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Home My WebLink AboutBTDJM Phase II Associates, LLC - BTDJM Phase II Associates (DJM), LLC - DJM - 2010-10-04Council/Agency Meeting Heia: IQAII,�0/6 - -- Deferred/Continued to: A r ved onditio all A p ovv ❑ Denied 6 C s Sig ure T 60 Council Meeting Date: October 4, 2010 Department ID Number: ED 10-044 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Chairman and Agency Members SUBMITTED BY: Fred A. Wilson, Executive Director PREPARED BY: Stanley Smalewitz, Deputy Executive Director SUBJECT: Adopt Agency Resolution No. 382 approving an Affordable Housing Agreement with BTDJM Phase II Associates (DJM), LLC, for a 467 mixed -use project located at 7601 Edinger Avenue; and, authorize execution of all related documents Statement of Issue: An Affordable Housing Agreement between the Agency and BTDJM Phase II Associates (DJM) is submitted for approval. The Agreement will facilitate the construction of a 467 mixed -use project, including 43 moderate units and 28 very -low units. This Agreement will reimburse DJM for construction of the affordable units only. Financial Impact: Redevelopment Agency will repay loan through revenues site - generated tax increment, including the 20% Housing Fund from the Bella Terra I project. Recommended Action: Motion to: A) Adopt Agency Resolution No. 382, "Resolution of the Redevelopment Agency of the City Of Huntington Beach Approving an Affordable Housing Agreement With BTDJM Phase II Associates LLC, a Delaware Limited Liability Company;" and, B) Authorize the Chairperson, Executive Director, and Agency Secretary to sign all related documents. Alternative Action(s): Do not approve the Affordable Housing Agreement and/or direct staff to amend the Agreement. -99- Item 5. - Page 1 AWES-T FOR COUNCIL ACTION MEETING DATE: 10/04/2010 DEPARTMENT ID NUMBER: ED 10-044 Analysis: DJM has proposed a mixed -use project located at 7601 Edinger Avenue. The mixed -use development will include 467 residential units; approximately 13,500 square feet of residential amenities, including a clubhouse, fitness center, leasing area, and lobby areas; approximately 700-space residential parking garage; and 155,000 square feet of retail. The project is located in the Huntington Beach Redevelopment Project Area — Huntington Center Sub -Area I. Since the development site is within the Redevelopment Project Area, it is subject to California Redevelopment Law Section 33413 — Replacement and Inclusionary Housing Requirements — which mandates that at least 15% of all new dwelling units developed shall be available at affordable housing costs. DJM has proposed to create the 15% affordable units housing_ on -site, including 43 moderate units and 28 very -low units. This meets the goals of the Redevelopment Plan, the Housing Element of the General Plan, and the Beach and Edinger Specific Plan by creating affordable housing on -site. DJM has requested financial assistance for the creation of the affordable housing units. Based upon review of the pro -forma and the creation of new affordable units, it is recommended that the Affordable Housing Agreement be approved. The Agreement consists of the following terms: - Term — the earlier of twenty six years (2036) or until reimbursement amount plus 4% interest is paid in full. Any outstanding balance remaining in 2036 must be forgiven by DJM - Fifty-five (55) year Housing Affordability Covenant - Site generated tax increment reimbursement up to $17 million plus 4% interest, based upon actual construction costs of 43 moderate units and 28 very -low units - Agreement to pay up to $250,000 for Pedestrian Access Crossing between the Levitz site and the Village at Bella Terra if construction is within 10 years of approval of Affordable Housing Agreement - Schedule of Performance, with construction commencing within five (5) years and completion within seven (7) years - Approval of any assignment or transfer to other than permitted transfers within DJM partnership - Provide Evidence of Financing and a Project Budget to the Agency - Project commences as rental units and if converted to for sale units, affordability covenants remain on units The Affordable Housing Agreement provides for 71 affordable units. The reimbursement of the affordable units will be based upon the site -generated tax increment for the mixed use project as well as the 20% housing fund from Bella Terra I. The City and the City's financial consultant have reviewed DJM's pro -forma and projected tax increment. The assistance does not exceed the feasibility gap for the project; therefore, the assistance is warranted. Item 5. - Page 2 -1 00- REQUEST FOR COUNCIL ACTION MEETING DATE: 10/04/2010 DEPARTMENT ID NUMBER: ED 10-044 Environmental Status: The Village at Bella Terra Project is covered by Environmental Impact Report (EIR) No. 07-03, prepared by PBS&J, and certified by the Planning Commission on October 14, 2008, as well as, Addendum to EIR No. 07-03 dated August 2010, pursuant to the provisions of the California Environmental Quality Act. Strategic Plan Goal: Enhance Economic Development Attachment(s): 1. 1Resolution No. 382 Resolution of the Redevelopment Agency of the City of Huntington Beach Approving an Affordable Housing Aqreement with BTDJM Phase II Associates 2. I PowerPoint -101- Item 5. - Page 3 3. Adopt Resolution No. 2010-70 approving a Side Letter to the Memorandum of Understanding (MOU) between the City and the Huntington Beach Police Officers' Association (POA) regarding the Medical Retirement Trust Fund Program Recommended Action: Adopt Resolution No. 2010770, "A Resolution of the City Council of the City of Huntington Beach Amending the Memorandum of Understanding Between the City and the Huntington Beach Police Officers' Association (HBPOA), By Adopting the Side Letter Agreement." Approved 5-0-2 (Carchio, Coerper absent) ADMINISTRATIVE ITEMS 4. Receive and file Library Strategic Plan 2010 - 2013 Recommended Action: Receive and file Library Strategic Plan 2010 — 2013. Approved 5-0-2 (Carchio, Coerper absent) 5. Adopt Agency Resolution No. 382 approving an Affordable Housing Agreement with BTDJM Phase II Associates (DJM), LLC, for a 467 mixed - use project located at 7601 Edinger Avenue; and, authorize execution of all related documents Redevelopment Agency Recommended Action: A) Adopt Agency Resolution No. 382, "Resolution of the Redevelopment Agency of the City Of Huntington Beach Approving an Affordable Housing Agreement With BTDJM Phase II Associates LLC, a Delaware Limited Liability Company;" a;�d-, approved as amended (1) to extend from 30 to 90 days the time limit for renters to accept offer to purchase, and (2) preference given to HB residents and/or those employed in the city, based on point system. Approved 5-0-2 (Carchio, Coerper absent) B) Authorize the Chairperson, Executive Director, and Agency Secretary to sign all related documents. Approved 5-0-2 (Carchio, Coerper absent) ORDINANCES FOR INTRODUCTION 6. Approve for introduction Ordinance No. 3900 amending Huntington Beach Municipal Code (HBMC) Chapter 17.56 by adopting the California Fire Code, 2010 Edition; and, schedule a public hearing for November 15, 2010 Recommended Action: After the City Clerk reads by title, approve for introduction Ordinance No. 3900, "An Ordinance of the City of Huntington Beach Amending Municipal Code -3- ATTACHMENT #1 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH RESOLUTION NO. 382 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING AN AFFORDABLE HOUSING AGREEMENT WITH BTDJM PHASE It ASSOCIATES, LLC, A DELAWARE LIMITED LIABILITY COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is engaged in activities necessary to carry out and implement the Redevelopment Plan for the Merged Redevelopment Project Area (the "Project Area') of the City of Huntington Beach; and WHEREAS, the Agency desires to enter into an Affordable Housing Agreement with BTDJM Phase II Associates, LLC, a Delaware limited liability company (the "Developer") by which the Agency will provide financial assistance to Developer to pay a portion of the costs for the construction of certain multi -family. dwelling units ("Dwelling Units") which shall be restricted for rental and/or sale to and occupancy by Moderate Income Households and Very Low Income Households upon certain real property known as 7777 Edinger Avenue, Huntington Beach, California; and WHEREAS, the Agency shall use funds from its Low and Moderate Income Housing Fund to finance more than fifty percent of the cost of producing the Dwelling Units; and WHEREAS, the amount of Agency assistance is necessary because the Developer has made a good faith attempt but has been unable to obtain commercial or private means of financing the units at the same level of affordability and quantity due to the costs of production and projected operating income of the Dwelling Units, as evidenced by the Project Budget, which is an attachment to the Affordable Housing Agreement; and WHEREAS, it is in the best interests of the City and for the common benefit of the residents and the City as a whole for the Agency to enter into the Affordable Housing Agreement; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, BE IT RESOLVED BY THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AS FOLLOWS: The Agency hereby finds and determines that the foregoing recitals are true and correct. 2. The Agency has duly considered the teams and conditions of the proposed transaction and detemuned that the proposed Affordable Housing Agreement is in the best interests of the Project Area and the City and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable State and local law and requirements. Redevelopment Agency Res.#382 3. The Agency Executive Director (or designee) and the Agency Chairperson are authorized to take any action and execute any and . all documents and agreements necessary to implement this Resolution without the necessity of further action by the Agency except to the extent required bylaw. 4. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meeting held thereof on the fday of October, 2010. REVIEWED AND APPROVED: APPROVED AS TO FO RM: E utiv Director G eral Co el INITIATED AND APPROVED: Z=:::Z �-- Director of Economic Development 2 KANE, BALLMER & BERKMAN Agency Special Counsel IL, Susan Y. Cola Res. No. 382 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF HUNTINGTON BEACH ) I, JOAN FLYNN, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a regular meeting of said Redevelopment Agency held on October 4, 2010 and that it was so adopted by the following vote: AYES: Hardy, Green, Bohr, Dwyer, Hansen NOES: None ABSENT: Carchio, Coerper ABSTAIN: None i k of the Redevelopm t Agency of the City of Huntington Beach, CA AFFORDABLE HOUSING AGREEMENT by and between CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY, "AGENCY" and BTDJM Phase II Associates, LLC, a Delaware limited liability company, "DEVELOPER" TABLE OF CONTENTS Paae ARTICLE 1. SUBJECT OF AGREEMENT................................................................................ 1 1.1 Purpose of the Agreement...............................................................................................1 1.2 The Redevelopment Plan ................................................................................................ 1 1.3 The Project...................................................................................................................... 1 1.4 Definitions........................................................................................................................2 1.5 Parties to the Agreement................................................................................................. 6 L5,1---- The Agency............................................................................................... 6 1.5.2 Developer.................................................................................................. 6 1.6 Assignments and Transfers............................................................................................. 7 ARTICLE2. FINANCING........................................................................................................... 9 2.1 Project Budget................................................................................................................. 9 2.2 Reimbursement............................................................................................................... 9 2.2.1 Reimbursement Amount............................................................................ 9 2.2.2 Escrow..................................................................................................... 10 2.2.3 Conditions Precedent to Closing............................................................. 11 2.2.4 Recordation of Documents at Closing; Lots Against Which Affordable Housing Covenants are to be Recorded; Partial Releases After Initial Closing.................................................................. 12 2.3 Representations and Warranties.................................................................................... 13 2.3.1 Representations and Warranties of Developer ....................................... 13 2.3.2 Representations and Warranties of Agency ............................................ 15 2.3.3 Estoppel Certificates............................................................................... 16 ARTICLE3. DEVELOPMENT................................................................................................. 16 3.1 Parcel Map..................................................................................................................... 16 3.2 Scope of Development.................................................................................................. 16 3.3 Entitlements.................................................................................................................. 16 3.4 Cost of Construction; Developer Contribution to Cost of Completing Pedestrian Crossing Between Property and Levitz Property......................................................... 16 3.5 Development Schedule................................................................................................. 17 3.6 Indemnification and Insurance...................................................................................... 17 3.7 Approval of Plans......................................................................................................... 20 3.8 Permits.......................................................................................................................... 20 3.9 Rights of Access........................................................................................................... 20 3.10 Local, State and Federal Laws...................................................................................... 21 3.11 Nondiscrimination.........................................................................................................22 3.12 Disclaimer by Agency................................................................................................... 22 3.13 Covenants of Developer................................................................................................ 22 3.13.1 Equal Opportunity Employment Practices ............................................ 22 1 AFFORDABLE HOUSING AGREEMENT [Final Execution] 3.13.2 Compliance with Environmental Laws ................................................ 23 3.13.3 Environmental Indemnity.....................................................................23 3.13.4 Encumbrances and Liens....................................................................... 24 3.13.5 Sales and Use Taxes; Point of Sale ....................................................... 24 3.14 Holder Not Obligated to Construct the Project............................................................. 25 3.15 Right of the Agency to Satisfy Other Liens on the Property ........................................ 25 3.16 Release of Construction Covenants.............................................................................. 25 ARTICLE 4. USE OF THE PROPERTY................................................................................... 26 4.1 Uses...............................................................................................................................26 4.1.1 Generally................................................................................................. 26 4.-1.2 Affordabi-lity Restrictions ........... :............................................................ 26 4.1.3 Monitoring...............................................................................................27 4.2 Payment of Real Estate Taxes....................................................................................... 27 4.3 Maintenance of the Property......................................................................................... 27 4.4 Obligation to Refrain from Discrimination.................................................................. 28 4.5 Form of Nondiscrimination and Nonsegregation Clauses ............................................ 28 4.5.1 In deeds.................................................................................................... 28 4.5.2 In leases................................................................................................... 28 4.5.3 In contracts.............................................................................................. 29 4.6 Effect and Duration of Covenants................................................................................. 29 ARTICLE 5. DEFAULTS, REMEDIES AND TERMINATION .............................................. 29 5.1 Defaults - General......................................................................................................... 29 5.2 Institution of Legal Actions.......................................................................................... 30 5.3 Applicable Law............................................................................................................. 31 5.4 Acceptance of Service of Process................................................................................. 31 5.5 Rights and Remedies Are Cumulative.......................................................................... 31 5.6 Damages........................................................................................................................31 5.7 Specific Performance.................................................................................................... 31 5.8 Termination by Developer............................................................................................ 32 5.9 Termination by Agency................................................................................................ 32 5.10 Attorney's Fees and Costs............................................................................................ 32 ARTICLE 6. GENERAL PROVISIONS................................................................................... 33 6.1 Notices.......................................................................................................................... 33 6.2 Conflicts of Interest....................................................................................................... 33 6.3 Non -liability of Agency/City Officials and Employees ................................................ 33 6.4 Force Majeure............................................................................................................... 33 6.5 Inspection of Books and Records................................................................................. 34 6.6 Consents and Approvals............................................................................................... 34 6.7 Real Estate Commissions.............................................................................................. 34 ARTICLE 7. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS ............................ 34 ii AFFORDABLE HOUSING AGREEMENT [Final Execution] ARTICLE 8. TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY; DATE OF AGREEMENT...................................................................................................... 35 ATTACHMENTS ATTACHMENT NO. 1 - LEGAL DESCRIPTION ATTACHMENT NO.2 - SCHEDULE OF PERFORMANCE ATTACHMENT NO.3 - SCOPE OF DEVELOPMENT ATTACHMENT NO.4 - PROJECT BUDGET ATTACHMENT NO.5 - INTENTIONALLY OMITTED ATTACHMENT NO.6 - AGREEMENT -CONTAINING COVENANTS AFFECTING REAL PROPERTY ATTACHMENT NO.6A - NOTICE OF AFFORDABILITY COVENANTS ON TRANSFER OF PROPERTY ATTACHMENT NO.6B - AGREEMENT AND COVENANTS CONCERNING USE AND RESALE OF RESIDENTIAL UNITS ATTACHMENT NO.6C - RIGHT OF FIRST REFUSAL ATTACHMENT NO.6D - PEDESTRIAN CROSSING AGREEMENT ATTACHMENT NO.7 - SCHEDULE OF FEASIBILITY GAP PAYMENTS ATTACHMENT NO.8 - ENVIRONMENTAL INDEMNITY ATTACHMENT NO.9 - ASSIGNMENT AND ASSUMPTION AGREEMENT ATTACHMENT NO. 10 - RELEASE OF CONSTRUCTION COVENANTS iii AFFORDABLE HOUSING AGREEMENT [Final Execution] AFFORDABLE HOUSING AGREEMENT .This AFFORDABLE HOUSING AGREEMENT (this "Agreement") is entered into as of 2010 ("Effective Date"), by and between the CITY OF HUNTINGTON BEACH R bYVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and BTDJM PHASE II ASSOCIATES, LLC, a Delaware limited liability company ("Developer"). The Agency and Developer hereby covenant and agree as follows: ARTICLE 1. SUBJECT OF AGREEMENT _l .l Purpose of the Agreement 1.1.1 The purpose of this Agreement is to implement the Redevelopment Plan for the Huntington Beach Redevelopment Project Area in the City of Huntington Beach (the "Redevelopment Plan") and, in accordance therewith, increase and improve the supply of affordable housing within the City of Huntington Beach ("City") by providing financial assistance to Developer to pay a portion of the costs for the construction of certain multi -family dwelling units ("Dwelling Units") which shall be restricted for rental and/or sale to and occupancy by Moderate Income Households and Very Low Income Households (the "Affordable Rental and/or Agency -approved For Sale Units") upon certain real property (the "Property"). 1.1.2 The financial assistance for the Affordable Rental and/or Agency - approved For Sale Units is to be provided solely in the form of reimbursement from the Agency's Low and Moderate Income Housing Fund, as more specifically provided for herein. The Project and the fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of the applicable federal, state and local laws and requirements under which the Project is to be undertaken and is being assisted. 1.2 The Redevelopment Plan This Agreement is authorized by and made in furtherance of the Redevelopment Plan, which was approved and adopted by the City Council of the City of Huntington Beach on December 16, 1996, by Ordinance No. 3343, and lawfully amended thereafter. 1.3 The Project The Project consists of the construction of 467 Dwelling Units, of which 43 shall be Affordable Rental Units and/or Agency -approved For Sale Units restricted for rental and/or sale to and occupancy by Moderate Income Households and 28 shall be Affordable Rental Units and/or Agency -approved For Sale Units restricted for rental and/or sale to and occupancy by Very Low Income Households, in accordance with this Agreement. The Property is more particularly described in the Legal Description, which is attached hereto as Attachment No. 1 and incorporated herein by this reference. AFFORDABLE HOUSING AGREEMENT [Fina]Execution] 1.4 Definitions "Affiliate" means (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; or (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, means the power to direct the management or the power to control election of the board of directors. It shall be a presumption that control with respect to a corporation or limited liability company is the right to exercise or control, 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, partner -ship, 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. "Affordable Housing; Cost" means the term defined in California Health and Safety Code section 50052.5(b). "Affordable Rent" means rent that meets the requirements of California Health and Safety Code section 50053(b). "Affordable Rental and/or A eg_nc�-approved For Sale Unit" means each Dwelling Unit restricted for rental and/or sale to and occupancy by qualifying Very Low Income Households or Moderate Income Households, in accordance with the Agreement Containing Covenants. "Agency" means the City of Huntington Beach Redevelopment Agency. "Agreement and Covenants Concerning; Use and Resale of Residential Units" means the Agreement and Covenants Concerning Use and Resale of Residential Units attached hereto as Attachment No. 6B and incorporated herein by reference. "Agreement Containing Covenants" means the Agreement Containing Covenants Affecting Real Property (Including Affordable Rental and/or Sale Restrictions), in substantially the form attached hereto as Attachment No. 6 and incorporated herein by reference, to be entered into by and between the Agency and the Developer, which shall be recorded on the Closing Date. "Area Median Income" or "AMI" means the most recently published area median income for the County of Orange as published in title 25, section 6932 of the California Code of Regulations, as amended from time to time. "Assignment and Assumption Agreement" means the agreement substantially in the form attached hereto as Attachment No. 9 and incorporated herein by this reference. "City" means the City of Huntington Beach. 