasehold Estate. (d) Nothing herein contained shall be deemed to prohibit Developer from contesting the validity or amount of any tax, assessment, encumbrance or lien, nor to limit the remedies available to Developer in respect thereto. 19. [§ 419] Additional Documents. Each party shall promptly execute and deliver to the other party, from time to time, such other documents as the requesting party may deem reasonably necessary or desirable for the purposes of this Agreement. 20. [§ 420] Replacement of Third Parties. Subject to the consent of Agency pursuant to this Agreement, Developer shall promptly replace or cause to be replaced any General Contractor, Architect, engineer, subcontractor, vendor or supplier which commits a material default that is not promptly cured, or 42 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM which is the subject of a petition, voluntary or otherwise, under any Debtor Relief Law. Developer shall promptly deliver to Agency the name and address of each replacement and copies of any documents required under this Agreement with respect to the replacement. Each replacement shall have the financial ability and expertise to fulfill the requirements of its contract. 21. [§ 421 ] Correction of Defects. During the course of construction, Developer shall promptly correct or cause to be corrected to the reasonable satisfaction of Agency (a) any material defect in the Project; (b) any material departure of the Project from the approved Plans and approved Changes thereto, Governmental Requirements, Governmental Approvals or sound building practices; and (c) any encroachment by any part of the Project on any building line, easement, property line or restricted area which affects the use of the Project in any material way. If Agency, in its. reasonable judgment, determines that any such circumstance exists, it may require the work to be stopped until the matter is corrected. If this occurs, Developer shall promptly undertake such corrective work and pending completion of such corrective work shall not allow any other work to proceed which could interfere with its completion or reinspection. 22. [§ 422] Storage of Materials. Developer shall cause all materials supplied for, or intended to be utilized. in, the construction of the Project, but not affixed to or incorporated into the Project, to be stored at the Property or at such other location as may be approved by Agency, with adequate safeguards to prevent and insure against loss, theft, damage or commingling with other materials or projects. Agency shall reasonably cooperate with Developer to designate a construction staging area on land owned by Agency adjacent to the Property which Agency determines is appropriate for construction staging, subject to the execution by Agency and Developer of a "Right of Entry" agreement containing such reasonable conditions as Agency may determine are reasonably necessary with respect thereto. 23. [§ 423] Signs and Publicity. Developer, without cost or expense to Agency, shall provide, periodically update (but not more frequently than upon changes in the membership of Agency or City Council) and maintain construction site signs identifying the development, giving recognition to Agency, the City Council and their members. Agency and Developer may refer to the Project in their own promotional and advertising materials and press releases. B. [§ 424] Subdivision of Property.. Agency shall, prior to the Agency Loan Closing, cause the Property to be subdivided so that it constitutes one legal parcel of real property in accordance with all applicable laws including, without limitation, California's Subdivision Map Act. Such subdivision of the Property shall be at Agency's sole cost and expense. 43 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM C. [§ 425] Taxes, Assessments and Liens. The Developer shall pay prior to delinquency all real estate taxes and assessments assessed and levied on or against the Property subsequent to the conveyance of the title or - possession of the Property. The Developer shall remove, or shall have removed, any levy or attachment made on the Property (or any portion thereof), except those created by work of the Agency, or shall assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amount of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. D. [§426] Maintenance of Property Security At all times prior to the completion of the construction of the Development on the Property, the Developer shall, at its expense, provide for and maintain adequate construction fencing and security with respect to the Property, to the satisfaction of the Agency. E. [§427] Security Financing; Right of Holders [§428] No Encumbrances except Mortgages, Deeds of Trust, Conveyances and Leases -Back or Other Conveyance for Financing for Development Notwithstanding anything to the contrary in this Agreement, mortgages, deeds of trust, and other forms of conveyance required for any reasonable method of financing are permitted for the purpose of securing loans of funds to be used for financing the construction of the Work of Improvement on the Property, refinancing any of the financing obtaining for the construction of the Work of Improvement, and any other expenditures necessary and appropriate to develop the Project pursuant to this Agreement. The Developer shall notify the Agency in advance of any mortgage, deed of trust, or other forms of conveyance for financing if the Developer proposes to enter into the same before the recordation of the Certificate of Completion. The Developer shall not enter into any such conveyance for financing or credit enhancement without the prior written approval of the Agency, which approval the Agency agrees to give if any such conveyance is given to a responsible financial or lending institution or other acceptable person or entity. The Agency shall automatically approve of a "responsible financial or lending institution" if such institution is one of the twenty-five (25) largest banking institutions doing business in the State of California or one of the twenty-five (25) largest insurance lending institutions in the United States qualified to do business in the State of California, or if the institution in question is a bank, savings and loan association, insurance company or pension fund with assets of at least S 150,000,000. Such lender shall be deemed approved unless rejected in writing by the Agency within ten (10) days after receipt of notice thereof by the Agency. Such lender approved by the Agency pursuant to this section 320, shall not be bound by any amendment, implementation or modification to this Agreement subsequent to its approval without such lender giving its prior written consent. 44 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 11:24 AM Notwithstanding anything contained herein to the contrary, the Developer shall promptly notify the Agency of any mortgage, dead of trust, or other financing that has been created or attached to the Leasehold Estate (or any portion thereof) prior to completion of the construction of the Development whether by voluntary act of the Developer or otherwise. The words "mortgage" and "deed of trust" as used herein include all other appropriate modes of financing real estate acquisition, construction and land development, and any other expenditures necessary and appropriate to develop the Property under this Agreement, which involves the granting of a security interest, except where such financing is as a result of an assignment allowed pursuant to Section 208 hereinabove. 2. [§ 4291 Holder Not Obligated to Construct Improvements The holder of any mortgage, deed of trust or other security interest authorized by this Agreement (the "Holder") shall in no way be obligated by the provisions of this Agreement to construct or complete the Work of Improvement or to guarantee such construction or completion, nor shall any covenants or any other provision in the Lease or Agreement Containing Covenants be so construed as to so obligate such Holder. No holder of any security agreement in the Leasehold Estate or any part thereof or any improvements thereon shall devote the Leasehold Estate to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 3. [§ 430] Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders; Right to Cure . Whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in completion of construction of the Development, or any other default, the Agency shall at the same time deliver to any lender approved by the Agency pursuant to Section 438 hereof and each Holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement, a copy of such notice or demand. Each such Holder shall have the right at its option within sixty (60) days after the receipt of the notice, to cure or remedy, or commence to cure or remedy, any such default and to add the cost thereof to the security interest debt and the lien of its security interest. If such default shall be a default which can only be remedied or cured by such Holder upon obtaining possession, if such Holder has elected to cure the default then such Holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise, and shall remedy or cure such default within sixty (60) days after obtaining possession; provided that in the case of a default which cannot with diligence be remedied or cured, or the remedy or cure of which cannot be commenced within such sixty- (60) day period, such Holder shall have such additional time as reasonably necessary to remedy or cure such default with diligence and continuity; and provided further that such Holder shall not be required to remedy or cure any non -curable default of the Developer. Nothing contained in this Agreement shall be deemed to permit or authorize such Holder to undertake or continue the construction or completion of the Development (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations (as of the date of such assumption), to the Agency by written agreement reasonably satisfactory to the Agency. Such Holder in that event 45 SF-2001 Agree: Bowen Court: DDA 6/1;01 - 11:24AM must agree to reasonably complete, in the manner provided in this Agreement, the improvements to which the lien or title of such Holder relates, and submit evidence reasonably satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. A Holder shall be deemed approved by the Agency unless rejected in writing by the Agency within thirty (30) days after receipt of such evidence by the Agency. Any such Holder properly completing the Development shall be entitled, upon written request made to the Agency, to a Certificate of Completion from the Agency. Provided that such Holder has given prior written notice of its name and address to the Agency, the notices of default to the Developer set forth herein, to be valid and effective as to the Holder and the Developer, shall be delivered by the Agency simultaneously to such Holder and the Developer. Breach of any of the covenants, conditions, restrictions or reservations contained in this Agreement shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value as to the Leasehold Estate or any part thereof or interest therein, whether or not said mortgage or deed of trust is subordinated to this Agreement, but unless otherwise herein provided, the terms, conditions, covenants, restrictions and reservation of this Agreement shall be binding and effective against the Holder and any owner of the Property, or any part thereof, whose title thereto is acquired by foreclosure, trustee's sale or otherwise. No purported rules, regulations, modification, amendment and/or termination of this Agreement affecting the right of a Holder shall be binding upon any Holder holding a mortgage or deed of trust from and after the date of recordation .of such mortgage or deed of trust until the written consent of such Holder is obtained. 4. [§431 ] Failure of Holder to Complete Work of Improvement In any case where, thirty (30) days after default by the Developer in completion of construction of the Work of Improvement under this Agreement, the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Leasehold Estate or any part thereof has not expressly assumed the Developer's obligations to the Agency under this Agreement as provided in Section 430 hereof, or if it has assumed such obligations but has not proceeded diligently with construction, the Agency may purchase the mortgage or deed of trust by payment to the holder the unpaid mortgage or deed of trust of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust. If the ownership of the Leasehold Estate has vested in the holder, the Agency, if it so desires, shall be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: (a) The unpaid mortgage or deed of trust at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received by the holder during foreclosure proceedings); (b) All expenses with respect to foreclosure; 46 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM (c) The net expense, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent management of the Property or any part thereof, (d) The cost of any improvements made by such holder; and (e) An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust and such debt had continued in existence to the date of payment by the Agency. Developer acknowledges and agrees that the purchase by the Agency of all amounts secured by any mortgage or deed of trust encumbering the Leasehold Estate shall automatically, without any further written confirmation of the same, release the holder of such deed of trust from any further disbursement obligations it may have arising out of any of the documents evidencing or relating to the indebtedness secured by such mortgage or deed of trust. The Agency's right to a conveyance of the Leasehold Estate from a holder upon payment of the amount set forth above shall automatically expire ninety (90) days after the holder takes title to the Leasehold Estate. [§ 432] Right of Agency to Cure Mortgage, Deed of Trust or Other Security Interest Default In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Leasehold Estate (or any portion thereof) prior to the issuance of a Certificate of Completion by the Agency, and the holder with respect to the Leasehold Estate (or any portion thereof) has not exercised its option to complete the development, the Agency may cure the default prior to completion of any foreclosure. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses reasonably incurred by the Agency in curing the default. The Agency shall also be entitled to a lien upon the Property (or portion thereof) to the extent of such costs and disbursements. Any such lien shall be subordinate and subject to mortgages, deeds of trust or other security instruments permitted by this Agreement.. F. [§ 433] Right of Agency to Satisfy Other Liens on the Property After Title Passes Prior to the recordation of the Certificate of Completion (referred to in Section 434 of this Agreement), and after the Developer has had a reasonable time to challenge, cure or satisfy any liens or encumbrances on the Leasehold Estate (or any portion thereof), the Agency shall have the right to satisfy any such liens or encumbrances after thirty (30) days prior written notice to the Developer; provided however, that nothing in this Agreement shall require the Developer to pay or make provisions for the payment of any tax, assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Leasehold Estate (or any portion thereof) to forfeiture or sale. 47 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM G. [§ 434] Certificate of Completion Promptly after completion of all construction to be completed by the Developer for the Work of Improvement, as set forth in the Scope of Development (Attachment No. 4), the Agency shall furnish the Developer with a Certificate of Completion upon written request therefore by the Developer. The Agency shall not unreasonably withhold any such Certificate of Completion. The Certificate of Completion shall be, and shall state that it is, a conclusive determination of satisfactory completion of the construction required by this Agreement for the Property. The Certificate of Completion shall not constitute a determination of satisfactory compliance with any other provision of this Agreement. The Certificate of Completion shall be in the form of Attachment No. 9, and may be recorded in the Office of the Recorder of the County of Orange. If the Agency refuses or fails to furnish a Certificate of Completion after written request from the Developer, the Agency shall, within thirty (30) days of receipt of the written request, provide the Developer with a written statement which details the reasons the Agency refused or failed to furnish a Certificate of Completion. The statement shall also contain the Agency's opinion of the actions the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate availability of specific items for landscaping, the Agency will issue its Certificate of Completion upon the posting of a bond by the Developer with the Agency in an amount representing the fair market value of the work not yet completed. If the Agency fails to provide the written statement within said thirty- (30) day period, the Developer shall be deemed entitled to the Certificate of Completion. The Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the Development, nor any part thereof. Such a Certificate of Completion is not notice of completion as referred to in Section 3093 of the California Civil Code, nor does it constitute evidence of compliance with or satisfaction of any obligation of the Developer with respect to requirements imposed by any governmental entity other than the Agency. H. [§ 4351 Subordination of Agency Deed of Trust, Agreement Containing Covenants, and this Agreement. Agency acknowledges and agrees that this Agreement (except for the Lease attached hereto), the Agency Deed of Trust and the Agreement Containing Covenants shall be subject and subordinate in all respects to all Permitted Mortgages and, within twenty (20) days following Developer's written request therefore, Agency shall execute a subordination agreement (on each holder's form) for the benefit of each holder of a Permitted Mortgage reflecting such subordination. 