Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
Orange County Community Housing Authority (OCCHC) - 2016-10-17
Dept. ID ED 16-32 Page 1 of 2 Meeting Date: 10/17/2016 CITY OF HUNTINGTON BEACH REQUEST FOR. HOUSING AUTHORITY ACTION MEETING DATE: 10/17/2016 SUBMITTED TO: Housing Authority Chairperson and Commissioners SUBMITTED BY: Fred A. Wilson, Executive Officer PREPARED BY: Kenneth A. Domer, Assistant City Manager Kellee Fritzal, Deputy Director, Business Development SUBJECT: Adopt Housing Authority Resolution No. 05 and City Council Resolution No. 2016-70 approving and authorizing execution of Affordable Housing Agreements between the Housing Authority/ City and Orange County Community Housing Corporation (OCCHC) for acquisition and rehabilitation of a four-unit multi-family complex located at 7792 Barton Drive; and, approve appropriations of funds Statement of Issue: City Council is requested to approve Affordable Housing Agreements between the Housing Authority / City and Orange County Community Housing Corporation (OCCHC). These Agreements will facilitate the acquisition and rehabilitation of a four-unit multi-family complex located at 7792 Barton Drive. Financial Impact: The Agreements will allocate $218,780 of Low Moderate Income Housing from Fund 352 and $781,220 of HOME Federal Housing grant funds for the acquisition and rehabilitation-of 7792 Barton Drive. Adequate fund balance is available in Fund 352 to appropriate $218,780 in account 35280301.89250 in FY 2016/17. $781,220 is available in the HOME Federal Housing grant funds in FY 2016/17. See Attachment 3 for a breakdown of the funds and requested budget adjustment. Housing Authority and City Council Recommended Action: A) Adopt Housing Authority Resolution No. 05, "Resolution of the Housing Authority of the City of Huntington Beach Approving an Affordable Housing Agreement With Orange County Community Housing Corporation;" and, B) Adopt City Council Resolution No. 2016-70 "A Resolution of the City Council of the City of Huntington Beach Approving a HOME Affordable Housing Agreement Between the City and Orange County Community Housing Corporation;" and, C) Approve the appropriation of $218,780 in account 35280301.89250 for the acquisition and rehabilitation of 7792 Barton Drive; and, D) Approve the transfer of grant appropriations of$44,986 from HOME FY 2010/11 (Fund 850) to HOME FY 2014/15 (Fund 1209) (see Att#3); and, E. Authorize the Chair/Mayor, Executive Officer/City Manager and Clerk of the Housing Authority/City Clerk to take any action and execute any and all documents and agreements necessary to implement the Agreement with OCCHC. Item 5. - I HB -60- Dept. ID ED 16-32 Page 2 of 2 Meeting Date: 10/17/2016 Alternative Action(s): Do not approve Agreement and direct staff as necessary. Analysis: On July 7, 2016, the City issued a Notice of Funding Availability (NOFA) to allocate between $700,000 and $1,000,000 in grant funds under the HOME Investment Partnership Program (HOME). The NOFA requested Community Housing Development Organizations (CHDOs) to submit viable projects within the City. Housing and Urban Development (HUD) request city's to spend 15% of HOME fund allocations on CHDO project. The proposed projects submitted were to create, retain or rehabilitate affordable housing to benefit very-low and low income households. The City received three (3) projects from Home Ownership for Personal Empowerment (HOPE), Jamboree, and Orange County Community Housing Corporation (OCCHC). City Staff reviewed the proposals and selected OCCHC to acquire and rehabilitate a property on Jacquelyn Lane. After closer inspection of the Jacquelyn Lane property, the foundation required substantial work; therefore, the project was no longer feasible. As a result, OCCHC submitted an alternative property located at 7792 Barton Drive providing four two-bedroom units, which was subsequently selected. OCCHC's Agreements call for the following terms: - Housing Authority units will be affordable for a minimum of 55 years with loan forgiveness if project is in compliance after 55 years. - HOME units will be affordable for a minimum of 15 years with loan forgiveness if project is in compliance after 15 years. - Restrict Occupancy to Very-Low (50% AMI) and Low (80% AMI) The term of the loans will be repaid by annual payments to the City from residual receipts once the project is completed. Residual receipts are defined as the amount of which the gross revenue exceeds the annual operating expenses. OCCHC must annually submit an audit by an independent certified public accounting firm. OCCHC qualifies as a CHDO, which makes them eligible to receive HOME program funds. Since 1993, OCCHC has partnered with the City to create and manage affordable housing for low- and very-low income families. Currently, OCCHC owns eight (8) apartment complexes with 52 units in Huntington Beach. Environmental Status: A Level of Environmental Review was completed and the project is Categorical Excluded subject to Section 58.5 pursuance to 24 CRF 58.35(a) Strategic Plan Goal: Improve quality of life Attachment(s): 1. Housing Authority Resolution No. 05, "Resolution of the Housing Authority of the City of Huntington Beach Approving an Affordable Housing Agreement with Orange County Community Housing Corporation" 2. City Council Resolution No. 2016-70, "A Resolution of the City Council of the City of Huntington Beach Approving a HOME Affordable Housing Agreement Between the City and Orange County Community Housing Corporation" 3. Home Federal Housing Grant Funds Available Budget HB -61- Item 5. - 2 ATTACHMENT # 1 HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH RESOLUTION NO. n,,— RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH APPROVING AN AFFORDABLE HOUSING AGREEMENT WITH ORANGE COUNTY COMMUNITY HOUSING CORPORATION WHEREAS, the Housing Authority of the City of Huntington Beach(the"Authority") 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 Authority desires to enter into an Affordable Housing Agreement with Orange County Community Housing Corporation(the "Developer") by which the Authority will provide financial assistance to Developer to pay a portion of the costs for acquisition and rehabilitation for four housing multi-family dwellings units ("Dwelling Units") which shall be restricted for 55 years for rental and occupancy by Very Low and Low income households upon certain real property known as 7792 Barton Drive, Huntington Beach, California; and WHEREAS, the Authority shall use funds from its Low.and Moderate Income Asset Fund to finance $218,780 of the cost to produce the Dwelling Units; and WHEREAS, the amount of Authority assistance is necessary because the Developer has made a good faith attempt but has been unable to obtain cormnercial or private means of financing the units at the same level of affordability and quantity due to the costs of production and projected operation 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 Authority to enter into the Affordable Housing Agreement, and WHEREAS, it is in the best interest of the City and for the common benefit of the residents and the City as a whole for the Authority to enter into the Affordable Housing Agreement; and WHEREAS, all other legal prerequisites to the adoption of the Resolution have occurred. NOW, THEREFORE, BE IT RESOLVED BY THE HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH AS FOLLOWS: 1. The Authority hereby finds and determines that the foregoing recitals are true and correct. 2. The Authority has"duly considered the terms and conditions of the proposed transaction and determined 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 purpose and provisions of applicable State and local law and requirements. 