2 AFFORDABLE HOUSING AGREEMENT [Final Execution] "Closing" means the closing of the Escrow provided for in Section 2.2.2-2.2.4 of this Agreement. "Closing Date" means the date of Closing. "Completion" means the point in time when all of the following shall have occurred with respect to the Project: (1) issuance of a final certificate of occupancy or final inspection by the City of Huntington Beach; (2) recordation of a Notice of Completion by Developer or its contractor; (3) certification by the project architect that construction of the Project (with the exception of minor "punchlist" items) has been completed in a good and workmanlike manner and substantially in accordance with the approved plans and specifications; and (4) any -- - mechanic's_ liens _that, have. been recorded or stop notices that have been delivered have been paid, settled or otherwise extinguished, discharged, released, waived, bonded or insured against. "Completion Date" means the date of Completion. "Construction Financing" means that construction financing obtained by Developer to finance construction of the Project. "Developer" means BTDJM Phase II Associates, LLC, a Delaware limited liability company, and its successors and assigns, including a Permitted Transferee. "Director" means the Agency's Executive Director or designee. Unless otherwise provided herein or unless the Agency otherwise notifies the Developer, any matter to be approved (or disapproved) by the Agency or any action to be taken by the Agency pursuant to this Agreement, shall be approved (or disapproved) or shall be taken, as the case may be, by the Director. "Dwelling Unit" means each residential dwelling unit constructed on the Property, including the Affordable Rental and/or Agency -approved For Sale Units and the Market Rate Units. "Environmental Indemnity" means the Environmental Indemnity dated and executed by Developer as of the Closing Date, in substantially the form attached hereto as Attachment No. 8. "Hazardous Materials" means any substance, material or waste which is or becomes regulated by the United States government, the State of California, or any local or other governmental authority, including, without limitation, any material, substance or waste which is (i) defined as a "hazardous waste," "acutely hazardous waste," "restricted hazardous waste," or "extremely hazardous waste" under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code; (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code; (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code; (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code; (v) petroleum; (vi) asbestos; (vii) a polychlorinated biphenyl; 3 AFFORDABLE HOUSING AGREEMENT [Final Execution] (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Chapter 20; (ix) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317); (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act (42 U.S.C. Section 6903); (xi) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601); or (xii) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any governmental requirements either requires special handling in its use, transportation, generation, collection, storage, treatment or disposal, or is defined as "hazardous" or is harmful to the environment or capable of posing a risk of injury to public health and safety. "Low and Moderate Income Housing Fund" means the separate fund of the Agency mandated by California Health and Safety Code section 33334.3(a). "Market Rate Unit(s)" means any Dwelling Unit(s) other than the Affordable Rental and/or Agency -approved For Sale Units. "Moderate Income Household" means persons and families whose income does not exceed 120 percent of the area median income, adjusted for family size by the California Department of Housing and Community Development ("HCD") in accordance with adjustment factors adopted and amended from time to time by the United States Department of Housing and Urban Development ("HUD") pursuant to Section 8 of the United States Housing Act of 1937. "Notice of Affordability Covenants" means the Notice of Affordability Covenants on transfer of Property attached hereto as Attachment No. 6A and incorporated herein by this reference. "Pedestrian Crossing and Covenant Agreement" means the Pedestrian Crossing and Covenant Agreement attached hereto as Attachment No. 6D and incorporated herein by this reference. "Permitted Mortgage" means the conveyance of a security interest in'the Property to one or more Permitted Mortgagees to secure the Construction Financing, or any conveyance of a security interest in the Property for permanent financing, or the conveyance of title to a Permitted Mortgagee or its assignee in connection with a foreclosure or a deed in lieu of foreclosure of such loan. "Permitted Mortgagee" means the holder of a Permitted Mortgage. "Permitted Transfer" means any of the following: (i) a Permitted Mortgage; (ii) a change in the ownership, management, or control of Developer, provided that one or more of Developer's principal owners as of the Effective Date, John Miller, Lindsay Parton, and Eric Satin (collectively, the "Principals") individually or collectively, directly or indirectly through his or their ownership interest(s) in another entity, has(have) power and control over 4 AFFORDABLE HOUSING AGREEMENT [Final Execution] management and development of the Project; (iii) a Transfer of this Agreement and all of Developer's interests in the Property to an entity in which one or more of the Principals, individually or collectively, directly or indirectly through his or their ownership interest(s), has(have) power and control over management and development of the Project; (iv) conveyance or dedication of portions of the Property to the City or other appropriate governmental agency or the granting of easements or permits to utility companies or otherwise to facilitate development and operation of the Project; (v) a Transfer resulting from the death or mental or physical incapacity of any individual directly or indirectly owning a beneficial interest or participating in the management of Developer, including without limitation any of the Principals; (vi) without limiting any of the foregoing Transfer events under (i) through (iii), a Transfer of stock in a publicly held corporation and a Transfer of the beneficial interest in any publicly held partnership -or real estate investment trust; and-(vii)-a Transfer in. -trust for_the.benefit. of a..spouse, children, or other family member. The documentation evidencing any such Permitted Transfer shall be subject to the reasonable approval of the Director or designee in accordance with the standards set forth in the respective provisions of this Agreement. "Permitted Transferee" means the transferee of a Permitted Transfer. "Person" means and includes a natural person or a partnership, limited partnership, trust, estate, association, corporation, limited liability company or other entity, domestic or foreign. "Project" means the construction of 467 Dwelling Units, of which 43 shall be Affordable Rental Units and/or Agency -approved For Sale Units for rental and/or sale to and occupancy by Moderate Income Households and 28 shall be restricted for rental and/or sale to and occupancy by Very Low Income Households, in accordance with this Agreement. "Project Budget" means the Project Budget attached hereto as Attachment No. 4. "Project Costs" means all costs incurred for development of the Project. The estimated Project Costs are identified in the Project Budget. "Property" means that certain real property upon which the Project is to be located, as more particularly described in the Legal Description attached hereto as Attachment No. 1. "Release of Construction Covenants" means the certificate described in Section 3.16 of this Agreement, in substantially the form attached hereto as Attachment No. 10, and incorporated herein by this reference. "Restricted Unit" means an Affordable Rental or Agency -approved For Sale Unit. "Right of First Refusal" means that agreement attached hereto as Attachment No. 6C and incorporated herein by this reference. "Schedule of Feasibility Gap Payments" means the Schedule of Feasibility Gap Payments attached hereto as Attachment No. 7, and incorporated herein by this reference. 5 AFFORDABLE HOUSING AGREEMENT [Final Execution] "Schedule of Performance" means the Schedule of Performance attached hereto as Attachment No. 2, and incorporated herein by this reference. "Scope of Development" means the Scope of Development attached hereto as Attachment No. 3, and incorporated herein by this reference. "Transfer" means any assignment, sale, lease, conveyance or other transfer of the Property or any portion thereof or interest therein, by any means or method. "Very Low Income Households" means those persons and families whose incomes do not exceed the qualifying limits for very low income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. 1.5 Parties to the Agreement. 1.5.1 The Agency The Agency is a public body, corporate and politic, exercising governmental functions and powers. The address of the Agency for purposes of receiving notices pursuant to this Agreement is: City of Huntington Beach Redevelopment Agency 2000 Main Street Huntington Beach, California 92648 Attention: Stanley Smalewitz, Economic Development Director Phone: (714) 526-5582 Fax: (714) 375-5087 "Agency" as used in this Agreement includes the City of Huntington Beach Redevelopment Agency, and any assignee of or successor to its rights, powers and responsibilities. 1.5.2 Developer Developer is a Delaware limited liability company. The address of Developer for purposes of receiving notices pursuant to this Agreement is: BTDJM Phase II Associates, LLC 922 Laguna Street, Santa Barbara, CA 93101 Attention: Lindsay Parton, President, DJM Development Partners, Inc. Phone: (805) 962-4300 Fax: (805) 962-4343 DJM Capital Partners, Inc. 60 South Market Street, Suite 1120 6 AFFORDABLE HOUSING AGREEMENT [Final Execution] with copies to: San Jose, CA 95113 Attention: Eric Sahn, Associate Partner Rutan & Tucker, LLP 611 Anton Boulevard, 14th floor Costa Mesa, CA 92626 Attention: Jeffrey M. Oderman Phone: (714) 641-3441 Fax: (714) 546-9035 "Developer." as used in this Agreement includes Developer and any assignee of or successor to its rights, powers and responsibilities under this Agreement, provided such assignees or successors obtained their interest pursuant to a Permitted Transfer or have been approved by the Agency in accordance with the provisions of this Agreement. 1.6 Assignments and Transfers 1.6.1 Developer represents and agrees that its undertakings pursuant to this Agreement are for the purpose of redevelopment of the Property and not for speculation in land holding. Developer further recognizes that the qualifications and identity of Developer are of particular concern to Agency, in light of the following: (1) the importance of the redevelopment of the Property to the general welfare of the community; and (2) the public assistance that has been made available by law and by the government for the purpose of making such redevelopment possible; and (3) the fact that a change in management or control of Developer or any other act or transaction involving or resulting in a significant change in management or control of Developer, is for practical purposes a Transfer or disposition of the property then owned by Developer. Developer further recognizes that it is because of its qualifications and identity that Agency is entering into the Agreement with Developer. Therefore, no voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. 1.6.2 Prior to the Release of Construction Covenants for the Project, and except as to Permitted Transfers, Developer shall not Transfer all or any part of this Agreement, or any interest herein, without the prior written approval of the Director, and no transferee excepting pursuant to a Permitted Transfer shall acquire any rights or powers under this Agreement. Developer shall deliver written notice to the Director requesting approval of any Transfer requiring Agency approval hereunder. In addition, Developer shall deliver to the Director such information as may be reasonably requested by the Director with regard to the proposed transferee to enable the Director to evaluate whether or not to approve the requested Transfer. Any request by the Director for additional information shall be delivered to Developer within fifteen (15) business days after the Director's receipt of Developer's initial request; otherwise, Developer's request for approval of a Transfer shall be deemed complete. Agency's approval of 7 AFFORDABLE HOUSING AGREEMENT [Final Execution] a requested Transfer shall not be unreasonably withheld or conditioned. Any disapproval shall be in writing, shall state the reasons therefor, and shall be delivered to Developer within fifteen (15) business days from the date that Developer's request for approval of the Transfer is determined by the Director to be complete or is deemed complete in accordance with the foregoing. In the event that Agency fails to disapprove Developer's request within said time, the request shall be conclusively deemed to be approved. In considering whether Agency will approve a request for a Transfer requiring Agency approval hereunder, the Director may consider factors such as (i) the financial strength and capability of the proposed transferee to perform Developer's obligations hereunder; (ii) the proposed transferee's experience and expertise in the planning, financing, and development of similar projects; and (iii) any other criteria reasonably related to transferee's ability and fitness to comply with this Agreement and associated obligations. 1.6.3 All Transfers, including Permitted Transfers to a different person or entity (but not Permitted Transfers where there is no change in the Developer entity), shall be evidenced by the Developer's, the assignee's, and Agency's execution of an Assignment and Assumption Agreement, substantially in the form attached to this Agreement as Attachment No. 9. 1.6.4 Developer represents and agrees for itself and any successor in interest that prior to the Release of Construction Covenants for the Project, unless the prior written approval of the Agency is obtained, there shall be no significant change in the ownership of the Developer or with respect to the identity of the parties in control of the Developer, by any method or means, except Permitted Transfers. Permitted Transfers shall be subject to the Director's review of documentation evidencing the Permitted Transfer. 1.6.5 Prior to the Release of Construction Covenants for the Project, Developer shall promptly notify the Agency of any and all changes whatsoever in the identity of the parties in control of Developer, or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. Except for Permitted Transfers, this Agreement may be terminated by the Agency if there is any significant change (voluntary or involuntary) in membership, management or control, of Developer, or the persons in control of Developer prior to the Release of Construction Covenants for the Project without the Director's prior written approval. For purposes of this Section 1.6, a significant change means any change in the identity of the Person or entity having ownership or control of Developer and/or the 'activities and construction of the Project contemplated by this Agreement. 1.6.6 Developer agrees to reimburse Agency for Agency's reasonable costs and attorneys' fees incurred in connection with the processing and documentation of any Transfer, change of ownership or hypothecation of this Agreement or Developer's interest in and to the Property, or any part thereof, which requires Director's approval hereunder. 1.6.7 The acceptance by Agency of any payment due hereunder from any other person shall not be deemed to be a waiver by Agency of any provision of this Agreement or to be consent to any Transfer. Consent by Director to one or more Transfers of this Agreement shall 8 AFFORDABLE HOUSING AGREEMENT [Final Execution] not operate as a waiver or estoppel to the future enforcement by Agency of its rights pursuant to the provisions of this Agreement. 1.6.8 If, except as provided in this Section 1.6, there is an assignment of this Agreement, or change in the management or control of Developer which the Director does not approve, the Agency may take such action as the Agency may deem appropriate to ensure that the purposes of this Agreement will be carried out, including, without limiting the generality of the foregoing, terminating this Agreement. 1.6.9 The restrictions of this Section 1.6 shall terminate upon the Release of Construction Covenants for the Project. Thereafter, any restrictions on Transfers shall be as set forth -in -the Agreement Containing Covenants. 1.6.10 From and after the effective date of a Transfer, the transferor shall be released from all obligations and shall release any rights it may have from the Agency under this Agreement if both the following conditions are satisfied ("Transfer Conditions"): (i) the Transfer is either a Permitted Transfer or the Transfer has been approved by Agency in accordance with this Agreement; and (ii) .the transferor and transferee have executed and delivered to Agency the Assignment and Assumption Agreement referred to in Section 1.6.c. Otherwise, no sale, transfer, conveyance or assignment of this Agreement or the Property (or any portion thereof), or approval by the Director of any such sale, transfer, conveyance or assignment, shall be deemed to relieve the original nor any successor Developer or any other party from any obligations under this Agreement unless the Director provides a specific written agreement of release. ARTICLE 2. FINANCING 2.1 Project Budget The estimated Project Costs are set forth in the Project Budget. 2.2 Reimbursement 2.2.1 Reimbursement Amount In consideration for Developer's development of the Restricted Units, the Agency agrees to reimburse Developer for a portion of the Project Costs attributable to the Restricted Units (the "Reimbursement"), in accordance with and subject to the terms and conditions set forth in the Schedule of Feasibility Gap Payments. The Reimbursement shall be made solely from the Agency's Low and Moderate Income Housing Fund, as more specifically provided in the Schedule of Feasibility Gap Payments. 9 AFFORDABLE HOUSING AGREEMENT [Final Execution] 2.2.2 Escrow No later than the applicable date established in the Schedule of Performance, Agency and Developer agree to cooperate in opening an escrow in the County of Orange with Stewart Title Insurance Company or such other escrow company, escrow department of a bank, or escrow department of a title insurance company first approved by Agency and Developer (the "Escrow Agent") relating to Developer's Construction Financing and the items referred to in Section 2.2.3 of this Agreement. This Section 2.2.2 and Sections 2.2.3 and 2.2.4 of this Agreement shall constitute the joint escrow instructions of Agency and Developer with respect to the recording of the Agreement Containing Covenants and the Notice of Affordability Restrictions, and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the escrow. Agency and Developer agree to execute and deliver such additional and supplemental escrow instructions and documents consistent with this Agreement as may be reasonably required by the Escrow Agent or as needed to implement the provisions of Sections 2.2.2-2.2.4 of this Agreement; provided, that unless the parties expressly agree to amend this Agreement this Agreement shall prevail over any inconsistencies in such other additional and supplemental escrow instructions and documents. The Escrow Agent hereby is empowered to act under such instructions, and upon indicating its acceptance thereof in writing, delivered to Agency and to Developer within five (5) days after the opening of the. escrow, shall carry out its duties as Escrow Agent hereunder. Upon receipt by the Escrow Agent of all executed and acknowledged documents, the Escrow Agent shall record all documents in accordance with Section 2.2.4 of this Agreement. Developer shall pay in escrow to the Escrow Agent the following fees, charges, and costs promptly after the Escrow Agent has notified Developer of the amount of such fees, charges, and costs, but not earlier than one (1) day prior to the Closing Date: Escrow fee; 2. Recording fees; and 3. Notary fees; The Escrow Agent is authorized to: 1. Pay and charge Developer for any fees, charges and costs payable under this Section 2.2.2. Before such payments are made, the Escrow Agent shall notify Developer of the fees, charges and costs; 2. Deliver documents to the parties entitled thereto when the conditions of the escrow have been fulfilled by Agency and Developer; and 10 AFFORDABLE HOUSING AGREEMENT [Final Execution] 3. Record any instruments delivered through the escrow if necessary or proper to vest the applicable interests in Developer and Agency in accordance with the terms and provisions of this Agreement. If the escrow is not in condition to close on or before the scheduled Closing Date, either party who then shall have fully performed the acts to be performed before the Closing Date may, in writing, demand the return of its money, papers or documents. No demand for return shall be recognized until ten (10) business days after the Escrow Agent shall have mailed copies of such demand to the other party 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 ten- (10) business day period. If any objections are raised within the ten- (10) business day period, the Escrow Agent is authorized to hold the money, paper- and- documents-untilinstructed. by- mutual agreement of the parties or, upon failure thereof, by a court of competent jurisdiction. Notwithstanding the foregoing, the termination rights of Agency and Developer and other rights and remedies on default are governed by Article 5 of this Agreement, and no demand for such return shall affect such rights or remedies. If no such demands are made, the escrow shall be closed as soon as possible. The Escrow Agent shall not be obligated to return any such money, papers or documents except upon the written instructions of both Agency and Developer affected thereby, or until the party entitled thereto has been determined by a final decision of a court of competent jurisdiction. Any amendments to these escrow instructions shall be in writing and signed by both Agency and Developer. At the time of any amendment the Escrow Agent shall agree to carry out its duties as escrow agent under such amendment. All communications from the Escrow Agent to Agency or Developer shall be directed to the addresses and in the manner established in Section 6.1 of this Agreement for notices, demands and communications between Agency and Developer. The liability of the Escrow Agent under this Agreement is limited to performance of the obligations imposed upon it under this Section 2.2.2 and Sections 2.2.3 and 2.2.4 of this Agreement. 2.2.3 Conditions Precedent to Closing The following are conditions precedent to Closing the Escrow provided for in Section 2.2.2. Subject to the notice and cure provisions of Article 5 and the force majeure provisions of Section 6.4 of this Agreement, the Agency at its option may terminate this Agreement pursuant to Section 5.9 unless all of the conditions precedent set forth below are satisfied by the Developer prior to the Closing Date or any unsatisfied conditions are waived in writing by the Director: 11 AFFORDABLE HOUSING AGREEMENT [Final Execution] 1. The Developer (including, if applicable, a Permitted Transferee or other transferee approved by the Agency) is the fee simple owner of the Property. 2. The Property is free and clear of all monetary liens, encumbrances, covenants, restrictions, leases, taxes and other defects, as reasonably necessary to ensure the first priority of recordation in title of the Agreement Containing Covenants and the Notice of Affordability Covenants. 3. Developer is prepared to close its Construction Financing. 4. Developer has executed the Environmental Indemnity and delivered the Environmental Indemnity to Agency or Developer is prepared to do so through the Escrow. 5. Developer has executed and acknowledged the Agreement Containing Covenants and the Notice of Affordability Covenants and delivered the same to Agency or Developer is prepared to do so through the Escrow. 6. Developer has submitted to Agency the proof of insurance required by Section 3.6 of this Agreement. 7. City has issued all approvals and permits required for Developer to develop the Project on the Property in accordance with the terms of this Agreement and the Scope of Development. S. Developer's representations and warranties set forth in Section 2.7 are true and correct in all material respects as of the Closing Date. Agreement. 9. Developer is not in default of any of its obligations set forth in this 2.2.4 Recordation of Documents at Closing; Lots Against Which Affordable Housing Covenants are to be Recorded; Partial Releases After Initial Closing Agency and Developer, respectively, agree to perform all acts necessary to achieve recordation and delivery of documents in sufficient time for escrow to be closed in accordance with the foregoing provisions. If prior to the Closing a final tract or condominium map or maps has(have) been recorded such that the Agreement Containing Covenants and the Notice of Affordability Covenants can be recorded against the Restricted Units only, then such documents shall be recorded only against the lots comprising the Restricted Units; otherwise, such documents shall be recorded against the lots of which the Restricted Units are a part. If the Agreement Containing Covenants and the Notice of Affordability Covenants are initially recorded against a lot or lots comprising more than the Restricted Units and a final tract or condominium map or maps, is(are) recorded at a later date creating the Restricted Units as separate legal lots, Agency shall cooperate with Developer, at no expense to Agency, in causing 12 AFFORDABLE HOUSING AGREEMENT [Final Execution] a partial release in a form reasonably satisfactory to Agency's counsel to be executed and acknowledged and recorded against all of the lots excepting the lots comprising the Restricted Units. a. Subject to subsection c below, the following documents shall be recorded at Closing in the following order ("Recorded Documents"): ORDER OF RECORDATION DOCUMENT NAME I Agreement Containing Covenants 2 Notice of Affordability Covenants 3 Permitted Mortgage instruments (Construction Lender) —] b. All documents to be recorded shall be recorded in the Office of the Orange County Recorder ("County Recorder"). C. Agency may, in its reasonable discretion, subordinate the Agreement Containing Covenants and Notice of Affordability Covenants to any Permitted Mortgage as authorized by California Health & Safety Code Section 33334.14; provided, however, that in the event of subordination, Agency shall have no obligation to make any Reimbursement payments under the Schedule of Feasibility Gap Payments to the extent that such subordinated covenants are rendered ineffective by any foreclosure, deed in lieu of foreclosure, or any other remedy implemented by a Permitted Mortgage, upon default of the Permitted Mortgage. The Agency and Developer intend that the relationship between the Agency and Developer shall be solely that of creditor and debtor. Nothing contained in this Agreement or in any other document or instrument made in connection with this Agreement shall be deemed or construed to create a partnership, tenancy in common, joint tenancy, joint venture or co - ownership by or between the Agency and the Developer. The Agency shall not be in any way responsible or liable for the debts, losses, obligations or duties of Developer with respect to the Property, or any portion thereof, or otherwise. 2.3 Representations and Warranties 2.3.1 Representations and Warranties of Developer As an inducement to the Agency to enter into this Agreement and to make the Reimbursement, Developer hereby represents and warrants to the Agency, which representations and warranties are true and correct as of the Effective Date of this Agreement and which shall survive the Release of Construction Covenants: a. 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; 13 AFFORDABLE HOUSING AGREEMENT [Final Execution] b. this Agreement and all documents required hereby to be executed by Developer are, and shall be, valid, legally binding obligations of and enforceable against Developer in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally; C. 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 or affecting the Property or Project; d. 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, affecting the Property or in which Developer is, or to the best of Developer's knowledge will be, a party by reason of Developer's ownership of the Property or Project, 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, or workers' compensation, personal injuries or property damages alleged to have occurred at the Property or Project or by reason of the condition or use of the Property or Project; e. 