48 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM I. [§ 436] Estoppel Certificates. Within twenty (20) days following Developer's written request, Agency shall execute and deliver to any potential holder of a Permitted Mortgage an estoppel certificate (a) confirming, provided that such be the case, that Developer is not in default under this Agreement or the Agreement Containing Covenants. and that neither this Agreement nor the Agreement Containing Covenants has been modified or supplemented in any way, (b) confirming that such holder of a Permitted Mortgage is entitled to all the protections afforded a holder of a Permitted Mortgage under this Agreement, and (c) containing such other certifications and agreements that such holder may reasonably require or request. [§ 437] Tolling of Time Periods for Benefit of Holder. Following the transfer of the Leasehold Estate to a holder (or its nominee), any and all obligations set forth under this Agreement to commence and complete construction of the Project as contemplated under this Agreement shall be suspended until the earlier of (a) ninety (90) days from the date of such transfer, and (b) the date such holder actually undertakes (if at all) the continuation of said construction obligations as evidenced by its written notice to Agency. V. [§ 500] USE OF THE PROPERTY A. [§ 501] Uses The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that the Property shall be developed as twenty (20) senior, affordable, for -rent dwelling units as set forth in the Scope of Development (Attachment No. 4). In addition, the Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Leasehold Estate or any part thereof, that during construction and development of the Project and thereafter the Developer, its successors and assignees, shall develop and devote the Property to the uses specified in the Redevelopment Plan, the Scope of Development (AttachmentNo. 4), the Lease (Attachment No. 5), the Agreement Containing Covenants (Attachment No. 6) and all plans approved by the Agency pursuant to this Agreement. B. [§ 5021 Maintenance of the Property Commencing at the time the Developer acquires title or possession to the Leasehold Estate, and solely at the Developer's expense, the Developer or the Developer's successor in interest shall reasonably maintain the improvements thereon in good condition and appearance. The Developer shall keep the Property reasonably free from any accumulation of graffiti, debris or waste materials. The Developer shall also maintain the landscaping on the Property required to be planted under the Scope of Development (Attachment No. 4) in a reasonably healthy condition. 49 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38AM If, at any time, the Developer fails to maintain the Property as required by this Section 502, and such failure is not corrected within thirty (30) days after the date of written notice from the Agency, either the Agency or the City may perform the necessary landscape or other maintenance, or other actions and the Developer shall pay all costs incurred for such maintenance. C. [§ 503] Obligation to Refrain from Discrimination The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or portion thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, creed, religion, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or any part thereof nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property or any part thereof. D. [§ 504] Form of Nondiscrimination and Nonsegregation Clauses The Developer shall refrain from restricting the rental, sale or lease of the Property on the basis of sex, marital status, race, color, creed, religion, ancestry or national origin of any person. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. 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 segregating of, any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. 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 sex, marital status, race, color, creed, religion, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall lessee himself or herself, or any person claiming under or through him or her, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 50 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM 3. In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, religion, creed, national origin or ancestry 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 it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." E. [§ 505] Effect and Duration of Covenants The covenants established in Sections 208, 309, 410(a), and 428 of this Agreement shall, without regard to technical classification and designation, be binding on the Developer and any successor in interest to the Leasehold Estate or any part thereof perpetuity for the benefit and in favor of the Agency, its successors and assigns, and the City. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and the Agreement Containing Covenants, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the Covenants have been provided. This Agreement and the Covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is, an owner of any land or interest therein in the Property or in the Project Area. The Agency shall have the right, if this Agreement or the Agreement Containing Covenants are breached, to exercise. all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and the Agreement Containing Covenants may be entitled. Breach of any of the covenants, conditions, restrictions or reservations contained in the Agreement Containing Covenants shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value as to the Leasehold Estate whether or not said mortgage or deed of trust is subordinated to the Agreement Containing Covenants. F. [§ 506] Rights of Access — Public Improvements and Facilities Notwithstanding the Developer's obligation to maintain the improvements on the Property as set forth in Section 502 above, the Agency for itself, and for the City and other public agencies, as their sole risk and expense, reserves the right to enter the Property or any part thereof at all reasonable times and with as little interference as possible, for the purposes of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Property. Representatives of the Agency, the City and other visitors to the Property shall observe any reasonable rules adopted by the Developer for purposes of maintaining safety on the Property, including requirements that such representatives or visitors be escorted. Any such entry shall be made only after reasonable notice to the Developer. Any damage or injury to the Property or any portion thereof resulting from such entry shall be promptly repaired at the sole expense of the public agency responsible for the entry. Agency agrees to defend, release, indemnify and hold harmless Developer, its partners, shareholders, officers, employees and consultants from any and all claims, actions, liability, fines, penalties, 51 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 11:26 AM charges, damages and costs whatsoever (including attorneys' fees) arising out of access to the Property pursuant to this Section. G. [§ 507] Operation of Protect Developer shall lease, operate and manage the Project in full conformance with the terms of this Agreement and the Agreement Containing Covenants. The rents for the twenty (20) units shall not exceed the "affordable housing cost" for Very Low Income Households, as specified at California Health & Safety Code Section 50052.5 and the implementing regulations specified at Section 6910 et seq. of Title 25 of the California Code of Regulations, whichever is less. H. [§ 508] 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 Property. Developer shall insert this provision in all contracts and subcontracts for work performed on the Project which involved the application of paint. I. [§ 509] Barriers to the Disabled Borrower shall ensure that the Project shall be developed and the Property shall be maintained to comply with all applicable federal, state, and local requirements for access for disabled persons. J. [§ 5101 Maintenance of the Property All Units must meet Federal Housing Quality Standards (24 CFR § 982.401) while occupied. Further, Participant shall maintain the Property in accordance with the terms of the Regulatory Agreement. K. [§ 511 ] Term of Agency Construction Loan. 1. [§ 512] Amount. The Agency Construction Loan shall be evidenced by the Agency Note in the amount of NINE HUNDRED THOUSAND DOLLARS ($900,000) subject to a dollar for dollar reduction to the extent Developer obtains County or alternative financing, if any. The Loan shall accrue interest at a simple rate of interest equal to THREE PERCENT (3%) per annum for the term of the Agency Note. 2. [§513] Term. The term of the Agency Note shall be sixty (60) years, commencing on the effective date of the Lease. 3. [§ 514] Repayment. Beginning on the third anniversary date of the Agency Note, and on each annual anniversary date of the Agency Note thereafter until the Agency Construction Loan is paid in full or othenvise canceled or forgiven pursuant to its terms, Developer shall pay to Agency an amount equal to FIFTY PERCENT (50%) of the Project's Net Operating Income for the preceding year. After the sixtieth (60`h) anniversary date of the 52 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM Agency Note, all remaining unpaid principal and interest on the Agency Construction Loan shall immediately become due and payable, and the Agreement Containing Covenants shall terminate. 4. [§ 5151 Definition of Net Operating Income. As used herein, the term "Net Operating Income of the Project" shall mean, for any reporting period (calendar year or fiscal year), (a) all Gross Income, minus (b) all Operating Expenses. 5. [§ 516] Reserved. L. [§ 5171 Financial Statements. Developer shall submit to Agency, on an annual basis, a true and correct copy of Developer's audited financial statement for the Project. After receipt of Developer's audited financial statements for the Project, Agency may, at its cost, request additional financial analyses or obtain a third party review of Developer's financial statement for the Project to verify the accuracy of Developer's payments made to the Agency pursuant to Section 515. VI. [§ 600] DEFAULTS, REMEDIES AND TERMINATION A. [§ 601 ] Default Subject to the provisions of Section 603, each of the following shall constitute a "Default" under this Agreement: l . Failure or delay by a party to perform any term or provision of this Agreement following the expiration of the notice and cure period set forth in Section 603 (Attachment No. 3). 2. Failure of the Developer to construct the Work of Improvement on the Property substantially in accordance with the Scope of Development (Attachment No. 4), plans and construction drawings previously approved by the Agency without the approval of such changes by the Agency. 3. Breach of any material covenant, material warranty or material agreement contained in this Agreement and the failure of the Developer to cure the same within the cure period set forth in Section 603. Subject to the extensions of time set forth in Section 603, the party who fails to perform, or delays performance of, any term or provision of this Agreement must immediately commence to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. B. [§ 602] Notice If a Default under this Agreement occurs, the injured party shall give written notice (a "Default Notice") of the Default to the party in default, specifying the nature of the default. 53 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default, nor shall it operate as a waiver of any rights or remedies of the injured party, but the injured party shall have no right to exercise any remedy hereunder without delivering the Default Notice as provided herein. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. C. [§ 603] Cure Period With respect to defaults or events for which a specific cure period is provided elsewhere in this Agreement, the specific cure period in that Section shall be applicable in lieu of the cure periods provided in this Section 603 and in no event shall the cure periods set forth in this Section 603 be added onto any other cure period set forth in this Agreement. The injured party shall have no right to exercise a right or remedy hereunder unless the subject event of default continues uncured for a period of sixty (60) days after delivery of the Default Notice with respect thereto, or, where the default is of a nature which cannot be cured within such sixty- (60) day period, the defaulting party fails to commence such cure within sixty (60) days and to diligently proceed to complete the same, but in no event more than one hundred twenty (120) days from receipt of the Default Notice. Notwithstanding the foregoing, any event of default occurring as a result of the failure by any party to ay a sum of money shall be cured within thirty (30) days. If any event of default is not cured, or commenced to be cured if such default is of a nature which cannot be cured within sixty (60) or thirty (30) days, as appropriate, by such party within said sixty (60) or thirty (30) days, as appropriate, of receipt of the Default Notice, the non - defaulting party, at its option, may institute an action for specific performance of the terms of this Agreement or pursue such other rights and remedies as it may have. D. [§ 6041 Rights and Remedies Upon the occurrence of an Event of Default and the expiration of the applicable cure period provided herein or by law, the injured party shall have all rights and remedies against the defaulting party as may be available at law or in equity to cure, correct or remedy any default, to obtain specific performance, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such rights and remedies are cumulative, and except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the exercise of one or more of such rights or remedies shall not preclude the exercise, at the same or different times, of any other rights or remedies for the same default or any other default by the defaulting party. 54 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM E. [§ 605] Legal Actions 1. [§ 606] Institution of Legal Actions Except as specified in Sections 609 and 610, and in addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy in law or equity consistent with the purposes of this Agreement. All legal actions must be instituted in the Superior Court of the County of Orange, State of California, in any other appropriate court of that county, or in the Federal District Court in the Central District of California. 2. [§ 607] Service of Process Service of process on the Agency shall be made by personal service upon the Secretary of the Agency, or in such other manner as may be provided by law. Service of process on the Developer shall be made by personal service upon the Developer or in such manner as may be provided by law, whether made within or without the State of California. 3. [§ 608] Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. F. [§ 609] Damages If either party defaults with regard to any of the provisions of this Agreement, the non - defaulting party shall serve written notice of such default upon the defaulting party. If the default is not commenced to be cured within thirty (30) days after service of the notice of default and is not cured promptly in a continuous and diligent manner within a reasonable period of time after commencement, the defaulting party shall be liable to the non -defaulting party for any damages caused by such default, and the non -defaulting party may thereafter (but not before) commence an action for damages against the defaulting party with respect to such default. G. . [§ 610] Specific Performance If either party defaults with regard to any of the provisions of this Agreement, the non - defaulting party shall serve written notice of such default upon the defaulting party. If the default is not commenced to be cured within thirty (30) days after service of the notice of default and is not cured promptly in a continuous and diligent manner within a reasonable period of time After commencement the defaulting party, at its option, may thereafter (but not before) commence an action for specific performance of the terms of this Agreement pertaining to such default. 55 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM H. [§ 611] Rights of Termination Upon termination of this Agreement, except as expressly provided herein, neither party shall have further rights or obligations to the other party. 1. [§ 612] Termination by Developer Notwithstanding any provision of this Agreement to the contrary, in the event that the Agency does not convey the Leasehold Estate or fund the Agency Construction Loan to the Developer in the manner and condition, and by the date provided in the Schedule of Performance (Attachment No. 3), and any such failure shall not be cured within ninety (90) days after the date that written demand by Developer is received by the Agency, then this Agreement and the Lease shall, at the option of the Developer, be terminated by written notice thereof to the Agency. 2. [§ 613] Termination by Agency The Agency at its option may terminate this Agreement in the event that, prior to the Lease Closing and in violation of this Agreement: The Developer (or any successor in interest) assigns or attempts to assign the Agreement or any right therein, or in the Property, or portion thereof, or any of the improvements thereon contrary to any provision in this Agreement; or b. The Developer fails to submit certificates and endorsements of insurance, as required by this Agreement by the dates respectively provided in this Agreement and the Schedule of Performance (Attachment No. 3) therefore; or C. The Developer is otherwise in default under this Agreement; If any default or failure referred to in this Section 613 shall not be cured within thirty (30) days after the date of transmission of written by the Agency, then this Agreement and any rights of the Developer, or any assignee or transferee, in this Agreement, or arising therefrom with respect to the Agency, shall at the option of the Agency, be terminated by the Agency by written notice to the Developer. [§ 614] Agency's Rights of Reentry Prior to the recordation of the Certificate of Completion, the Agency shall have the right, at its option, to reenter and take possession of the Leasehold Estate with all improvements thereon, and to terminate and revest in the Agency the estate theretofore conveyed to the Developer, subject to the lien and effect of all Permitted Mortgages, if the Developer (or its successors in interest) for any reason: 56 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM l . fails to commence construction of the Development as required by this Agreement .for a period of thirty (30) days after written notice to proceed from the Agency subject to Force Majeure delays; or 2. abandons or suspends or fails to diligently proceed with construction of the improvements on the Property for a period of thirty (30) days after written notice of such abandonment or suspension or failure to diligently proceed from the Agency subject to Force Majeure Delays; or 3. fails to complete the construction of the Development in accordance with this Agreement subject to Force Majeure delays; or 4. assigns or attempts to assign this Agreement, or any rights herein, or transfer, or suffer any involuntary transfer of the Leasehold Estate, or any part thereof, in violation of this Agreement, and such violation shall not be cured within thirty (30) days after the date of receipt of written notice thereof by the Agency to the Developer. The right to reenter, repossess, terminate, revest and repurchase the Leasehold Estate shall be subject and limited by and shall not defeat, render invalid or limit: any mortgage, deed of trust or other security interests permitted by this Agreement; 2. any rights or interests provided in this Agreement for the protection of the holders of such mortgages, deeds of trust or other security interests. Upon the revesting in the Agency of title to the Property, or any part thereof, as provided in this Section 614, the Agency shall, pursuant to its responsibilities under state law, use its best efforts to resell the Leasehold Estate, or any part thereof, as soon and in such manner as the Agency shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan to a qualified and responsible party or parties (as determined by the Agency), who will assume the obligation of making or completing the Development, or such other improvements in their stead, as shall be satisfactory to the Agency and in accordance with the uses specified for the Property, or any part thereof, in the Redevelopment Plan. Upon such resale of the Leasehold Estate, or any part thereof, the proceeds thereof shall be applied. first, to reimburse the Agency on its own behalf or on behalf of the City for all costs and expenses incurred by the Agency including but not limited to: a. salaries to personnel, in connection with the recapture, management and resale of the Property, or part thereof, less any gain or income derived, withdrawn or made by the Agency from the Property or part thereof, or from the improvements thereon; 57 SF-2001 Aimee: Bowen Court: DDA 6,1/01 - 10:38 AM b. all taxes, assessments and water and sewer charges with respect to the Property or part thereof; any payments made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Developer, its successors or transferees; and d. any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Property or part thereof; and e. any amounts otherwise owing to the Agency by the Developer, or its successors or transferees; and 2. second, to reimburse the Developer, or its successor or transferee, up to the amount equal to the costs incurred for the development of the Property, or part thereof, pursuant to this Agreement at the time of reentry and repossession (not including amounts which the Developer has not actually paid, such as amounts financed), less any gains or income withdrawn or made by the Developer from the Property or the improvements thereon. Any balance remaining after such reimbursements shall be retained by the Agency as its property. The rights established in this Section 614 are to be interpreted in light of the fact that the Agency will convey the Leasehold Estate to the Developer for development and not for speculation in undeveloped land. VH. [§ 700] GENERAL PROVISIONS A. [§ 701] Notices, Demands and Communications between the Parties Formal notices, demands and communications between the Agency and the Developer shall be sufficiently given if personally delivered or if dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Developer, as designated in Sections 106 and 107 hereof. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section 601. In addition, a copy of any notice shall be sent to the following: 58 SF-2001 Agree: Bogen Court: DDA 6/1/01 - 10:38 Alf For the Agency: City Attorney 2000 Main Street Huntington Beach, CA 92648 For the Developer: Bowen Court, L.P. Merit Housing, Inc. Attn: Eunice Bobert 414 East Chapman Avenue Orange, CA 92866 B. [§ 702] Conflict of Interest No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is, directly or indirectly, interested. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. C. [§ 703] Nonliabilityof Agency Officials and Employees No member, official, employee or consultant of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Developer or to its successor, or on any obligations under the terms of this Agreement. D. [§ 704] Enforced Delay; Extension of Time of Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, lock -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, third -party litigation, unusually severe weather, inability to secure necessary labor, materials or tools, delays of any contractor, subcontractor or suppliers, acts of the other party, acts or failure to act of the City or any other public or governmental agency or entity (other than that act or failure to act of the Agency or the City shall not excuse. performance by the Agency) or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of actual knowledge of the commencement of the cause. Times of 59 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38 AM performance under this Agreement may also be extended in writing by the Agency and the Developer. E. [§ 705] Inspection of Books and Records The Agency has the right at all reasonabletimes to inspect the books and records of the Developer pertaining to the Property as pertinent to the purposes of this Agreement. The Developer also has the right at all reasonable times to inspect the books and records of the Agency pertaining to the Property as pertinent to the purposes of this Agreement. F. [§ 706] Real Estate Commissions The Agency shall not be liable for any real estate commissions, brokerage fees or finders fees which may arise from the sale of the Leasehold Estate to the Developer. The Developer hereby agrees to defend, release, indemnify and hold harmless the Agency, the City and their employees, agents and consultants from any claim, liability, and/or cost (including attorneys' fees) which may arise out of or in connection with any claim that such fees are due based upon its involvement with the broker. G. [§ 707] Plans and Data In the event this Agreement is terminated, the Developer shall deliver to the Agency any and all plans and data concerning the Property. In such event, the Agency or any person or entity designated by the Agency to recei�Te such plans and data, subject to the rights reserved by the architect or other draftsmen of such plans, to use such plans and data provided their use shall only be for the development of the Property. The Agency use of such plans and specifications shall be without any warrants or representation by the Developer or its agents. The Developer's agreement with the architect shall reflect the provisions of this Section 607. H. [§ 708] Not a Joint Venture or Partnership Agreement It is not the intent of the parties to create a joint venture or partnership by entering into this Agreement. VIII. [§ 800] SPECIAL PROVISIONS A. [§ 801] Agreement Containing Covenants The Property was acquired by the Agency with moneys from the Agency's Low and Moderate Income Housing Fund. Since the Agency is assisting the Developer in the Developer's construction and redevelopment of the twenty (20) dwelling units pursuant to this Agreement, the Community Redevelopment Law requires that the twenty (20) dwelling units remain available at affordable housing costs to persons and families of low and moderate income households in perpetuity. Accordingly, in order to implement this requirement, the Developer agrees to execute and deliver to the Agency an Agreement Containing Covenants in substantially 60 SF 2001 Agree: Bowen Court: DDA 6/6M - 4:01 PM the form attached hereto as Attachment No. 6. The Agreement Containing Covenants shall be recorded against the Leasehold Estate with the Lease hereunder upon the close of escrow. IX. [§ 900] ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS This Agreement shall be executed in three (3) du`plicate originals each of which is deemed to be an original. This Agreement includes SIIM-Tw°'(0-) pages and nine (9) attachments which constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the Property. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Agency or the Developer, and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Developer. This Agreement and any provisions hereof may be amended by mutual written agreement by Developer and the Agency and such amendment shall not require the consent of any other fee owner, tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary under a deed of trust , or any other person or entity having an interest in the Property. X. (§ 1000] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY; OF AGREEMENT DATE This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency within sixty (60) days thereafter, or this Agreement may be terminated by the Developer on written notice to the Agency. The date of this Agreement shall be the date it is signed by the Agency. [Signatures on following page] 61 SF-2001 Agree: Bowen Court: DDA 6/1/01 - 10:38AM Dated: � � j , I'm REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("Agency") By: Pam Julien chen, Chairperson APPROVED AS TO FORM: ATTEST" By: By: Gail Hutton 5(! Connie Brockway Agency General Counsel I Agency Clerk BOWEN COURT, L.P., a California limited partnership ("Developer") By: MERIT HOUSING, INC., a California Nonprofit Corporation, its General Partner Dated: �0 , loot By: Eunice Bobert Chief Executive Officer F SF-2001 Agree: Bowen Court: DDA 6/1/01 - 11:37 AM CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County of On & before me,�1�/<r�/�� 'Date Name and Title of Officer (e.g., J ne Doe, Notary Pub%75 personally appeared - O Name(s) of Signer(s) 1$6 personally known to me — OR — ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) jX/are subscribed to the within instrument and acknowledged to me that ji&sh6/they executed the same in W+ eVtheir authorized capacity(ies), and that by Jams/fir/their signature(s). on the instrument the person(s), or the entity upon behalf of which the person(s) acted, CHRISTINE CLEARY executed the instrument. _ Commission f# 1258t7ts Notary M.4c - CdMxT o WITNESS my hand and official seal. dame County Ir 111 ArtyCa rmEVk%Jm1&2lD4 Signature of Notary Public �X— OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could pre nt fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Numb z0fages: Signer(s) Other Than Named Above: /Z Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Top of thumb here Signer Is Repr enting: i Siav+&'s Name: 0 I IN Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER ` 0 1995 National Notary Association • 8236 Remmet Ave., P.O. Box 7184 • Canoga Park. CA 91309-7184 Prod. No. 5907 Reorder. Call Toll -Free 1-800.876-6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of f(� SS. On &L before me, LA-aw&_ �Jvlw►�(� � Date? • Name and Title of Officer (e.g., 'Jane Doe, otary Public') personally appeared Itit,lM1 t C� 'dO� P.i� Name(s) of Signer(s) LALR2A A. NELSON corrxritww # 122So66 ►VotaryRrbia—Coktarrlia MY Comm�Ex�ta' m Jul 23. 2003 ❑ personally known to me proved to me on the basis of satisfactory evidence to be the person(Is) whose name(' QaFe-- subscribed to the within instrument and acknowledged to me thROgh@ hey.executed the same in (9s fei.r. authorized capacity(ies-), and that by signature(4on the instrument the person(*, or the entity upon behalf of which the person(s�) acted, executed the instrument. WITNESS hand and official seal. Place Notary Seal Above . Signature of Notary Public OPT NAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document_ /////yyyyy ^ _� �r Title or Type of Document: 157�E�/'f? Gyl a&4 bG(lrwa Document Date: (D L L I � Number of Pages: 6-2— Signer(s) Other Than Named Above: �� Capacity(ies) Claimed by Si ner Signer's Name: LL"tzCLJ"f^ ❑ Individual Top of thumb here Corporate Officer — Title(s): �°,A/L 1 P.4� 6?C(/� t��r ❑ Partner — ElLimited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator =` ❑ Other: �1 Signer Is Representing: t , 0 1999 National Notary Association - 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.nationalnotary.org Prod. No. 5907 Reorder. Call Toll -Free 1-e00-676-6827 ATTACHMENT 1 (Legal Description) ALTA OWNERS POLICY EXHIBIT "A" OR-93GO198 ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, AND IS DESCRIBED AS FOLLOWS: LOTS 1 TO 5 INCLUSIVE OF TRACT NO. 13920, AS SHOWN ON A MAP FILED IN BOOK 673, PAGES 14 TO 16 INCLUSIVE OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING THEREFROM ALL OIL, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND ALL OTHER MINERALS WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED AND INCLUDING ALL FISSIONABLE MATERIALS WITHIN OR THAT MAY BE PRODUCED OR EXTRACTED OR TAKEN FROM SAID LAND BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED BY THE HUNTINGTON BEACH COMPANY IN A DEED RECORDED NOVEMBER 4, 1988 AS INSTRUMENT NO. 88-569347 OF OFFICIAL RECORDS. ALSO EXCEPTING ALL WATER RIGHTS AS RESERVED BY THE HUNTINGTON BEACH COMPANY IN DEED RECORDED NOVEMBER 4, 1988 AS INSTRUMENT NO. 88-569347 OF OFFICIAL RECORDS. NOTE 1: BY A QUITCLAIM DEED RECORDED AUGUST 29, 1957 IN BOOK 4021, PAGE 372 OF OFFICIAL RECORDS, THE HUNTINGTON BEACH COMPANY QUITCLAIMED ALL ITS RIGHT TO DRILL SLANTED WELLS FROM LANDS ADJACENT TO SAID LAND, INTO AND THROUGH THE TOP FIVE HUNDRED (500) FEET, MEASURED VERTICALLY IN DEPTH BELOW THE SURFACE OF SAID LAND. . NOTE 2: EXCEPT AS HEREINAFTER SPECIFICALLY PROVIDED, GRANTEE AGREES THAT, WITHOUT THE CONSENT OF GRANTOR IN WRITING BEING FIRST OBTAINED, IT WILL NOT USE THE SURFACE OF THE LANDS DESCRIBED ABOVE OR THAT PORTION OF SAID LANDS FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, INCLUDING, BUT NOT LIMITED TO DRILLING ANY WELL OR WELLS OR ANY OTHER ACTIVITY IN CONNECTION WITH DEVELOPING, PRODUCING OR OPERATING THE MINERAL INTERESTS (NOTHING HEREIN IS INTENDED TO PREVENT GRANTOR FROM USING CITY STREETS AND OTHER PUBLIC WAYS). IT IS UNDERSTOOD AND AGREED, HOWEVER, THAT BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE (HEREINAFTER CALLED THE "SUB-500 PORTION") GRANTEE MAY SLANT DRILL UNDER SUCH LANDS, AND/OR DRILL WELL OR WELLS ON LANDS POOLED THEREWITH, AND OTHERWISE CONDUCT OPERATIONS WHICH DO NOT INVOLVE THE USE OF THE SURFACE (OR THAT PORTION OF THE SUBSURFACE OTHER THAN THE SUB-500 PORTION) OF SUCH LANDS, IN ORDER TO REACH AND PRODUCE THE OIL, GAS AND OTHER MINERALS IN AND UNDER SUCH SUB-500 PORTION OF .SUCH LANDS. IT IS RECOGNIZED THAT THE CERTAIN WELLS KNOWN AS THE ELLIOTT NO. 1 WELL IS LOCATED ON THE ABOVE DESCRIBED LANDS - AND IS PRODUCING OIL AND GAS ATTRIBUTABLE TO THE MINERAL INTERESTS; GRANTEE AGREES TO PLUG AND ABANDON SUCH WELLS ON OR BEFORE JANUARY 1, 1989, AND GRANTOR AGREES THAT, NOTWITHSTANDING THE PRECEDING PORTION OF THIS PARAGRAPH, GRANTEE MAY USE THE SURFACE OF THE ABOVE DESCRIBED LANDS TO OPERATE SUCH WELLS PRIOR TO SUCH JANUARY 1, 1989, AND TO CONDUCT SUCH OPERATIONS AS MAY BE REQUIRED TO PLUG AND ABANDON SUCH WELLS, AS GRANTED TO ANGUS PETROLEUM CORPORATION IN A DEED RECORDED JULY 5, 1988 AS INSTRUMENT NO.88-319698 OF OFFICIAL RECORDS. PAGE 4 ATTACHMENT 2 (Site Plan) -c-r ``r .�•' :ar.� ,., .13924 "°S TRACT NO J•T 'Y SvarE♦ xroeE•. '9ef I M.m.673/14-16 gAs.c :c vcs. SCIA-cs S-C••'•.-E•Lc•' ✓E S-Sc7 r•CC' ?C rG rO•� :C'9':S C•S aC• - C' -AA •O 13569 :SL/ !r- 31-ECJ^JS O[ O,o.4c CC�rn DETA/L A JCac! r'•La vl-\•vEr •,O!ES .a^•. •'K r•?`• '•C S*Wo[O •fCE •9WY 9C Scr •1 •t,C 8O•M-wr :CvsCr1 ..'•-, 90 Y♦S •f♦Cv •CCIJ♦.. c c[ vo•C`ErErrS •TY. v.eC w•v.•.c ST••..E. . Cc •9.OY Ov f Sa•E • ..5+-Et S'r-" C, '9•..Y 'J 9C SE' •T -" -OT _C^`•EvS. T- CET CC'•TE•LrE r•E9SCC-cV.KS. i C'S. C C S. -0 nt J^•CR Pa..rS co, CC/•rnR -r_ 90 0• S .i[Ev •CC♦E �[ roC.C.%rs. -L 'C4ZZ [OVrO NO" 4C..i AS •OTEO I �I I g; 2 C1 is \ •Jflr •r 9JAV L , \ is • tea' ^♦' br we• a M 1 ti i .:1.. a!J/r•i.. rl cr%I� � •s'rm � N •J O �) � ..•lrir �rac � i!c � asap � {•, b G! J .up I ^• . .. mar .�.^ ss •/�lrY ter• �•r >t••>- A . w a. 11us4 � ' /!t : tilt .W 'A 'l .N •efliK C. ,is o!' � .� �- oss a ... :ir/ .ylnr(f/rrr •� sY . • e.ac.q ca o ° a C,i w Z e a e1 V 24 4 W /} � •x s i 41 �- • .. • - r e�.e ys•r V ' PARK_ srREEr ` /LLe), ° (r w'.e s.•..1r �..e�•.e s.•,. � � T o i, ., s�.c s.•r ... =i __,, 2 To• i V ss _ J II C ' f/I+la 1KIJ• � rGr�O. •f .lKr ••r .!!1 Q (��f �..i J 1 Ir//.•!l �� \ ✓O'!II♦! 1rl' � Q11 L.w /ltrrl Ktl . \ y .I Jr• uric a AVENUE Ir.1H� .ff OJ' 7•[.[.JA..J •b ram!! .. Jr.....cj /� �i.•f+ SJ .. ,.. .. .., ate•«'.i .. {I • ?•r �/ .r /f !. � I y r.y ' 'J/IIiI, Wi / . )Jar '+ .hr /r/ First American Title Insurance Company THIS MA) IS FOR INFORMATION ONLY AND IS NOT A PART OF THIS TTTU iV CWW" Amendment No. 1 to the Bowen Court Disposition and Development Agreement ATTACHMENT #2 AMENDMENT NO. 1 TO THE DISPOSITION AND DEVELOPMENT AGREEMENT FOR BOWEN COURT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND BOWEN COURT, L.P. THIS AMENDMENT NO. 1 (the "Amendment") is made and entered into this 17th day Of December , 2001, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and BOWEN COURT, L.P., a California limited partnership ("Developer"). WHEREAS, Agency and Developer are parties to that certain agreement executed by Agency on June 7, 2001, entitled "Disposition and Development Agreement for Bowen Court", which agreement shall hereinafter be referred to as the "Agreement", and Agency and Developer wish to amend the Agreement to allow for the subordination of the lease conveying the Property (as that term 'is defined in the Agreement) to Developer, which lease was approved by Agency on June 4, 2001, with an effective date of June 11, 2001, NOW, THEREFORE, it is agreed by Agency and Developer as follows: 1. SECTIONI. Section 435 of the Agreement (entitled "Subordination of Agency Deed of Trust, Agreement Containing Covenants, and this Agreement") shall be replaced with the following language: "Agency acknowledges and agrees that this Agreement (including the Lease which was approved by Agency on June 4, 2001, with an effective date of June 11, 2001, the Agency Deed of Trust and the Agreement Containing Covenants shall be subject and subordinate in all respects to all Permitted Mortgages and, within twenty (20) days following Developer's written request therefore, Agency shall execute a subordination agreement (on a form approved by Agency's Executive Director and General Counsel) for the benefit of each holder of a Permitted Mortgage reflecting such subordination together with a deed of trust (on a form approved by Agency's Executive Director and General Counsel) for the benefit of each holder of a Permitted Mortgage (which deed of trust will be executed by Agency as an accommodation and will be non -recourse to Agency) encumbering Agency's fee interest in the Property." 2. SECTION 2. Except as specifically modified herein, all other terms and conditions of the Agreement shall remain in full force and effect. 