16-5414/145349.docx RESOLUTION NO: 05 3. The Authority 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 Authority except to the extent required by law. 4. This Resolution shall take effect immediately upon its adopting. PASSED AND ADOPTED by the Housing Authority of the City of Huntington Beach at a regular meeting held thereof on the 17" day of October 2016. ChairnW REVIEWE AND kPPROVED APPROVED AS TO ORM: Executi ire or Ger ral Counsels l01<o\�b INI=ANDR Assistant City Manager 16-5414/145349.docx Housing Authority Res. No. 05 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF HUNTINGTON BEACH ) I, ROBIN ESTANISLAU, Housing Authority Clerk of the Huntington Beach Housing Authority DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Huntington Beach Housing Authority at a Special meeting of said Housing Authority held on October 17, 2016 and that it was so adopted by the following vote: AYES: Posey, O'Connell, Katapodis, Hardy, Delgleize NOES: Sullivan, Peterson ABSENT: None ABSTAIN: None Clerk of the Huntington Beach Housing Authority City of Huntington Beach, California AFFORDABLE HOUSING AGREEMENT By and Among THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic, CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California, and ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California Non Profit Public Benefit Corporation (7792 Barton Drive) TABLE OF CONTENTS Page SECTION 1. DEFINITIONS.................................................................................................. 1 SECTION 2. SUBJECT OF THIS AGREEMENT.............................................................. 6 2.1 Purpose of the Agreement .............................................................................................. 6 2.2. The Redevelopment Plan................................................................................................ 6 2.3 Developer........................................................................................................................ 6 2.4 Term of Agreement......................................................................................................... 6 2.5 Prohibition Against Transfers; Right of First Refusal.................................................... 6 SECTON 3. FINANCING AND ACQUISITION OF THE SITE. .................................... 8 3.1 Ownership of the Site. .................................................................................................... 8 3.2 Authority Financial Assistance....................................................................................... 8 3.3 Disbursement of Authority Loan.................................................................................... 9 3.4 Form of Authority Financial Assistance; Purpose of Note and Security........................ 9 3.5 Escrow. ........................................................................................................................... 9 3.6 Authority's Conditions to Closing................................................................................ 11 3.7 Developer's Conditions To Closing. ............................................................................ 12 3.8 Broker's Fees................................................................................................................ 13 3.9 Use of Excess Proceeds of Conventional Loan. ........................................................... 13 3.10 Subordination Agreement............................................................................................. 13 SECTION 4. ACQUISITION AND REHABILITATION OF THE SITE....................... 14 4.1 General.......................................................................................................................... 14 4.2 Rehabilitation of the Units............................................................................................ 14 4.3 Insurance....................................................................................................................... 14 4.4 Indemnification............................................................................................................. 15 4.5 Hazardous Materials..................................................................................................... 16 4.6 Security Financing; Right of Holders........................................................................... 16 4.7 Refinancing of Senior Loans ......................:................................................................. 17 4.8 Developer Fee............................................................................................................... 17 4.9 Legal Requirements...................................................................................................... 17 4.10 Release of Construction Covenants. ................................................................................ 18 SECTION 5. USE OF THE SITE......................................................................................... 19 5.1 No Inconsistent Uses .................................................................................................... 19 5.2 Regulatory Agreement.................................................................................................. 19 5.3 Relocation..................................................................................................................... 19 5.4 Maintenance of the Site....................................:........................................................... 20 5.5 Nondiscrimination. ....................................................................................................... 20 5.6 Form of Nondiscrimination and Nonsegregation Clauses............................................ 21 5.7 Effect and Duration of Covenants ................................................................................ 21 5.8 Creation of Capital Reserve Account........................................................................... 22 5.9 Capital Reserves. .......................................................................................................... 22 5.10 Payment of Portion of Residual Receipts..................................................................... 22 5.11 Financial Statements..................................................................................................... 23 5.12 Operation of Project...................................................................................................... 23 i 5.13 Lead-Based Paint.......................................................................................................... 23 5.14 Barriers to the Disabled................................................................................................ 23 SECTION 6. DEFAULTS AND REMEDIES..................................................................... 24 6.1 Developer Defaults....................................................................................................... 24 6.2 Authority Defaults........................................................................................................ 24 6.3 Notice of Default.......................................................................................................... 25 6.4 Authority's Remedies................................................................................................... 25 6.5 Developer's Remedies.................................................................................................. 25 6.6 Rights and Remedies are Cumulative........................................................................... 25 SECTION 7. GENERAL PROVISIONS........................................................................... 25 7.1 Developer's Warranties ................................................................................................ 25 7.2 Governing Law............................................................................................................. 26 7.3 Attorneys' Fees............................................................................................................. 26 7.4 Notices, Demands, and Communications Between the Parties.................................... 26 7.5 Acceptance of Service of Process................................................................................. 26 7.6 Conflicts of Interest ...................................................................................................... 