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; f. to the best of Developer's knowledge, there are no violations of any governmental regulations relating to the Property or Project; g. as of the Closing Date, Developer will be the legal fee simple titleholder of the Property and will then have and thereafter continue to have good, marketable and insurable title to the Property; h. to the Developer's knowledge, all reports, documents, instruments, information and forms of evidence delivered to the Agency concerning or required by this Agreement are accurate, correct and sufficiently complete to give the Agency true and accurate knowledge of their subject matter, and do not contain any misrepresentation or omission; and i. 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. 14 AFFORDABLE HOUSING AGREEMENT [Final Execution] Developer's representations and warranties made in this Section 2.3.1 shall be continuing and shall be true and correct as of the Closing Date with the same force and effect as if remade by Developer in a separate certificate at that time. The truth and accuracy of Developer's representations and warranties made herein shall constitute a condition for the benefit of the Agency to the disbursement of the Reimbursement. 2.3.2 Representations and Warranties of Agency As an inducement to the Developer to enter into this Agreement and to plan, finance, develop, and operate the Project, Agency hereby represents and warrants to Developer, which representations and warranties are true and correct as of the Effective Date of this Agreement and which -shall survive the Release of Construction Covenants: a. 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; b. 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 bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally; C. 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 Agency is a party; d. 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, affecting the Property or in which Agency is, or to the best of Agency's knowledge will be, a party by reason of Agency's entering into or performing its obligations set forth in this Agreement or concerning the Project, including, but not limited to, judicial, municipal, or administrative proceedings in eminent domain or alleged building code, health and safety, or zoning violations; e. 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; and f. 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. 15 AFFORDABLE HOUSING AGREEMENT [Final Execution] Agency's representations and warranties made in this Section 2.3.2 shall be continuing and shall be true and correct as of the Closing Date with the same force and effect as if remade by Agency in a separate certificate at that time. 2.3.3 Estoppel Certificates Agency shall provide estoppel certificates from time to time, upon the request of Developer or the holder of a security interest in the Property (subject to any restrictions on Transfer herein). The estoppel certificates shall address any inquiries regarding the status of any provisions in this Agreement that may have expired or terminated. ARTICLE 3. DEVELOPMENT 3.1 Parcel Map Developer shall, at its sole expense, ensure that the Property is in compliance with the Subdivision Map Act (Government Code §66410 et seq.). 3.2 Scope of Development Developer shall develop the Project on the Property in accordance with the Scope of Development and within the time period set forth in the Schedule of Performance. 3.3 Entitlements It is the responsibility of Developer, without cost to Agency, to ensure that zoning of the Property and all applicable City land use requirements will be such as to permit development of the Property and construction of the Project and the use, operation and maintenance of such Project in accordance with the provisions of this Agreement. Nothing contained herein shall be deemed to entitle Developer to any City permit or other City approval necessary for the development of the Property, or waive any applicable City requirements relating thereto. This Agreement does not (a) grant any land use entitlement to Developer, (b) supersede, nullify or amend any condition which may be imposed by the City in connection with approval of the development described herein, (c) guarantee to Developer or any other party any profits from the development of the Property, or (d) amend any City laws, codes or rules. This Agreement is not a development agreement as provided in Government Code Section 65864 et seq. Without cost to Agency, Agency shall provide appropriate technical assistance to and otherwise cooperate with Developer in connection with Developer's obtaining all necessary entitlements, permits and approvals for the construction of the Project. 3.4 Cost of Construction; Developer Contribution to Cost of Completing Pedestrian Crossing Between Property and Levitz Property Developer shall comply with all terms and conditions of the Pedestrian Crossing Agreement. 16 AFFORDABLE HOUSING AGREEMENT [Final Execution] All Project Costs, including any and all public improvements and any other permit conditions required by the City, shall be the responsibility of and paid by the Developer. 3.5 Development Schedule Within the times established in the Schedule of Performance, Developer shall begin and thereafter diligently complete the development of the Project as contemplated herein, and the development of the Project shall conform to the terms and conditions of that certain Development Agreement concerning the Project entered into between the Developer and the City. 3.6 Indemnification and Insurance 3.6.1 As a material part of the consideration for this Agreement, and to the maximum extent permitted by law, Developer shall indemnify, protect, defend and hold harmless the Agency and City, and their respective officers, employees, agents, and representatives (the "Indemnitees"), with counsel reasonably acceptable to Agency and/or City, from and against any and all loss, liability, damage, claim, cost and expense (including reasonable attorneys' fees, court and litigation costs and fees of expert witnesses) resulting or arising from or in any way connected to this Agreement including but not limited to the following, provided, however, Developer shall not be responsible for (and such indemnity shall not apply to) any loss, liability, damage, claim, cost or expense arising to the extent of the gross negligence or willful misconduct of the Indemnitees or material breach of this Agreement by any of the Indemnitees: 1. Developer's pre -development, construction, development, marketing, sale or use of the Property in any way; 2. Any plans or designs for the Project prepared by or on behalf of Developer, including without limitation any errors or omissions with respect to such plans or designs; 3. Any loss or damage to Agency or City resulting from any inaccuracy in or breach of any representation or warranty of Developer, or resulting from any breach or default by Developer under this Agreement; and 4. Any loss or damage to Agency and/or City described in Section 3.6(c) of this Agreement. 5. Any loss or damage to Agency and/or City arising from any claimed or actual construction defects. 3.6.2. The foregoing indemnities shall survive Completion of the Project. 3.6.3. Prior to the Closing, Developer shall furnish or cause to be furnished to the City Risk Manager evidence of the following policies of insurance, naming Developer as 17 AFFORDABLE HOUSING AGREEMENT [Final Execution] insured and the Agency and City as additional insureds. The insurance shall be kept in force until the date Agency issues its Release of Construction Covenants for the Project or such earlier date that Agency is required to issue its Release of Construction Covenants for the Project: 1. Builder's Risk/Fire Policies: Developer shall maintain or cause to be maintained a policy or policies of insurance against loss or damage to the Property or the improvements and all property of an insurable nature located upon the Property, resulting from fire, lightning, vandalism, malicious mischief, riot and civil commotion, and such other perils ordinarily included in extended coverage fire insurance policies. Such insurance shall be maintained in an amount not less than one hundred percent (100%) of the full insurable value of the improvements, as defined herein. 2. Intentionally Omitted. 3. Liability Insurance: Developer shall maintain or cause to be maintained public liability insurance, to protect against loss from liability imposed by law for damages on account of personal injury, including death therefrom, suffered or alleged to be suffered by any person or persons whomsoever on or about the Property and the business of Developer on the Property, or in connection with the operation thereof, resulting directly or indirectly from any acts or activities of Developer or its lessees, or any person acting for Developer, or under its control or direction, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on or about the Property, or in connection with the operation thereof, caused directly or indirectly by or from acts or activities of Developer or its tenants, or any person acting for Developer, or under its control or direction. Such property damage and personal injury insurance shall also provide for and protect the Agency against incurring any legal cost in defending claims for alleged loss. Such personal injury and property damage insurance shall be in a general aggregate amount of not less than Two Million Dollars ($2,000,000) combined single limits and ' shall be written on a per occurrence basis. It is the mutual intent of the parties that the levels of insurance coverage described herein shall be and remain comparable to the level of insurance coverage that is customary with comparable operations in Orange County. From time to time, either parry may provide notice to the other party that the level of insurance being maintained by Developer is no longer comparable to the level of insurance coverage that is customary with comparable operations in Orange County, and request that the minimum limit hereinabove designated shall be changed (either increased or decreased) accordingly. The party receiving such request shall not unreasonably withhold its consent to such change. Developer agrees that provisions of this paragraph as to maintenance of insurance shall not be construed as limiting in any way the extent to which Developer may be held responsible for the indemnification of Agency or the payment of damages to persons or property resulting from Developer's activities, activities of its tenants or the activities of any other person or persons for which Developer is otherwise responsible. 4. Automobile Insurance: To the extent applicable, at all times prior to Completion, Developer shall maintain or cause to be maintained automobile insurance, maintained in full force and effect in an amount of not less than $1,000,000 million per accident. 18 AFFORDABLE HOUSING AGREEMENT [Final Execution] 5. Workers' Compensation Insurance: Developer shall maintain or cause to be maintained workers' compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the workers' compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers' compensation insurance shall cover all persons employed by Developer in connection with the Property and shall cover liability within statutory limits for compensation under any such act aforesaid, based upon death or bodily injury claims made by, for or on behalf of any person incurring or suffering injury or death in connection with the Property or the operation thereof by Developer. Notwithstanding the foregoing, Developer may, in compliance with the laws of the State of California and in lieu of maintaining such insurance, self -insure for workers' compensation in which event shall deliver to Agency evidence that such self-insurance has been approved by the appropriate State authorities. 6. All policies hereunder shall not be subject to cancellation, reduction in coverage, or non renewal except after notice in writing shall have been sent by registered mail addressed to Agency, to the extent practicable within 30 days but in any event prior to the effective date thereof. All policies name the Agency, the City and Developer as insureds, additional insureds, and/or loss payable parties as their interests may appear. 7. , The term "full insurable value" as used in this Section 3.6.3 means the actual replacement cost (excluding the cost of excavation, foundation and footings below the lowest floor and without deduction for depreciation) of the improvements on the Property immediately before such casualty or other loss, including the cost of construction, architectural and engineering fees, and inspection and supervision. 8. All insurance provided under this Section 3.6.3 shall be for the benefit of Developer, Agency and City. Developer agrees to timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with all insurance requirements necessary for the maintenance of such insurance. Developer agrees to submit policies of all insurance required by this Section 3.6.3, or certificates evidencing the existence thereof, to Agency within 10 days prior to the Closing, indicating full coverage of the contractual liability imposed hereby. Within thirty (30) days, if practicable, but in any event prior to expiration of any such policy, copies of renewal policies, or certificates evidencing the existence thereof, shall be submitted to Agency. All insurance herein provided for under this Section 3.6.3 shall be effected under policies issued by insurers of recognized responsibility, licensed or permitted to do business in the State of California and reasonably approved by Agency. 9. If Developer fails or refuses to procure or maintain insurance as required by this Agreement, Agency and City shall each have the right, at their election, and upon five (5) days prior notice to Developer, to procure and maintain such insurance. The premiums paid by the City or Agency shall be treated as a loan, due from Developer, to be paid on the first day of the month following 'the date on which the premiums were paid. The City r Agency 19 AFFORDABLE HOUSING AGREEMENT [Final Execution] shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s). 10. Coverage provided hereunder by Developer shall be primary insurance and not contributing with any insurance maintained by the City and/or Agency, and the policy shall contain such an endorsement. The insurance policy or the certificate of insurance shall contain a waiver of subrogation for the benefit of the City and/or Agency. 11. Developer shall also furnish or cause to be furnished to the Director evidence satisfactory to the Director that any contractor, with whom Developer has contracted for the performance of the development of the Project, or any of them, carries the insurance required by this Section. 3.7 Approval of Plans 3.7.1 The Developer shall obtain the City's approval all plans, drawings and related documents (if any) for the development of the Project, including any changes proposed to such documents or drawings, and all necessary City entitlements required for the development of the Project, all in accordance with applicable City regulations, rules, resolutions and ordinances. 3.7.2 If Developer desires to make any material change in the plans, drawings or related documents after their approval by the City, Developer shall submit the proposed change to the City for approval by the City. 3.7.3 If any revisions or corrections of plans are not acceptable to other government agency, including the City, having jurisdiction over the development of the Property, the Agency shall reasonably cooperate with the Developer to obtain a waiver of such requirements or to develop a mutually acceptable alternative; provided, however, that Developer understands and agrees that the Agency has not guaranteed approvals required for the Project by the City or any other governmental agency. 3.8 Permits Before commencement of construction, Developer shall obtain or cause to be obtained any and all permits which may be required by the City or any other governmental agencies affected by such construction, development, or work. The Agency agrees to reasonably cooperate with Developer as appropriate to assist Developer to obtain such permits. 3.9 Rights of Access Representatives of the Agency shall have the reasonable right of access to the Property at normal hours during the period of development for the purposes of this Agreement, including but not limited to the inspection of the work being performed. 20 AFFORDABLE HOUSING AGREEMENT [Final Execution] 3.10 Local, State and Federal Laws Developer shall carry out the development of the Project on the Property, including, without limitation, any and all public works, (as defined by applicable law), if any, in conformity with all applicable local, state and federal laws, including, without limitation, all applicable federal and state labor laws (including, without limitation, any applicable requirement to pay state prevailing wages). Developer hereby agrees that Developer shall have the obligation to provide any and all disclosures, representations, statements, rebidding, and/or identifications which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer hereby agrees that Developer shall have the obligation to provide and maintain any and all bonds to secure the payment of contractors_ (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer shall indemnify, protect, defend and hold harmless the Agency, City and their respective officers, employees, contractors and agents, with counsel reasonably acceptable to Agency, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs" (including labor costs, penalties, reasonable attorneys fees, court and litigation costs, -and fees of expert witnesses) which, in connection with the development and/or construction (as defined by applicable law) of the Project, including, without limitation, any and all public works (if any) (as defined by applicable law), results or arises in any way from any of the following: (1) the noncompliance by Developer of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (2) the implementation of Chapter 804, Statutes of 2003; (3) the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (4) failure by Developer to provide any required disclosure representation, statement, rebidding and/or identification which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; and/or (5) failure by Developer to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer hereby expressly acknowledges and agrees that neither City nor Agency has ever previously affirmatively represented to Developer or its contractor(s) for the Project in writing or otherwise, that the work to be covered by the bid or contract is not a "public work," as defined in Section 1720 of the Labor Code. It is agreed by the parties that, in connection with the development and construction (as defined by applicable law) of the Project, including, without limitation, any public work (as defined by applicable law), if any, Developer shall bear all risks of payment or non-payment of state prevailing wages and/or the implementation of Chapter 804, Statutes of 2003 and/or Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs" as used in this Section shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing indemnity shall survive 21 AFFORDABLE HOUSING AGREEMENT [Final Execution] termination of this Agreement and shall continue after recordation of the Release of Construction Covenants for the Project. Notwithstanding the foregoing, nothing in this Agreement is intended to constitute an assertion by Agency or an acknowledgment or admission by Developer that the Project is or is not a "public work." 3.11 Nondiscrimination The Developer, for itself, its successors and assigns, agrees that in regards to the development provided for in this Agreement, it will not discriminate against any employee or applicant for employment because of race,. religion, creed, color, national origin, ancestry, handicap, sex, sexual orientation, marital status, age or any other protected classification. 3.12 Disclaimer by Agency Except as expressly provided in this Agreement, the Agency shall not undertake or assume or have any responsibility or duty to Developer or to any third party to review, inspect, supervise, pass judgment upon or inform Developer or any third party of any matter in connection with the development of the Property, whether regarding the quality, adequacy or suitability of the plans, any labor, service, equipment or material furnished to the Property, any person furnishing the same, or otherwise. Developer and all third parties shall rely upon its or their own judgment regarding such matters, and any review, inspection, supervision, exercise of judgment or information supplied to Developer or to any third party by the Agency in connection with such matter is for the public purpose of improving affordable housing in the City and neither Developer (except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon. 3.13 Covenants of Developer Developer covenants for itself and its successors and assigns as follows: 3.13.1 Equal Opportunity Employment Practices a. Developer certifies and represents that, during the performance of this Agreement, Developer and each of its contractors and subcontractors will adhere to equal employment practices to assure that applicants and employees are treated equally and are not discriminated against because of their race, religion, creed, color, national origin, ancestry, handicap, sex, marital status, or age. Developer further certifies that it shall not maintain any segregated facilities. b. Developer agrees that it shall, in all solicitations or advertisements for applicants for employment placed by or on behalf of Developer, state that it is an "Equal Opportunity — Affirmative Action Employer" or that all qualified applicants will receive consideration for 22 AFFORDABLE HOUSING AGREEMENT [Final Execution] employment without regard to their race, religion, creed, color, national origin, ancestry, handicap, sex, marital status, or age. C. Developer agrees that it shall, if requested to do so by Agency, certify that it has not, in the performance of this Agreement, discriminated against applicants or employees because of their membership in a protected class. d. Developer agrees to provide the Agency with access to, and, if requested to do so by the Agency, provide copies of all of its records pertaining to or relating to its employment practices, to the extent such records are not confidential or privileged under state or federal law. e. Nothing contained in this Agreement shall be construed in any manner so as to require or permit any act which is prohibited by law. f. Developer shall include the provisions of this Section 3.13.1 in all of its contracts relating to development of the Project. 3.13.2 Compliance with Environmental Laws Developer shall comply with all environmental laws and environmental permits applicable to the operations of Developer and the ownership or use of the Property, and shall immediately pay or cause to be paid all costs and expenses incurred by reason of such compliance. Developer shall keep the Property free and clear of any environmental claims or liens imposed pursuant to any environmental law, and shall obtain and renew all environmental permits required for ownership or use of the Property. 3.13.3 Environmental Indemnity a. Developer's Warranty Developer hereby represents and warrants that the development, construction and uses of the Property permitted under this Agreement shall comply with all applicable environmental laws. As part of the development of the Property, Developer shall conduct such tests as Developer may deem necessary or appropriate. Developer shall promptly deliver to the Director the results of all environmental studies conducted on the Property. Developer shall, at its sole cost and expense, remove, remediate and/or abate any Hazardous Materials on the Property, as required by applicable governmental entities and/or requirements, to develop the Property as contemplated herein. b. Environmental Indemnity Effective upon the Closing, Developer agrees to indemnify, defend and hold harmless Agency and City and their respective members, officers, agents, employees, contractors and consultants, in accordance with the Environmental Indemnity. 23 AFFORDABLE HOUSING AGREEMENT [Final Execution] Developer's Release By execution of this Agreement, Developer hereby waives, releases and discharges the Agency, the City, and their respective members, officers, employees, agents, contractors and consultants, from any and all present and future claims, demands, suits, legal and administrative proceedings, and from all liability for damages, losses, costs, liabilities, fees and expenses (including, without limitation, attorneys' fees) arising out of or in any way connected with the Agency's or Developer's use, maintenance, ownership or operation of the Property, any Hazardous Substances on the Property, or the existence of Hazardous Substances contamination in any state on the Property, however the Hazardous Substances came to be placed.there, except that arising out of the negligence or willful misconduct of the Agency or City or any of their employees, officers, agents, contractors or consultants. Developer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the .time of executing the release, which if known by him must have materially affected his settlement with the debtor." To the extent of the release set forth in this Section 3.13.3, Developer hereby waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code. 3.13.4 Encumbrances and Liens Prior to the Release of Construction Covenants for the Project, Developer shall not place or allow to be placed on the Property, or on any portion thereof, any mortgage, trust deed, encumbrance or lien other than Permitted Mortgages; and Developer shall remove, or shall have removed, any levy or attachments made on the Property (or any portion thereof), or shall assure the satisfaction thereof within a reasonable time. Developer shall pay, or cause to be paid, prior to delinquency, all taxes, assessments, charges and levies imposed by any public authority or utility company which are or may become a lien affecting the Property; provided, however that Developer shall not be required to pay and discharge any such tax, assessment, charge or levy so long as the legality thereof shall be promptly and actively contested in good faith and by appropriate proceedings. 3.13.5 Sales and Use Taxes; Point of Sale In connection with construction materials to be used for the Development of the Project, and all related items which are subject to the California sales and use tax, Developer shall report the use of all such construction materials as occurring at the Property, so as to legally establish pursuant to all applicable provisions of the California Revenue and Taxation Code and all other applicable law the point of sale or point of use as the City of Huntington Beach or purposes of the calculation of such sales and use taxes. 