01 agree/jmf/Bowen Court Amendment No. 1/12/7/01/jn IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by and through their authorized offices the day, month and year first above written. BOWEN COURT, L.P., a California limited partnership ("Developer") By: MERIT HOUSING, INC., a California nonprofit corporation, its general partner 05g�� By: Eunice Bobert Chief Executive Officer 2 01 agree/jmf/Bowen Court Amendment No. 1/12/7/01/jn REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic Chairperson ATTEST: Agency Clerk APPROVED AS TO FORM: L ? I Agency General Counsel z�glD CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California } ss. County of Orange J On December 7, 2001 , before me, --------- Laura A. Nelson, Notary Public ------ Date Name and Title of Officer (e.g., "Jane Doe, Notary Public") personally appeared Eunice Bobert --------------------------------------- Name(s) of Signer(s) 5 personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/aoe subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/bier/tl;*ir authorized capacity(ies), and that by his/barAUsir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS y hand and official seal. Place Notary Seal Above Signature of Notary Public OPVONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Amendment 1 to DDA for Bowen Court Document Date: No date Signer(e) Other Than Named Above: None Capacity(!") Claimed by Signer Signer's Name: Eunice Bobert ❑ Individual d Corporate Officer — Title(s): Chief Executive Officer AM Partner — ❑ Limited ❑ General Attorney in Fact rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Merit Housing Inc. Number of Pages: 2 of thumb here 0 1999 National Notary Association - 9350 De Soto Ave., P.O. Box 2402 - Chatsworth, CA 91313.2402 - www.nationatnotary.org Prod. No. 5907 Reorder: Call Toll -Free 1-800-878-M7 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of County of On 4t/C64;i- �Da� before me, Date n Name and Title of Officer (e.g., "Jane Doe, Nofary Public") personally appeared of ❑ personally known to me - OR roved to me on the basis of satisfactory evidence to be the person(&), whose names) is/re subscribed to the within instrument and acknowledged to me that-he/sheAbey executed the same in-Iiis/herAheir authorized capacity{ias), and that by -bis/her/. heir signature.(&) on the instrument the person{&}, or the entity upon behalf of which the personfs) acted, YIRGINIA R. MELTON executed the instrument. Camnbston # 12M573 NdWPubic- Cafffbmla f WITNESS my hand and official seal. %7Ormge Coem>hr V#Cmm8&0pkwnjanI 2 5 Signature of Nota6 Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: 7a e��rT 7o�e)iZ- �OLi/�iJ G'UL/.P/ Document Date: /Uy 6�gZE_ Number of Pages: a SignerW Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: 1 Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER .. of thumb here Signer's Name: 1 I III Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER © 1995 National Notary Association - 8236 Remmet Ave., P.O. Box 7184 - Canoga Park, CA 91309-7184 Prod. No. 5907 Reorder: Call Toll -Free 1-800-676-6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of 44ZI A111 4 County of On before me, Xle/-19- Da a Name and Title of Officer (e.g., "Jane Doe, Notafy Public") 6 0 it/,Vi, ILit'U personally appeared of X personally known to me - OR - ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the AN a Oft AL same in his/her/their authorized capacity(ies), and that by VIRGINIA R. MELTON his/her/their signature(s) on the instrument the person(s), Commission# 1290573 Z or the entity upon behalf of which the person(s) acted, Notary Public- Cagkxrdo executed the instrument. O UW County MI►ODrrrn-E0wjan1&ZM WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: r %l�U i d ��� �'a'1�C �04/�/ �6)4sPi— Document Date: /0 ���_ Number of Pages: _ Signer(o Other Than Named Above: /40/7 Capacity(ies) Claimed by Signer(s) Signer's Name: Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER .. of Signer's Name: i Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER .. of thumb her 0 1995 National Notary Association - 8236 Remmet Ave., P.O. Box 7184 - Canoga Park, CA 91309-7184 Prod. No. 5907 Reorder: Call Toll -Free 1-800-876-6827 Section 33433 Summary Report ATTACHMENT #3 SUMMARY REPORT PURSUANT TO SECTION 33433 of the CALIFORNIA COMMUNITY REDEVELOPMENT LAW on AMENDMENT NO. 1 TO THE DISPOSITION AND DEVELOPMENT AGREEMENT FOR BOWEN COURT between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and BOWEN COURT, L.P. The following Summary Report (November 2001 Summary Report) has been prepared pursuant to Section 33433 of the California Health and Safety Code (Section 33433). This report sets forth certain details of the proposed Amendment No. 1 to the Disposition and Development Agreement for Bowen Court (Amended Agreement) between Bowen Court, L.P. (Developer) and the Redevelopment Agency of the City of Huntington Beach (Agency). BACKGROUND STATEMENT The executed Disposition and Development Agreement for Bowen Court (Executed Agreement) imposed the following requirements on the Agency and the Developer: 1. The Agency is required the Agency to convey the .75-acre site located at Yorktown Avenue and Lake Street (Site) to the Developer in the form of a long- term ground lease. 2. The Developer is required to construct 20-apartment units with adjacent garages and a community building; all 20-units must be allocated to very -low income senior citizen households (Project). In accordance with Section 33433, a Summary Report was prepared for the Executed Agreement. The Summary Report was dated February 1, 2001 (February 2001 Summary Report), and is attached to this November 2001 Summary Report for reference purposes. The February 2001 Summary Report was based on the terms and conditions imposed by the Executed Agreement, and it contains the following information: A description of the Executed Agreement's salient points, including the responsibilities imposed on the Developer and the Agency; 0111 xxx.HTB;KHH:gbd 14066.001 /xxx;11 /23/01 2. A quantification of the total and net cost of the Executed Agreement to the Agency; 3. An estimate of the Site's value at the highest use permitted by the Yorktown - Lake Redevelopment Project Redevelopment Plan; 4. An estimate of the Site's fair reuse value given the requirements imposed by the Executed Agreement; 5. An identification of the consideration being received by the Agency for the interests being conveyed; 6. A description of how the Project will eliminate the blighting influence on the Site; and 7. An explanation of how the Executed Agreement complies with redevelopment strategy identified in the Agency's adopted AB1290 Implementation Plan. At this time, the Agency and the Developer wish to amend the Executed Agreement. The following section of this November 2001 Summary Report identifies the changes to the Executed Agreement that are embodied in the Amended Agreement. SALIENT POINTS OF THE AMENDED AGREEMENT The Executed Agreement required the Agency to ground lease the Site to the Developer for a 60-year term. In addition, the Developer may extend the ground lease term indefinitely as long as the income and affordability standards defined in the Executed Agreement are maintained. The Amended Agreement modifies the "Agency Responsibilities" by adding the following language: "Agency acknowledges and agrees that this Agreement (including the Lease attached as Attachment No. 5), the Agency Deed of Trust and the Agreement Containing Covenants shall be subject and subordinate in all respects to all Permitted Mortgages..." The proposed subordination language means that the use, income and affordability standards imposed by the Executed Agreement can be terminated by the lender if there is a foreclosure on the Project's first trust deed mortgage. In addition, potentially the Agency could lose its fee interest in the Site in a foreclosure on the mortgage. Keyser Marston Associates, Inc. (KMA), the Agency's financial consultant, has indicated that the proposed subordination terms would likely be required by any of the Project's prospective lenders, and that the subordination requirement adds a layer of risk that was 0111)=.HTB;KHH:gbd 2 14066.0011)=;11 /23/01 not present in the Executed Agreement. However, this risk is mitigated by the fact that the Agency is entitled to receive notification from the lender before the initiation of any foreclosure activities on the Project. The Agency could, at their discretion, chose to step in and cure a Developer default to avoid a foreclosure on the Project. In this way, the Executed Agreement terms and the Agency's interest in the Site could be protected. OTHER MODIFICATIONS TO THE EXECUTED AGREEMENT All other terms and conditions imposed by the Executed Agreement remain in full force and effect. Therefore, it is not necessary to make any additional modifications to the February 2001 Summary Report. 0111)=.HTB;KHH:gbd 3 14066.001/)=;11/23/01 Bowen Court Ground Lease ATTACHMENT #4 e ATTACHMENT NO. 5 GROUND _LEASE Table of Contents Preamble and Recitals ARTICLE 1. LEASE OF PREMISES AND TERM OF LEASE § 1.01. Agreement to Lease § 1.02. Status of Title § 1.03. Term of Lease § 1.04 Ownership of Improvements ARTICLE 2. RENT § 2.01. Minimum Rent § 2.02. Time and Place for Payment of Rent ARTICLE 3. USE OF PREMISES § 3.01. Permitted Use § 3.02. Maintenance ARTICLE 4. TAXES AND UTILITIES § 4.01. Tenant to Pay Taxes § 4.02 Proration of First and Last Year Taxes § 4.03. Payment Before Delinquency § 4.04. Taxes Hold -Harmless Clause § 4.05 Utilities § 4.06 Payment by Landlord ARTICLE 5. ENCUMBRANCE OF LEASEHOLD ESTATE § 5.01. Tenant's Right to Encumber Leasehold Estate § 5.02. Notices to Leasehold Mortgagee; Leasehold Mortgagee's Right to Cure § 5.03. Landlord's Consents § 5.04. No Voluntary Surrender; Subordination; Modification § 5.05. Prohibition Against Change in Ownership Management and Control of Tenant § 5.06. Permitted Transfer § 5.07. Notices of Default § 5.08. No Merger § 5.09. Estoppel Certificates § 5.10. Waiver of Subrogation § 5.11. Amendments § 5.12. Non -Disturbance �of Subleases § 5.13. New Lease to Leasehold Mortgagee § 5.14. No Fee Mortgages SF-2001 Agree: Bowen Court: Ground Lease rn in i Attachment No. 5 Page 1 of 17 ARTICLE 6. LEASE TERMINATION § 6.01. Lease Termination for Inability to Finance § 6.02. Quitclaim Deed ARTICLE 7. DISCRIMINATION PROHIBITED § 7.01. Discrimination Prohibited § 7.02. Discrimination Prohibited in Assignments ARTICLE 8. OTHER PROVISIONS § 8.01. Attorneys' Fees § 8.02. Notices to Landlord § 8.03. Notices to Tenant § 8.04. Governing Law § 8.05. Binding on Heirs and Successors § 8.06. Memorandum of Lease for Recording § 8.07. Special Notice to Limited Partners Lease Attachments 1) Legal 2) Site 3) Memorandum of Lease Attachment No. 5 Page 2 of 17 SF-2001 Agree: Bowen Court: Ground Lease LEASE Preamble and Recitals This Lease is entered into as of June 11, 2001 by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic, of the State of California, herein called "Landlord," acting under the Community Redevelopment Law (California Health and Safety Code §§ 33000, et seq.) of the State of California, and BOWEN COURT, L.P., a California limited partnership corporation, herein called "Tenant." A. Landlord is the owner of certain real property in the County of Orange, State of California, legally described on Attachment 1, and depicted on the Site Map as Attachment 2, which are attached and made a part of this Lease (referred to in this Lease as "the Premises"). B. Tenant desires to lease the Premises (together with certain appurtenant rights and easements) for the purpose of constructing and operating an affordable senior housing project (collectively referred to in this lease as "the Improvements") in accordance with the Disposition and Development Agreement dated June 11, 2001, by and between the parties (the "DDA"). The Premises are located inside the boundaries of the Huntington Beach Redevelopment Project Area ("Project Area") in the City of Huntington Beach ("City"), State of California, and are leased in furtherance of the provisions of (1) 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; (2) the Disposition and Development Agreement by and between the Landlord and Tenant relating to the Premises (the "DDA"); and (3) the General Plan of the City of Huntington Beach. Said Ordinances, DDA and the General Plan are fully incorporated herein by the aforementioned reference and made a part hereof as though they are fully set forth herein. ARTICLE 1 LEASE OF PREMISES AND TERM OF LEASE Agreement to Lease Section 1.01. For and in consideration of the rents to be paid and covenants to be performed by Tenant under this Lease, Landlord agrees to lease the Premises to Tenant, and Tenant agrees to lease the Premises from Landlord, on the terms and conditions set forth in this Lease. Except as expressly otherwise provided in this Lease, "the Premises" includes the real property plus any appurtenances and easements described in Attachment 1 of this Lease, exclusive of any improvements (the "Improvements") now or subsequently located on the Premises, notwithstanding that any Improvements may or shall be construed as affixed to and as constituting part of the described Premises, and without regard to whether ownership of the Improvements is in Landlord or in Tenant. Notwithstanding the foregoing, the Improvements are, and shall be treated as real property. Attachment No. 5 Pale 3 of 17 SF-2001 Agree: Bowen Court: Ground Lease Status of Title Section 1.02. Title to the Leasehold Estate created by this lease is subject to all exceptions, easements, rights, rights -of -way, and other matters of record set forth on the Preliminary Title Report issued by Chicago Title Insurance, dated May 22, 2001. Term of Lease Section 1.03. The term of this Lease shall be for a period of sixty (60) years commencing on June 11, 2001 and continuing 60 years until June 10, 2061, unless terminated earlier as provided in this lease. The Lease may be extended for a tern not exceeding forty (40) years if Tenant gives written notice to Landlord at least one (1) year prior to the expiration of this Lease that Tenant will continue to operate the Premises as a senior, affordable housing project, pursuant to the DDA and the Agreement Containing Covenants. Ownership of Improvements Section 1.04. Title to the Improvements to be constructed on the Premises by Tenant shall be owned by Tenant until expiration of the term or earlier termination of this Lease. Upon expiration of the term or earlier termination of this Lease, the Improvements shall, without compensation to Tenant, then automatically and without any act of Tenant or any third party become Landlord's property. Tenant shall surrender the Project to Landlord at the expiration of the term or earlier termination of this Lease, free and clear of all liens and encumbrances, other than those, if any, permitted under this Lease, the DDA or otherwise created or consented to by Landlord. Tenant agrees to execute, acknowledge, and deliver to Landlord any instrument requested by Landlord as reasonably necessary in Landlord's opinion to perfect Landlord's right, title, and interest to the Project and the Premises following termination of this Lease. ARTICLE 2 RENT Minimum Rent Section 2.01. Tenant agrees to pay to Landlord annual rent for each year during the term of this Lease in the amount of One Dollar ($1.00). Attachment No. 5 Paoe 4 of 17 SF-2001 Agree: Bowen Court: Ground Lease Time and Place for Payment of Rent Section 2.02. The Rent shall be paid for the first year of the Lease at the close of escrow, and thereafter on June 11 of each subsequent year. All rent required under this Lease shall be paid to Landlord at Huntington Beach City Hall, 2000 Main Street, Huntington Beach, California, or any other place or places that Landlord may designate by written notice to Tenant. ARTICLE 3 USE OF PREMISES Permitted Use Section 3.01. The Premises shall be devoted only to the development permitted and the uses specified in the applicable provisions of the Redevelopment Plan, General Plan, and this Lease, whichever document is more restrictive. Maintenance Section 3.02. Solely at Tenant's expense, Tenant or Tenant's successor in interest shall reasonably maintain the improvements on the Premises in good condition and appearance. Tenant shall keep the Premises reasonably free from any accumulation of graffiti, debris or waste materials. If, at any time, Tenant fails to maintain the Premises as required by this Section, and such failure is not corrected within thirty (30) days after the date of written notice from the Landlord, Landlord or the City may perform the maintenance, or other actions and Tenant shall pay all costs incurred for such maintenance. ARTICLE 4 TAXES AND UTILITIES Tenant to Pay Taxes Section 4.01. Subject to any exemption obtained by Tenant, Tenant shall pay during the term of this Lease, without abatement, deduction, or offset, any and all real and personal property taxes, general and special assessments, and other changes (including any possessory interest tax) of any description levied or assessed during the term of this Lease by any governmental agency or entity on or against the Premises, the Improvements located on the Premises, personal property located on or in the Premises or Improvements, and the Leasehold Estate created by this Lease. Proration of First and Last Year Taxes Section 4.02. Notwithstanding the provisions of Section 4.01 of this Lease, all taxes, assessments, or other charges levied or assessed during the tax years in which the term of this Lease commences and ends shall be prorated between Landlord and Tenant as of 12:01 A.M. on Attachment No. 5 Page 5 of 17 SF-2001 Agree: Bowen Court: Ground Lease the date the term commences and on the date the term ends, respectively, on the basis of tax years that commence on July 1 and end on June 30 of each year. Landlord shall pay the taxes, assessments, or other charges for the year in which the term of this Lease commences and Tenant shall promptly, on service of written request by Landlord, reimburse Landlord for Tenant's share of those taxes, assessments, or other charges. Tenant shall pay the taxes, assessments, and other charges for the year in which this Lease is to end; and Landlord shall promptly, on service of written request by Tenant, reimburse Tenant for Landlord's share of those taxes, assessments, and other charges. Payment Before Delinquency Section 4.03. Any and all taxes and assessments and installments of taxes and assessments required to be paid by Tenant under this Lease shall be paid by Tenant at least.ten (10) days before each such tax, assessment, or installment of tax or assessment becomes delinquent. Tenant shall deliver to Landlord the official and original receipt evidencing the payment of any taxes, assessments, and other charges required under this Article. Tax Hold -Harmless Clause Section 4.04. Tenant shall indemnify and hold Landlord and Landlord's property, including the Premises and any Improvements now or subsequently located on the Premises, free and harmless from any liability, loss, or damage resulting from any taxes, assessments, or other charges required by this Article to be paid by Tenant and from all interest, penalties, and other sums imposed thereon and from any sales or other proceedings to enforce collection of any such taxes, assessments, or other charges. Utilities Section 4.05. Tenant shall pay or cause to be paid, and hold Landlord and the Premises free and harmless from, all charges for the furnishing of gas, water, electricity, telephone service, and other public utilities to the Premises during the Lease's term and for the removal of garbage and rubbish from the Premises during the term of this Lease. Payment by Landlord Section 4.06. Should Tenant fail to pay within the time specified in this Article any taxes, assessments, or other charges required by this Article to be paid by Tenant, and subject to the right of Tenant to contest the payment of the same, Landlord may, upon thirty (30) days prior written notice to Tenant, pay, discharge, or adjust that tax, assessment, or other charge for the benefit of Tenant. In that event, Tenant shall promptly on written demand of Landlord reimburse Landlord for