27 7.7 Titles and Captions....................................................................................................... 27 7.8 Gender........................................................................................................................... 27 7.9 Modifications................................................................................................................ 27 7.10 Merger of Prior Agreements and Understandings........................................................ 27 7.11 No Third Parties Benefited........................................................................................... 27 7.12 Assurances to Act in Good Faith; Approvals by Both Authority and City.................. 27 7.13 Warranty Against Payment of Consideration for Agreement....................................... 27 7.14 Nonliability of City Officials and Employees.............................................................. 27 7.15 Interpretation................................................................................................................. 28 7.16. Counterparts.................................................................................................................. 28 7.17 Severability................................................................................................................... 28 7.18. Extension of Times of Performance ............................................................................. 28 7.19 Inspection of Books and Records ................................................................................. 28 7.20 Waivers......................................................................................................................... 28 SECTION 8. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE ........... 28 ii Exhibits Exhibit A Legal Description Exhibit B Site Map Exhibit C Scope of Development Exhibit D Project Budget Exhibit E Schedule of Performance Exhibit F Promissory Note Exhibit G Deed of Trust Exhibit H Regulatory Agreement Exhibit I Subordination Agreement Exhibit J Release of Construction Covenants Exhibit K Notice of Affordability Restrictions in AFFORDABLE HOUSING AGREEMENT THIS AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as of , 2016 ("Effective Date") by and between THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), and ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California Non Profit Public Benefit Corporation ("Developer"). RECITALS A. Developer has entered into a Purchase and Sale Agreement to acquire the "Site" (as such term is defined herein) from Brian and Barbara Bridgewater and Corrine Bridgewater (collectively, "Seller") and intends to implement the "Project" (as such term is defined herein) on the Site in accordance with the terms of this Agreement. B. Authority is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (California Health and Safety Code Section 33000 et seq.). C. Pursuant to the California Redevelopment Law, Authority has established a Housing Set Aside Fund and has deposited therein certain tax revenues made available to the Authority exclusively for the purpose of increasing and improving the community's supply of affordable very low and low income housing ("Set Aside Funds"). D. Authority desires to meet its affordable housing goals in the amount of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.00) (the "Authority Loan") to assist Developer in funding the acquisition and rehabilitation of the Site, which will be maintained for not less than 55 years as a four unit multi- family complex for very low and low income persons and families, more specifically, the Project as hereinafter defined. NOW, THEREFORE, in consideration of the promises and covenants contained herein, the above recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: AGREEMENT SECTION 1. DEFINITIONS The following terms, as used in this Agreement, shall have the meanings given unless expressly provided to the contrary: The term "Affordable Low Income Unit" shall mean two of the four (4) rental dwelling units in the Project restricted to occupancy by Low Income Households. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE1 The term "Affordable Rent" shall mean, for Affordable Very Low and Low Income Units, rental rates not to exceed the "very low and low income" affordable rent as defined by California Health & Safety Code Section 50053(b)(2), or its successor. Affordable Rent shall include a reasonable utility allowance for tenant-paid utilities based on the Orange County Housing Authority's published utility schedules. The term "Affordable Very Low Income Unit" shall mean two of the four (4) rental dwelling units in the Project restricted to occupancy by Very Low Income Households. The term "Affordable Very Low Income Unit" and "Affordable Very Low Income Units" shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. The term "Agreement" or any reference to this "Agreement" shall mean this Affordable Housing Agreement executed by and between Authority and Developer, including all exhibits attached hereto, which exhibits are incorporated herein by this reference and all other documents incorporated herein by reference. The term "Authority" shall mean the The City of Huntington Beach Housing Authority, a public body, corporate and politic, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to, the rights, powers, and responsibilities of Authority. The term "Authority Deed of Trust" shall mean the Deed of Trust attached as Exhibit "G" hereto. The term "Authority Executive Director" shall mean the individual duly appointed to the position of Executive Director of the Authority, or authorized designee. Whenever an administrative action is required by Authority to implement the terms of this Agreement, the Authority Executive Director, or an authorized designee, shall have authority to act on behalf of Authority, except with respect to matters reserved under California law wholly for determination by the Authority's governing body. The term "Authority Loan" shall mean the Authority's loan to Participant in the amount of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.00) of Set Aside Funds, as evidenced by the Authority Note and secured by the Authority Deed of Trust. The term "Authority Note" shall mean that certain Promissory Note attached here to as Exhibit"F." The term "Authority Subordination Agreement" shall mean the form of Subordination Agreement attached hereto as Exhibit"I." The term "City" shall mean the City of Huntington Beach, a municipal corporation of the State of California, having its offices at 2000 Main Street, Huntington Beach, CA 92648. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE The term "City Manager" shall mean the individual duly appointed to the position of City Manager of the City, or authorized designee. Whenever an administrative action is required by City to implement the terms of this Agreement, the City Manager, or an authorized designee, shall have authority to act on behalf of City, except with respect to matters reserved under California law or the City's Charter wholly for City Council determination. The term "Conventional Lender" shall mean one or more lenders providing funds for Developer's implementation of the Project. The term "Conventional Loan" shall mean the loan provided to Developer by the Conventional Lender for implementation of the Project. Developer shall endeavor to maximize the amount of the Conventional Loan, but such amount shall not be less than the amount set forth in the Project Budget attached as Exhibit"D" without prior written approval by the Authority. The term "Days" shall mean calendar days and the statement of any time period herein shall be calendar days and not working days, unless otherwise specified. The term "Developer" shall mean ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California Non Profit Public Benefit Corporation, whose address is 501 North Golden Circle, Suite 200, Santa Ana, CA 92705. The term "Effective Date" shall mean the date the governing body of the Authority approves this Agreement and authorizes its execution; which date