24 AFFORDABLE HOUSING AGREEMENT [Final Execution] 3.14 Holder Not Obligated to Construct the Project Permitted Mortgagees shall in no way be obligated by the provisions of this Agreement to complete the Project, or to guarantee the completion of the Project. Nothing in this Agreement shall be deemed or construed to permit or authorize any such holder to devote the Property to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 3.15 Right of the Agency to Satisfy Other Liens on the Property After Developer has had a reasonable time to challenge, cure or satisfy any liens or encumbrances on the Property, or any portion thereof, the Agency shall have the right, without obligation, to satisfy any such liens or encumbrances; provided, however, that nothing in this Agreement shall require Developer to pay or make provision for the payment of any tax, assessment, lien or charge so long as Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Property (or any portion thereof) to forfeiture or sale. 3.16 Release of Construction Covenants Promptly after Completion, the Director shall furnish Developer with a Release of Construction Covenants to cover the release for the Project, upon written request by Developer. The Release of Construction Covenants shall be in recordable form. The Director or designee shall not unreasonably withhold any such Release of Construction Covenants. The Release of Construction Covenants shall be a conclusive determination of satisfactory completion of the construction required by this Agreement upon or with respect to the Project, and the Release of Construction Covenants shall so state. If Agency refuses or fails to furnish a Release of Construction Covenants after written request from Developer, Agency shall, within forty-five (45) days of the written request, provide Developer with a written statement of the reasons Agency refused or failed to furnish the Release of Construction Covenants. The statement shall also contain Agency's opinion of the action Developer must take to obtain a Release of Construction Covenants; provided, however, that the statement need not contain technical information or instructions. Failure by the Agency to provide the written statement shall be deemed as the Agency's approval of the Release of Construction Covenants. If the reason for Agency's refusal to issue a Release of Construction Covenants is confined to Developer's failure to complete specific punch list items which cannot immediately be completed due the short-term unavailability of required materials, Agency shall issue the Release of Construction Covenants upon the delivery of a deposit or the posting of a bond by Developer, first approved in writing by the Agency as to form and substance, in favor of the Agency in an amount representing the fair value of the work not yet completed. If a bond is provided, the bond shall specify a deadline for completion of the outstanding items, which shall be the earliest reasonable date and shall not be more than ninety (90) days after the issuance of the Release of Construction Covenants. 25 AFFORDABLE HOUSING AGREEMENT [Final Execution] The Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of a Permitted Mortgage, or any insurer of a Permitted Mortgage securing money loaned to finance the Project, or any part thereof, or of Developer's performance of any obligation under this Agreement other than completion of the construction to which the Release of Construction Covenants pertains. The Release of Construction Covenants is not notice of completion as referred to in Section 3093 of the California Civil Code. ARTICLE 4. USE OF THE PROPERTY 4.1 Uses 4.1.1 Generally Developer covenants and agrees (for itself, its successors, assigns, and every successor in interest to the Property or any part thereof) that Developer, such successors, and such assigns shall: a. Develop the Property in accordance with the Scope of Development and devote the Property and the Project to the uses specified in this Agreement and the Agreement Containing Covenants; b. Comply with all of Developer's obligations set forth in the Agreement Containing Covenants with respect to the Restricted Units; C. Maintain the Property in accordance with Section 4.3 of this Agreement; d. Not permit the use of the Project or the Property for any purpose other than permitted by this Agreement without the prior written approval of the Agency. 4.1.2 Affordability Restrictions a. Developer covenants and agrees (for itself, its successors, assigns, and every successor in interest to the Property or any part thereof) that, for a period of no less than fifty- five (55) years, beginning from the date of the City's issuance of a certificate of occupancy for the Project ("Covenant Period"), nine percent (9%) of the Dwelling Units shall be rented or sold exclusively to and occupied by qualifying Moderate Income Households ("Qualified Renters" or "Qualified Purchasers") at an Affordable Rent or Affordable Housing Cost and six percent (6%) of the Dwelling Units constructed upon the Property shall be rented or sold exclusively to and occupied by qualifying Very Low Income Households ("Qualified Renters" or "Qualified Purchasers") at an Affordable Rent or Affordable Housing Cost, in accordance with the affordability restrictions set forth in the Agreement Containing Covenants. b. This 4.1.2 shall survive the Completion of the Project. 26 AFFORDABLE HOUSING AGREEMENT [Final Execution] 4.1.3 Monitoring a. The parties acknowledge that this Agreement is subject to the provisions of Section 33418 of the California Health and Safety Code, which provides that: b. An agency shall monitor, on an ongoing basis, any housing affordable to persons and families of low or moderate income developed or otherwise made available pursuant to any provisions of this part. As part of this monitoring, an agency shall require Developers or managers of the housing to submit an annual report to the agency. The annual reports shall include for each Affordable Rental and/or Agency -approved For Sale Unit the rental and/or housing costs and the income and family size of the occupants. The income information required by this section shall be supplied by the tenant in a certified statement of a form provided by the agency. C. To satisfy the requirements of said Section 33418, prior to initial occupancy of any Restricted Unit, and during the period of time the affordability covenants applicable to the Property are in effect, Developer shall enter into a reporting and monitoring agreement with the Agency and shall provide all information on a timely basis that is required by the Agency for such monitoring purposes, and shall pay the Agency monitoring fees established by the Agency to cover the cost to the Agency of such monitoring. The Developer shall comply with all affordability certification of affordability procedures of the Agency, and shall complete or cause the completion of all sample forms provided by the Agency to verify the required affordability on an annual basis. 4.2 Payment of Real Estate Taxes Developer shall pay when due all real estate taxes levied on the Property or any improvements thereon or any interest therein and refrain from appealing, challenging or contesting in any manner the validity or amount of any tax assessment, encumbrance or lien on the Property ("Imposition"); provided, however, that such prohibition shall not apply to an appeal, challenge or contesting of the erroneous initial assessment of the Project in the fiscal year of Completion. 4.3 Maintenance of the Property 4.3.1 Developer shall maintain -the Project and all of the structures and grounds on the Property, in accordance with applicable City requirements. 4.3.2 In the event Developer fails to maintain the exterior of the structures on the Property in accordance with applicable City requirements, the Agency shall have the right to pursue any remedy available to the Agency at law or in equity and shall have the right, but not the obligation, to enter the Property, correct any violation, and hold the Developer responsible for the cost thereof, and such cost, until paid, shall constitute a lien on the Property. 27 AFFORDABLE HOUSING AGREEMENT [Final Execution] 4.3.3 The Agreement Containing Covenants shall contain appropriate provisions implementing this Section 4.3. 4.4 Obligation to Refrain from Discrimination There shall be no discrimination against or segregation of any person, or groups 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 Property or the Project, and Developer itself (for any person claiming under or through it) shall not 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 the Project. 4.5 Form of Nondiscrimination and Nonsegregation Clauses Developer shall refrain from restricting the rental, sale or lease of the Property or the Project, or any portion thereof, on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 4.5.1 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 segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." Notwithstanding the paragraph, with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall also apply to the above paragraph. 4.5.2 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as 28 AFFORDABLE HOUSING AGREEMENT [Final Execution] those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955; and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." Notwithstanding the above paragraph, with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51 A4 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to the above paragraph. "The lessee herein covenants by and for, himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: 4.5.3 In contracts: The foregoing provisions shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under this Agreement. 4.6 Effect and Duration of Covenants The covenants established in this Agreement shall, without regard to technical classification and designation, be binding on Developer and any successor in interest to the Property, or any part thereof, the Project or any part thereof for the benefit and in favor of the Agency, their respective successors and assigns. The Agency shall be the beneficiary of the covenants contained in this Article 4 and the Agreement Containing Covenants (the "Covenants"). Except as otherwise expressly allowed herein, the Covenants shall remain in effect for fifty-five (55) years, in accordance with the Agreement Containing Covenants. The covenants against discrimination (set forth in Sections 4.4 and 4.5) shall remain in perpetuity. ARTICLE 5. DEFAULTS, REMEDIES AND TERMINATION 5.1 Defaults - General 5.1.1 Subject to the extensions of time set forth in Section 6.4, failure or delay by Agency or Developer to perform any term or provision of this Agreement to be performed by such party constitutes a default under this Agreement. The party in default must immediately commence to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. 5.1.2 The complaining party shall give written notice of default to the party in default. Failure or delay in giving such notice shall not constitute a waiver of any default, nor 29 AFFORDABLE HOUSING AGREEMENT [Final Execution] shall it change the time of default. Except as otherwise expressly provided in this Agreement, any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies 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. 5.1.3 If a monetary event of default occurs, prior to exercising any remedies hereunder, the aggrieved party shall give the party in default written notice of such default. The party in default shall have a period of ten (10) business days after such notice is given within which to cure the default. 5.1.4 If a non -monetary event of default occurs, prior to exercising any remedies hereunder, the aggrieved party shall give the party in default notice of such default. If the default is reasonably capable of being cured within thirty (30) days, the party in default shall have such period to effect a cure prior to exercise of remedies by the aggrieved party. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and the party in default (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then the party in default shall have such additional time as is reasonably necessary to cure the default, not to exceed ninety (90) days. 5.1.5 The Agency agrees to accept cures tendered by any Permitted Mortgagee in the Project .within the cure periods provided herein and in the Agreement Containing Covenants or within the time periods provided in Civil Code Section 2924c, whichever is longer. Additionally, in the event the Permitted Mortgagee is precluded from curing a default due to a bankruptcy, injunction, or similar proceeding by or against Developer, the Agency agrees to forbear from completing a foreclosure (judicial or nonjudicial) during the period during which the Permitted Mortgagee is so precluded from acting, not to exceed 90 days, provided such Permitted Mortgagee is otherwise in compliance with the foregoing provisions. In no event shall the Agency be precluded from exercising remedies if its rights become or are about to become materially jeopardized by any failure to cure a default. 5.2 Institution of Legal Actions Subject to the notice and cure provisions of Section 5.1, in addition to any other rights or remedies (and except as otherwise provided in this Agreement), either party may institute legal action to cure, correct or remedy any default, to obtain the specific performance of obligations hereunder to enjoin, abate or prevent any further violation or default, to appoint a receiver to operate the Property, to recover damages for any default, or to obtain any other remedy allowed at law or equity consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Orange, State of California, in any other appropriate court of that county, or in the United States District Court for the Central District of California. 30 AFFORDABLE HOUSING AGREEMENT [Final Execution] 5.3 Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 5.4 Acceptance of Service of Process 5.4.1 In the event that any legal action is commenced by Developer against the Agency, service of process on the Agency shall be made by personal service upon the Director, or in such other manner as may be provided by law. 5.4.2 In the event that any legal action is commenced by the Agency against Developer, service of process on Developer shall be made by personal service upon an officer of the Developer and shall be valid whether made within or without the State of California, or in such manner as may be provided by law. 5.5 Rights and Remedies Are Cumulative Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either parry of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 5.6 Damages If either party defaults with regard to any of the provisions of this Agreement, the non - defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured within the time provided in Section 5.1, and subject to the restriction in Section 5.6.1, the defaulting party shall be liable to the non -defaulting party for any damages caused by such default, and the non -defaulting parry may thereafter (but not before) commence an action for damages against the defaulting party with respect to such default. 5.6.1 Mutual Waiver of Consequential Damages. Agency and Developer each hereby agree that neither shall be liable to the other for any incidental, special, punitive, indirect or consequential damages, of any kind whatsoever. Without limiting the generality of the foregoing, Agency's obligations to Developer shall be limited solely to the payments required to be made by Agency to Developer under the Schedule of Feasibility Gap Payments. 5.7 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 cured within the time provided in Section 5.1, the non -defaulting party, at its 31 AFFORDABLE HOUSING AGREEMENT [Final Execution] option, may thereafter (but not before) commence an action for specific performance of the terms of this Agreement pertaining to such default. 5.8 Termination by Developer In the event that the Agency fails to disburse the Reimbursement as provided herein, then this Agreement and any rights of Agency in this Agreement may be terminated by Developer by giving written notice thereof to the Agency. 5.9 Termination by Agency In the event that any of the following failures of condition, defaults, or breaches of Developer's representations and warranties occur prior to Agency's issuance of its Release of Construction Covenants and such failures, defaults, or breaches, as applicable, are not cured within the time provided in Section 5.1, then this Agreement and any rights of Developer, or any assignee or transferee, may, at the option of the Agency, be terminated and rescinded, and thereafter Developer shall have no further rights against the Agency with respect to the Reimbursement: 5.9.1 Developer fails to satisfy any of the conditions precedent to Closing and/or disbursement of the Reimbursement, in accordance with Section 2.2.3 and the Schedule of Feasibility Gap Payments, as applicable; or 5.9.2 Developer (or any successor in interest) transfers or assigns this Agreement or any rights herein or in the Property, or any portion thereof, or in the Project or any portion thereof, except as permitted by this Agreement; or 5.9.3 Developer or its general contractor does not begin and thereafter diligently proceed with construction of the Project in accordance with the Schedule of Performance; or 5.9.4 Any representation or warranty by Developer to the Agency contained herein proves to be materially false or misleading and Developer does not, after receiving written notice thereof from the Director, initiate and diligently pursue all actions necessary to make such representation or warranty no longer false or misleading; or 5.9.5 Developer neglects, fails or refuses to keep in full force and effect any permit or approval with respect to the development of the Project, any policy or policies of insurance required by this Agreement, or any other undertakings required hereunder. 5.10 Attorney's Fees and Costs If any action or proceeding is brought by either party against the other under this Agreement, whether for interpretation, enforcement or otherwise, each party shall pay for its own costs and expenses, including the fees of its attorney and any expert witnesses in such action or 32 AFFORDABLE HOUSING AGREEMENT (Final Execution] proceeding. This provision shall also apply to any post judgment action by either party, including without limitation efforts to enforce a judgment. ARTICLE 6. GENERAL PROVISIONS 6.1 Notices Formal notices, demands and communications between the Agency and Developer shall be sufficiently given if delivered personally, or dispatched by registered or certified mail, postage prepaid, return receipt requested, to the respective addresses of the Agency and Developer, as provided in Section 1.5 hereof. Such notices, demands and communications, if given in person, shall be deemed given when delivered, and, if given by mail, shall be deemed given three (3) business days after deposit in the mail. 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 6.1. 6.2 Conflicts of Interest 6.2.1 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. 6.2.2 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, other than normal fees paid to Developer's independent contractors, attorneys, and consultants. 6.3 Non -liability of Agency/City Officials and Employees No member, official, employee, attorney or consultant of the Agency and/or City shall be personally liable to Developer, or any successor in interest of Developer, in the event of any default or breach by the Agency or for any amount which may become due to Developer or to its successor, or on any obligations under the terms of this Agreement. 6.4 Force Majeure 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, litigation, unusually severe weather, inability to secure necessary labor, materials or tools, delays of any contractor, subcontractor or supplier, acts of the other party, acts or failure to act of any public or governmental agency or entity or any other causes beyond the control or without the fault of the party claiming an extension of time to 33 AFFORDABLE HOUSING AGREEMENT [Final Execution] 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 the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is sent to the other party within thirty (30) days of knowledge of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the Agency and the Developer. 6.5 Inspection of Books and Records The Agency has the right at all reasonable times to inspect the books and records of Developer pertaining to the Property as pertinent to the purposes of this Agreement. 6.6 Consents and Approvals Except where this Agreement expressly provides that a party may withhold its approval in its sole and absolute discretion, approvals required of the Agency or the Developer shall not be unreasonably withheld or delayed. Except as otherwise expressly provided in this Agreement, approvals or consents required of the Agency shall be deemed granted by the written approval of the Director or designee. Notwithstanding the foregoing, the Director or designee may, in his or her sole and absolute discretion, refer to the governing board of the Agency any item requiring Agency approval. 6.7 Real Estate Commissions Developer represents and warrants to the Agency, and the Agency represents and warrants to Developer, that no broker or finder has been engaged by them, respectively, in connection with any of the transactions contemplated by this Agreement, or to its knowledge is in any way connected with any of such transactions. Developer will indemnify, save harmless and defend the Agency from any liability, cost, or expense arising out of or connected with any claim for any commission or other compensation made by any person or entity claiming to have been retained or contacted by Developer in connection with any of the transactions contemplated by this Agreement. The Agency will indemnify, save harmless, and defend Developer from any liability, cost, or expense arising out of or connected with any claim for any commission or other compensation made by any person or entity claiming to have been retained or contacted by the Agency and/or the City in connection with any of the transactions contemplated by this Agreement. This indemnity provision shall survive the Closing or any earlier termination of this Agreement. ARTICLE 7. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS This Agreement shall be executed in three (3) duplicate originals, each of which is deemed to be an original. 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 34 AFFORDABLE HOUSING AGREEMENT [Final Execution] 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 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, except as otherwise expressly provided in this Agreement. This Agreement, including all attachments and addenda hereto, constitutes the entire understanding and agreement of the parties. ARTICLE 8. TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY; DATE OF AGREEMENT This Agreement, when executed by Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency within forty-five (45) days after this Agreement is signed by Developer or this Agreement may be terminated by Developer on written notice to the Agency. This Agreement may be executed in counterparts and when so executed, each such counterpart will constitute an original document and such counterparts will constitute one and the same agreement. [SIGNATURES ON NEXT TWO PAGES] 35 AFFORDABLE HOUSING AGREEMENT [Final Execution] IN WITNESS WHEREOF, the Agency and Developer have executed this Agreement as of the date first set forth hereinabove. Date: ObAbA2 I / 1) ATTEST: APPROVED AS TO FORM: Agency General Counsel B ' ' J �/M n Jennifer McGrath 0 APPROVED AS TO FORM: KANE, BALLMER & BERKMAN By: Agency Speci ounsel Susan Y. Cola THE CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY (Agency) By: Chairman 36 AFFORDABLE HOUSING AGREEMENT [Final Execution] BTDJM ASSOCIATES, LLC, a Delaware limited liability company / 1 By: BELLA TERRA PARTNERS, LI LN Lindsay 37 AFFORDABLE HOUSING AGREEMENT [Final Execution] ATTACHMENT NO. 1 LEGAL DESCRIPTION ATTACHMENT NO.1 LEGAL DESCRIPTION Those portions of Parcel 1 of Parcel Map No. 86-200 and Parcel 9 of Parcel Map No. 2003-163, in the City of Huntington Beach, County of Orange, State of California, as shown on maps filed in Book 255 at Pages 40 through 45, inclusive, and Book 358 at Pages 1 through 9, inclusive, respectively, both of Parcel Maps, in the office of the County Recorder of said county, described as follows: Commencing at the northwest corner of said Parcel 1 of Parcel Map No. 86-200; thence along the north line of said parcel and the north line of said Parcel 9 South 89°32'06" East 815.77 feet to the northerly prolongation of that course in the west line of the easement for Public Vehicular & Pedestrian Access described as being "North 00°03'12" East 144.51 feet" in a document recorded October 27, 2006, as Instnunent No. 2006000726618 of Official Records of said county; thence along said prolongation and said west line the following courses: South 0°00'36" West 220.57 feet to a curve concave westerly having a radius of 102.00 feet, southerly 45.25 feet along said curve through a central angle of 25°25'08" to a reverse curve concave easterly having a radius of 466.00 feet and southerly 194.94 feet along said curve through a central angle of 23°58'08" to a line parallel with and southerly453.00 feet from said north lines; thence non -tangent from said curve and along said parallel line North 89°32'06" West 6.00 feet to the True Point of Beginning; thence along a non - tangent curve concave easterly having a radius of 472.00 feet, a radial line to the beginning of said curve bears North 88°33'09" West; thence southerly 37.62 feet along said curve through a central angle of 4°34'01'; thence non -tangent from said curve South 86°52'50" West 17.00 feet to a non - tangent curve concave easterly having a radius of 489.00 feet, a radial line to the beginning of said curve bears South W5T50" West; thence southerly 186.49 feet along said curve through a central angle of 21°51'05'; thence non -tangent from said curve North 65'01'44" East 17.00 feet to a non - tangent curve concave northeasterly having a radius of 472.00 feet, a radial line to the beginning of said curve bears South 65°01'44" West; thence southeasterly 98.73 feet along said curve through a central angle of 11°59'05" to a compound curve concave northeasterly having a radius of 46.00 feet; thence southeasterly 42.13 feet along said curve through a central angle of 52°28'34'; thence South 89°25'55" East 5.62 feet; thence South 0°27'54" West 129.91 feet; thence North 89032'06" West 390.54 feet; thence North 0°2754" East 4.00 feet; thence North 89°32'06" West 138.46 feet; thence South 0°2754" West 43.00 feet; thence South 89°32'06" East 21.00 feet; thence South 0°27'54" West 143.03 feet; thence South 89°32'06' East 19.00 feet; thence South 0°2754" West 42.91 feet to the south line of said Parcel 1 of Parcel Map No. 86-200; thence along said south line North 89°32'06" West 404.92 feet to the westerly line of said Parcel 1; thence along said westerly line North 0°16'24" East 667.82 feet to said parallel line; thence along said parallel line South 89°32'06" East 757.01 feet to the True Point of Beginning. Contains an area of 10.262 acres, more or less. ATTACHMENT NO.2 SCHEDULE OF PERFORMANCE ATTACHMENT NO.2 SCHEDULE OF PERFORMANCE 1. Satisfaction of all Conditions Precedent to Not later than five (5) years from the Closing. The Developer shall have complied Effective Date of the AHA. with all conditions precedent to Closing as required by Section 2.2.3 of the Affordable Housing Agreement ("AHAJ. 2. Closing Date. Closing shall occur in accordance with Article 2 of the AHA. 3. Commencement of Construction. The Developer shall commence construction of the Project. 