the full amount paid by Landlord in paying, discharging, or adjusting that tax, assessment, or other charge together with interest thereon at the ten -maximum legal rate from the date of payment by Landlord until the date of repayment by Tenant. If this Article does not specify the time within which Tenant must pay any charge required by this Article, Tenant shall pay that charge before it becomes delinquent. Attachment No. 5 Page 6 of 17 SF-2001 Agree: Bowen Court: Ground Lease ARTICLE 5 ENCUMBRANCE OF LEASEHOLD ESTATE Tenant's Right to Encumber Section 5.01. Tenant's Right to Encumber Leasehold Estate. Tenant shall have the right, at any time, or from time to time, without Landlord's consent, to mortgage or otherwise encumber its interest in this Lease and in the Leasehold Estate created hereunder and/or in the Improvements (hereinafter referred to as a "Leasehold Mortgage," with the mortgagee or beneficiary under such Leasehold Mortgage being hereinafter referred to as a "leasehold Mortgagee"). No Leasehold Mortgage shall constitute an assignment or transfer prohibited under this Lease nor shall a Leasehold Mortgagee, as holder of a Leasehold Mortgage, be deemed an assignee or transferee of this Lease so as to require such Leasehold Mortgagee to assume the performance of any of the terms, covenants or conditions on the part of Lessee to be performed hereunder. Section 5.02. Notices to Leasehold Mortgagee; Leasehold Mortgagee's Right to Cure. (a) Notices to Leasehold Mortgagee. Landlord shall send to each Leasehold Mortgagee, by certified or registered mail, a true, correct and complete copy of any notice to Tenant of a default by Tenant under this Lease at the same time as and whenever any such notice of default shall be given by Landlord to Tenant, addressed to such Leasehold Mortgagee at the address last furnished to Landlord by Tenant or such Leasehold Mortgagee. No notice by Landlord to Tenant of a default by Tenant under this Lease shall be deemed to have been given unless and until a copy thereof shall have been so given to and received by such Leasehold Mortgagee. Tenant irrevocably directs that Landlord accept, and Landlord agrees to accept, performance and compliance by any such Leasehold Mortgagee of and with any term, covenant, agreement, provision, condition or limitation on Tenant's part to be kept, observed or performed hereunder with the same force and effect as though kept, observed or performed by Tenant. (b) Leasehold Mortgagee's Right to Cure. Notwithstanding anything stated to the contrary in this Lease, this Lease shall not be terminated because of a default or breach hereunder on the part of Tenant until and unless (i) written notice of any such default or breach has been delivered to Leasehold Mortgagee in accordance with the provisions of Section 5.02(a) above, and (ii) with respect to a default or breach that is curable solely by the payment of money, Leasehold Mortgagee and Tenant have failed to cure such default or breach within thirty (30) days following the expiration of any of Tenant's notice and cure periods set forth herein, and (iii) with respect to a default or breach that is not curable solely by the payment of money, Leasehold Mortgagee and Tenant have failed to cure such default or breach Attachment No. 5 Page 7 of 17 SF-2001 Agree: Bowen Court: Ground Lease within sixty (60) days following the expiration of any of Tenant's notice and cure periods set forth herein or, if such default or breach is curable but cannot be cured within such time period, (A) Leasehold Mortgagee has failed to notify Landlord within such time period that Leasehold Mortgagee intends to cure such default or breach, (B) Leasehold Mortgagee fails to diligently commence to cure such default of breach, or (C) Leasehold Mortgagee fails to prosecute such cure to completion. It is expressly understood and agreed that no Leasehold Mortgagee shall have any obligation hereunder to cure or complete any cure of any breach or default by Tenant hereunder. Section 5.03 Landlord's Consents. Landlord hereby consents to, and agrees that any Leasehold Mortgage may contain provisions for any or all of, the following: (a) An assignment of Tenant's share of the net proceeds from available insurance coverage or from any award or other compensation resulting from a total or partial taking of the Premises by condemnation. (b) The entry by the Leasehold Mortgagee upon the Premises during business hours, without notice to Landlord or Tenant, to view the state of the Premises. (c) A default by Tenant under this Lease being deemed to constitute a default under the Leasehold Mortgage. (d) An assignment of Tenant's right, if any, to terminate, cancel, modify, change, supplement, alter or amend this Lease, including without limitation Tenant's right under Section 365(h)(1) of the Federal Bankruptcy Code to elect to treat this Lease as terminated, and an assignment of all of Tenant's other rights under the Federal Bankruptcy Code. (e) An assignment of any sublease to which the Leasehold Mortgage is subordinated. (f) The following rights and remedies to be available to the Leasehold Mortgagee upon any default under any Leasehold Mortgage: (1) The foreclosure of the Leasehold Mortgage pursuant to a power of sale, by judicial proceedings or other lawful means and the sale of the Leasehold Estate hereunder to the purchaser at the foreclosure sale and a subsequent sale or sublease of the Leasehold Estate hereunder by such purchaser if the purchaser is the Leasehold Mortgagee or its nominee or designee. (ii) The appointment of a receiver, irrespective of whether the Leasehold Mortgagee accelerates the maturity of all indebtedness secured by the Leasehold Mortgage. (ill) The right of the Leasehold Mortgagee or the receiver appointed under subparagraph (ii) above to enter and take possession of the Premises, to manage and operate the same, to collect the subrentals, issues and profits therefrom and any other income Attachment No. 5 Page 8 of 17 SF-2001 Agree: Bowen Court: Ground Lease 11ii /Al generated by the Premises or the operation thereof and to cure any default under the Leasehold Mortgage or any default by Tenant under this Lease. . (iv) An assignment of Tenant's right, title and interest tinder this Lease in and to any deposit of cash, securities or other property which may be held to secure the performance of covenants, conditions and agreements contained in this Lease, in the premiums for or dividends upon any insurance provided for the benefit of any Leasehold Mortgagee or required by the terms of this Lease, as well as in all refunds or rebates of taxes or assessments upon or other charges against the Premises, whether paid or to be paid. Section 5.04. No Voluntary Surrender; Subordination; Modification. Without the written consent of all Leasehold Mortgagees, Landlord agrees not to accept a voluntary surrender of this Lease at any time while the Leasehold Mortgage of any Leasehold Mortgagee shall remain a lien on the Leasehold Estate hereunder. Section 5.05 Prohibition against Change in Ownership, Management and Control of Tenant (a) The Tenant represents and agrees that its lease of the Leasehold Estate and its other undertakings pursuant to this Lease are, and will be used, for the purpose of redevelopment of the Premises and not for speculation in landholding. The Tenant further recognizes that, in view of: (i) the importance of the redevelopment of the Premises to the general welfare of the community; (i.i) the public aid that has been made available by law and by the government for the purpose of making such redevelopment possible; and (iii) the fact that a significant change in identity of the Tenant, excepting the substitution of a purchaser at a foreclosure sale, is for practical purposes, a transfer or disposition of the Leasehold Estate; the qualifications and identity of the Tenant is of particular concern to the community and the Landlord.. The Tenant further recognizes that it is because of such qualifications and identity that the Landlord is entering into the Lease with the Tenant. Accordingly, except pursuant to a Permitted Transfer (as that term is defined in the DDA), the Tenant shall not assign or transfer or attempt to assign or transfer all or any part of this Agreement, or any rights herein, without the express written consent of the Landlord. (b) After the issuance of the Certificate of Completion pursuant to Section 434 of the DDA: Attachment No. 5 Page 9 of 17 SF-2001 Agree: Bowen Court: Ground Lease (i) Except in connection with a Permitted Transfer, the Tenant shall not assign all or any part of this Lease without the prior written approval of the Landlord. (ii) For the reasons cited above, the Tenant represents and agrees for itself and any successor in interest that without the prior written approval of the Landlord, except for a Permitted Transfer there shall be no significant change in the ownership of the Tenant or in the relative proportions thereof, or with respect to the identity of the parties in control of the Tenant or the degree thereof, by any method or means. (iii) The Tenant shall promptly notify the Landlord of any and all changes whatsoever in the identity of the parties in control of the Tenant or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Lease may be terminated by the Landlord if there is any significant change (voluntary or involuntary) in membership, management or control of the Tenant (other than such changes occasioned by the death or incapacity of any individual or occasioned by a Permitted Transfer). (iv)' Tenant shall not, except as permitted by this Lease and except pursuant to a Permitted Transfer, assign or attempt to assign this Lease or any right herein, nor except pursuant to a Permitted Transfer, make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Leasehold Estate (referred to hereinafter as a "Transfer"), without prior written approval of the Agency, except as expressly permitted by this Lease. Consent to a Transfer shall not result in acceleration of the Agency Note. Consent to one such Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers. Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Agency, to fulfill the obligations undertaken in this Agreement by the Tenant. Any such proposed transferee, by instrument in writing satisfactory to the Landlord and inform recordable among the land records, for itself and its successor and assigns, and for the benefit of the Landlord shall expressly assume all of the obligations of the Tenant in this Lease as of the date of such assumption, and agree to be subject to all conditions and restrictions applicable to the Tenant in this Lease. There shall be submitted to the Landlord for review all instruments and other legal documents proposed to effect any such Transfer, and if approved by the Landlord its approval shall be indicated to the Tenant in writing. Attachment No. 5 Page 10 of 17 SF-2001 Aeree: Bowen Court: Ground Lease (v) In the absence of specific written agreement by the Landlord, no unauthorized Transfer, or approval thereof by the Landlord shall be deemed to relieve the Tenant or any other party from any obligations under this Lease. Section 5.06. Permitted Transfers. (a) Notwithstanding anything stated to the contrary in this Lease, the following transfers shall be permitted and shall not require the approval or consent of Landlord: (i) A transfer of this Lease at foreclosure sale under the Leasehold Mortgage, whether pursuant to the power of sale contained therein or a judicial foreclosure decree, or by an assignment in lieu of foreclosure, or (ii) Any subsequent transfer by the Leasehold Mortgagee or its nominee or designee if the Leasehold Mortgagee, or such nominee or designee, is the purchaser at such foreclosure sale or under such assignment in lieu of foreclosure. (b) Any such transferee shall be liable to perform the obligations of Tenant under this Lease only so long as such transferee holds title to the Leasehold Estate hereunder, provided that upon any conveyance of title, such transferee's transferee expressly assumes and agrees to perform all of the obligations of this Lease first arising after the date of such conveyance. (c) Following the transfer, if any, described in Section 5.06(a)(i) above, all non -curable defaults existing under the Lease prior to such transfer shall be deemed waived without further notice or action of any party. Section 5.07. Notices of Default. Upon and immediately after the recording of a Leasehold Mortgage, Landlord, at Landlord's expense, may cause to be recorded in the office of the County Recorder of Orange County, California, a written request duly executed and acknowledged by Landlord for a copy of any notice of default and of any notice of sale under the Leasehold Mortgage as provided by the statutes of the State of California. Section 5.08. No Merger. If title to Landlord's estate and to Tenant's estate shall be acquired by the same person, firm or entity, other than as a result of termination of this Lease, no merger shall occur, if the effect of such merger would extinguish or in any way impair the lien of any Leasehold Mortgage. Section 5.08. Estoppel Certificates. Within twenty (20) days following Tenant's written request, Landlord shall execute and deliver to any person, firm or entity specified by Tenant (a) provided that such be the case, a certificate stating that this Lease is in full force and effect, that Tenant is not in default under this Lease, that this Lease has not been modified or supplemented in any way and containing such other certifications and agreements as such person, firm or entity Attachment No. 5 Page I I of 17 cF_�nnt nay— Rrnvrn C'nnrt: GrOUnd Lease may reasonably request, and (b) copies of the documents creating or evidencing the Leasehold Estate hereunder certified by Landlord as being true, correct and complete copies thereof. Section 5.10. Waiver of Subrogation. Any policy of hazard insurance insuring Landlord shall contain an endorsement waiving the insurer's right of subrogation as against the Leasehold Mortgagee and Tenant. Section 5.11. Amendments. If, in connection with any financing or refinancing of the Leasehold Estate hereunder by Tenant, any Leasehold Mortgagee requests any changes or additions to this Lease, Landlord and Tenant shall amend this Lease to include such changes or additions, provided that such changes or additions do not materially impair Landlord's rights hereunder, materially increase Landlord's obligations hereunder, or materially decrease the value of this Lease. Notwithstanding anything to the contrary contained in this Lease, this Lease shall not be amended or modified without the written consent of all Leasehold Mortgagees. Section 5.12. Non -Disturbance of Subleases. Upon any termination of this Lease for any reason whatsoever, neither Landlord nor any mortgagee (to the extent permitted under Section 5.14 below) of the Landlord's revisionary fee interest in the Premises shall disturb the possession of any of Leasehold Mortgagee's sublessees of the Premises, as permitted under Section 5.03(f)(1) above, so long as such sublessees are not in default under their respective subleases. Section 5.13. New Lease to Leasehold Mortgagee. If this Lease is terminated for any reason (including, without limitation, Tenant's default hereunder), then any Leasehold Mortgagee may elect to demand a new lease of the Premises by written notice to Landlord within thirty (30) days after such termination. Upon any such election,.the following provisions shall apply: (a) The new lease shall be for the remainder of the term of this Lease, effective on the date of termination, at the same rent and shall contain the same covenants, agreements, conditions, provisions, restrictions and limitations as are then contained in this Lease. Such new lease shall be subject to all existing subleases. (b) The new lease shall be executed by Landlord within thirty (30) days after receipt by Landlord of written notice of the Leasehold Mortgagee's -or such other acquiring person's election to enter into a new lease. (c) If Tenant refuses to surrender possession of the Premises, Landlord shall, at the request of the Leasehold Mortgagee or such other acquiring person, institute and pursue diligently to conclusion of the appropriate legal remedy or remedies to oust or remove Tenant and all subtenants actually occupying the Premises or any part thereof who are not authorized to remain in possession hereunder. Any such action taken by Landlord at the request of the Leasehold Mortgagee or such other acquiring person shall be at the Leasehold Mortgagee's or such other acquiring person's sole expense. Attachment No. 5 Page 12 of 17 SF-2001 Agree: Bowen Court: Ground Lease Fnmi If there is more than one Leasehold Mortgagee seeking to obtain a new lease under this Section 5.12, the Leasehold Mortgagee with the most senior Leasehold Mortgage shall have the right to enter into the new lease. Section 5.14. No Fee Mortgages. Notwithstanding anything to the contrary contained in this Lease, Landlord shall not encumber Landlord's fee simple interest in the Premises or any part thereof with a deed of trust, mortgage or other security instrument without the prior written consent of Tenant and all Leasehold Mortgagees, which consent may be withheld in their sole and absolute discretion. ARTICLE 6 LEASE TERMINATION Lease Termination for Inability to Finance Section 6.01. Notwithstanding anything stated to the contrary in this Lease, Landlord and Tenant shall each have the right to terminate this Lease upon thirty (30) days prior written notice to the other if, prior to September 30, 2001, Tenant fails to obtain a written commitment for tax credit financing in accordance with the provisions of Section 312 of the DDA. Further, Tenant shall have the right to terminate this Lease upon thirty (30) days prior written notice to Landlord at any time prior to the Agency Construction Loan Closing (as such term is defined in the DDA). Quitclaim Deed Section 6.02. If Landlord or Tenant terminates this Lease pursuant to Section 6.01, Tenant shall execute and deliver to Landlord a quitclaim deed in favor of the Landlord, which shall relinquish all of Tenant's right, title, and interest in, to, and under this Lease and the Premises. In the event Landlord terminates this Lease under this section, Landlord shall have the right to immediately record the quitclaim deed. ARTICLE 7 DISCRIMINATION PROHIBITED Section 7.01. Tenant covenants and agrees for itself, its successors, its assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Premises, nor shall Tenant itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Premises. The foregoing covenants shall run with the land. Attachment No. 5 Page 13 of 17 SF-2001 Agree: Bowen Court: Ground Lease 6/ 1 /fl 1 Discrimination Prohibited in Assignments Section 7.02. All deeds, leases or contracts made relative to the Premises, improvements thereon, or any part thereof, shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In Deed: "The Tenant herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the Tenant itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In Leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of sex, marital. status, race, color, creed, religion, national origin, or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall lessee itself or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." (c) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, religion, creed, national origin or ancestry 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 it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the land." In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that the Landlord shall be deemed a beneficiary'of the agreements and covenants provided hereinabove both for and in its own right and also for the purpose of protecting the interests of the community. All covenants without regard to technical classification or designation shall be binding for the benefit of the Landlord, and such covenants shall run in favor of the Landlord for the entire period during which such covenants shall be in force and effect, without regard to whether the Landlord is or remains an owner of any land or Attachment No. 5 Pa-e 14 of 17 SF-2001 Agree: Bowen Court: Ground Lease interest therein to which such covenants relate. Landlord shall have the right in the event of any breach of any such agreement or covenant, to exercise all the rights and remedies, and to maintain any actions at law or suit in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Lease shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest permitted by Article 5 of this Lease; provided, however, that any subsequent owner of the Premises shall be bound by such remaining covenants, conditions, restrictions, limitations, and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. None of the terms, covenants, agreements or conditions heretofore agreed upon in writing in other instructions between the parties to this Lease with respect to obligations to be performed, kept or observed by Tenant or Landlord in respect to the Premises or any part thereof after this conveyance of the Premises shall be deemed to be merged with this Lease until such time as a Certificate of Completion issued by the Landlord pursuant to the DDA is recorded for the Premises conveyed hereby or such part thereof. ARTICLE 8 OTHER PROVISIONS Attorneys' Fees Section 8.01. Should any litigation be commenced between the parties to this Lease concerning the Premises, this Lease, or the rights and duties of either in relation thereto, each party shall bear its own attorneys' fees. Notices to Landlord Section 8.02. Except as otherwise expressly provided by law, any and all notices or other communications required or permitted by this Lease or by law to be served on or given to Landlord by Tenant or any Lender described in Article 5 of this Lease shall be in writing and shall be deemed duly served and given when personally delivered to Landlord, to any managing employee of Landlord, or, in lieu of personal service, when deposited in the United States mail, first-class postage prepaid, and sent by express mail that allows for tracking, addressed to Landlord at 2000 Main Street, Huntington Beach, California 92648. Landlord may change Landlord's address for the purpose of this section by giving written notice of that change to Tenant in the manner provided in Section8.03; Tenant shall then transmit a copy of that notice to any Lender described in Article 5 of this Lease. Notices to Tenant Section 8.03. Except as otherwise expressly provided by law, any and all notices or other communications required or permitted by this Lease or by law to be served on or given to Tenant by Landlord shall be in writing and shall be deemed duly served and given when Attachment No. 5 Page 15 of 17 SF-2001 Agree: Bowen Court: Ground Lease personally delivered to Tenant, any managing employee of Tenant, or, in lieu of personal services, when deposited in the United States mail, first-class postage prepaid, and sent by express mail that allows for tracking, addressed to Tenant at Merit Housing, Inc., Attn: Eunice Bobert, 414 East Chapman Avenue, Orange, California. Tenant may change its address for the purpose of this section by giving written notice of that change to Landlord in the manner provided in Section 8.02 of this Lease. Governing Law Section 8.04. This Lease, and all matters relating to this Lease, shall be governed by the laws of the State of California in force at the time any need for interpretation of this Lease or any decision or holding concerning this Lease arises. Binding on Heirs and Successors Section 8.05. This Lease shall be binding on and shall inure to the benefit of the heirs, executors, administrators, successors, and assigns of the parties hereto, but nothing in this section shall be construed as a consent by Landlord to any assignment of this Lease or any interest in the Lease by Tenant except as permitted in the DDA or in this Lease. Memorandum of Lease for Recording Section 8.06. Landlord and Tenant shall execute a memorandum or "short form" of his Lease for purposes of recordation in the form of Attachment 4 hereto. The memorandum or "short form" of this Lease shall be recorded at the close of the escrow described in the DDA. Special Notice to Limited Partners Section 8.07. Notwithstanding anything to the contrary contained in this Lease, prior to declaring any default or taking any remedy -permitted under this Lease or applicable law based upon an alleged default under this Lease by Tenant, each limited partner in Tenant at the time of such default shall have any additional period of not less than (a) ten (10) days to cure such alleged default if of a monetary nature, and (b) thirty (30) days to cure such alleged default if on a non -monetary nature. Attachment No. 5 Page 16 of 17 SF-2001 Agree: Bowen Court: Ground Lease c„ ,n, IN WITNESS WHEREOF, the Landlord and Tenant have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized this day of Ung/ )2001. s� ATTEST: Agency Secretary APPROVED AS TO FORM: Agency General Counsel 611101 Dated: Landlord REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: �-� ae!::% xecutive Director By. ChalwPerson Tenant BOWEN COURT, L.P., a California limited partnership By: MERIT HOUSING, INC., a California Nonprofit Corporation, its General Partner By: Eunice Bobert Chief Executive Officer SF-2001 Agree: Bowen Court: Ground Lease Attachment No. 5 Page 17 of 17 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California 1 County of —0 ss. Onbefore me, D to Name and Title of Officer (e.g., "Jane Dce. olary Public") personally appeared �u-,�/�tl/P✓� (AURA A. NELSON Commission # 1226066 Notary Pubic—Caiforria Orange County My Comm. Expires Jul 23. 2003 )Cpersonally known to me p Is a evidence to be the persons whose name(f4 � subscribed to the within instrument and acknowledged to me that®/s�ey executed the same in i /hef4Wreir authorized capacity(4es), and that by Is herfthr signature(s).on the instrument the person(*, or the entity upon behalf of which the personF4 acted, executed the instrument. WITNESS my d and official seal. Place Notary Seal Above Signature of Notary Public OPTIO L Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Do me�nt-�w� ff __ __ //���� Title or Type of Document: cln W � l.�G� �L ^ � � u, e-" �-tl7 ,r Document Date: I of Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) CI coed by Si er t _ Signer's Name: �(LI I t CAO O J ❑ Individual Top of thumb here p ( ): �'� eK �� D Corporate Officer —Titles G qlj ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee _~ ❑ Guardian or Conservator=� ❑ Other: h e- Signer Is Representing: . 0 1999 National Notary Association • 9350 be Soto Ave., RO. Box 2J02 • Chatsworth, CA 91313-2402 • w .nationalnotary.org Prod. No. 5907 Reorder: Call Toll -Free 1-800-876-6827 STATE OF CALIFORNIA ss. COUNTY OF ORANGE On 7 p before me, i / 1' Gf r4 personally appeared u/ ' , persona ly kn to me (Qppreved- tn _ o ha is 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 biaAxt/their authorized capacity(ies), and that by-hisllaer/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. OWE STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) On before me, J. personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature ATTACHMENT 1 (Legal Description) ALTA OWNERS POLICY OR - 9 3 6 019 $ EXHIBIT "A" ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, AND IS DESCRIBED AS FOLLOWS: LOTS 1 TO 5 INCLUSIVE OF TRACT NO. 13920, AS SHOWN ON A MAP FILED IN BOOK 673, PAGES 14 TO 16 INCLUSIVE OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING THEREFROM ALL OIL, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND ALL OTHER MINERALS WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED AND INCLUDING ALL FISSIONABLE MATERIALS WITHIN OR THAT MAY BE PRODUCED OR EXTRACTED OR TAKEN FROM SAID LAND BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED BY THE HUNTINGTON BEACH COMPANY IN A DEED RECORDED NOVEMBER 4, 1988 AS INSTRUMENT NO.88-569347 OF OFFICIAL RECORDS. ALSO EXCEPTING ALL WATER RIGHTS AS RESERVED BY THE HUNTINGTON BEACH COMPANY IN DEED RECORDED NOVEMBER 4, 1988 AS INSTRUMENT NO. 88-569347 OF OFFICIAL RECORDS. NOTE 1: BY A QUITCLAIM DEED RECORDED AUGUST 29, 1957 IN BOOK 4021, PAGE 372 OF OFFICIAL RECORDS, THE HUNTINGTON BEACH COMPANY QUITCLAIMED ALL ITS RIGHT TO DRILL SLANTED WELLS FROM LANDS ADJACENT TO SAID LAND, INTO AND THROUGH THE TOP FIVE .HUNDRED (500) FEET, MEASURED VERTICALLY IN DEPTH BELOW THE SURFACE OF SAID LAND. NOTE 2: EXCEPT AS HEREINAFTER SPECIFICALLY PROVIDED, GRANTEE AGREES THAT, WITHOUT THE CONSENT OF GRANTOR IN WRITING BEING FIRST OBTAINED, IT WILL NOT USE THE SURFACE OF THE LANDS DESCRIBED ABOVE OR THAT PORTION OF SAID LANDS FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, INCLUDING, BUT NOT LIMITED TO DRILLING ANY WELL OR WELLS OR ANY OTHER ACTIVITY IN CONNECTION WITH DEVELOPING, PRODUCING OR OPERATING THE MINERAL INTERESTS (NOTHING HEREIN IS INTENDED TO PREVENT GRANTOR FROM USING CITY STREETS AND OTHER PUBLIC WAYS). IT IS UNDERSTOOD AND AGREED, HOWEVER, THAT BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE (HEREINAFTER CALLED THE "SUB-500 PORTION") GRANTEE MAY SLANT DRILL UNDER SUCH LANDS, AND/OR DRILL WELL OR WELLS ON LANDS POOLED THEREWITH, AND OTHERWISE CONDUCT OPERATIONS WHICH DO NOT INVOLVE THE USE OF THE SURFACE (OR THAT PORTION OF THE SUBSURFACE OTHER THAN THE SUB-500 PORTION) OF SUCH LANDS, IN ORDER TO REACH AND PRODUCE THE OIL, GAS AND OTHER MINERALS IN AND UNDER SUCH SUB-500 PORTION OF SUCH LANDS. IT IS RECOGNIZED .THAT THE CERTAIN WELLS KNOWN AS THE ELLIOTT NO. 1 WELL IS LOCATED ON THE ABOVE DESCRIBED LANDS AND IS PRODUCING OIL AND GAS ATTRIBUTABLE TO THE MINERAL INTERESTS; GRANTEE AGREES TO PLUG AND ABANDON SUCH WELLS ON OR BEFORE JANUARY 1, 1989, AND GRANTOR AGREES THAT, NOTWITHSTANDING THE PRECEDING PORTION OF THIS PARAGRAPH, GRANTEE MAY USE THE SURFACE OF THE ABOVE DESCRIBED LANDS TO OPERATE SUCH WELLS PRIOR TO SUCH JANUARY 1, 1989, AND TO CONDUCT SUCH OPERATIONS AS MAY BE REQUIRED TO PLUG AND ABANDON SUCH WELLS, AS GRANTED TO ANGUS PETROLEUM CORPORATION IN A DEED RECORDED JULY 5, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. PAGE 4 ATTACHMENT 2 (Site Plan) L•ECT 3 3 '•!9.'3 CERACE. 567 AC. 6 `°R DATE OF SUR.ET' JC rcBEa. �9e9 TRACT N0.1392 M.M.673/14-16 BASS .c '_» vGS. BEA li cs S-c— .•ERECI ARE BASED -_4" r.•E C-rTERUAK Cl :ME SrREr BE •.0 wOQN Jcl9',S EAST PER 'RAC' WAP 40 13569 � r 652/ 26- 33-ECOOOS CE ORAMCE ECVYrT IO.Or pyN 15•Sr C sl �cs i� `t. 4 Y v ofr,,rc �' covtlf spec! f u - "er—i \ cfry i \ C2 155'•e J,- i Jz7 .•• cl 52•••'J!' • l7:P iI 2• OETA/L A " p� vCv_vENT • RON'RE --I 'AC_ ST—PEO •aCE 1910Y •0 BE SET •T ALL BOuMOARr _JR.EaS -• — 90 DAIS ALTER •CCEPTu.CE OC -P CAE-0 S ROn P•RE .�ry •AC STAUPED'RCE '9A0Y ca C SP'AE & r S+•ER ST—PED .a C E. '9AOY 'J 9E SET •T •E� _Jr CCawEaS. S +EET CC'.TEQLNE w'EaSECrC�S. BC'S. EC'S.. O Ay or -ER P°P(rS CE Co�r%DL w�T— 90 OAS AMR ACCETTAnC£ Jr LQEO E-OrS. -TAr- NCICA-ES EOU•.O uONUNCNT AS NOTED l ) c,.c e w Atc•Ao �tR *'� •3Sa.� ti .5<inA � �I I 0Q i; ! ee W C •: lrr rKo f<O! K Nrtk/ y .irf+ y1 2s-J5i l Q9 Cam• J~ 00 ✓ !r! eiri I V e, OAP I1y /l(^! ! I c /7 9 C a 0 7 �'J • nJ 2 • PARK STREET erg) `• } J � � /I.a(•r y/ NrJ 1 AV-!e!, e A l' UT/CA ✓ �! AVENUE • w• rI� •tar/ hM !(/ // N KI✓ First American Title Insurance Company THIS MAP IS FOR INFORMATION ONLY AND IS NOT A PART Of THIS TTTU EVIDENCt Amendment No. 1 to the Bowen Court Ground Lease ATTACHMENT #5 AMENDMENT NO. 1 TO THE LEASE FOR THE BOWEN COURT PROPERTY BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND BOWEN COURT, L.P. THIS AMENDMENT NO. 1 (the "Amendment") is made and entered into this 17th day of December , 2001, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic, of the State of California, herein called "Landlord," acting under the Community Redevelopment Law (California Health & Safety Code §§ 33000, et seq.) of the State of California, and BOWEN COURT, L.P., a California limited partnership, herein called "Tenant." WHEREAS, Landlord and Tenant are parties to that certain agreement executed by Landlord on June 7, 2001, entitled "Disposition and Development Agreement for Bowen Court", which agreement shall hereinafter be referred to as the "DDA"; and Landlord and Tenant are also parties to that certain lease, approved by Landlord on June 4, 2001, with an effective date of June 11, 2001, for the premises in the County of Orange, State of California, legally described on Attachment 1 to this Amendment, and depicted on the Site Map as Attachment 2 to this Amendment, which Attachments are attached hereto and made a part of this Amendment (this lease shall hereinafter be referred to as the "Lease"); and Landlord and Tenant wish to amend the Lease to provide for indemnification and insurance to be provided by Tenant during the entire term of the Lease or any renewals or extensions thereof or during any holdover period, NOW, THEREFORE, it is agreed by Landlord and Tenant as follows: follows: SECTION 1. Article 9 shall be added to the Lease, which shall read as "ARTICLE 9 INDEMNIFICATION AND INSURANCE Indemnification, Defense and Hold Harmless Agreement Section 9.01. Tenant hereby agrees to protect, defend, indemnify and hold harmless Landlord, the City of Huntington Beach ("City") and their officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with (1) the use or occupancy of the Premises and the Improvements (as the Premises and Improvements are defined in the Lease) by Tenant or any other person under Tenant, or (2) the death or injury of any person or the damage to property caused by a condition of the Premises, or (3) the death or injury of 01 agree/jmf/Bowen Court Lease Amendment One 1/12/13/01/jn any person or the damage to property on or about the Premises and Improvements from any cause whatsoever, or (4) any failure by Tenant to keep the Premises and the Improvements in a safe condition, or (5) Tenant's (or Tenant's agents and/or subtenants, if any) performance of this Lease or its failure to comply with any of its obligations contained in this Lease by Tenant, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of Landlord. Tenant shall hold all goods, materials, furnishings, fixtures, equipment, machinery and other property whatsoever on the Premises and the Improvements at the sole risk of Tenant and save Landlord and City harmless from any loss or damage thereto by any cause whatsoever, except such loss or damage which was caused by the sole negligence or willful misconduct of Landlord. Landlord shall be reimbursed by Tenant for all costs and attorney's fees incurred by Landlord in enforcing this obligation. Tenant will conduct all defense at its sole cost and expense and Landlord shall approve selection of Tenant's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Tenant. Workers' Compensation and Employers' Liability Insurance Section 9.02. Tenant acknowledges awareness of Section 3700 et seq. of the California Labor Code, which requires every employer to be insured against liability for workers' compensation. Tenant covenants that it will comply with such provisions prior to the commencement of this Lease. Tenant shall obtain and furnish to Landlord workers' compensation and employers' liability insurance in amounts not less than the State statutory limits. Tenant shall require all subtenants and contractors to provide such workers' compensation and employers' liability insurance for all of the subtenants' and contractors' employees. Tenant shall furnish to Landlord a certificate of waiver of subrogation under the terms of the workers' compensation and employers' liability insurance and Tenant shall similarly require all subtenants and contractors to waive subrogation. General Public Liability Insurance Section 9.03. In addition to the workers' compensation and employers' liability insurance and Tenant's covenant to indemnify Landlord and City, Tenant shall obtain and furnish to Landlord, a policy of general public liability insurance, including motor vehicle coverage against any and all claims arising out of or in connection with the Premises. This policy shall indemnify Tenant, its officers, employees and agents, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Premises, and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of Three Million Dollars ($3,000,000.00) per occurrence. If coverage is provided under a form which includes a designated general aggregate limit, the aggregate limit must be no less than Three Million Dollars ($3,000,000.00) for the Premises. This policy shall name Landlord, City and their officers, elected or appointed officials, employees, agents, and volunteers as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the Lease shall be deemed excess coverage and that Tenant's insurance shall be primary. 