shall be inserted into the preamble of this Agreement. The term "Eligible Tenant" shall mean any person entitled to rent an Affordable Very Low Income or Low Income Unit as set forth in the Regulatory Agreement. The term "Escrow" shall mean that certain escrow with [First American Title Insurance Company], which has been established to convey the Site from the Seller to Developer, and into which Authority shall deposit the Authority Loan funds described in Sections 3.2 in accordance with the terms of this Agreement. The term "First Deed of Trust" shall mean a deed of trust securing the Conventional Loan. The term "Force Majeure" shall mean any war; insurrection; strike; lock-out; labor dispute; riot; flood; earthquake; fire; casualty; Act of God; act of the public enemy; epidemic; quarantine; restriction; freight embargo; unavoidable lack of transportation; governmental restriction; unusually severe weather; inability to secure necessary labor, materials, or tools; delay of any contractor, subcontractor or supplier; economic or market conditions; lack of tenant commitments or tenant changes; inability to secure satisfactory financing; act of the other party including act or failure to act of any public or governmental Authority or entity (except that any act or failure to act of Authority shall not excuse performance by Authority unless otherwise OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE provided herein); or any other cause beyond the control or without the fault of the party claiming an extension of time to perform. The term "Grant Deed" shall mean that certain Grant Deed that conveys the Site from the current owner, the Seller, to Developer. The term "Hazardous Materials" means any hazardous or toxic substances, materials, wastes, pollutants, or contaminants, which are defined, regulated, or listed as "hazardous substances," "hazardous wastes," "hazardous materials," "pollutants," "contaminants," or "toxic substances," under federal or state environmental and health and safety laws and regulations, including without limitation petroleum and petroleum byproducts, flammable explosives, area formaldehyde insulation, radioactive materials, asbestos, and lead. Hazardous Materials do not include substances that are used or consumed in the normal course of developing, operating, or occupying a housing project, to the extent and degree that such substances are stored, used, and disposed of in the manner and in amounts that are consistent with normal practice and legal standards. The term "Lease" means the lease entered into between Developer and an Eligible Tenant of an Affordable Very Low Income or Low Income Unit in the Project. The term "Low Income Household" shall have the meaning given in 24 CFR 92.2 and shall generally mean persons and families whose income does not exceed 80% of the median family income adjusted for family size, as determined by HUD and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. For purposes of determining eligibility to occupy a Low Income Inclusionary Unit, the term "Low Income Household" shall mean persons and families whose income does not exceed the income limits for Low Income household in Orange County, published approximately annually by the California Department of Housing and Community Development ("HCD"). If HCD discontinues publishing such income limits, the term "Low Income" shall mean a household income that does not exceed 80% of the Area Median Income, adjusted for family size. The term "Median Income" shall mean the area median income of the Orange County metropolitan statistical area (PMSA), with adjustments for household size, as estimated annually by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937 as amended and published by California's Housing and Community Development Department pursuant to Health and Safety Code section 50093. The term "Notice of Affordability Restrictions" shall mean the Notice of Affordability Restrictions on Transfer of Property to be recorded upon the Close of Escrow attached hereto as Exhibit"K." The term "Project" shall mean generally the acquisition, rehabilitation and operation of the existing apartment building on the Site, consisting of four Units, and the subsequent rental of the four (4) Affordable Very Low or Low Income Units to Eligible Tenants, all at Affordable Rent for a period of not less than 55 years, pursuant to the procedures set forth herein and more particularly described in the Scope of Development and Regulatory Agreement. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 4 The term "Project Budget" shall mean the sources and uses of funds for acquisition of the Site and the rehabilitation and operation of the Units as set forth in Exhibit "D." The Project Budget and Developer's proposed method of financing shall be subject to change from time-to- time, subject to the prior written approval of Developer and the Authority Executive Director and subject to and conditioned on such further review and approval by the Authority's governing board as is needed to satisfy applicable law, policies and procedures, upon which approval the Project Budget shall be replaced by the approved revised Project Budget. The term "Project Costs" shall mean those costs and expenses incurred or to be incurred in connection with the acquisition, rehabilitation and operation of the Project, as set forth in the Project Budget, which is hereby approved by the Authority. The term "Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions attached hereto as Exhibit"H." The term "Sale Price" shall mean the sale price for the Site set forth in the Purchase and . Sale Agreement between Seller and Developer, being the amount of ONE MILLION EIGHTEEN THOUSAND DOLLARS ($ 1,018,000). The term"Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit "E" setting forth the times upon which performance by the parties under this Agreement is due. The term "Scope of Development" shall mean that certain exhibit attached hereto as Exhibit"C." The term "Seller" shall mean Brian and Barbara Bridgewater and Corrine Bridgewater, collectively. The term "Site" shall mean that certain real property located in the City of Huntington Beach, County of Orange, State of California, commonly known as 7792 Barton Drive, Huntington Beach, California, 92647 and legally described in Exhibit "A" and depicted on the Site Map attached hereto as Exhibit"B". The term "Subordination Agreement" shall mean the Authority Subordination Agreement. The term "Units" shall mean the four (4) two bedroom dwelling units comprising the Project. The term "Very Low Income Household" shall have the meaning given in 24 CFR 92.2 and shall generally mean persons and families whose income does not exceed 50% of the median family income adjusted for family size, as determined by HUD. For purposes of determining eligibility to occupy a Very Low Income Inclusionary Unit, the term "Very Low Income Household" shall mean person and families whose income does not exceed the income limits for OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE Very Low Income households in Orange county, published approximately annually by the California Department of Housing and community Development ("HCD"). If HCD discontinues publishing such income limits, the term"Very Low Income" shall mean a household income that does not exceed 50% of the Area Median Income, adjusted for family size. SECTION 2. SUBJECT OF THIS AGREEMENT 2.1 Purpose of the Agreement. (a) The purpose of this Agreement is to promote affordable housing by providing the Authority Loan in the amount TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.00), as evidenced by the Authority Note secured by the Authority Deed of Trust, to assist Developer in the acquisition, rehabilitation and operation of affordable housing in the City of Huntington Beach. (b) This Agreement is intended to facilitate Developer's acquisition of the Site and existing four-unit multi-family complex located thereon for rehabilitation and rental to Very Low Income and Low Income Households for a period of not less than 55 years. The Project pursuant to this Agreement and the fulfillment generally of this Agreement are in the best interests of the City and the welfare of its residents, and are in accordance with the public purposes and provisions of applicable federal, state, and local laws and requirements under which the Project has been undertaken and is being assisted. (c) The Project will be used and operated for not less than fifty-five (55) years as rental housing, with all four of the Units restricted to occupancy by Very Low Income and Low Income Households in accordance with the Regulatory Agreement. 