4. Completion of Construction. The Developer shall complete construction of the Project. 5. Tenant Selection. Developer shall submit a tenant selection plan for the Affordable Rental Units for Agency review and approval. 6. Rental Rates. Developer shall submit a rental rate plan for the Affordable Rental Units for Agency review and approval. Final Execution Attachment No. 2 Page 1 of 1 Not later than sixty (60) days after the satisfaction of all conditions precedent to Closing as required by Section 2.2.3 of the AHA. Not later than sixty (60) days after the Closing Date. Not later than thirty-six (36) months after commencement of construction of the Project. At least (30) days prior to commencement of pre -leasing. At least (30) days prior to commencement of pre -leasing. ATTACHMENT NO. 3 SCOPE OF DEVELOPMENT ATTACHMENT NO.3 SCOPE OF DEVELOPMENT This is the Scope of Development attached to the Affordable Housing Agreement ("AHA') by and between the City of Huntington Beach Redevelopment Agency ("Agency") and BTDJM Phase II Associates, LLC, a Delaware limited liability company ("Developer"). Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the AHA. 1. PROJECT DESCRIPTION The Property is located at 7777 Edinger Avenue, Huntington Beach, California. The Project entails the following components, as the same may be amended from time to time in accordance with plans and permits approved by the City of Huntington Beach (but with the understanding that the number and type of affordable housing units required pursuant to the AHA shall in no event be reduced without Agency's approval): A. Demolish the existing Montgomery Ward store and the associated auto repair. B. Develop 467 multi -family residential units within a four-story building C. Develop approximately 13,500 square feet of residential amenities, such as a clubhouse, fitness center, leasing office, and lobby D. Develop an additional 17,500 square feet of mixed use retail and restaurants on the ground floor of the residential; provided that, and notwithstanding any other provision set forth in the AHA to the contrary, including without limitation the definition of the term "Completion" in Section 1.4 thereof, Developer's obligations with respect to construction of this non-residential portion of the Project shall only extend to completion of the building shell(s), Developer shall not be required to construct or install or cause the construction or installation of tenant improvements, and Developer shall not be required to obtain certificates of occupancy within the time set forth for Completion of the Project or at all. The mixed -use development includes 467 residential apartment units within a four-story building; approximately 13,500 square feet of residential amenities such as a clubhouse room, fitness center, leasing office, and lobby areas; and an approximately 700-space five -level residential parking garage in the central portion of the site. The 700 — space parking garage is for the exclusive use of the residents and their guests. Primary access to the residential parking garage will be from the north and west sides. Residents will be able to access the site from either Edinger or Center Avenues. The mixed -use development will be elevated approximately two feet above existing grade to comply with flood plain regulations. The applicant's multi -family residential project includes ten floor plans summarized below. Final Execution Attachment No. 3 Page 1 of 2 (square feet) Units Plan No. Plan Type Floor Area No. of' 1 Private i otai rrivate mp=__ Plan 1 Studio 563 20 1 62 1,240 Plan 2 Studio 586 70 60 4,200 Plan 3 1 Bed/1 Bath 724 70 60 4,200 Plan 4 1 Bed/1 Bath 732 70 113 7,910 Plan 5 1 Bed + Den/1 Bath 926 56 106 5,936 Plan 6 2 Bed/2 Bath 1,069 106 60 6,360 Plan 7 2 Bed/2 Bath 1,230 24 72 1 728 Plan 8 3 Bed/2 Bath 1,364 30 130,900 Plan 9 1 Bed + Lof1/1 Bath 8-71 10 116 1,160 Plan 10 2 Bed + Loft/2 Bath 1,210 11 60 660 Total 467 37,294 The mixed use retail and restaurant on the ground floor will be designed at a two-story building height to achieve high volume ceilings popular with retail tenants today. The ground floor commercial will be topped by two additional stories of residential units. Approximately 17,500 square feet of retail and restaurant uses are proposed on the ground floor of the residential building. II. IMPROVEMENTS The Improvements shall be comparable in quality to the housing development constructed by Developer within the City (commonly referenced as "Bella Terra"), and in accordance with conceptual plans approved by City of Huntington Beach Design Review Board. The Improvements shall be constructed in accordance with all federal, state, and/or local development regulations and/or agreements. II. ENVIRONMENTAL REVIEW Developer shall be responsible for causing the preparation of all California Environmental Quality Act ("CEQA') documents necessary for the entitlements for the Project and the development of the Improvements on the Property. The City shall be responsible for certification of any CEQA documentation in connection with the approval of the Project. Developer shall be responsible for the payment of all CEQA compliance costs and shall fully comply with all mitigation measures set forth in the Project entitlements. Final Execution Attachment No. 3 Page 2 of 2 ATTACHMENT NO.4 PROJECT BUDGET Bella Terra Phase 2 Residential Development Budget Property Acquistion Cost $19,648,000 - Agreed Amount Off -Site Improvements (1) $7,322,000 - Actual Cost for Entire Site times 44% Hard Costs $69,972,000 Indirect Costs (2) $19,163,000 Financing Costs - Land (3) $1,375,000 Construction (4) $4,344,000 Loan Origination Fees (5) $1,241,000 Total Cost $123,065,000 (1) - Includes Relocation of G Building Tenants, Demolition, Site Utilities, Civil Permits & Fees (2) Architectural & Engineering, Residential Building Permits & Fees, Taxes, Legal, Accounting Insurance, Marketing/Leasing, Developer Fee (3% times Hard Cost), Contingency (3) - 7% times $19;648,000 applicable to period commencing on execution date of AHA through Construction Completion (4) - Actual Construction Loan Interest Rate multiplied by Total Cost (less Land Loan) applicable to average Loan Amount outstanding during Construction Phase. (5) - 2% times Total Cost ATTACHMENT NO.5 INTENTIONALLY OMITTED ATTACHMENT NO.6 AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder OFFICIAL BUSINESS II I IIIII II 1111111111111111111111111111111111111111111111111IIIIN0 FEE L?ocument entitled to free recording 2013000657709 09:17am 12/04/13 per Government Code Section 6103 217 401 Al 41 0.00 0.00 0.00 0.00 120.00 0.00 0.00 0.00 Recording Requested By and When Recorded Mail to: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Economic Development Director Space above this line for Recorder's use only AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY (INCLUDING AFFORDABLE RENTAL AND/OR SALE RESTRICTIONS) THIS AGREEMENT CONTAINING QOVENANTS AFFECTING REAL PROPERTY (the "Agreement") is entered into as of .3 , 2013, by and between the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("Successor Agency"), and BELLA TERRA VILLAS LLC, a Delaware limited liability company ("Developer"). A. Developer owns fee title to that certain real property (the "Property") located in the City of Huntington Beach, County of Orange, State of California, legally described in the "Legal Description" attached hereto as Exhibit "A" and incorporated herein by this reference. B. B. The former Redevelopment Agency of the City of Huntington Beach ("Former Agency"), Successor Agency's predecessor -in -interest, and Developer's predecessor - in -interest, BTDJM Phase II Associates, a Delaware limited liability company ("BTDJM"), entered into that certain AFFORDABLE HOUSING AGREEMENT ("AHA"), dated October 11, 2010, for the purpose of financing the construction of 43 Affordable Rental Units and/or Successor Agency -approved For Sale Units restricted for rental and/or sale to and occupancy by Moderate Income Households and 28 Affordable Rental Units and/or Successor Agency - approved For Sale Units restricted for rental and/or sale to and occupancy by Very Low Income Households, in accordance with the AHA. AHA as used herein shall mean, refer to and include the AHA, as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments thereto (which are hereby incorporated herein by this reference) or other documents expressly incorporated by reference in the AHA. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the AHA. C. With the consent of the Former Agency, BTDJM assigned its right, title and interest in and to the AHA to Developer pursuant to that certain Assignment and Assumption Agreement, dated as of October 21, 2011. The Former Agency's consent to such assignment is attached to such Assignment and Assumption Agreement. Final Execution la-1217015 v3 This document is solely for the official bush*" of the City of Huntington as contemPlated under Go"rmwt Code Sec. 6163 and b9 recorded free of charge, D. The Former Agency is now a dissolved community redevelopment agency pursuant to Assembly Bill XI 26, which was passed by the California State Legislature, approved by the Governor on June 28, 2011, and chaptered by the Secretary of State on June 29, 2011, and which added Parts 1.8 and 1.85 to Division 24 of the California Health & Safety Code ("Dissolution Act"). By Resolution No. 2012-01, considered and approved by the City Council of the City of Huntington Beach ("City") at an open public meeting on January 9, 2012, the City Council chose to have the City become and serve as the "Successor Agency" to the Former Agency under the Dissolution Act, and effective as of and on and after February 1, 2012, the Successor Agency will perform its functions under the Dissolution Act to administer the enforceable obligations of the Former Agency and otherwise unwind the Former Agency's affairs. E. This Agreement is entered into and recorded in accordance with the AHA. NOW, THEREFORE, SUCCESSOR AGENCY AND DEVELOPER COVENANT AND AGREE AS FOLLOWS: 1. Construction of the Project. Developer covenants and agrees for itself, its successors and assigns and every successor in interest to the Property or any part thereof, that Developer, its successors and assigns, shall acquire the Property and construct or cause the construction of the Project in accordance with the provisions of the AHA. 2. Release of Construction Covenants. Following Completion of the Project in accordance with the AHA, Successor Agency shall record a Release of Construction Covenants on the Property, in accordance with Section 3.16 of the AHA. Following the Successor Agency's recording of the Release of Construction Covenants, the covenants contained in Paragraph 1 herein shall terminate and be of no further force and effect with respect to the Property. 3. Use of the Property. Developer, on behalf of itself and its successors, assigns, and each successor in interest to Developer's interest in the Property or any part thereof, hereby covenants and agrees as follows: a. For a period of no less than fifty-five (55) years, beginning from the date of the City's issuance of a certificate of occupancy for the Project (the "Covenant Period"), Developer shall use the Property only for the uses specified in the Redevelopment Plan, any development agreements entered into by and between the City and Developer relating to the Property, the AHA, and this Agreement. During the Covenant Period, no change in the use of the Property shall be permitted without the prior written approval of Successor Agency. b. During the Covenant Period, nine percent (9%) of the Dwelling Units constructed upon the Property (43, based on the currently anticipated total of 467 Dwelling Units in the Project) shall be rented exclusively to and occupied by qualifying Moderate Income Households ("Qualified Renters") at an Affordable Rent and six percent (6%) of the Dwelling Units constructed upon the Property (28, based on the currently anticipated total of 467 Dwelling Units in the Project) shall be rented exclusively to and occupied by qualifying Very Low Income Households ("Qualified Renters") at an Affordable Rent, in accordance with Health and Safety Final Execution la-1217015 v3 Code section 50053(b). The aforementioned restricted units shall be referenced hereinafter individually as "Restricted Unit" and collectively as "Restricted Units". C. During the Covenant Period, Developer shall not change a Restricted Unit from a rental unit to a for -sale unit without the prior written approval of the Director, which approval the Director shall be required to give if Developer satisfies each of the following conditions precedent: (i) a Restricted Unit that is restricted for rental to and occupancy by a Very Low Income Household shall first be offered for sale to the tenant occupying that unit at Affordable Housing Cost for a Very Low Income Household, in accordance with Health and Safety Code section 50052.5(b) (herein, the "Right of First Refusal"). Said offer shall be in writing and have a heading at or near the top of the first page in bold.type not less than 12-point font substantially in the following form: "This Document Sets Contains a Written Offer to Sell To You the Residential Unit in Which You Are a Tenant. Please Review Carefully. If You Wish to Accept This Offer, You Must Do So Within Thirty (30) Days After This Offer Is Delivered To You By Signing and Dating This Offer Where Indicated Below and Delivering This Accepted Offer to the Owner at the Owner's Address. If You Do Not Do So, Your Right to Purchase This Residential Unit Will Terminate and Expire." The offer shall contain a complete statement of the terms of the proposed sale, shall clearly state the applicable purchase price and closing date (which in no case shall be less than thirty (30) days after the date the offer is accepted) and shall comply with all applicable provisions of law pertaining to the sale of residential condominium units in the State of California, City of Huntington Beach. If the tenant does not timely accept Developer's offer the tenant's Right of First Refusal shall expire and be of no further force or effect and thereafter Developer shall be free to market and sell that Restricted Unit to any other Very Low Income Household ("Qualified Purchaser") at Affordable Housing Cost. Alternatively, if the tenant does timely accept the offer but thereafter the tenant fails to timely perform any of its obligations to complete the purchase of the Restricted Unit pursuant to the contract entered into between Developer and the tenant, subject to whatever default, notice, and cure rights may be set forth in said contract Developer shall have the right hereunder to terminate said contract, in which event the tenant's Right of First Refusal shall expire and be of no further force or effect and thereafter Developer shall be free to market and sell that Restricted Unit to any other Qualified Purchaser at Affordable Housing Cost, in accordance with Health and Safety Code section 50052.5(b); (ii) a Restricted Unit that is restricted for rental to and occupancy by a Moderate Income Household shall first be offered for sale to the tenant occupying that unit at Affordable Housing Cost for a Moderate Income Household, in accordance with Health and Safety Code section 50052.5(b) (herein, the "Right of First Refusal"). Said offer shall be in writing and have a heading at or near the top of the first page in bold type not less than 12-point font substantially in the following form: "This Document Sets Contains a Written Offer to Sell To You the Residential Unit in Which You Are a Tenant. Please Review Carefully. If You Wish to Accept This Offer, You Must Do So Within Thirty (30) Days After This Offer Is Delivered To You By Signing and Dating This Offer Where Indicated Below and Delivering This Accepted Offer to the Owner at the Owner's Address. If You Do Not Do So, Your Right to Purchase This Residential Unit Will Terminate and Expire." The offer shall contain a complete statement of the terms of the proposed sale, shall clearly state the Final Execution K la-1217015 v3 applicable purchase price and closing date (which in no case shall be less than thirty (30) days after the date the offer is accepted) and shall comply with all applicable provisions of law pertaining to the sale of residential condominium units in the State of California, City of Huntington Beach. If the tenant does not timely accept Developer's offer the tenant's Right of First Refusal shall expire and be of no further force or effect and thereafter Developer shall be free to market and sell that Restricted Unit to any other Moderate Income Household ("Qualified Purchaser") at Affordable Housing Cost. Alternatively, if the tenant does timely accept the offer but thereafter the tenant fails to timely perform any of its obligations to complete the purchase of the Restricted Unit pursuant to the contract entered into between Developer and the tenant, subject to whatever default, notice, and cure rights may be set forth in said contract Developer shall have the right hereunder to terminate said contract, in which event the tenant's Right of First Refusal shall expire and be of no further force or effect and thereafter Developer shall be free to market and sell that Restricted Unit to any other Qualified Purchaser at Affordable Housing Cost, in accordance with Health and Safety Code section 50052.5(b); (iii) the Developer shall notify the Successor Agency, in writing, of its request for Successor Agency's approval to change any Restricted Unit from a rental unit to a for -sale unit no later than ninety (90) days prior to offering a Restricted Unit for sale to any Person ("Notice of Change Request"). The Notice of Change Request shall be accompanied by the following information: (a) the form(s) of purchase contract(s) Developer intends to use (consistent with the requirements of paragraph 3.c(i) and (ii) with respect to the Right of First Refusal for each existing tenant); (b) a form of grant deed to be used for each such sale which sets forth the applicable restrictions upon resale and use of each for -sale Restricted Unit consistent with this Agreement; and (c) written evidence documenting Developer's compliance with all applicable laws and regulations governing the sale of condominium units. The Director shall approve or disapprove the Notice of Change Request, including the form of the documents submitted therewith, within thirty (30) days after receipt, with approval not to be unreasonably conditioned or withheld. Any disapproval shall be in writing and shall state the reasons therefor and the actions that Developer must take or the changes Developer must make to the applicable documents in order to obtain Successor Agency's approval. If the Director fails to timely approve or disapprove Developer's Notice of Change Request within said time, Developer's Notice of Change Request and the form of the accompanying documents shall be deemed approved; (iv) concurrently with the close of escrow for the conveyance of any Restricted Unit to a Qualified Purchaser, Developer and Successor Agency shall fill in the blanks in the "Agreement and Covenants Concerning Use and Resale of Residential Unit" in the form attached hereto as Exhibit "B" and incorporated herein by this reference and the "Right of First Refusal" in favor of the Successor Agency in the form attached hereto as Exhibit "C" and incorporated herein by this reference and Developer shall record such instruments or cause them to be recorded in the Official Records of the Orange County Recorder; and (v) Developer hereby forever knowingly, intelligently and voluntarily waives, disclaims and releases the Successor Agency and City, and their principals, officers, employees, agents and contractors, from any claims for Relocation Benefits and agrees to indemnify, protect, defend and hold Successor Agency and the City and their principals, officers, employees, agents and contractors harmless against any such claims for such Relocation Final Execution 4 la-1217015 v3 Benefits; provided, however, that nothing in this Agreement is intended or shall be interpreted as an acknowledgment or admission by Developer that the sale of any of the residential units within the Property, including without limitation the Restricted Units, and the displacement or eviction of tenants in conjunction therewith gives rise to an obligation to provide or pay any Relocation Benefits. For purposes of this Agreement, the term "Relocation Benefits" shall mean: costs for relocation assistance and benefits pursuant to all applicable state and local relocation laws, including without limitation, the California Relocation Assistance Law (Government Code § 7260 et seq.) and the implementing regulations thereto and local implementing regulations thereto, and all applicable federal relocation laws, including, without limitation, the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. § 4201- 4655, and 49 CFR part 24). d. During the Covenant Period, all Restricted Units shall be occupied at all times only by Qualified Renters or, subject to paragraph 3.c above, by Qualified Purchasers, as applicable. The Developer covenants to cooperate with the Successor Agency in taking all steps necessary to implement and monitor this requirement with respect to all Qualified Renters. e. During the Covenant Period, as long as the Restricted Units are required to be rented to and occupied by Qualified Renters and until the close of escrow for the conveyance of any Restricted Units to Qualified Purchasers, Developer shall provide the Successor Agency with a monthly report with respect to Restricted Units under lease and/or contract (as applicable), closed sales (as applicable), and such other information as the Successor Agency may reasonably request. f. During the Covenant Period, as long as the Restricted Units are required to be rented to and occupied by Qualified Renters and until the close of escrow for the conveyance of any Restricted Units to Qualified Purchasers, Developer shall use reasonable efforts to provide adequate information to assist Qualified Renters and Qualified Purchasers in locating and obtaining available forms of subsidized or assisted financing to enable Qualified Renters and Qualified Purchasers to qualify for and minimize the cost of renting or purchasing any Restricted Unit, as applicable. Developer further covenants that it shall take all steps and pay all fees necessary to apply for both Veterans' Administration loan guaranties and Federal Housing Authority insured mortgage loans for any Restricted Units Developer intends to sell to Qualified Purchasers, if the Successor Agency or the City requires Developer to apply for such approvals. g. During the Covenant Period, as long as the Restricted Units are required to be rented to and occupied by Qualified Renters and for each proposed sale of a Restricted Unit by Developer to a Qualified Purchaser, Developer shall require the prospective renter or purchaser, as applicable, to complete and execute an application form verifying the identity of each individual person who intends to occupy the Restricted Unit and the income of the household. The application form shall be subject to the prior approval of the Director, which approval shall not be unreasonably withheld, conditioned, or delayed. Without limiting the foregoing, the Director may require that Developer's verification process require the prospective renter or purchaser to submit, without limitation, income tax returns and/or paycheck stubs to verify income. Final Execution 1a-1217015 0 h. Over -Income Tenants. During the Covenant Period and as long as the Restricted Units are required to be rented to and occupied by Qualified Renters, Developer shall comply with the following rule: any tenant in a Restricted Unit who initially qualified as a Moderate Income Household or Very Low Income Household, as applicable, and who no longer qualifies as a Moderate Income Household or Very Low Income household, respectively, shall pay as rent an amount equal to 30 percent of the household income, and shall be given one (1) year to relocate from the Restricted Unit for which such tenant initially qualified. i. The parties acknowledge that this Agreement is subject to the provisions of Section 33418 of the California Health and Safety Code, subdivision (a) of which provides as follows: "An agency shall monitor, on an ongoing basis, any housing affordable to persons and families of low or moderate income developed or otherwise made available pursuant to any provisions of this part. As part of this monitoring, an agency shall require developers or managers of the housing to submit an annual report to the agency. The annual reports shall include for each Affordable Rental and/or Agency -approved For Sale Unit the rental and/or housing costs and the income and family size of the occupants. The income information required by this section shall be supplied by the tenant in a certified statement on a form provided by the agency." To satisfy the requirements of said Section 33418, during the Covenant Period and for as long as the Restricted Units are required to be rented to and occupied by Qualified Renters, prior to initial occupancy of any Restricted Unit Developer shall provide all information on a timely basis that is required by the Successor Agency for such monitoring purposes and shall pay any generally applicable monitoring fees established by the Successor Agency from time to time to cover the cost to the Successor Agency of such monitoring. The Developer shall comply with all generally applicable affordability certification procedures of the Successor Agency, and shall complete or cause the completion of all sample forms provided by the Successor Agency to verify the required affordability on an annual basis. j. Upon the close of each escrow for Developer's transfer of a Restricted Unit to a Qualified Purchaser, Successor Agency shall cooperate with Developer in executing and causing to be recorded an instrument terminating this Agreement such that, after the closing, Developer's obligations with respect to that Restricted Unit shall terminate and, thereafter, the rights and obligations of the Successor Agency and the Qualified Purchaser (and its successors and transferees) shall be as set forth in the Agreement and Covenants Concerning Use and Resale of Residential Unit (Exhibit "B" hereto) and the Right of First Refusal (Exhibit "C" hereto) recorded at the closing. 