2 01 agree/jmf/Bowen Court Lease Amendment One 1/]2/13/01/jn Under no circumstances shall said above -mentioned insurance contain a self -insured retention, or a "deductible" or any other similar form of limitation on the required coverage. Property Insurance Section 9.04. Tenant shall obtain and furnish to Landlord property and fire insurance with extended coverage endorsements thereon, including vandalism and malicious mischief endorsements, by a company acceptable to Landlord authorized to conduct insurance business in California, in an amount insuring for the full insurable value of all Improvements, structures, buildings, trade fixtures and personal property in or on the Premises against damage or destruction by fire, theft or the elements. This policy shall contain a full replacement cost endorsement naming Tenant as the insured and shall not contain a coinsurance penalty provision. The policy shall also contain an endorsement naming Landlord and City as additional insureds. The policy shall contain a special endorsement that such proceeds shall be used to repair, rebuild or replace any such Improvements, structures, buildings, trade fixtures and personal property so damaged or destroyed; and if not so used, such proceeds shall be paid to Landlord. The proceeds of any such insurance payable to Landlord shall be used for rebuilding or repair as necessary to restore the Premises. This policy shall also contain the following endorsements: (a) The insurer shall not cancel or reduce the insured's coverage without (30) days prior written notice to Landlord; (b) Landlord will not be responsible for premiums or assessments on the policy. A complete and signed certificate of insurance with all endorsements required by this Section shall be filed with Landlord prior to the commencement of this Lease. At least thirty (30) days prior to the expiration or termination of any such policy, a signed and complete certificate of insurance showing that coverage has been renewed shall be filed with Landlord. Increase in the Amount of Public Liability and Property Damage Insurance Section 9.05. Not more frequently than once every two (2) years, if, in the sole opinion of Landlord, the amount and/or scope of general public liability and property damage insurance coverage at that time is not adequate, Tenant shall increase the insurance coverage as reasonably required by Landlord. Certificates of Insurance; Additional Insured Endorsements Section 9.06 Prior to commencement of this Lease, Tenant shall furnish to Landlord certificates of insurance subject to approval of Landlord's General Counsel evidencing the foregoing insurance coverages as required by this Amendment; these certificates shall: (a) provide the name and policy number of each carrier and policy; (b) shall state that the policy is currently in force; and 3 01 agree/jmf/Bowen Court Lease Amendment One 1/12/13/01/jn (c) shall promise to provide that such policies will not be canceled or modified without thirty (30) days' prior written notice of Landlord; however ten (10) days' prior written notice in the event of cancellation for nonpayment of premium. Tenant shall maintain the foregoing insurance coverages in force during the entire term of the Lease or any renewals or extensions thereof or during any holdover period. The requirement for carrying the foregoing insurance coverages shall not derogate from Tenant's indemnification and defense obligations as set forth in this Amendment. Landlord or its representatives shall at all times have the right to demand the original or a copy of all the policies of insurance. Tenant shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. Insurance Hazards Section 9.07. Tenant shall not commit or permit the commission of any acts on the Premises nor use or permit the use of the Premises in any manner that will increase the existing rates for, or cause the cancellation of any property, liability, or other insurance policy for the Premises. Tenant shall, at its sole cost and expense, comply with all requirements of any insurance carrier providing any insurance policy for the Premises necessary for the continued maintenance of these policies at reasonable rates." 2. SECTION 2. Section 8.08 shall be added to the Lease, which shall read as follows: "Survival Section 8.08. Terms and conditions of this Lease, which by their sense and context survive the expiration or termination of this Lease shall so survive." 3. SECTION 3. Section 5.10 of the Lease entitled "Waiver of Subrogation" is deleted in its entirety. 4. SECTION 4. Except as specifically modified herein, all other terms and conditions of the Lease shall remain in full force and effect. Signatures on next page 4 01 agree/jmf/Bowen Court Lease Amendment One 1/12/13/01/in IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by and through their authorized offices the day, month and year first above written. BOWEN COURT, L.P., a California limited partnership By: MERIT HOUSING, INC., a California nonprofit corporation, its general partner By: Eunice Bobert Chief Executive Officer REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic /� , 17 r /1 1 Chairperson, ATTEST: Agency Clerk ` APPROVED AS TO FORM: a Agency General Counsel 40 1141 i2// ,7%l 5 01 agree/jmf/Bowen Court Lease Amendment One 1/12/13/01/in CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On December 7, 2001 , before me, --------- Laura A. Nelson, Notary Public ------- Date Name and Title of Officer (e.g., "Jane Doe, Notary Public") personally appeared ----------------------------------- Eunice Bobert --------------------------------------- Name(s) of Signers) (Al1PP� A. NELSON Commission i# 12260" z Z „� ' a Notary Public - California Z Orange County My Comm. B Jul 23, 2003 Place Notary Seal Above Ff personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(e) whose name(s) is/are subscribed to the within instrument and acknowledged to that he/she/they executed the - same in his/I;i r/thaw authorized capacity(ies), and that by his/tw;AUei.r signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS Vhand and official seal. Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Amendment 1 to Lease for Bowen Court Document Date: No date Signer(a) Other Than Named Above: Capacity(") Claimed by Signer Signer's Name: Eunice Bobert ❑ Individual Ef Corporate Officer — Title(s): Chief Executive Officer ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Merit Housing Inc. Number of Pages: X q 0 1999 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313.2402 • www.naflonalrotary.org Prod. No. 5907 Reorder. Call Toll -Free 1"800.876-M7 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of (J.Q/�_,Ox 4/i/� County of On before me, 9 to Name and Title of Officer (e.g., "Jane Doe, Nota Public") personally appeared �4 Name(s) of Signerfs) — El personally known to me - OR -IX -Proved to me on the basis of satisfactory evidence to be the person(&) whose name.(&) is/aFe subscribed to the within instrument and acknowledged to me that he/sheAhey executed the same iF++�s/her/tiieir authorized ca acit WGINIA R. MELTON p y(+es), and that by Commission 11UVIII Z his/her/#�ieir signature(&) on the instrument the person(&), t!ilotary Public- California T. or the entity upon behalf of which the person{&) acted, Orange County executed the instrument. U,yCwm,.bpm ion 13,?IDb WITNESS my hand and official seal. Signature of Notary Public OPTIO IAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: 'r77-N10, / 7 2D Z Document Date: /y0. u�I-;5— Number of Pages: Signer.(&) Other Than Named Above: A10,yz Capacity(ies) Claimed by Signer(s) Signer's Name: i Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian'or Conservator Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER •. Signer's Name: In Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER .. of tMumb Mere © 1995 National Notary Association - 8236 Remmet Ave., P.O. Box 7184 - Canoga Park, CA 91309-7184 Prod. No. 5907 Reorder: Call Toll -Free 1-800-876-6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of / 404 // County of // On ji41464-r �� � before me, U 40_—/IV/,4 FC d/!/ /vv77q� Date" Name and Title of Officer (e.g., "Jane Doe, Atary Public") personally appeared �dil/�/i� 6C (jrky.lzq, personally known to me — OR — ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), :VIR�GINIAR. MELTON or the entity upon behalf of which the person(s) acted, n # 122573 executed the instrument. Notary Public - California y Orange County WITNESS my hand and official seal. MvComm.Epiesion 13,2005 Signa ure of N ary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attachedd%Document h/ / �{ Title or Type of Document: / !�?'l f°/IG�/hC�2T/U� 7-6 Z eZ- Fe Document Date: A/72F7_Number of Pages: 5 Signe4e) Other Than Named Above: /l/lJAl� Capacity(ies) Claimed by Signer(s) Signer's Name: FE I Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER .. of thumb here Signer's Name: s 1 Individual Corporate Officer Title(s): Partner — ❑ Limited ❑ General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER Top of 0 1995 National Notary Association - 8236 Remmet Ave., P.O. Box 7184 - Canoga Park, CA 91309-7184 Prod. No. 5907 Reorder: Call Toll -Free 1-800-876-6827 ATTACHMENT 1 (Legal. Description) ALTA OWNERS POLICY EXHIBIT "A" OR- 93 60,198 ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, AND IS DESCRIBED AS FOLLOWS; LOTS 1 TO 5 INCLUSIVE OF TRACT NO. 13920, AS SHOWN ON A MAP FILED IN BOOK 673, PAGES 14 TO 16 INCLUSIVE OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING THEREFROM ALL OIL, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND ALL OTHER MINERALS WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED AND INCLUDING ALL FISSIONABLE MATERIALS WITHIN OR THAT MAY BE PRODUCED OR EXTRACTED OR TAKEN FROM SAID LAND BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED BY THE HUNTINGTON BEACH COMPANY IN A DEED RECORDED NOVEMBER 4, 1988 AS INSTRUMENT NO. 88-569347 OF OFFICIAL RECORDS. ALSO EXCEPTING ALL WATER RIGHTS AS RESERVED BY THE HUNTINGTON BEACH COMPANY IN DEED RECORDED NOVEMBER 4, 1988 AS INSTRUMENT NO. 88-569347 OF OFFICIAL RECORDS. NOTE 1: BY A QUITCLAIM DEED RECORDED AUGUST 29, 1957 IN BOOK 4021, PAGE 372 OF OFFICIAL RECORDS, THE HUNTINGTON BEACH COMPANY QUITCLAIMED ALL ITS RIGHT TO DRILL SLANTED WELLS FROM LANDS ADJACENT TO SAID LAND, INTO AND THROUGH THE TOP FIVE HUNDRED (500) FEET, MEASURED VERTICALLY IN DEPTH BELOW THE SURFACE OF SAID LAND. NOTE 2: EXCEPT AS HEREINAFTER SPECIFICALLY PROVIDED, GRANTEE AGREES THAT, WITHOUT THE CONSENT OF GRANTOR IN WRITING BEING FIRST OBTAINED, IT WILL NOT USE THE SURFACE OF THE LANDS DESCRIBED ABOVE OR THAT PORTION OF SAID LANDS FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, INCLUDING, BUT NOT LIMITED TO DRILLING ANY WELL OR WELLS OR ANY OTHER ACTIVITY IN CONNECTION WITH DEVELOPING, PRODUCING OR OPERATING THE MINERAL INTERESTS (NOTHING HEREIN IS INTENDED TO PREVENT GRANTOR FROM USING CITY STREETS AND OTHER PUBLIC WAYS). IT IS UNDERSTOOD AND AGREED, HOWEVER, THAT BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE (HEREINAFTER CALLED THE "SUB-500 PORTION") GRANTEE MAY SLANT DRILL UNDER SUCH LANDS, AND/OR DRILL WELL OR WELLS ON LANDS POOLED THEREWITH, AND OTHERWISE CONDUCT OPERATIONS WHICH DO NOT INVOLVE THE USE OF THE SURFACE (OR THAT PORTION OF THE SUBSURFACE OTHER THAN THE SUB-500 PORTION) OF SUCH LANDS, IN ORDER TO REACH AND PRODUCE THE OIL, GAS AND OTHER MINERALS IN AND UNDER SUCH SUB-500 PORTION OF SUCH LANDS. IT IS RECOGNIZED THAT THE CERTAIN WELLS KNOWN AS THE ELLIOTT NO. I WELL IS LOCATED ON THE ABOVE DESCRIBED LANDS' AND IS PRODUCING OIL AND GAS ATTRIBUTABLE TO THE MINERAL INTERESTS; GRANTEE AGREES TO PLUG AND ABANDON SUCH WELLS ON OR BEFORE JANUARY 1, 1989, AND GRANTOR AGREES THAT, .NOTWITHSTANDING THE PRECEDING PORTION OF THIS PARAGRAPH, GRANTEE MAY USE THE SURFACE OF THE ABOVE DESCRIBED LANDS TO OPERATE SUCH WELLS PRIOR TO SUCH JANUARY 1, 1989, AND TO CONDUCT SUCH OPERATIONS AS MAY BE REQUIRED TO PLUG AND ABANDON SUCH WELLS, AS GRANTED TO ANGUS PETROLEUM CORPORATION IN A DEED RECORDED JULY 5, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. PAGE 4 ATTACHMENT 2 (Site Plan) . q..f{ ,., .c "°rt r TRACT Npa 13920 i K M .67 3/ 14 —16 =_•S.S KII N(:S. le,./' es !-C.---(-cc.% JC s sr •� *-e ;:•z.c.c e• a r•ee- ee c •O.1 -c9:i W, •C• h" w •p •3549' rr :lir 2e-!!•C.C•0S o, Ot✓CC cc,,r . J•N� r ! 1f f+ f f! �r PI vC%.-EN' ',07ES aC• •'•C cc "-or, '] SC SCr •r «1 OO.r•C.•R'r :CtiCK .•�.•• 90 Yn •rTc. •CCCvrr•CC C! v—Cvt..Cvr% a,.0 -.<• ••C Sr,.• -CO -.CC •9•4i C. If S-r( • .ks-c. 5,—,Cz .•CC •9rlY -J SC SC' •r . L or -C.••C•S. s—CC, CC' ER.,( r•E•SCC-C••S. S C'S. CC S. r.0 •. ;,rrC. •O.•.fs Cc cc-ra0t r.r.,.•. 90 C—S -rE• .CCC,,_, t 3c ra•c�•ErE!.rS. CGTs c0.,.0 .c—, c.r �s -Arco 1 Cec • •• .r11— -ra — .It,, — —.1n n �-e rjI � 4 �• c• u••• n1<lr . e r I \ \ •V ri!!r /r/C C 0 cl f!••rx' Ira .J r9 <t✓,••Jr elf •—.v.iI V •!1J• i1 l 3qa DeTAlf -A ). I G'. r I •` • r• Jf f••r, :ell ,- so _x••„ v• ✓rs.'J t—L� �� . r3 a . 1 Z C 1 I+ a ;C ►. ,1: fig. • (rr ' I • 4 ° Pi felt[ . •re' ��i J� /I ? •x s.r ` - V P.dRK_, STREET F-- siz sr ALLEY .,,�•:3� j A E • ! rf' I - I a a I � I i ♦r•r r .. ✓! ric� Q � �. Irr l.•!! V r+JMrarL Ur/CA AVENUE -,...rla.•rf .•,�� s.ol ti ✓2 lIrJKJ✓! / • rf e! ..trle Jl I w�llr!!.. f.rr J•.!n a .y First American Title Insurance Company - Building Fee Agreement ATTACHMENT #,6 AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND BOWEN COURT, L.P. FOR PAYMENT OF BUILDING FEES THIS AGREEMENT ("Agreement") is made and entered into as of January 31, 2002, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") and BOWEN COURT, L.P., a California limited partnership ("Developer"). RECITALS WHEREAS, Developer intends to construct and operate a twenty (20) unit low income senior housing project (the "Project") in City; and The Redevelopment Agency of the City of Huntington Beach ("Agency") and Developer have entered into that certain "Disposition and Development Agreement for Bowen Court," executed by Agency on June 7, 2001, regarding the development of the Project (the "DDA"); and City will require certain fees from Developer regarding the construction and development of the Project in City, NOW, THEREFORE, on the basis of the foregoing recitals and for other valuable consideration, the receipt and adequacy of which is hereby acknowledged, City and Developer hereby agree as follows: PAYMENT OF BUILDING FEES Developer shall pay certain fees listed in Exhibit "A", which is attached hereto and incorporated hereby by this reference, in the total amount of One Hundred Twenty-seven Thousand Nine Hundred Eighty-one Dollars ($127,981.00) to City regarding the construction and development of the Project in City (collectively, the "Building Fees"). The Building Fees shall be due and payable on or before February 28, 2002, and shall not be refundable once paid. Developer acknowledges and agrees that these Building Fees shall be required to be paid again solely by Developer if the Project should ever be built (once the original Project is completed) in the event that the original Project is destroyed. A late charge of ten percent (10%) shall be applied to any outstanding balance after any payment hereunder is due but unpaid. In addition, one and a half percent (1 ''/z%) interest per month shall be added for each month payment hereunder is due but unpaid. Notwithstanding anything to the contrary herein, any fees required to be paid by Developer under City codes or regulations, or pursuant to any agreements entered into by Developer, and not included herein, shall be paid by Developer when ordinarily due. -1- Olagrce/Bowen Court Development Fees/jmf/jn/l/30/02 2. CITY EMPLOYEES AND OFFICIALS Developer shall employ no City official nor regular City employee in the work performed pursuant to this Agreement. No officer or employee of City shall have any direct financial interest in this Agreement. 3. INDEMNIFICATION Developer hereby agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with Developer's (or Developer's subcontractors, if any) negligent performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by Developer, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of City. City shall be reimbursed by Developer for all costs and attorney's fees incurred by City in enforcing this obligation. Developer will conduct all defense at its sole cost and expense and City shall approve selection of Developer's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Developer. 4. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to Developer or to City as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below; provided that City and Developer, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent: To City: City of Huntington Beach Attn: Director of Economic Development 2000 Main Street Huntington Beach, CA 92648 -2- 0 1 agree/Bowen Court Development Fees/jmf/jn/ 1 /30/02 To Developer: Merit Housing, Inc. Attn: Eunice Bobert 414 East Chapman Avenue Orange, CA 92866 5. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 6. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 7. INTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be -construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 8. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 9. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. -3- 0 1 agree/Bowen Court Development Fees/jmf/jn/ 1 /30/02 10. LEGAL SERVICES SUBCONTRACTING PROHIBITED Developer and City agree that City is not liable for payment of any subcontractor work involving legal services, and that legal services are expressly outside the scope of services contemplated hereunder. Developer understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for City; and City shall not be liable for payment of any legal services expenses incurred by Developer. 11. ATTORNEY'S FEES Except as expressly set forth in Section 3 of this Agreement, in the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non -prevailing party. 12. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement shall so survive. 13. BINDING EFFECT This Agreement shall be binding upon and inure to the benefit of each of the parties and its successors and assigns. 14. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supercede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. [SIGNATURES ON NEXT PAGE] -4- 0 1 agree/Bowen Court Development Fees/jmf/jn/ 1 /30/02 IN WITNESS WHEREOF, City and Developer have executed this Agreement as of the date first hereinabove written. BOWEN COURT, L.P., a California limited partnership By: MERIT HOUSING, INC., a California corporation, its Managing General Partner In Eunice Bobert, Chief Executive Officer -5- 0 1 agree/Bowen Court Development Fees/jmf/jn/1/30/02 CITY OF HUNTINGTON BEACH, a municipal corporation By: >✓ aA 4 / / NYyor ATTEST: By: City Clerk 44 APPROVED AS TO FORM: INITIATED AND APPROVED: By: A 0 /X/� Director of Economic Development REVIEWED AND APPROVED: By: �a.� s�,�,�•-t City -Administrator Exhibit "A" Bowen Court Senior Apartments Huntington Beach City Fees Planning/Zoning Application/Processing Fees, Plan Check Fees, Building Fees, Other Fees and Permits Related to the Development of the Project. $127,981.00 Note: The fees listed in this Exhibit do not constitute an all-inclusive list of fees Developer will pay to City for the construction and development of the Project. -6- 01 agree/Bowen Court Development Fees/jmf/jn/ 1 /30/02 AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND BOWEN COURT, L.P. FOR PAYMENT OF BUILDING FEES \THIS�REEMENT ("Agreement") is made and entered into as of , , by alld between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of Califia ("City") and BOWEN COURT, L.P., a California limited partnership ("Developer"). RFC1TAT C WHEREAS, Developer ii ends to construct and operate a twenty (20) unit low income senior housing project (the "Project kJ in City; and The Redevelopment Agency have entered into that certain "Di: executed by Agency on June 7, 2001, City will require certain fees from of the Project in City, City of Huntington Beach ("Agency") and Developer on and Development Agreement for Bowen Court," iyng the development of the Project (the "DDA"); and oper regarding the construction and development NOW, THEREFORE, on the basis of th foregoing recitals and for other valuable consideration, the receipt and adequacy of which is ereby acknowledged, City and Developer hereby agree as follows: 1. PAYMENT OF BUILDING FEES Developer shall pay certain fees listed in Exhibit "A", which is attached hereto and incorporated hereby by this reference, in the total amount of Dollars ($ ) to City regarding the construction and develop\anda f the Project in City (collectively, the "Building Fees"). The Building Fees shall be d payable on or before February 28, 2002, and shall not be refundable once paid. Develknowledges and agrees that these Building Fees shall be required to be paid again soleeveloper if the Project should ever be built (once the original Project is completed) in the et the original Project is destroyed. A late charge of ten percent (10%) shall be applied to anan ing balance after any payment hereunder is due but unpaid. In addition, one and a haent 1 %%) interest per month shall be added for each month payment hereunder is duepaid. Notwithstanding anything to the contrary herein, any fees required to be paid by er un r City codes or regulations, or pursuant to any agreements entered into by Develnd not i cluded herein, shall be paid by Developer when ordinarily due. -1- 01agree/Bowen Court Development Fees/jmf/jn/l2/l3/01 CITY EMPLOYEES AND OFFICIALS eveloper shall employ no City official nor regular City employee in the work performed purs t to this Agreement. No officer or employee of City shall have any direct financial interest i this Agreement. 