2.2. The Redevelopment Plan. This Agreement conforms to the Redevelopment Plan for the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project") which was approved by adoption of Ordinance No. 3343 on December 16, 1996, and which merged together four different, previously approved project areas. The Site is located inside of the Merged Redevelopment Project. Authority intends this Agreement to meet its obligations pursuant to Health and Safety Code Sections 33413, 33334.2 and 33413(b)(2)(A)(ii). 2.3 Developer. The Developer is ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California Non Profit Benefit Corporation, whose address is 501 North Golden Circle, Suite 200, Santa Ana, CA 92705. 2.4 Term of Agreement. In accordance with the formula set forth in 24 CFR 92.252(e) and as required by California Health and Safety Code Section 33334.3, this Agreement shall remain in effect for not less than fifty-five (55) years from the date on which a Release of Construction Covenants for the Project is issued by the Authority. 2.5 Prohibition Against Transfers; Right of First Refusal. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 6 (a) The qualifications and identity of the Developer are of particular concern to the Authority. It is because of those qualifications and identity that the Authority has entered into this Agreement with the Developer. No voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. (b) Developer agrees that Developer shall not sell the Site during the term of this Agreement, unless and until Developer has given to Authority notice in writing of its intent to sell, specifying the identity of the prospective buyer and the price and terms of the contemplated sale. Within ninety (90) days after Developer gives Authority written notice of Developer's intent to sell, Authority shall have the right to purchase the Site at the same price and on the same terms and conditions set forth in Developer's written notice of intent to sell. To exercise this right, Authority must, within the same ninety (90) day period, deposit in escrow with any escrow company in Orange County, California, all moneys and instruments required by the terms of the Developer's notice of intent to sell to be paid or delivered to Developer on close of escrow and shall also give Developer written notice of the deposit. If Authority does not exercise the right in accordance with the provisions of this Section, Developer may sell the Site to the prospective buyer for the price and on the terms contained in the notice; provided, however, that Developer has made every reasonable effort to sell the Site to another nonprofit housing corporation with Developer's similar experience and reputation in the field of very low and low-income housing (including the management of properties with income and affordability restrictions), and provided further that Authority has approved such prospective buyer in advance in writing. If at any time during the term of this Agreement Developer receives from any third party a bona fide offer to purchase the Site on terms acceptable to Developer, Developer shall give written notice of the offer to Authority. Within ninety (90) days after Developer gives Authority written notice of the third-party offer, Authority shall have the right to purchase the Site at the same price and on the same terms and conditions set forth in the third-party offer. To exercise its right, Authority must, within the same ninety (90) day period, deposit in escrow with any escrow company in Orange County, California, all moneys and instruments required by the terms of the offer to be paid or delivered to Developer on close of escrow and shall also give Developer written notice of the deposit. In the event Authority does not exercise its right to purchase in accordance with the provisions of this Section, Developer may sell the Site to the third party making the offer on the same terms and conditions set forth in that offer; provided, however, that Developer has made every reasonable effort to sell the Site to another nonprofit housing corporation with Developer's similar experience and reputation in the field of low- income housing (including the management of properties with income and affordability restrictions), and provided further that Authority has approved such prospective buyer in advance in writing. If for any reason the Site is not sold to the party making the offer, Developer shall give Authority the same right to purchase the Site on receiving any subsequent offer from any third party that is acceptable to Developer. (c) For the reasons cited above, the Developer represents and agrees for itself and any successor in interest that without the prior written approval of the Authority, there shall be no significant change in the ownership of the Developer or in the relative proportions thereof, OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE or with respect to the identity of the parties in control of the Developer or the degree thereof, by any method or means. (d) The Developer shall promptly notify the Authority of any and all changes whatsoever in the identity of the parties in ownership and/or in control of the Developer or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by the Authority and the Authority may exercise any and all available remedies, if there is any significant change (voluntary or involuntary) in membership, ownership, management or control, of the Developer (other than such changes occasioned by the death or incapacity of any individual). (e) Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Site (referred to hereinafter as a "Transfer"), without prior written approval of the Authority Executive Director, except as expressly permitted by this Agreement. Consent to a Transfer shall not result in acceleration of the Authority Note. Any proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Authority, to fulfill the obligations undertaken in this Agreement by the Developer. Any such proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Authority shall expressly assume all of the obligations of the Developer under this Agreement and agree to be subject to all conditions and restrictions applicable to the Developer in this Agreement. There shall be submitted to the Authority for review all instruments and other legal documents proposed to affect any such Transfer, and if approved by the Authority Executive Director, its approval shall be indicated to the Developer in writing. (f) In the absence of specific written agreement by the Authority, no unauthorized Transfer, or approval thereof by the Authority, shall be deemed to relieve the Developer or any other party from any obligations under this Agreement. (g) Consent to any Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers. (h) The provisions of this Section 2.5 shall be of no force or effect as of the expiration of the Regulatory Agreement. SECTION 3. FINANCING AND ACQUISITION OF THE SITE. 3.1 Ownership of the Site. As of the Effective Date of this Agreement, Developer is in escrow to acquire the Site from the Seller. 3.2 Authority Financial Assistance. The Authority, pursuant to the terms of this Agreement, shall provide to Developer the Authority Loan. Upon satisfaction of all conditions precedent (or waiver by Authority) to Authority's obligation to deposit the Authority Loan into Escrow under this Agreement, Authority shall deposit TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.) of the Authority Loan OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE funds into Escrow. A portion of the Authority Loan in the amount of TWENTY ONE THOUSAND EIGHT HUNDRED SEVENTY EIGHT DOLLARS ($21,878.), representing ten percent (10%) will be retained by the Authority until final inspection of the rehabilitation of the building. 