4. Maintenance of the Property. During the Covenant Period and as long as the Restricted Units are required to be rented to and occupied by Qualified Renters, Developer, its successors and assigns, shall maintain the Property in the same aesthetic and sound condition (or better) as the condition of the Property at the time Successor Agency issues a Release of Construction Covenants pursuant to the AHA, reasonable wear and tear excepted. This standard for the quality of maintenance of the Property shall be met whether or not a specific item of maintenance is listed below. However, representative items of maintenance shall include frequent and regular inspection for graffiti or damage or deterioration or failure, and immediate repainting or repair or replacement of all surfaces, fencing, walls, equipment, etc., as necessary; Final Execution C7 la-1217015 0 emptying of trash receptacles and removal of litter; sweeping of public sidewalks adjacent to the Property, on -site walks and paved areas and washing -down as necessary to maintain clean surfaces; maintenance of all landscaping in a healthy and attractive condition, including trimming, fertilizing and replacing vegetation as necessary; cleaning windows on a regular basis; painting the buildings on a regular program and prior to the deterioration of the painted surfaces; conducting a roof inspection on a regular basis and maintaining the roof in a leak -free and weather -tight condition; maintaining security devices in good working order. In the event Developer, its successors or assigns fails to maintain the Improvements in accordance with the standard for the quality of maintenance, Successor Agency or its designee shall have the right but not the obligation to enter the Property upon reasonable notice to Developer, correct any violation, and hold Developer, or such successors or assigns responsible for the cost thereof, and such cost, until paid, shall constitute a lien on the Property. 5. Obligation to Refrain from Discrimination. Developer covenants and agrees for itself, its successors and its assigns in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the land. The covenants in this Section 5 shall remain in effect in perpetuity. 6. Form of Nondiscrimination and Nonsegregation Clauses. Developer shall refrain from restricting the rental, sale or lease of the Property on the basis of sex, sexual orientation, 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: a. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision ( m ) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: Final Execution 7 la-1217015 0 That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." C. In contracts: "There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the land." The covenants in this Section 6 shall remain in effect in perpetuity. 7. Covenants Running with the Land. All conditions, covenants and restrictions contained in this Agreement shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by Successor Agency, its successors and assigns, and the City and its successors and assigns, against Developer, its successors and assigns, to or of the Property or any portion thereof or any interest therein, and any party in possession or occupancy of said Property or portion thereof. Successor Agency and the City shall be deemed the beneficiaries of the covenants, conditions and restrictions of this Agreement both for and in their own rights and for the purposes of protecting the interests of the community. The covenants, conditions, and restrictions shall run in favor of the Successor Agency and the City, without regard to whether the Successor Agency or City has an interest therein in the Property. 8. Permitted Mortgages. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage permitted by the AHA. 9. Payment of Real Estate Taxes. Developer shall pay when due all real estate taxes levied on the Property or any improvements thereon or any interest therein and refrain from appealing, challenging or contesting in any manner the validity or amount of any tax assessment, encumbrance or lien on the Property ("Imposition"); provided, however, that such prohibition shall not apply to an appeal, challenge or contesting of the erroneous initial assessment of the Project in the fiscal year of Completion. Final Execution 8 1a-1217015 0 10. Notice and Opportunity to Cure. Prior to exercising any remedies hereunder, Successor Agency shall give Developer notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Developer shall have such period to effect a cure prior to exercise of remedies by Successor Agency. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Developer (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then Developer shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Successor Agency, but in any event no more than one hundred and twenty days (120) days of receipt of such notice of default from the Successor Agency. 11. Enforcement. If a violation of any of the covenants or provisions of this Agreement remains uncured after the respective time period set forth in Paragraph 9 above, Successor Agency and its successors and assigns, without regard to whether Successor Agency or its successors and assigns is an owner of any land or interest therein to which these covenants relate, may institute and prosecute any proceedings at law or in equity to abate, prevent or enjoin any such violation or attempted violation or to compel specific performance by Developer of its obligations hereunder. No delay in enforcing the provisions hereof as to any breach or violation shall impair, damage or waive the right of any party entitled to enforce the provisions hereof or to obtain relief against or recover for the continuation or repetition of such breach or violations or any similar breach or violation hereof at any later time. 12. Partial Release of Agreement. If this Agreement is initially recorded against a lot or lots comprising more than the Restricted Units and a final tract map or condominium map or maps is(are) recorded at a later date creating the Restricted Units as separate legal lots, Successor Agency shall cooperate with Developer, at no expense to Successor Agency, in causing a partial release of this Agreement to be executed, acknowledged, and recorded against all of the lots excepting only the lots comprising the Restricted Units. The form of said partial release shall be reasonably satisfactory to Successor Agency's counsel. 13. Counterparts. This Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. The signature pages of one or more counterpart copies may be removed from such counterpart copies and all attached to the same copy of this Agreement, which, with all attached signature pages, shall be deemed to be an original Agreement. 14. Estoppel Certificates. Successor Agency shall provide estoppel certificates from time to time, upon the request of Developer or the holder of a security interest in the Property (subject to any restrictions on Transfer in the AHA). The estoppel certificates shall address any inquiries regarding the status of any provisions in this Agreement or the AHA that may have expired or terminated. [SIGNATURES ON NEXT PAGE] Final Execution W la-1217015 0 IN WITNESS WHEREOF, the Successor Agency and Developer have executed this Agreement as of the date first set forth hereinabove. SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH M. ATTEST: Ag y Secretary REVIEWED AND APPROVED AS TO FORM: City Attorney Jen�erMcGrath aa ,._. 16 REVIEWED AND APPROVER AS TO FORM: Kane Ball er & Berkman [SIGNATURE CONTINUED ON NEXT PAGE] Final Execution 10 la-1217015 v3 BELLA TERRA VILLAS LLC, a Delaware limited liability company By: DCO Realty, Inc., a Delaware corporation, its Sole Member By. Warren L. Troupe, President Final Execution Ia-1217015 0 State of Colorado ) ) ss. County of Douglas ) On November 7, 2013, before me, Deborah J. Shannon, personally appeared Warren L. Troupe, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the state of Colorado that the foregoing paragraph is true and correct. WITNESS my hand and official seal. ( 7�'& Notary Public ` My commission expires: January 20, 2015 (SEAL) -ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On December 3, 2013 before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Fred A. Wilson who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P L. ESPARZA WITNESS my hand and official seal. Commission # 2032750 Notary Public • California zz IlaOrange County il Comm. Expires Au 4, 2017 • (Seal) (Notary Signat e) EXHIBIT "A" LEGAL DESCRIPTION The land referred to herein is situated in the State of California, County of Orange, City of Huntington, and described as follows: That certain real property in the City of Huntington Beach, County of Orange, State of California, being Lots 1 and 2 of Tract No. 17261 as per map filed in Book 914, Pages 24 through 27, inclusive, of Miscellaneous Maps, in the office of the County Recorder of said county. AGREEMENT AND COVENANTS CONCERNING USE AND RESALE OF RESIDENTIAL UNITS [SAME AS ATTACHMENT NO. 6B] EXHIBIT "C" RIGHT OF FIRST REFUSAL [SAME AS ATTACHMENT NO. 6C] ATTACHMENT NO. 6A NOTICE OF AFFORDABILITY COVENANTS ON TRANSFER OF PROPERTY This Document was electronically recorded by City of Huntington Beach OFFICIAL BUSINESS Document entitled to free recording per Government Code Section 6103 Recording Requested By and When Recorded Mail to: Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder 1111111111111111111111111111111111111111111111111IIINO FEE 2013000663055 08:21 am 12/09/13 276 402 NO3 F13 7 0.00 0.00 0.00 0.00 18.00 0.00 0.00 0.00 City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Economic Development Director Space above this line for Recorder's use only NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f)(3) as amended effective January 1, 2008, Declarant, the Successor Agency to the Redevelopment Agency of the City of Huntington Beach, is recording this Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 7777 Edinger Avenue, Huntington Beach, California, and more particularly described in Exhibit "A" attached hereto (the "Property"). 1. Definitions. Any capitalized term not otherwise defined herein shall have the same meaning ascribed to such term in the Agreement Containing Covenants Affecting Real Property recorded concurrently herewith as Instrument No. 2013000657709n the Official Records of the Orange County Recorder (the "Agreement Containing Covenants"). 2. Affordability Restrictions. The Property is subject to the following covenants (collectively, the "Affordability Covenants"): a. Subject to subparagraph b below, for a period of no less than fifty-five (55) years, beginning from the date of the City's issuance of a certificate of occupancy for the Project ("Covenant Period"), nine percent (9%) of the Dwelling Units constructed on the Property (43, based on the currently anticipated total of 467 Dwelling Units in the Project) shall be rented exclusively to and occupied by qualifying Moderate Income Households ("Qualified Renters") at an Affordable Rent and six percent (6%) of the Dwelling Units constructed upon the Property (28, based on the currently anticipated total of 467 Dwelling Units in the Final Execution la-1217019 v3 Project) shall be rented exclusively to and occupied by qualifying Very Low Income Households ("Qualified Renters") at an Affordable Rent, in accordance with Health and Safety Code section 50053(b). The aforementioned restricted units shall be referenced hereinafter individually as "Restricted Unit" and collectively as "Restricted Units". b. During the Covenant Period, Developer shall not change a Restricted Unit from a rental unit to a for -sale unit without the prior written approval of the Director, as provided in Section 3.c of the Agreement Containing Covenants. If such a change is approved and a sale occurs, for the remainder of the Covenant Period the Restricted Units previously restricted to occupancy by qualifying Moderate Income Households shall be sold at an Affordable Housing Cost for Moderate Income Households and thereafter occupied only by qualifying Moderate Income Households and the Restricted Units previously restricted to occupancy by qualifying Very Low Income Households shall be sold at an Affordable Housing Cost for Very Low Income Households and thereafter occupied only by Very Low Income Households, as more particularly set forth in the "Agreement and Covenant Concerning Use and Resale of Residential Units" in the form attached as Exhibit "B" to the Agreement Containing Covenants and the Restricted Unit shall be subject to the Successor Agency's right to purchase in accordance with the "Right of First Refusal" in the form attached as Exhibit "C" to the Agreement Containing Covenants. C. During the Covenant Period, if Developer changes a Restricted Unit from a rental unit to a for -sale unit, Developer shall be required to first offer said Restricted Unit for sale to the Qualified Renter occupying that Restricted Unit before offering said Restricted Unit for sale to other Qualified Purchasers, as provided in Section 3.c(i) and (ii) of the Agreement Containing Covenants. d. During the Covenant Period and as long as the Restricted Units are required to be rented to and occupied by Qualified Renters, Developer shall comply with the following rule: any tenant who initially qualified as a Moderate Income Household or Very Low Income Household, as applicable, and who no longer qualifies as a Moderate Income Household or Very Low Income household, respectively, shall pay as rent an amount equal to 30 percent of the household income, and shall be given one (1) year to relocate from the Restricted Unit for which such tenant initially qualified. 3. Partial Release(s). If after the date this Notice is recorded a final subdivision map is recorded against the Property, Successor Agency shall cooperate with the Developer by executing in recordable form and recording a Final Execution 2 la-1217019 0 partial release terminating this Notice as to all of the separate legal lots within the Property, excepting only those lots as to which the Affordability Covenants apply. IN WITNESS WHEREOF, the Successor Agency and Developer have executed this Notice. SUCCESSOR AGENCY TO THE REDEVELO MENT AGENCY OF THE CITY OF TINGTON BEACH Date: off. Lt By: ive Director ATTEST: g cy Secretary rIEWED AND APPROVED AS TO FORM: City Attorney B6. - Jennifer cGrath REVIEWED AND APPROVED AS TO FORM: Kan an [SIGNATURES CONTINUED ON NEXT PAGE] Final Execution 3 la-1217019 v3 BELLA TERRA VILLAS LLC, a Delaware limited liability company By: DCO Realty, Inc., a Delaware corporation, its Sole Member Final Execution 4 1a-1217019 0 By: Warren L. Troupe, Presi �lt— State of Colorado ) ) ss. County of Douglas ) On November 7, 2013, before me, Deborah J. Shannon, personally appeared Warren L. Troupe, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the state of Colorado that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (SEAL) Notary Public My commission expires: January 20, 2015 C C-4pU/SS'01V ExP►aEs �P�1► in -ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On December 3, 2013 before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Fred A. Wilson who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P. L. ESPARU WITNESS my hand and official seal. Commission 0 2032750 Notary Public - California Orange County .1xPlmAuQ1S17j 179 < (Seal) (Notary Signa e) EXHIBIT "A" LEGAL DESCRIPTION The land referred to herein is situated in the State of California, County of Orange, City of Huntington, and described as follows: That certain real property in the City of Huntington Beach, County of Orange, State of California, being Lots I and 2 of Tract No. 17261 as per map filed in Book 914, Pages 24 through 27, inclusive, of Miscellaneous Maps, in the office of the County Recorder of said county. PEDESTRIAN CROSSING PAYMENT AND COVENANT AGREEMENT FOR PEDESTRIAN PATH IMPROVEMENTS THIS PEDESTRIAN CROSSING PAYMENT AND COVENANT AGREEMENT FOR PEDESTRIAN PATH IMPROVEMENTS (the "Agreement") is entered into as of O 2010, by and between the CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY (the "Agency") and BTDJM PHASE II ASSOCIATES, LLC, A DELAWARE LIMITED LIABILITY COMPANY ("Developer"). A. Developer owns fee title to that certain real property (the "Property") located in the City of Huntington Beach (the "City"), County of Orange, State of California, legally described in the "Legal Description" attached hereto as Exhibit "A" and incorporated herein by this reference. B. The Agency and Developer entered into t at certain AFFORDABLE HOUSING AGREEMENT ("AHA"), dated z 2010, for the purpose of financing the construction of 43 Affordable Rental Units and/or Agency -approved For Sale Units restricted for rental and/or sale to and occupancy by Moderate Income Households and 28 Affordable Rental Units and/or Agency -approved For Sale Units restricted for rental and/or sale to and occupancy by Very Low Income Households, in accordance with thef AHA. AHA as used herein shall mean, refer to and include the AHA, as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments thereto (which are hereby incorporated herein by this reference) or other documents expressly incorporated by reference in the AHA. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the AHA. C. This Agreement is entered into and recorded in accordance with the AHA. NOW, THEREFORE, AGENCY AND DEVELOPER COVENANT AND AGREE AS FOLLOWS: .1. Covenant and Payment Agreement. The Property adjoins a parcel (the "Levitz Parcel") generally known as , and more particularly described in Exhibit A-1. The Agency anticipates that future development of the Levitz Parcel will require the construction of a pedestrian path (the "Pedestrian Path Improvements" or the "PPI") connecting the Property to the Levitz Parcel all to the mutual benefit of the Levitz Parcel and the Property. In the event the Agency and/or City require, as part of the entitlement process and/or development process, for the future development of the Levitz Parcel that the PPI be built by the owner of the Levitz Parcel, Developer covenants and agrees for itself, its successors and assigns and every successor in interest to the Property or any part thereof; that Developer, its successors and assigns, shall make the contribution set out below to partially cover the cost of construction of the Pedestrian Path Improvements. Final Execution Attachment No. 6D Page 1 of 6 2. Developer's Contribution to Pedestrian Path Improvements. Developer agrees to contribute toward the cost of construction of the Pedestrian Path Improvements one-half (V2) of the costs of the PPI not to exceed the sum of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) (the "Developer's Contribution"). Developer will tender payment of Developer's Contribution to the Agency upon demand from the Agency for said payment. Said demand will be presented by Agency to Developer together with an itemized line budget estimate for the PPI cost of construction. Agency shall give Developer not less than sixty (60) days of written notice demanding tender of Developer's Contribution. All funds received from Developer shall be deposited in an account (the "PPI Account") by the Agency to be retained until the funds are applied to the costs of construction of the Pedestrian Path Improvements. 3. Timing of Demand. As a condition precedent to the demand by Agency for payment of Developer's share of the PPI, Agency will certify to Developer that (i) the Levitz Parcel has received all approvals for construction of the improvements to the Levitz Parcel and construction of the improvements has begun, and (ii) the permits for the PPI have been approved by the City. 4. Location of Pedestrian Path Improvements and Permitting_ The location of the Pedestrian Path Improvements shall be selected and agreed to by the Agency, City, Developer and the owner of the Levitz Property. In the event that the parties cannot agree to the location, the City's Planning Director shall make the selection of the location for the Pedestrian Path Improvements. The Planning Director's decision may be appealed to the City Council and the decision of the City Council regarding location shall be final and not subject to appeal by any party. 5. Failure to Tender Payments. In the event Developer fails to make any contribution to the PPI Account when due (as set forth in Paragraph 2, above), Agency reserves the right to withhold from any sums due Developer under the AHA Reimbursement provisions including, without limitation, any funds owed Developer under the provisions of the Schedule of Feasibility Gap Payments attached to the AHA as Attachment No. 7. The amount Agency may withhold shall be such amounts as are necessary to cover the Developer's Contribution to the PPI Account. Developer agrees that any sums thus retained by the Agency shall not relieve Developer of any obligation under the AHA nor shall such actions give rise to any claims against the Agency by Developer or anyone claiming through Developer as a beneficiary of the retained sums. In the event Developer fails to tender payment to the PPI Account prior to a time when Developer is due any funds under the AHA Reimbursement provisions, all sums due and unpaid by Developer as part of this Agreement shall be subject to interest accrual at the annual rate of five and one-half percent (5.5%) with interest to begin accruing the day after the tender of payment by Developer to Agency was due. Interest shall cease to accrue when payment is tendered by Developer or funds are available under the AHA Reimbursement provisions and the same " are applied to the balance owed by Developer, including accrued interest, to the PPI Account. Final Execution Attachment No. 6D Page 2 of 6 6. Intentionally Omitted. 7. Covenants Running .with the Land. All conditions, covenants and restrictions contained in this Agreement (the "Covenants") shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by Agency, its successors and assigns, and the City of Huntington Beach (the "City") and its successors and assigns, against Developer, its successors and assigns, to or of the Property or any portion thereof or any interest therein, and any party in possession or occupancy of said Property or portion thereof. Agency and the City shall be deemed the beneficiaries of the covenants, conditions and restrictions of this Agreement both for and in their own rights and for the purposes of protecting the interests of the community. The covenants, conditions, and restrictions shall run in favor of the Agency and the City, without regard to whether the Agency or City has an interest therein in the Property. 8. Permitted Mortgages. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage permitted by the AHA. 9. Term. The Covenants shall remain in effect until the earlier of (i) when Developer has made all payments due under this Agreement and the Pedestrian Path Improvements are built, or (ii) Agency makes the determination that the Pedestrian Path Improvements will not -be built and notifies Developer of the decision not to build the Pedestrian Path Improvements. Notwithstanding the foregoing, Developer's obligation to make the Developer's Contribution shall terminate ten (10) years after the approval of the AHA. In the event -the Developer's Contribution has been received by the Agency but construction and completion of the PPI does not take place, Agency will refund the Developer's Contribution to Developer less Developer's share (one-half of the total) of any costs incurred on the PPI prior to the determination not to build or complete the PPI. 10. Intentionally omitted. It. Notice Concerning Default Agency's sole obligation to Developer in the event of Developer's failure to comply with the tender demand within the sixty day period identified in paragraph 2, above, shall be to notify Developer that Agency will exercise the self-help remedies identified in paragraph 5, above. 12. Enforcement. If a violation of any of the covenants or provisions of this Agreement remains uncured after the respective time period set forth in Paragraph I 1 above, Agency and its successors and assigns, without regard to whether Agency or its successors and assigns is an owner of any land or interest therein to which these covenants relate, may institute and prosecute any proceedings at law or in equity to abate, prevent or enjoin any such violation or attempted violation or to compel specific performance by Developer of its obligations hereunder. No delay in enforcing the provisions hereof as to any breach or violation shall impair, Final Execution AttachmentNo. 6D Page 3 of 6 damage or waive the right of any party entitled to enforce the provisions hereof or to obtain relief against or recover for the continuation or repetition of such breach or violations or any similar breach or violation hereof at any later time. 13. Liens. Nothing herein contained shall be deemed to prohibit Developer from contesting the validity or amounts of any encumbrance, lien, levy or attachment, nor to limit the remedies available to Developer in respect thereto. 