3. Developer h eby agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed fficials, employees, agents and volunteers from and against any and all claims, damages, losses, ex enses, judgments, demands and defense costs (including, without limitation, costs and fees of litig ion of every nature or liability of any kind or nature) arising out of or in connection with Dev oper's (or Developer's subcontractors, if any) negligent performance of this Agreement or its ailure to comply with any of its obligations contained in this Agreement by Developer, its officers, ents or employees except such loss or damage which was caused by the sole negligence or wil ul misconduct of City. City shall be reimbursed by Developer for all costs and attorney's fees curred by City in enforcing this obligation. Developer will conduct all defense at its sole cost\and expense and City shall approve selection of Developer's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Developer. 4. NOTICES Any notices, certificates, or other commuffii by personal delivery to Developer or to City as the situa same in a sealed envelope, postage prepaid, and depositin Service, to the addresses specified below; provided that hereunder, may designate different addresses to which si communications will be sent: To City: City of Huntington Beach Attn: Director of Economic Development 2000 Main Street Huntington Beach, CA 92648 -2- Olagree/Bowen Court Development Fees/jmf/jn/12/13/01 ,ns hereunder shall be given either shall warrant, or by enclosing the same in the United States Postal and Developer, by notice given anent notices, certificates or other To Merit Housing, Attn: Eunice E 414 East Chapl Orange, CA 92 Inc. Avenue 5. No Axiver or modification of any language in this Agreement shall be valid unless in writing and duly ex uted by both parties. 6. SECTION ADINGS The titles, c\v'ous tion, paragraph and subject headings, and descriptive phrases at the beginning of tsections in this Agreement are merely descriptive and are included solely for convenieence only and are not representative of matters included or excluded from such provisio,of interpret, define, limit or describe, or construe the intent of the parties or affect the construction o\ interpretation of any provision of this Agreement. 7. INTERPRETATION OF The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not st 'ctly for or against any of the parties. If any provision of this Agreement is held by an arbitra\dn ourt of competent jurisdiction to be unenforceable, void, illegal or invalid, such holdingnot invalidate or affect the remaining covenants and provisions of this Agreement. No covr provision shall be deemed dependent upon any other unless so expressly provided here. d in this Agreement, the masculine or neuter gender and singular or plural number shall bd to include the other whenever the context so indicates or requires. Nothing contained s 11 be construed so as to require the commission of any act contrary to law, and whereveis y conflict between any provision contained herein and any present or future statute, lainanc or regulation contrary to which the parties have no right to contract, then the latll pre il, and the provision of this Agreement which is hereby affected shall be curtaileimited o ly to the extent necessary to bring it within the requirements of the law. 8. DUPLICATE ORIGINAL The original of this Agreement and one or more copies heret have been prepared and signed in counterparts as duplicate originals, each of which so executed s all, irrespective of the date of its execution and delivery, be deemed an original. Each duplicat original shall be deemed an original instrument as against any party who has signed it. 9. GOVERNING LAW This Agreement shall be governed and construed in accordance with thews of the State of California. -3- 0 1 agrec/Bowen Court Development Fees/jmf/jn/12/13/01 10. LEGAL SERVICES SUBCONTRACTING PROHIBITED D veloper and City agree that City is not liable for payment of any subcontractor work involving le 1 services, and that legal services are expressly outside the scope of services contemplated hereun er. Developer understands that pursuant to Huntington Beach City Charter Section 309, the City torney is the exclusive legal counsel for City; and City shall not be liable for payment of any legal rvices expenses incurred by Developer. 11. ATTORNEY'&FEES Except as expressly set forth in Section 3 of this Agreement, in the event suit is brought by either party to construx interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performa cc hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be en itled to recover its attorney's fees from the non -prevailing party. 12. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement shall so survive. 13. BINDING EFFECT This Agreement shall be binding upon ure to the benefit of each of the parties and its successors and assigns. 14. ENTIRETY The parties acknowledge and agree that they are en\ah nto this Agreement freely and voluntarily following extensive arm's length negotiation, and h has had the opportunity to consult with legal counsel prior to executing this Agreement. Ties also acknowledge and agree that no representations, inducements, promises, agreementsanties, oral or otherwise, have been made by that party or anyone acting on that party's be'ch are not embodied in this Agreement, and that that party has not executed this e t in reliance on any representation, inducement, promise, agreement, warranty, fact osta ce not expressly set forth in this Agreement. This Agreement, and the attached exhibtain t e entire agreement between the parties respecting the subject matter of this Agreand s ercede all prior understandings and agreements whether oral or in writing bethe partie respecting the subject matter hereof. [SIGNATURES ON NEXT PAGE] -4- 0lagrce/Bowen Court Development Fees/jmf/jn/12/13/01 ` EI WITNESS WHEREOF, City and Developer have executed this Agreement as of the date firstshereinabove written. BOWEN COURT, L.P., a California limited partnership\ By: MERIT HOUSIN , INC., a California corporation, its Managing General Partner By: Eunice Bobert, Chief Executive -5- 0 1 agree/Bowen Court Development Fees/jmf/jn/12/13/01 CITY OF HUNTINGTON BEACH, a municipal corporation By: Mayor ATTEST: City Clerk APPROVED AS TO FORM: By: City Attorney +2D% INI DATED AND APPROVED: of Economic Development REVIEWED AND APPROVED: City Administrator Exhibit "A" Bowen Court Senior Apartments Huntington Beach City Fees Planning/Zoning Application/Processing Fees, Plan Check Fees, Building Fees, Other Fees and Permits $ Related to the Development of the Project. Note: The fees listed in this Ex ibit do not constitute an all-inclusive list of fees Developer will pay to City for tc\construction and development of the Project. RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Bowen Court Senior Apartments DDA Amendment, Ground Lease Amendment, and Building Fee Agreement COUNCIL MEETING DATE: December 17, 2001 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Attached Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attorney) Attached Subleases, Third Party Agreements, etc. (Approved as to form by City Attome) Not Applicable Certificates of Insurance (Approved by the City Attorney) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORM RDED Administrative Staff Assistant City Administrator (Initial) ( ( ) City Administrator (initial) City Clerk FOR RETURN IWIMMM RCA Author: HOLTZ (5901) u6 imy -Setif: , T63 C O �#+ll-�tcFV A-fAL1911WR��-tw@-itBRaS: ,3 ^• D-3. (City Council/Redevelopment Agency) Joint Public Hearing to Consider Approval of Amendments to the v•+ ,�, Bowen Court Senior Apartments (1982-1986 Lake Street) Affordable Housing Project: (1) Disposition and 00 Development Agreement and (2) Ground Lease and_(3) Approve a Building Fee Agreement between the City and ...h Bowen Court, L.P. Question: Are these two amendments going to be recorded? Ut/� nLCe.Ssu a teF two OL - ,cM� � i0 ��-- i- i • _. n 4 ? s� n _• ... /Jeffrey— c co �c- o s� I-n CITY OF HUNTINGTON BEACH a InterOffice Communication Economic Development Department N O G pw TO: Honorable Mayor/Chairman and City Council a ; Members/Redevelopment Agency Members C--) CD FROM: Ray Silver, City Administrator/Executive Director M-- D�z , PREPARED BY: David C. Biggs, Director of Economic Development/Deputy W s Executive Director Uj `-) Zi ro DATE: December 17, 2001 SUBJECT: Late Communication for Agenda Item D-3 Please accept this late communication of the PowerPoint Presentation that will be shown for Agenda Item D-3: Bowen Court Senior Apartments — Request for Approval of the DDA Amendment, Lease Amendment, and Building Fee Agreement. Thank You. Bowen Court Senior Apartments Request for Approval of the DDA Amendment, Lease Amendment, and Building Fee Agreement City of Huntington Beach December 17, 2001 Agenda Item D-3� Yorktown Ave. Civic Center r o0 • °1 N 7 (D n Cn Cn s _W 51 Utica Ave. • DDA Approved June 4, 2001. • Agency has leased site to Merit Housing. • Project will include 20 new apartments for very low-income seniors. Merit Housing will build project and maintain affordability for 60 year lease term. r i Project Summary Continued • Agency will provide residual receipts construction loan up to $900,000. • After 60 years, all outstanding loan principal and interest must be repaid. • Lease & loan terms may be extended if project will continue to be affordable senior housing. 0 Financing sources include: • Tax Credits $1,782,436 • Conventional First Trust Deed $725,000 • Agency Residual Receipts Loan $900,000:., ,..'3 2 Requested DDA Amendment • Authorizes subordination of the Agency's ground lease to the primary mortgage. • Subordination is needed for developer to obtain conventional financing. • With this amendment, the Agency's Deed of Trust, Agreement Containing Covenants, and Ground Lease will be subordinate to the developer's approved mortgage. Requested Building Fee ' J• m S':1'i' Agreement • Proposed Building Fee Agreement will make City fees eligible project costs for Tax Credits. • Developer needs agreement to receive maximum project cost consideration for Tax Credits. • Agreement makes City fees project -based, requires repayment should project ever be rebuilt (i.e. if the project is destroyed by fire and is built again). • Developer requests this agreement because of recent IRS opinions that would otherwise limit eligible project costs for Tax Credits. 3 Requested Lease Amendment a Two provisions are added to the Ground Lease: • Indemnification of the City & Agency. • Liability & Property Insurance. a Because the DDA is substantially voided upon completion of construction, Agency Counsel recommends adding indemnification & insurance requirements to the ground lease that will be in effect for the duration of the project. F'15 Recommended City/Agency Action 1. Open the public hearing, take testimony, and close the public hearing on the proposed DDA Amendment. rd Recommended City Action 1. Approve the draft Building Fee Agreement between the City & Bowen Court, L.P. in substantially the same form as the attached agreement, and authorize its execution by the Mayor and City Clerk. Recommended Agency Action 1. Approve Amendment No. 1 to the Bowen Court DDA and authorize the execution and recordation of the amendment and other necessary related documents. 2. Approve Amendment No. 1 to the Bowen Court Ground Lease and authorize the execution and recordation of the amendment and other necessary related documents. HII 6 The End PROOF OF PUBLICATION STATE OF CALIFORNIA) .. ) SS. County of Orange ) I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, ' County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of said newspaper to wit the issue(s) of: November 29, 2001 December 6, 2001 I declare, under penalty of perjury, that the foregoing is true and .correct. Executed on December 61 ?nQJ at Costa Mesa, California. Signature PUBLIC NOTICE NOTICE OF JOINT . PUBLIC HEARING BY. THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AND THE REDEVELOPMENT, AGENCY OF THE CITY OF HUNTINGTON BEACH ON A PROPOSED AMENDMENT TO THE DISPOSITION AND DEVELOPMENT _AGREEMENT PROVIDING FOR THE LEASE OF REAL PROPERTY WITHIN THE 'MERGED REDEVELOPMENT PROJECT AREA OF THE CITY OF HUNTINGTON BEACH TO BOWEN COURT, L.P.: NOTICE IS HEREBY GIVEN THAT THE City Council of the City of Huntington Beach, Cali- fornia (the "City") and the Redevelopment Agency of the City of Huntington Beach (the "Agency") will hold a joint public hearing on December 17, 2001, at the hour of 7:00 PM, or soon thereafter as the matter can be heard, at City Hall, 2000 Main Street, Huntington Beach, California, pur- suant to California Com- munity Redevelopment ,Law (Health and Safety Code Section 33000, at seq.) for the purpose of considering an Amend- ment to the approved Disposition and De- velopment Agreement (the "DDA") between the Agency 'and Bowen', Court, L.P. (the "De-1 veloper" ). i The Amendment to the Disposition and'. De- velopment. Agreement (the "DDA") with" Bowen Court, L.P. (the -,,"De - eloper" ) concernsthe disposition - of property which has been .or may be acquired by the Re- development Agency of the City of Huntington Beach and =lease to Bowen Court, L.P. The, DDA' Amendment provides for the, subordination of the re- corded lease of ap-. proximately 1.4 acres of parcels commonly known as .11986-1982 Lake Street to all per-1 mitted mortgages of . the Developer. The purpose of the joint public_ hearing is to consider: 1. The' proposed amended terms and conditions of the lease of real property by the Agency to the de- veloper: 2. All evidence and testi- mony for and against the approval of the Disposi- tion and Development Agreement Amendment and the amended terms and conditions of the lease of real property. The Agency :has prepared a Summary Report in connection with the DDA Amend- ment that describes the salient points of the DDA Amendment, including the cost of the • Amend- ment to the Agency. At the above stated! day, hour, and place,; any and all persons having objections to ors wishing to express sup- port .of the proposed, Amendment to the Dis- i position and Develop- ment Agreement may appear and be heard before the Agency and the .City Council. Any person desiring to be heard at the hearing on the proposed Amend- ment to the Disposition and Development Agreement will be af- forded an opportunity to be heard. The documents re- ferred to above are available for - public in- spection and copying during the regular office hours.at the office of the City Clerk and ,the Clerk of the Redevelopment Agency,, City Hall, 2000 Main Street, Huntington Beach, California. Dated November 26, 2001' CONNIE BROCKWAY City Clerk.of the City of Huntington .Beach and Clerk of -the . Re- development Agency of the City of Hunt- ington Beach.' Published Huntington Beach Independent November 29, Decem- ber 6, 2001' 121-541 MEETING DATE: December 17, 2001 DEPARTMENT REQUESTING: SUBJECT: Economic Development Bowen Court DDA Amendment TODAY'S DATE November 26, 2001 VERIFIED BY ADMININSTRATION: APPROVED BY: Ray Silxyer ' City Administrator 11/26/01 2:23 PM 41A 11"I-0i 14-61- DI PUBLIC NOTICE NOTICE OF JOINT PUBLIC HEARING BY THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AND THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ON A PROPOSED AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT PROVIDING FOR THE LEASE OF REAL PROPERTY WITHIN THE MERGED REDEVELOPMENT PROJECT AREA OF THE CITY OF HUNTINGTON BEACH TO BOWEN COURT, L.P. NOTICE IS HEREBY GIVEN THAT THE City Council of the City of Huntington Beach, California (the "City") and the Redevelopment Agency of the City of Huntington Beach (the "Agency") will hold a joint public hearing on December 17, 2001, at the hour of 7:00 PM, or soon thereafter as the matter can be heard, at City Hall, 2000 Main Street, Huntington Beach, California, pursuant to California Community Redevelopment Law (Health and Safety Code Section 33000, et seq.) for the purpose of considering an Amendment to the approved Disposition and Development Agreement (the "DDA") between the Agency and Bowen Court, L.P. (the "Developer"). The Amendment to the Disposition and Development Agreement (the "DDA") with Bowen Court, L.P. (the "Developer") concerns the disposition of property which has been or may be acquired by the Redevelopment Agency of the City of Huntington Beach and leased to Bowen Court, L.P. The DDA Amendment provides for the subordination of the recorded lease of approximately 1.4 acres of parcels commonly known as 1986-1982 Lake Street to all permitted mortgages of the Developer. The purpose of the joint public hearing is to consider: 1. The proposed amended terms and conditions of the lease of real property by the Agency to the developer. 2. All evidence and testimony for and against the approval of the Disposition and Development Agreement Amendment and the amended terms and conditions of the lease of real property. The Agency has prepared a Summary Report in connection with the DDA Amendment that describes the salient points of the DDA Amendment, including the cost of the Amendment to the Agency. At the above stated day, hour, and place, any and all persons having objections to or wishing to express support of the proposed Amendment to the Disposition and Development Agreement may appear and be heard before the Agency and the City Council. Any person desiring to be heard at the hearing on the proposed Amendment to the Disposition and Development Agreement will be afforded an opportunity to be heard. The documents referred to above are available for public inspection and copying during the regular office hours at the office of the City Clerk and the Clerk of the Redevelopment Agency, City Hall, 2000 Main Street, Huntington Beach, California. Dated November 26, 2001 CONNIE BROCKWAY City Clerk of the City of Huntington Beach and Clerk of the Redevelopment Agency of the City of Huntington Beach.