3.3 Disbursement of Authority Loan. Upon Close of Escrow, the Escrow Agent shall disburse the Sale Price to the Seller by disbursing the amount of the Sale Price from the Authority Loan. The Escrow Agent shall pay from the Authority Loan the Developer's share of closing costs, the Developer's pro-rated taxes and assessments on the Site, and the cost of the Authority's Lender's Title Policy. The Escrow Agent shall reimburse to Developer from the Authority Loan other Project Costs included in the attached Project Budget that were previously incurred and paid by Developer in advance of the Close of Escrow, provided that such reimbursement of Project Costs has been approved in writing by the Authority. The Escrow Agent shall also disburse to Developer the payout on the Developer Fee described in Section 4.8 in the amount of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.) from the Authority Loan. The remaining balance of the Authority Loan ("Authority Loan Balance") shall be refunded to the Authority. The Authority shall subsequently disburse to Developer such portion of the Authority Loan Balance as needed to pay for approved Project Costs not otherwise payable from the proceeds of the Conventional Loan. The Authority's subsequent disbursement of any portion of the Authority Loan Balance to Developer will be conditioned upon (1) the Authority's prior review and approval of an updated Project Budget, (2) Authority review and approval of the final signed loan documents for the Conventional Loan (3) Authority approval of an application for disbursement of funds that sets forth the amount requested and the specific expenses to be paid and provides accompanying documentation reasonably acceptable to the Authority, and (4) will be further conditioned upon Developer remaining in full compliance with the terms and conditions of this Agreement and all documents and instruments referred to herein or executed by Developer in furtherance of this Agreement. The Relocation Funds will be disbursed by the Authority directly to, or for the benefit of, those persons who meet the eligibility requirements of the Uniform Relocation Act and the California Relocation Assistance Act and the guidelines promulgated in connection therewith. 3.4 Form of Authority Financial Assistance; Purpose of Note and Security. In the event Developer is in Material Default of any of its obligations hereunder or under the Regulatory Agreement, the entire principal balance of the Authority Loan plus any default interest due thereon shall immediately become due and payable, and Authority shall have the right, at its sole option, to: (a) demand full payment of the principal balance of the Authority Loan plus all default interest; (b) take over ownership and management of the Site; and/or (c) foreclose on the Site under the Deed of Trust. 3.5 Escrow. This Agreement, once deposited in Escrow, shall constitute joint escrow instructions of Authority and Developer. The Escrow agent is hereby empowered to act under the Agreement and upon indicating its acceptance in writing to Authority and Developer within five (5) days after receipt of this Agreement; provided, however, that any undertaking by the Escrow agent of any of the acts or services set forth in this Agreement shall constitute acceptance of the obligation to perform as Escrow agent under this Agreement. Any amendment OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 9 to the Escrow instructions contained herein shall be in writing and signed by Authority and Developer. (a) Closing Date. On or before the date established in the Schedule of Performance, the parties shall satisfy the conditions described in Sections 3.5(b) and 3.6 and complete the Close of Escrow. If, for any reason, the Close of Escrow has not occurred by the date provided therefor in the Schedule of Performance, any party may terminate this Agreement, by providing written notice of termination to the other parties. (b) Delivery of Documents and Funds by Developer. On or before twelve noon on the last business day prior to the scheduled Closing Date, Developer shall deposit or cause to be deposited with the Escrow agent the following: (i) the Grant Deed executed in recordable form by the Seller; (ii) the Authority Note, executed by Developer; (iii) The Authority Deed of Trust, including the Rider thereto, executed in recordable form by Developer; (iv) the Regulatory Agreement, executed in recordable form by Developer; and (v) all funds, documents, and deposits Developer is required to deposit with Escrow agent in order to close the Escrow conveying the Site to Developer. (c) Delivery of Documents and Funds by Authority. On or before twelve noon on the last business day prior to the scheduled Closing Date, Authority shall deposit or cause to be deposited with the Escrow agent the following: (i) the Authority Deed of Trust, including the Rider thereto, executed in recordable form by Authority; (ii) the Regulatory Agreement, executed in recordable form by Authority; (iii) the Authority Loan funds described in Section 3.2; and (iv) the Authority Subordination Agreement; and (v) the Notice of Affordability Restrictions. (d) Recordation. Escrow agent is directed, on the Closing Date, to record against the Site the following documents in the following order of priority: (i) the Grant Deed; (ii) the Regulatory Agreement; (iii) the Notice of Affordability Restrictions; (iv) any First Deed of Trust and then any other documents required to be recorded by the Conventional Lender; and OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 10 (v) the Authority Deed of Trust. A Subordination Agreement, if required to effectuate the approved priority of the foregoing deeds of trust and Regulatory Agreement, shall be recorded at the direction of the Authority and Developer in accordance with the terms of this Agreement. (e) Escrow Agent Duties. The Escrow agent shall (i) record the documents as provided in subparagraph (d); and (ii) at Closing, deliver the original Authority Note to Authority and a copy of same to Developer, and upon recordation deliver to Authority and Developer conformed copies of the Grant Deed, Authority Deed of Trust, any First Deed of Trust and any other documents required to be recorded by the Conventional Lender, the Regulatory Agreement and the Notice of Affordability Restrictions. (f) Interest Bearing Accounts. Escrow agent shall hold all funds received in an interest bearing account with the interest accrued paid at Closing to the party depositing such funds. (g) Title Insurance. Escrow agent shall deliver to Authority at Closing an ALTA standard form lender's policy of title insurance in the amount of ONE MILLION EIGHTEEN THOUSAND DOLLARS ($1,018,000.) issued by Fidelity National Title Company, insuring in favor of Authority the priority of the Authority Deed of Trust and Regulatory Agreement in accordance with the priority established by this Agreement. 