14. Counterparts. This Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. The signature pages of one or more counterpart copies may .be removed from such counterpart copies and all attached to the same copy of this Agreement, which, with all attached signature pages, shall be deemed to be an original Agreement. [SIGNATURES ON NEXT PAGE] Final Execution Attachment No. 6D Page 4 of 6 IN WITNESS WHEREOF, the Agency and Developer have executed this Agreement as of the date first set forth hereinabove. THE CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY (Agency) Date:By: '^ Chai ATTEST: APPROVED AS TO FORM: Agency General Counsel By: ennifer McGrath APPROVED AS TO FORM: KANE, BALLMER & BERKMAN By: Agen y Special el Susan Y. Cola [SIGNATURE CONTINUED ON NEXT PAGE] Final Execution Attachment No. 6D Page 5 of 6 BTDJM ASSOCIATES, LLC, a Delaware limited liability company By: BEL PAR Final Execution Attachment No. 6D Page 6 of 6 EXHIBIT "A" LEGAL DESCRIPTION EXffiBIT "A" LEGAL DESCRIMON Those portions of Parcel 1 of Parcel Map No. 86-200 and Parcel of Parcel Map No. 2003-163, in the City of Huntington Beach, County of Orange, State of California, as shown on maps filed in Book 255 at Pages 40 through 45, inclusive, and Book 358 at Pages 1 through 9, inclusive, respectively, both of Parcel Maps, in the office of the County Recorder of said county, described as follows: Commencing at the northwest comer of said Parcel 1 of Parcel Map No. 86-200; thence along the north line of said parcel and the north line of said Parcel 9 South 89032'06" East 815.77 feet to the northerly prolongationof that course in the west line of the easement for Public Vehicular & Pedestrian Access described as being "North 00°03'12" East 14451 feet" in a document recorded October 27, 2006, as Instrument No. 2006000726618 of Official Records of said county; thence along said prolongation and said west line the following courses: South 0°00'36" West 220.57 feet to a curve concave westerly having a radius of 102.00 feet, southerly 45.25 feet along said curve through a central angle of 25°25'08" to a reverse curve concave easterly having a radius of 466.00 feet and southerly 194.94 feet along said curve through a central angle of 23*5908" to a line parallel with and southerly 453.00 feet from said north lines; thence non -tangent from said curve and along said parallel line North 89°32'06" West 6.00 feet to the True Point of Beginning; thence along a non - tangent curve concave easterly having a radius of 472.00 feet, a radial line to the beginning of said curve bears North 88°33'09" West; thence southerly 37.62 feet along said curve through a central angle of 4°34%"; thence non -tangent from said curve South 86°52'50" West 17.00 feet to a non - tangent curve concave easterly having a radius of 489.00 feet, a radial line to the beginning of said curve bears South 86°52'50" West; thence southerly 186.49 feet along said curve through a central angle of 21°51'05'; thence non -tangent from said curve North 65001144" East 17.00 feet to a non - tangent curve concave northeasterly having a radius of 472.00 feet, a radial line to the beginning of said curve bears South 65*01'44" West; thence southeasterly 98.73 feet along said curve through a central angle of 11*59105" to a compound curve concave northeasterly having a radius of 46.00 feet; thence southeasterly 42.13 feet along said curve through a central angle of 52°2834'; thence South 89°25'55" East 5.62 feet; thence South 0°27'54" West 129.91 feet; thence North 89032'06" West 390.54 feet; thence North 0°2754" East 4.00 feet; thence North 89°32'O6' West 138.46 feet; thence South 0°2754" West 43.00 feet; thence South 89°32'06" East 21.00 feet; thence South 0°27'54' West 143.03 feet; thence South 89°32'06" East 19.00 feet; thence South 0°2754" West 42.91 feet to the south line of said Parcel 1 of Parcel Map No. 86-200; thence along said south line North 89°32'O6' West 404.92 feet to the westerly line of said Parcel 1; thence along said westerly line North 0°16'24" East 667.82 feet to said parallel line; thence along said parallel line South 89°32'06" East 757.01 feet to the True Point of Beginning. Contains an area of 10.262 acres, more or less. ATTACHMENT NO.7 SCHEDULE OF FEASIBILITY GAP PAYMENTS ATTACHMENT NO.7 SCHEDULE OF FEASIBILITY GAP PAYMENTS This SCHEDULE OF FEASIBILITY GAP PAYMENTS ("Schedule") by and between THE CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and BTDJM PHASE II ASSOCIATES, LLC, a Delaware limited liability .company ("Developer") hereby evidences the Agency's obligation to make certain reimbursement payments to Developer for Developer's construction of residential multi -family dwelling units, which are restricted for rental or sale to and occupancy by Moderate Income Households and Very Low Income Households upon certain real property, in accordance with that certain Affordable Housing Agreement, dated &rt 2010 ("AHA") between Developer and the Agency. AHA as used herein shall mean, refer to and include the AHA, as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments thereto (which are hereby incorporated herein by this reference) or other documents expressly incorporated by reference in the AHA. Any capitalized term not otherwise defined'herein shall have the meaning ascribed to it in the AHA. Agency and Developer may be referred to herein individually as "Party" and collectively as "Parties". NOW, THEREFORE, in consideration of the promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: (a) Reimbursement. The Agency's reimbursement to Developer ("Reimbursement") shall be allocated on a pro rata basis measured against the actual number of Restricted Units completed. The applicable Reimbursement amount shall accrue interest at the rate of 4% per annum, beginning from eighteen (18) months prior to the Completion Date and ending upon the sooner of (i) payment in full of the Reimbursement Amount, (ii) the end of fiscal year 2035-36 (September 30, 2036)("Outside Termination Date"), regardless of whether Developer has been paid the full Reimbursement Amount, or (iii) Developer's uncured default of the AHA, regardless of whether Developer has been paid the full Reimbursement Amount. (b) Maximum Amount of Reimbursement. Subject to all of the terms and conditions of this Schedule (including, without limitation, the provisions of paragraph (d), below), the maximum amount payable by the Agency to Developer under this Schedule (the "Reimbursement Amount") shall be SEVENTEEN MILLION DOLLARS AND NO CENTS ($17,000,000), plus accrued interest, subject to the Look Back provision in paragraph (c)(iii), below. (c) The Reimbursement shall be a special and limited obligation payable to Developer solely from the Agency's Low and Moderate Income Housing Fund. The Agency shall have no obligation to pay any amounts to Developer pursuant to this Schedule except as follows: [Final Execution] Attachment No. 7 Page 1 of 9 (i) The following conditions precedent to each payment hereunder shall be satisfied ("Conditions Precedent"): (A) Developer shall have satisfied all conditions for Completion of the Project (subject to any modifications to the Scope of Development agreed to, in writing, by Agency), as evidenced by the Release of Construction Covenants; and (B) Developer shall not have failed to cure any default within the applicable cure period, if any, as to any of its obligations under the AHA; (C) A certificate of occupancy shall have been issued for the "Costco" retail center and fueling station, as described in General Plan Amendment No. 10-001 /Zoning Text Amendment No. 10-001/Site Plan Review No. 10-001 ("The Village at Bella Terra— Costco'�; (D) Developer shall have completed the following public improvements to the satisfaction of the City of Huntington Beach Building Official, subject to any deviations authorized by the City as conditions or requirements of entitlements permitted for the Project, no later than Developer's receipt of a certificate of occupancy for The Village as Bella Terra — Costco: (a) widening of Edinger Avenue along the Project frontage in accordance with the April 1992 City of Huntington Beach Precise Plan of Street Improvements for Edinger Avenue, Gothard Street to Beach Boulevard; (b) enhancement of the existing median in Edinger Avenue adjacent to the southwest corner of the Project per the Beach/Edinger Corridor Specific Plan; (c) modification of one driveway on Edinger Avenue and one driveway on Center Avenue; (d) construction of a new driveway off of Center Avenue and Edinger Avenue; (e) relocation of an existing water main connecting the lines in Center Avenue and Edinger Avenue to the western edge of the Property; (f) reconnection of two public water lines from the existing Bella Terra site to the east of the Property; (g) reconstruction of an existing ten -inch (10") City sewer stub from the Orange County Sanitation District trunk line to the Project boundary; [Final Execution] Attachment No. 7 Page 2 of 9 (h) relocation of utilities including sewer, storm drain, electrical, telephone, cable television, and gas lines that will serve the Project; (i) storm drainage facilities per the final approved Hydrology and Hydraulics Study and approved plans; (j) sanitary sewer facilities per the approved Sewer Study and approved plans; (k) signage and striping per the approved (traffic) Signage and Striping Plan; (1) traffic signal modifications per the approved Traffic Signal Modification Plan; (m) removal and replacement of curb, gutter, sidewalk and pavement to the centerline of Center Ave and Edinger Avenue along the project frontage, per the approved plans; (n) construction of ADA compliant driveways and ramps on Center Avenue and Edinger Avenue per the approved plans. (o) Water (domestic and fire) infrastructure (including pipeline and appurtenances), per the approved plans. (p) Right -of way dedication (9-ft) on Edinger Avenue along the project frontage. (q) All landscaping and irrigation improvements per the approved Landscape and Irrigation Plan. (E) Developer shall be in full compliance with the Pedestrian Crossing Payment and Covenant Agreement ('PCPCA'). In the event Developer fails to make any contribution to the PPI Account when due (as set forth in Paragraph 2 of the PCPCA), Agency may withhold Developer's contribution from any sums due Developer under this Schedule. The amount Agency may withhold shall be such amounts as are necessary to cover the Developer's Contribution to the PPI Account plus any interest authorized by the PCPCA. (ii) Subject to all of the terms and conditions of this Schedule, Reimbursement shall commence no later than ninety (90) days following Agency's receipt of the first baseline assessment of the Bella Terra II Site by the Orange County Assessor following the Completion Date for the Project ("Trigger Event"), and continue until the sooner of (i) payment in full of the Reimbursement Amount, (ii) the end of fiscal year 2035-36 (September 30, 2036)("Outside [Final Execution] Attachment No. 7 Page 3 of 9 Termination Date"), regardless of whether Developer has been paid the full Reimbursement Amount, or (iii) Developer's uncured default of the AHA, regardless of whether Developer has been paid the full Reimbursement Amount. Agency shall make payments to Developer once every six months, subject to reasonable adjustments by Agency based upon the dates of its actual receipt of tax increment from the Orange County Treasurer. Each payment amount shall be based upon the amount of the Bella Terra Housing Deposit plus the Bella Terra II Supplemental Deposit received by Agency from the Orange County Treasurer for six month period for which such taxes have been collected. BY EXECUTION OF THIS AGREEMENT, DEVELOPER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT ANY DELAYS IN THE SCHEDULE OF PERFORMANCE AND/OR DELAYS TO SATISFACTION OF THE CONDITIONS PRECEDENT, ABOVE,FROM ANY CAUSE WHATSOEVER, SHALL NOT EXTEND THE OUTSIDE TERMINATION DATE. (iii) Reimbursement Rate. Subject to availability of funds as set forth in paragraph (d)(iv), below, the exact Reimbursement amount to be paid by the Agency shall be determined, as follows: Restricted Units available for rental or sale to and occupancy by Moderate Income Households at the rate of $175,600 per Completed unit. Restricted Units available for rental or sale to and occupancy by Very Low Income Households at the rate of $337,600 per Completed unit. Look Back Provision. In the event that Completion of Construction does not occur before the designated date set forth in the Schedule of Performance, a cost certification audit shall be performed at Developer's expense, by a certified public accountant acceptable to the Agency, within thirty (30) days of the Completion Date for the Project. In the event that actual Development Costs are less than the Development Costs for each Restricted Unit as determined in the Project Budget, the resulting cost savings ("Cost Savings") shall be deducted from the principal amount of the Reimbursement. (iv) Availability of Funds. Beginning eighteen (18) months prior to the Completion Date and continuing thereafter until the Agency's Reimbursement obligations under this Schedule are satisfied, and subject to all conditions, above, the Agency shall deposit (x) twenty percent (20%) of the Gross Tax Increment generated from and actually received by Agency from the Orange County Treasurer from the Bella Terra I Site and Bella Terra lI Site ("Bella Terra Housing Deposit"), and (y) fifty percent (50%) of Available Site -Generated Property Tax Increment that is generated from and received by Agency from the Bella Terra II Site ("Bella Terra II Supplemental Deposit") into the Agency's Low and Moderate Income Housing Fund. Notwithstanding anything to the contrary herein or the AHA, the Agency's Reimbursement to Developer shall be no more than the sum of the Bella Terra Housing Deposit plus the Bella Terra II Supplemental Deposit, up to the Reimbursement Amount, plus accrued interest. [Final Execution] Attachment No. 7 Page 4 of 9 (d) The Agency's obligations hereunder may be prepaid by the Agency, in whole or in part, at any time and from time to time without penalty. (e) The Agency's obligation to pay the Reimbursement in accordance with this Schedule shall be subordinate to the Agency's existing bonded indebtedness and bond issuance(s) and the refunding or refinancing thereof and any future bonds the Agency may issue and the bonded indebtedness incurred in connection therewith, provided that the Agency reasonably determines at the time of issuance of any such future bonds (based on the written opinion of the independent financial advisor retained by Agency to assist with issuance of such bonds) that such issuance and indebtedness will not adversely affect the Agency's ability to timely perform its obligations under this Schedule. Bonded indebtedness includes any indebtedness incurred by the Agency for bonds, notes, interim certificates, debentures, and certificates of participation or other obligations issued by the Agency. The Agency's obligation to pay a portion of the Gross Tax Increment orAvailable Available Site - Generated Property Tax Increment to Developer under this Schedule is not and shall not be construed as a "pledge" of property tax revenues for purposes of Section 33671.5 of the Community Redevelopment Law. (f) This Schedule is part of the AHA and is subject to all of the terms and conditions thereof. (g) Developer shall refrain from appealing, challenging or contesting in any manner the validity or amount of any tax assessment, encumbrance or lien on the Site ('Imposition"); provided, however, that such prohibition shall not apply to an appeal, challenge or contesting of the erroneous initial assessment for property tax purposes of the Site in the fiscal year of Completion. (h) Notwithstanding any other provision set forth in this Schedule to the contrary, and in addition to any other remedy available to Agency under applicable law or the AHA, if Developer or any successor in interest commits an uncured default of its obligations under the Agreement Containing Covenants, the Agreement and Covenant Concerning Use and Resale of Residential Units, or the Right of First Refusal and, as a result, one or more of the Restricted Units either is (i) rented to or occupied by a non -Qualified Renter or at a rent that is above the applicable Affordable Rent or (ii) sold to a non -Qualified Purchaser or at a price that exceeds the applicable Affordable Housing Cost, then Agency shall have the right to suspend a pro rata portion of the Reimbursement payments (including principal and interest) and otherwise due hereunder attributable to said default until the default is cured. For purposes of this remedy,. the parties agree that the pro rata portion of each periodic Reimbursement payment that is attributable to each Restricted Unit that is supposed to be reserved for occupancy by a Moderate Income Household shall be 1.03% of the total Reimbursement payment otherwise due and the pro rata portion of the Reimbursement attributable to each Restricted Unit that is supposed to be reserved for occupancy by a Very Low Income Household shall be 1.98% of the Reimbursement otherwise due. The amount of the suspension of payments shall be based on the period of time that the uncured material default continues. Upon Developer's cure of said default, the suspended payments (including principal and interest) shall terminate, but Agency shall have no [Final Execution] Attachment No. 7 Page 5 of 9 obligation to pay the suspended portion of the periodic Reimbursement payments for the period that the suspension of payments was in effect." (i) The following definitions shall apply to this Schedule: (1) "Available Site -Generated Property Tax Increment" means the total ad valorem property tax increment revenue allocated to and received by.Agency in any fiscal year pursuant to Section 33670(b) of the California Health and Safety Code, as said statute may be amended from time to time, by application of the one percent (1 %) tax levied against real property as permitted by Article XIIIA of the California Constitution, in an amount equal to any increase in the assessed value of the Bella Terra II Site over and above an assessed value of ELEVEN MILLION SIX HUNDRED AND SEVENTY-SEVEN THOUSAND DOLLARS ($11,677,000)("Baseline Value'),!/ but specifically excluding therefrom all of the following: (A) a portion of such tax increment revenues equal to the twenty percent (20%) of tax increment revenue from the redevelopment project area as a whole that is set aside pursuant to Sections 33334.2 et seq. of the California Health and Safety Code or any successor law form low- and moderate -income housing purposes; (B) a portion of such tax increment revenues equal to the percentage of tax increment revenues from the redevelopment project area as a whole that the Agency is required to pay to any and all governmental entities pursuant to any provision of law, as amended from time to time, or pursuant to tax sharing/pass-through agreements (including any and all agreements entered into prior to the AHA by Agency and such governmental entities implementing the tax sharing/pass-through agreements), (C) a portion of tax increment revenues equal to the percentage of such revenues in the redevelopment project area as a whole which the Agency may be required by the State of California to pay from time to time, including, for example, and without limiting the generality of the foregoing, any payments which the Agency may be required to pay to the Education Revenue Augmentation Fund or equivalent funds pursuant to Section 33681 et seq. of the Community Redevelopment Law; (D) the amount of any revenues received by the Agency which are attributable to any special taxes or assessments or voter -approved indebtedness; and (E) charges for County administrative charges, fees or costs equal to the percentage of such charges in the Project Area as a whole. 1/ Agency and Developer acknowledge that the Developer will process a lot line adjustment as part of the entitlements for the Project, which will eliminate parcels from the Bella Terra site and commute those parcels into the Project site. The lot line adjustment will therefore reduce the propertytax base from the Bella Terra site and commensurately increase the property tax base for the Project site. As a result, Agency and Developer agree that.(i) the Baseline Value will be adjusted upward to reflect the change in the property tax base for the Project upon Completion and (ii) prior to the adjustment of the Baseline Value and as a condition thereto, the Agency and Developer shall execute a Third Implementation Agreement to the Owner Participation Agreement by and between Agency and Bella Terra Associates, LLC to reduce the baseline value (currently set at $43,228,000) by the same amount as the adjustment upward in the Baseline Value. [Final Execution] Attachment No. 7 Page 6 of 9 (2) "Bella Terra I Site". means Parcel 4, as indicated in the attached Exhibit "A", entitled "Lot Line Adjustment Exhibit". (3) "Bella Terra II Site" means Parcels 1-3, as indicated in the attached Exhibit "A", entitled "Lot Line Adjustment Exhibit". (4) "Gross Tax Increment" means the property taxes allocated to the Agency in accordance with Health and Safety Code section 33670. (5) "Project Area" means the redevelopment project area contemplated by the Redevelopment Plan, which was approved and adopted by the City Council of the City of Huntington Beach on December 16,1996, by Ordinance No. 3343, and lawfully amended thereafter. SIGNATURES ON NEXT PAGE [Final Execution] Attachment No. 7. Page 7 of 9 IN WITNESS WHEREOF, the Agency and Developer have executed this Schedule as of the date first set forth hereinabove. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Agency) d R"M ATTEST: APPROVED AS TO FORM: Agency General Counsel By: enifer Grath Y J APPROVED AS TO FORM: KANE, BALLMER & BERKMAN By: Ag ncy SpeciKtounsel Susan Y. Cola SIGNATURE CONTINUED ON NEXT PAGE [Final Execution] Attachment No. 7 Page 8 of 9 BTDJM ASSOCIATES, LLC, a Delaware limited liability comnnnv By: BEL PAR [Final Execution] Attachment No. 7 Page 9 of 9 ATTACHMENT NO. 8 ENVIRONMENTAL INDEMNITY ENVIRONMENTAL INDEMNITY THIS ENVIRONMENTAL INDEMNITY (this "Indemnity"), dated as of 3 20J3, made by and between the Successor Agency to the Redevelopment Agency of the City of Huntington Beach ("Successor Agency") and Bella Terra Villas LLC, a Delaware limited liability company ("Developer"), whose address for purposes of giving notices is 1745 Shea Center Drive, Suite 200, Highlands Ranch, CO 80129, in favor of the Successor Agency, whose address for purposes of giving notices is 2000 Main Street, Huntington Beach, CA 92648. WITNESSETH WHEREAS, Developer is the owner of certain real property situated in the City of Huntington Beach, California, described in Exhibit "A" which is attached hereto and made a part hereof (the "Property"), and has agreed to construct certain improvements thereon (the "Improvements"); and WHEREAS, pursuant to the 'AFFORDABLE HOUSING AGREEMENT ("AHA") entered into by and between the former Redevelopment Agency of the City of Huntington Beach (the "Former Agency") and Developer's predecessor -in -interest, BTDJM PHASE II ASSOCIATES, LLC, a Delaware limited liability company ("BTDJM"), as the original "Developer" therein, dated October 11, 2010, the original Developer agreed to execute and deliver to the Former Agency an environmental indemnity to induce the Former Agency to enter into the AHA; and WHEREAS, with the consent of the Former Agency, BTDJM assigned its right, title and interest in and to the AHA to Developer pursuant to that certain Assignment and Assumption Agreement, dated as of October 21, 2011. The Former Agency's consent to such assignment is attached to such Assignment and Assumption Agreement; and WHEREAS, the Former Agency is now a dissolved community redevelopment agency pursuant to Assembly Bill XI 26, which was passed by the California State Legislature, approved by the Governor on June 28, 2011, and chaptered by the Secretary of State on June 29, 2011, and which added Parts 1.8 and 1.85 to Division 24 of the California Health & Safety Code ("Dissolution Act"). By Resolution No. 2012-01, considered and approved by the City Council of the City of Huntington Beach ("City") at an open public meeting on January 9, 2012, the City Council chose to have the City become and serve as the "Successor Agency" to the Former Agency under the Dissolution Act, and effective as of and on and after February 1, 2012, the Successor Agency will perform its functions under the Dissolution Act to administer the enforceable obligations of the Former Agency and otherwise unwind the Former Agency's affairs. NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual agreements hereinafter set forth, Developer hereby agrees with the Successor Agency as follows: Final Execution Ia-1217028 v3 SECTION 1. DEFINITIONS All capitalized terms used in this Indemnity shall have the meaning ascribed to them in the AHA with the same force and effect as if set forth in full below. SECTION 2. COVENANTS AND INDEMNITY The following covenants and indemnities are hereby given and made by Developer: 2.1 Covenants. (a) Developer covenants that it shall (i) comply with any and all laws, regulations, and/or orders which may be promulgated, from time to time, with respect to the discharge and/or removal of Hazardous Materials, (ii) pay immediately when due the costs of the removal of, or any other action required by law with respect to, any such Hazardous Materials, and (iii) keep the Property free of any lien imposed pursuant to any such laws, regulations, or orders. (b) Developer covenants that the Property will not be used for any activities involving, directly or indirectly, the use, generation, treatment, storage, release, or disposal of any Hazardous Materials, except for de minimis quantities used at the Property in compliance with all applicable environmental laws and required in connection with the routine operation and maintenance of the Property (the "De Minimis Exception"). (c) Developer further agrees that, except with respect to the De Minimis Exception, Developer shall not release or dispose of any Hazardous Materials on the Property without the express written approval of the Successor Agency and that any such release or disposal shall be effected in strict compliance with all applicable laws and all conditions, if any, established by the Successor Agency. (d) The Successor Agency shall have the right, at any time up through Completion, to conduct an environmental audit ("Agency Audit"), at the Successor Agency's expense, unless Hazardous Materials (other than in connection with the De Minimis Exception) are found, then at Developer's sole cost and expense, and Developer shall cooperate in the conduct of any such environmental audit but in no event shall such audit be conducted unless the Successor Agency reasonably believes that such audit is warranted. Other than in an emergency, such audit shall be conducted only after prior notice has been given to Developer and only in the presence of a representative of Developer. The Agency Audit shall not interfere with occupancy or ongoing work. Successor Agency shall obtain Developer's prior approval of any work plan that involves invasive or destructive testing or work, with Developer's approval to not be unreasonably withheld. Successor Agency shall promptly repair and restore any damage to the Property caused by the Successor Agency's entry. If Successor Agency believes it has found evidence of Hazardous Materials, Successor Agency shall cooperate with the Developer by providing the Developer with complete information, including any inspection logs, reports, etc. (e) Developer shall not install, or permit to be installed, on the Property friable asbestos or any substance containing asbestos and deemed hazardous by federal or state regulations respecting such material and with respect to such material Developer shall remove or Final Execution 2 1a-1217028 v3 cause to be removed any such material. If Developer shall fail to comply with this subsection within the cure period permitted under applicable law, regulation, or order, the Successor Agency may do whatever is necessary to eliminate said substances from the premises or to otherwise comply with the applicable law, regulation, or order, and the costs thereof shall be added to the Obligations (as hereinafter defined) of Developer under this Section 2. (f) Developer shall immediately advise the Successor Agency in writing of any of the following: (i) any pending or threatened environmental claim against Developer or the Property or (ii) any condition or occurrence on the Property that (A) results in noncompliance by Developer with any applicable environmental law, (B) could reasonably be anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use or transferability of the Property under any environmental law, or (C) could reasonably be anticipated to form the basis of an environmental claim against the Property or Developer. 