3.6. Authority's Conditions to Closing. Authority's obligations to deposit the Authority Loan funds described in Section 3.2 in Escrow for disbursement at Closing shall be conditioned and contingent upon satisfaction or Authority's waiver of each of the following conditions precedent (collectively, the "Authority's Conditions to Closing"): (a) Authority shall have in its account TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.) of readily available Set Aside Funds. (b) Developer shall have completed the inspection of the Site for lead-based paint and asbestos hazards as required by Section 4.5(a) and shall have delivered the inspection report to the Authority; (c) The Conventional Lender shall have deposited into Escrow the amount of the Conventional Loan or Developer shall have delivered to Authority evidence satisfactory to Authority that Developer has obtained a binding loan commitment for the Conventional Loan from a lender satisfactory to Authority; (d) Developer shall have deposited in Escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow; (e) Developer shall have delivered to Authority and Authority shall have approved the Purchase and Sale Agreement between Developer and Seller and any amendments thereto; OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 11 (f) Developer shall have delivered evidence acceptable to the Authority that Developer has obtained the insurance policies required by Section 4.3 of this Agreement; (g) Developer shall have delivered to the Authority a current certificate of good standing issued by the California Secretary of State's office and shall have delivered to the Authority a certified resolution of Orange County Community Housing Corporation's Board of Directors authorizing Developer's execution and implementation of this Agreement; and (h) The Authority shall have determined that Developer is in full compliance with the terms and conditions of this Agreement and all documents and instruments referred to herein or executed by Developer in furtherance of this Agreement. In the event any of the Authority's Conditions to Closing are not satisfied (or waived by Authority), Authority may cancel the Escrow and terminate this Agreement by delivering ten (10) days prior written notice to Developer and the Escrow agent. Developer may nullify Authority's notice to terminate if, within such ten (10) day period Developer (at no cost to Authority) cures any unsatisfied Authority Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds deposited by Authority shall be returned to it with any interest earned on such funds; (ii) Developer shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. 3.7 Developer's Conditions To Closing. Developer's obligations to close Escrow shall be conditioned and contingent upon satisfaction or Developer's waiver of each of the following conditions precedent (collectively, the "Developer's Conditions to Closing"): (a) The Seller shall have executed the Grant Deed in recordable form and shall have deposited same in Escrow; (b) Authority shall have deposited in Escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow, including but not limited to the Authority Loan funds described in Section 3.2, the Authority Deed of Trust, Regulatory Agreement, Notice of Affordability Restrictions and such Subordination Agreement as may be required to effect the priority required by this Agreement; (c) The Conventional Lender has deposited in escrow all of the funds and instruments required of it to effect Close of Escrow; (d) All conditions to Closing set forth in (i) the Purchase and Sale Agreement and any amendments thereto between Developer and the Seller for conveyance of the Site; and (ii) agreements and financing documents pertaining to Developer's financing of the acquisition of the Site, including as pertaining to financing by the Conventional Lender, have been satisfied (or waived by the appropriate party). OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 12 In the event any of the Developer's Conditions to Closing are not satisfied (or waived by Developer), and provided Developer has fully performed its obligations hereunder, Developer may cancel the Escrow and terminate this Agreement by delivering ten(10) days prior written notice to Authority and the Escrow agent. Authority may nullify Developer's notice to terminate if, within such ten (10) day period Authority (at no cost to Developer) cures any unsatisfied Developer's Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (i) the Escrow shall be cancelled and any funds deposited by Developer shall be returned to it with any interest earned on such funds; (ii) Authority shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. 3.8 Broker's Fees. Developer and Authority shall each indemnify, defend, and hold harmless the other from any claims or damages for payment of any real estate commissions or broker's fees or finder's fees arising out of the acts or representations of the other with respect to any of the transactions contemplated by this Agreement. 3.9 Use of Excess Proceeds of Conventional Loan. The proceeds of the Conventional Loan must be used exclusively for the payment of Project Costs pursuant to this Agreement; provided that, if the Conventional Loan is in an amount that, when added to the Authority Loan, exceeds Project Costs, then Developer shall either deposit such excess proceeds into the Capital Reserve Account or shall, if directed by the Authority, apply such excess proceeds to repayment of the Authority Loan. Developer acknowledges and agrees that the Authority Loan is intended to be gap financing and Developer must endeavor to maximize the amount of the Conventional Loan. If the First Deed of Trust is recorded after the Close of Escrow for conveyance of the Site to Developer, then Developer shall provide to Authority copies of the note evidencing the Conventional Loan and conformed copies of the First Deed of Trust and any other documents required to be recorded by the Conventional Lender. 3.10 Subordination Agreement. Pursuant to Section 33334.14 of the Health and Safety Code, Authority is permitted to subordinate the Authority Deed of Trust and the Regulatory Agreement to superior deeds of trust, regulatory agreements and other related documents including but not limited to those required by the Conventional Lender, if certain findings are made and certain written commitments are obtained from such Conventional Lender. Therefore, upon receiving a written request from the Conventional Lender, the Authority may subordinate, in the form of the Subordination Agreement attached as Exhibit I, the Authority Deed of Trust and the Regulatory Agreement to the Conventional Lender's First Deed of Trust and such other related documents as Conventional Lender may require, in the amount the Authority determines was reasonably necessary to implement the Project. Developer may apply to the Authority to increase said indebtedness, setting forth with specificity reasons for such a request, which approval the Authority shall not unreasonably withhold. The priority of such deeds of trust shall be affected through the order of recordation of documents as set forth in Section 3.5(e). Such Subordination Agreement shall provide for: (i) A right of the Authority to cure a default on the Conventional Lender's First OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 13 Deed(s) of Trust; (ii) A right of the Authority to negotiate with any lenders after notice of default from the lender; (iii) An agreement that if prior to foreclosure of any lenders' loans, the Authority takes title to the Site and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan by reason of the transfer of title to the Authority; and (iv) A right of the Authority to purchase the Site from the Developer at any time after a default on the loan. SECTION 4. ACQUISITION AND REHABILITATION OF THE SITE 4.1 General. The Project shall consist of the acquisition of the existing multi- family complex containing a total of four (4) units on the Site and the use of the Site as an affordable rental multi-family complex in accordance with this Agreement and the Regulatory Agreement. It is anticipated that Developer will contract for performance of specific activities, including but not limited to activities such as relocation services, site inspections, and management of the Units. Such contracts shall not in any way diminish or waive Developer's obligations under this Agreement. 4.2 Rehabilitation of the Units. Developer shall obtain all necessary entitlements and permits and shall commence rehabilitation of the Units within the time set forth in the Schedule of Performance. Developer shall diligently prosecute its work so as to achieve completion of rehabilitation and rent up of the Project within the time set forth in the Schedule of Performance. Rehabilitation of the Units shall be planned and performed in a manner that will bring the Units into compliance with all applicable federal, state and local laws and requirements and in conformance with a Rehabilitation Plan approved by the Authority. 