2.2 Indemnity. Developer shall indemnify, protect, and hold the Successor Agency harmless from and against any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements, or expenses (including, without limitation, attorneys' and experts' fees and disbursements) of any kind or of any nature whatsoever (collectively, the "Obligations") which may at any time be imposed upon, incurred by or asserted or awarded against the Successor Agency and arising from or out of: (a) The presence of any Hazardous Materials on, in, under, or affecting all or any portion of the Property or any surrounding areas existing on or before the date of Completion; (b) The enforcement by the Successor Agency of any of the provisions of this Section 2.2 or the assertion by Developer of any defense to its obligations hereunder. SECTION 3. DEVELOPER'S UNCONDITIONAL OBLIGATIONS 3.1 Unconditional Obligations. Developer hereby agrees that the Obligations will be paid and performed strictly in accordance with the terms of this Indemnity, regardless of any law, regulation, or order now or hereafter in effect in any jurisdiction affecting the AHA or affecting any of the rights of the Successor Agency with respect thereto. The obligations of Developer hereunder shall be absolute and unconditional irrespective of: (a) The validity, regularity, or enforceability of the AHA or any other instrument or document executed or delivered in connection therewith (collectively, the "AHA Documents"); (b) Any alteration, amendment, modification, release, termination, or cancellation of any of the AHA Documents, or any change in the time, manner, or place of payment of, or in any other term in respect of, all or any of the obligations of Developer contained in any of the AHA Documents; Final Execution la-1217028 v3 (c) Any waiver of, or consent to any departure from, any provision contained in the AHA Documents; (d) Any exculpatory provision in any of the AHA Documents limiting the Successor Agency's recourse to Developer's interest in the Property; (e) Any exchange, addition, subordination, or release of, or non -perfection of any lien on or security interest in, any collateral for the AHA Documents. (f) The insolvency or bankruptcy of Developer, or of any indemnitor or guarantor under any other indemnity or guarantee given in respect of the AHA Documents; or (g) Any other circumstance that might otherwise constitute a defense available to, or a discharge of, Developer or any other indemnitor or guarantor with respect to the AHA Documents, or any or all of the Obligations. 3.2 Continuation. This Indemnity is a continuing indemnity and shall remain in full force and effect until the satisfaction in full of all of the Obligations (notwithstanding the payment in full of the Reimbursement); provided, however, that the Indemnity shall only cover Hazardous Material existing in, under, or across the Property on or before the date of Completion. SECTION 4. WAIVER Developer hereby waives the following: (a) Promptness and diligence; (b) Notice of acceptance and notice of the incurrence of any obligation by Developer; (c) Notice of any action taken by the Successor Agency or any other interested party under this Indemnity and/or the AHA Documents (but only to the extent it affects rights under this Indemnity), or under any other agreement or instrument relating thereto; (d) All other notices, demands, and protests, and all other formalities of every kind, in connection with the enforcement of the Obligations, the omission of or delay in which, but for the provisions of this Section 4, might constitute grounds for relieving Developer of its Obligations hereunder; (e) Any requirement that the Successor Agency protect, secure, perfect, or insure any security interest or lien in or on any property subject thereto; (f) Any requirement that the Successor Agency exhaust any right or take any action against Developer or any other person or collateral; and (g) Any defense that may arise by reason of - Final Execution 4 la-1217028 v3 (1) The incapacity, lack of authority, death or disability of, or revocation hereof by, any person or persons; (2) The failure of the Successor Agency to file or enforce any claim against the estate (in probate, bankruptcy, or any other proceedings) of any person or persons; or (3) Any defense based upon an election of remedies by the Successor Agency. SECTION 5. NOTICES Any notice, demand, statement, request, or consent made hereunder shall be in writing and shall be personally served, mailed by first-class registered mail, return receipt requested, to the address set forth in the first paragraph of this Indemnity, above, or given by telecopier to the telecopier numbers stated below, with confirmations mailed by first class registered mail, return receipt requested to the address set forth above, of the party to whom such notice is to be given (or to such other address as the parties hereto, shall designate in writing): To Successor Agency:City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Economic Development Director with copies to: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: City Attorney To Developer: Bella Terra Villas LLC c/o UDR, Inc. 1745 Shea Center Drive, Suite 200 Highlands Ranch, CO 80129 Attention: Warren L. Troupe with copies to: Morrison & Foerster LLP 707 Wilshire Boulevard Los Angeles, CA 90017 Attention: Thomas R. Fileti Phone: (213) 892-5276 Fax: (213) 892-5454 Any notice that is transmitted by electronic facsimile transmission followed by delivery of a "hard" copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the Final Execution la-1217028 v3 documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. SECTION 6. MISCELLANEOUS 6.1 Developer shall make any payment required to be made hereunder in lawful money of the United States of America, and in same day funds, to the Successor Agency at its address specified in the first paragraph hereof. 6.2 No amendment of any provision of this Indemnity shall be effective unless it is in writing and signed by Developer and the Successor Agency, and no waiver of any provision of this Indemnity, and no consent to any departure by Developer from any provision of this Indemnity, shall be effective unless it is in writing and signed by the Successor Agency, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 6.3 No failure on the part of the Successor Agency to exercise, and no delay in exercising, any right hereunder or under the AHA Documents (as it relates to rights under this Indemnity) shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Successor Agency provided herein and in the AHA Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. 6.4 Any provision of this Indemnity that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof and without affecting the validity or enforceability of such provision in any other jurisdiction. 6.5 This Indemnity shall be binding upon Developer and Developer's successors and assigns; provided, however, that from and after the effective date of a Transfer, the transferor shall be released from all obligations and shall release any rights it may have from the Successor Agency under this Agreement. This Indemnity shall inure, together with all rights and remedies of the Successor Agency hereunder, to the benefit of the Successor Agency, its respective directors, officers, employees, and agents, any successors to the Successor Agency's interest in the Property, any other person who acquires any portion of the Property at a foreclosure sale or otherwise through the exercise of the Successor Agency's rights and remedies under the AHA Documents, any successors to any such person, and all directors, officers, employees, and agents of all of the aforementioned parties. 6.6 Developer hereby (a) irrevocably submits to the jurisdiction of any California or federal court sitting, in each instance, in Orange County in any action or proceeding arising out of or relating to this Indemnity, (b) waives any defense based on doctrines of venue or forum non conveniens or similar rules or doctrines, and (c) irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such California or federal court. Developer irrevocably consents to the service of any and all process which may be required or permitted in any such action or proceeding to the address specified in the first paragraph of this Indemnity, above. Developer agrees that a final judgment in any such action or proceeding shall Final Execution 6 la-1217028 v3 be inclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law. 6.7 The title of this document and the captions used herein are inserted only as a matter of convenience and for reference and shall in no way define, limit, or describe the scope or the intent of this Indemnity or any of the provisions hereof. 6.8 This Indemnity shall be governed by, and construed and interpreted in accordance with, the laws of the State of California applicable to contracts made and to be performed therein, except to the extent that the laws of the United States preempt the laws of the State of California. 6.9 This Indemnity may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one agreement. IN WITNESS WHEREOF, the Successor Agency and Developer have executed this Indemnity as of the date first set forth hereinabove. SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ATTEST: A ncy Secretary R VIEWED AND APPROVED AS TO FORM: City Attorney Jennif McGrath �a REVIEWED AND APPROVED AS TO FORM: Kane Ba �er & Berkman /.By: Final Execution 7 la-1217028 v3 Director BELLA TERRA VILLAS LLC, a Delaware limited liability company By: DCO Realty, Inc., a Delaware corporation, its Sole Member !�� By: Warren L. Troupe, President Final Execution 1a-1217028 0 EXHIBIT "A" LEGAL DESCRIPTION All that certain real property situated in the County of Orange, State of California, as follows: That certain real property in the City of Huntington Beach, County of Orange, State of California, being Lots 1 and 2 of Tract No. 17261 as per map filed in Book 914, Pages 24 through 27, inclusive, of Miscellaneous Maps, in the office of the County Recorder of said county. Final Execution 1a-1217028 v3 ATTACHMENT NO.9 ASSIGNMENT AND ASSUMPTION AGREEMENT ASSIGNMENT AND ASSUMPTION AGREEMENT THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is made as of b (`A0kjL('_ L1 , 2011 by and between BTDJM PHASE Il ASSOCIATES, LLC, a Delaware limited liability company ("Assignor"), and BELLA TERRA VILLAS LLC, a Delaware limited liability company ("Assignee"). RECITALS A. Assignor has certain rights and obligations (the "Rights" and the "Obligations," respectively) with regard to the real property described on Exhibit A attached hereto. B. Such Rights and Obligations are described in that certain Affordable Housing Agreement ("AHA") by and between the CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY ("Agency") and BTDJM PHASE II ASSOCIATES, LLC, a Delaware limited liability company ("Developer" therein), dated October 11, 2010, which document is a record on file in the offices of the City Clerk of the City of Huntington Beach and the Secretary of the Agency. The AHA is incorporated herein by this reference as though fully set forth herein. AHA as used herein shall mean, refer to and include the AHA, as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments thereto (which are hereby incorporated herein by this reference) or other documents expressly incorporated by reference in the AHA. Any capitalized term not otherwise defined herein shall have the meaning ascribed to it in the AHA. C. Pursuant to the AHA, Assignor has the right and desires to assign the Rights and Obligations to Assignee, and Assignee desires to assume the Rights and Obligations. AGREEMENT NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Assignor and Assignee hereby agree as follows: 1. Assignment. Effective as of the date on which a grant deed executed by Assignor and conveying the portion of the Property described on Exhibit B to Assignee is recorded in the Official Records of Orange County, California (such date is referred to herein as the "Effective Date"), Assignor hereby assigns all of the Rights to Assignee. 2. Acceptance and Assumption. Effective as of the Effective Date, Assignee hereby accepts the assignment of the Rights from Assignor and assumes all of the Obligations arising from and after the Effective Date. Assignor and Assignee acknowledge that such assignment and acceptance shall relieve Assignor of its duty to comply with the Obligations effective as of the Effective Date. Effective as of the la- 1136662 Effective Date, Assignee agrees to perform all of the Obligations in accordance with the AHA. 3. Assignee Address. Effective as of the Effective Date, the principal address of Assignee for purposes of the AHA is as follows: c/o UDR, Inc. 1745 Shea Center Drive, Suite 200 Highlands Ranch, CO 80129 4. Miscellaneous. (a) This Assignment shall be determined in accordance with and governed by the laws of the State of California. (b) This Assignment may be executed in counterparts, each of which shall be deemed an original and which, when taken together, shall constitute a complete instrument. (c) Each party agrees to perform any further acts, and to execute and deliver any further documents that may be reasonably necessary or required to carry out the intent and provisions of this Assignment and the transactions contemplated hereby. (d) This Assignment shall bind and inure to the benefit of the respective heirs, personal representatives, grantees, successors and assigns of the parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be signed by their duly authorized officers as of the day and year first written above. ASSIGNOR: BTDJM Phase II Associates, LLC, a Delaware limited liability company ASSIGNEE: Bella Terra Villas LLC, a Delaware limited liability company By By: Name: Eric Sahn Title: Vice President DCO Realty, Inc, a Delaware corporation, its Sole Member By: Name: Warren L. Troupe Title: President ]a-] 136662 2 Effective Date, Assignee agrees to perform all of the Obligations in accordance with the AHA. 3. Assignee Address. Effective as of the Effective Date, the principal address of Assignee for purposes of the AHA is as follows: c/o UDR, Inc. 1745 Shea Center Drive, Suite 200 Highlands Ranch, CO 80129 4. Miscellaneous. (a) This Assignment shall be determined in accordance with and governed by the laws of the State of California. (b) This Assignment may be executed in counterparts, each of which shall be deemed an original and which, when taken together, shall constitute a complete instrument. (c) Each party agrees to perform any further acts, and to execute and deliver any further documents that may be reasonably necessary or required to carry out the intent and provisions of this Assignment and the transactions contemplated hereby. (d) This Assignment shall bind and inure to the benefit of the respective heirs, personal representatives, grantees, successors and assigns of the parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be signed by their duly authorized officers as of the day and year first written above. ASSIGNOR: BTDJM Phase II Associates, LLC, a Delaware limited liability company By: Name: Eric Sahn Title: Vice President ASSIGNEE: Bella Terra Villas LLC, a Delaware limited liability company By: DCO Realty, Inc, a Delaware corporation, its Sole Member By: 1 -_ Name: Warren L. Troupe Title: President 1a-1136662 2 CONSENT TO ASSIGNMENT AND ASSUMPTION In reliance upon the assumption by BELLA TERRA VILLAS LLC, a Delaware limited liability company, as Assignee, of all Rights and Obligations pursuant to the foregoing Assignment and Assumption Agreement, the CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY does hereby consent to and approve of the assignment of the Rights and Obligations by BTDJM PHASE II ASSOCIATES, LLC, a Delaware limited liability company, to Assignee, effective as of the Effective Date set forth in the foregoing Assignment and Assumption Agreement. Approval thereof by the Agency shall not be construed to relieve or release BTDJM PHASE II ASSOCIATES, LLC, a Delaware limited liability company, from its duty to comply with any of its Obligations. THE CITJ OF HUNTDiCTON BEACH REDEV LOPMEN3/AGENCY (Agency) Date: August 24, 2011 By Chairman ATTEST: REVIEWED AND APPROVED AS TO FORM: Agency General Counsel Y� Agenc GeneralCel Jennifer McGrath APPROVED AS TO FORM: KANE, BALLMER & BERKMAN LIN Agency Susan Y. la- 1136662 Exhibit A to Assignment and Assumption Agreement Legal Description of the Property described in the Affordable Housing Agreement Those portions of Parcel 1 of Parcel Map No. 86-200 and Parcel 9 of Parcel Map No. 2003-163, in the City of Huntington Beach, County of Orange, State of California, as shown- on maps filed in Book 255 at Pages 40 through 45, inclusive, and Book 358 at Pages 1 through 9., inclusive, respectively, both of Parcel Maps, in the office of the County Recorder of said county, described as follows: Commencing at the northwest corner of said Parcel 1 of Parcel Map No. 86-200;. thence along the north line of said parcel and the north line of said Parcel 9 South 8903TW East 815.77 feet to the northerly prolongation of that course in the west line of the easement for Public Vehicular & Pedestrian Access described as being "North 00°03'12" East 144.51 feet" in a document recorded October 27, 2006, as Instrument No. 2006000726618 of Official Records of said county; thence along said prolongation and said west line the following courses: South 0°006" West 22057 feet to a curve concave westerly having a radius of 102.00 feet, southerly 45.25 feet along said curve through a central angle of 25°25'08" to a reverse curve concave easterly having a radius of 466.00 feet and southerly 194.94 feet along said curve through a central angle of 23°58'08" to a line parallel with and southerly 453.00 feet from -said north lines; thence non -tangent from said curve and along said parallel line North 89°32'06" West 6.00 feet to the True Point of Beginning; thence along a non - tangent curve concave easterly having a radius of 472.00 feet, a radial line to the beginning of said curve bears North 88°33'09" West; thence southerly 37.62 feet along said curve through a central angle of 4°301'; thence non -tangent from said curve South 86052'50" West 17.00 feet to a non - tangent curve concave easterly having a radius of 489.00 feet, a radial line to the beginning of said curve bears South 8605250" West; thence southerly 186.49 feet along said curve through a central angle of 21°51'05'; thence non -tangent from said curve North 65°01'44" East 17.00 feet to a non - tangent curve concave northeasterly having a radius of 472.00 feet, a radial line to the beginning of said curve bears South 65°01'44" West; thence southeasterly 98.73 feet along said curve through a central angle of 11*59'05" to a compound curve concave northeasterly having a radius of 46.00 feet; thence -southeasterly 42.13 feet -along said curve through a central angle of 52°28'34'; thence South - - 89025155" East 5.62 feet; thence South 0°2754" West 129.91 feet; thence North 89032'06" West la-1136662 390.54 feet; thence North MT54" East 4.00 feet; thence North 89°32'06" West 138.46 feet; thence South 0027'54" West 43.00 feet; thence South 89032'06" East 21.00 feet; thence South 0"2754" West 143.03 feet; thence South 89"32'06" East 19.00 feet; thence South 0°27'54" West 42.91 feet to the south line of said Parcel 1 of Parcel Map No. 86-200; thence along said south line North 89°32'06" West 404.92 feet to the westerly line of said Parcel 1; thence along said westerly line North 0°16'24" East 667.82 feet to said parallel line; thence along said parallel line South 89032'06" East 757.01 feet to the True Point of Beginning. Contains an area of 10.262 acres, more or less. 1a-1136662 Exhibit B to Assignment and Assumption Agreement Legal Description of the Property described in the Grant Deed from Assignor to Assignee PARCEL 3 OF LOT LINE ADJUSTMENT NO.10-006 RECORDED , 2011 AS INSTRUMENT NO. OF OFFICIAL RECORDS IN ORANGE COUNTY, CALIFORNIA la- 1136662 ATTACHMENT NO. 10 RELEASE OF CONSTRUCTION COVENANTS This Document was electronically recorded by City of Huntington Beach OFFICIAL BUSINESS Document entitled to free recording per Government Code Section 6103 Recording Requested By and When Recorded Mail to: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Economic Development Director Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder 11111111111111111111111111111111111111111111111111 111INO FEE 2014000215006 12:28pm 06/03/14 105 409 R08 7 0.00 0.00 0.00 0.00 18.00 0.00 0.00 0.00 SPACE ABOVE THIS LINE FOR RECORDER'S USE RELEASE OF CONSTRUCTION COVENANTS (APN: 142-075-01 AND 142-075-02) This document is solely for fffe offldai bins of the Clty of Hun*Vton Beech, as contemplated under G*vmwmt Code Sec. 6103 cad Should be moordsd km of cPuirp, WHEREAS, BELLA TERRA VILLAS LLC, a Delaware limited liability company (the "Developer"), is the owner of certain real property situated in the City of Huntington Beach, California, described in Exhibit "A" which is attached hereto and made a part hereof (the "Property"), and has agreed to construct certain improvements thereon (the "Improvements"); and WHEREAS, the former Redevelopment Agency of the City of Huntington Beach ("Former Agency"), the predecessor -in -interest to the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("Successor Agency"), and Developer's predecessor -in -interest, BTDJM Phase H Associates, a Delaware limited liability company ("BTDJM"), entered into that certain Affordable Housing Agreement ("AHA"), dated October 11, 2010; and WHEREAS, with the consent of the Former Agency, BTDJM assigned its right, title and interest in and to the AHA to Developer pursuant to that certain Assignment and Assumption Agreement, dated as of October 21, 2011. The Former Agency's consent to such assignment is attached to such Assignment and Assumption Agreement; and WHEREAS, pursuant to that certain Estoppel Certificate (Pursuant to Affordable Housing Agreement), dated August 24, 2011, the Former Agency acknowledged that the Improvements to be developed pursuant to the AHA would be developed solely on the portion of the site described in the AHA that is contained within the legal description of the Property that is attached hereto; and WHEREAS, the Former Agency is now a dissolved community redevelopment agency pursuant to Assembly Bill XI 26, which was passed by the California State Legislature, approved by the Governor on June 28, 2011, and chaptered by the Secretary of State on June 29, 2011, and which added Parts 1.8 and 1.85 to Division 24 of the California Health & Safety Code ("Dissolution Act"). By Resolution No. 2012-01, considered and approved by the City Council 1 of the City of Huntington Beach ("City") at an open public meeting on January 9, 2012, the City Council chose to have the City become and serve as the "Successor Agency" to the Former Agency under the Dissolution Act, and effective as of and on and after February 1, 2012, the Successor Agency will perform its functions under the Dissolution Act to administer the enforceable obligations of the Former Agency and otherwise unwind the Former Agency's affairs; and WHEREAS, pursuant to the AHA, the Successor Agency has agreed to furnish the Developer with a Release of Construction Covenants ("Release") upon the completion of construction and development of the Improvements, and such certificate is to be in such form as to permit it to be recorded in the Recorder's Office of Orange County; and WHEREAS, the AHA states that -the Release shall be conclusive determination of satisfactory completion of the construction and development of the Improvements as required by the AHA; and WHEREAS, the Successor Agency has determined that the construction and development of the Improvements on the Property as required by the AHA has been satisfactorily completed. NOW THEREFORE, it is hereby acknowledged and agreed by the parties hereto that: 1. The Successor Agency hereby certifies that the construction and development of the Improvements on the Property has been fully and satisfactorily performed and completed as required by the AHA. 2. Nothing contained in this instrument shall modify any provisions of the AHA. IN WITNESS WHEREOF, the Successor Agency has executed this Release this 3" day of .. w 4' , 2014. 2 SUCCESSOR AGENCY SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Lm ATTEST: tAncy Secretary REVIEWED AND APPROVED AS TO FORM: City Attorney By: v 6ennifer cGrath REVIEWED AND APPROVED AS TO FORM: Kane Ba er & Berkma By: -- C [SIG URES CONTINUED ON NEXT PAGE] 3 DEVELOPER BELLA TERRA VILLAS LLC, a Delaware limited liability company By: DCO Realty, Inc., a Delaware corporation, its Sole Member B L Warren L. Troupe, President 4 la-1217015 0 LEGAL DESCRIPTION The land referred to herein is situated in the State of California, County of Orange, City of Huntington, and described as follows: That certain real property in the City of Huntington Beach, County of Orange, State of California, being Lots 1 and 2 of Tract No. 17261 as per map filed in Book 914, Pages 24 through 27, inclusive, of Miscellaneous Maps, in the office of the County Recorder of said county. la-1241199 STATE OF ) COUNTY OF ) On r , l T C t L� before me, (here insert name and title of the officer), personally appeared Warren 1 . 1 Court-Rn"do0' &'hC-0 ,Tt'Le, who proved to me on the basis of satisfactory evidence to be .the person(s) whose names) is/are subscribed to the within instrument and acknowledged to me that 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. C.olo�.p I certify under PENALTY OF PERJURY under the laws of the State of C-a4444a that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Sign Cre (Seal) -ACKNOWLEDGMENT STATE OF CALIFORNIA ss COUNTY OF ORANGE On June 3, 2014 before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Fred A. Wilson who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Kota ry Si hat e) P. L. EBPAAZA Commission * 2032750 Notary Public - Calit0mla Orange County :y Comm. Expires Aua 4 2017 (Seal) LT�R® Opening doors to the futures - March 6, 2014 Kellee Fritzal Successor Agency to the Huntington Beach Redevelopment Agency 2000 Main Street, Huntington Beach, CA 92648 Re: Release of Construction Covenants Dear Kellee: Reference is made to that certain Affordable Housing Agreement ("AHA") dated October 4, 2010. Terms not defined herein shall have the same meaning as in the AHA. Pursuant to Section 3.16 of the AHA, Developer is providing written request that the Release of Construction Covenants attached hereto be executed and recorded as a conclusive determination of satisfactory completion of the construction required by the AHA upon or with respect to the Project. Very truly yours, BELLA TERRA VILLAS LLC, a Delaware limited liability company By: DCO REALTY, INC., aZatorpor ion, it Sole ember 111 William D. Licko, Treasurer 1745 Shea Center Dr., Suite 200 Highlands Ranch, CO 80129 Tel: 720.283.6120 Fax: 720.283.2453 www.udr.com ATTACHMENT #2 -261- Item 5. - Page 163 0 N N DJM - THE VILLAGE AT BELLA TERRA SEPTEMBER 20, 2010 Project Description Scope of Development includes 467 residential units �4 Project site is in Redevelopment Project Area and subject to a 15% affordable housing requirement N v Project creates 71 on -site affordable housing w units • 43 moderate income units • 28 very low income units Affordable Housing Agreement � Reimbursement - through site generated tax_ increment � Up to $17 million A � Term is the earlier of 26 years (2036) or until reimbursement is paid > Reimbursement includes 4% interest Affordable Housing Agreement (cunt.) Affordable units will have a 55 year housing covenant If units are converted from rental to ownership, they remain the same level of N affordability and are sold to qualified buyers � Affordable renters would have the right to purchase for ownership the units first cif Affordable Housing Agreemen-IjOLL (cont.) Schedule of Performance Construction beginning within 5 years 3 years of construction � Agreement to pay $250,000 of construction of pedestrian crossing payment between Bella Terra and Levitz site for up to 10 years �> Approve Affordable Housing Agreement