4.3 Insurance. Developer shall procure and maintain, during the term of this Agreement, at its sole cost and expense, until the date that Authority or City waives any such insurance requirement or requirements in writing, the following policies of insurance on a Project specific basis: (a) Workers' Compensation Insurance. Pursuant to California Labor Code Section 1861, Developer acknowledges awareness of Section 3700 et seq. of said code, which requires every employer to be insured against liability for workers' compensation. Developer covenants that it will comply with such laws and provisions prior to commencing any work of construction or rehabilitation on the Site. Developer shall maintain such Workers' Compensation Insurance in an amount not less than the statutory requirements in California for bodily injury and disease and must maintain employer's liability coverage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00). Developer shall require all contractors to provide such Workers' Compensation Insurance for all of the subcontractor's employees. Developer shall furnish Authority and City with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Developer shall similarly require all subcontractors to waive subrogation. (b) General Liability and.Auto Insurance. Developer shall carry general commercial liability insurance, including coverage for bodily injury, property damage, products/completed operations and blanket contractual liability in an amount not less than TWO OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 14 MILLION DOLLARS ($2,000,000.00) per occurrence and FOUR MILLION DOLLARS ($4,000,000.00) annual aggregate, combined single limit for bodily injury and property damage. All such insurance shall be provided by insurance companies admitted in California, or if not admitted in California, then reasonably acceptable to Authority and City. Such insurance shall name the City and Authority and their officers, agents, and employees acting in their official capacity, as additional insureds. Developer shall carry automobile insurance, including liability coverage for bodily injury and property damage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00) per occurrence. Developer shall require its insurer to waive its subrogation rights against Authority and City and shall provide certificates of insurance evidencing same. (c) Property Insurance. Developer shall obtain and maintain in force, all- perils (to include fire and vandalism protection) property insurance with extended coverage endorsements thereon, on the Site, in an amount equal to the full replacement costs and/or value thereof, this policy shall contain a replacement cost endorsement naming Authority as the insured and shall not contain a coinsurance penalty provision. The policy shall contain a lender's loss payable endorsement that such proceeds shall be used to repair or rebuild any Units or other improvements situated on the Site so damaged or destroyed; and, if not so used, such proceeds shall be paid to Authority. The proceeds of any such insurance payable to Authority shall be used for rebuilding or repair as necessary to restore the site at the sole discretion of Authority. The policy shall name Authority and City, officers, agents and employees acting in their official capacity as additional insureds. (d) Certificate of Insurance; Additional Insured Endorsements. Prior to the close of escrow, Developer shall furnish to Authority and City certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement. Such certificates and endorsements shall be subject to the reasonable approval of the City Attorney and shall provide the name and policy number of each carrier and policy and shall state that the policy is currently in force and shall promise to provide that such policies will not be cancelled without thirty (30) days prior written notice to.Authority and City. 4.4 Indemnification. During the term of this Agreement, Developer agrees to and shall protect, defend, indemnify and hold the Authority and City harmless from and against all liability, loss, damage, cost or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of (i) Developer's failure to perform any obligations as and when required by this Agreement or any document referred to herein, and (ii) the death of any person or any accident, injury loss, or damage whatsoever caused to any person or to the property of any person which shall occur on the Site and which shall be directly or indirectly caused by the acts of, or any errors or omissions of, the Developer or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Developer shall not be responsible for, and the Authority shall protect, defend, hold harmless and indemnify Developer against any liability, loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result of the active concurrent negligence, sole negligence or sole willful misconduct of the Authority or its members, officers, officials, employees, agents, representatives, servants, or contractors. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 15 4.5 Hazardous Materials (a) Lead-Based Paint and Asbestos Containing Materials. Developer shall inspect the Site for lead-paint and asbestos hazards in accordance with Title X of the 1992 Housing and Community Development Act. Any lead-paint and asbestos hazards identified must be abated as part of the rehabilitation of the Site. In the event the full abatement cost for such hazards causes the rehabilitation costs in the Project Budget to increase in an amount that exceeds the sum of the available Authority Loan Balance and the Deferred Developer Fee, Developer may request additional Set Aside funds to pay for such additional cost. The Authority Board of Directors, as the case may be, in its sole discretion, shall approve or disapprove any such loan request based upon the recommendation of the Authority Executive Director. (b) Indemnification. Developer, from and after the Close of Escrow, and until a transfer, sale, or assignment of the Site upon which the following covenant shall then be the obligation of the transferee, purchaser, or assignee, shall indemnify, defend, and hold harmless Authority and City and their respective officers, employees, agents and representatives (collectively, the "Indemnified Parties") from and against any and all liabilities (including penalties, fines and monetary sanctions) arising from a violation of state or federal law pertaining to (i) the storage of Hazardous Materials on the Site or (ii) contamination of the Site by a release of Hazardous Materials. Developer, prior to the Closing Date, shall provide to Authority and City a copy of any notices, orders, or reports concerning the presence of any Hazardous Materials on or affecting the Site that is in Developer's possession. 4.6 Security Financing; Right of Holders (a) Permitted Encumbrances. Developer shall be permitted to enter into mortgages, deeds of trust, conveyances, and leases-back or any other form of conveyance in which the Site is used as security for the purpose of securing loans of funds to be used for the implementation of the Project provided such conveyance (i) is for the purposes permitted herein and (ii) is given to a financial or lending institution or other acceptable person or entity capable of performing or causing to be performed Developer's obligations under this Agreement, including without limitation a pension fund, insurance company, or real estate investment trust. Any and all such loan amounts and security conveyances shall be subject to the prior approval of the Authority's Executive Director, which approval shall not be unreasonably withheld. (b) Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders; Right to Cure. Whenever Authority shall deliver any notice or demand to Developer with respect to any breach by Developer in performance of this Agreement, it shall at the same time deliver a copy of such notice or demand to each approved holder of record of any mortgage, deed of trust, or other security interest which has previously requested such notice in writing. Each such holder shall (insofar as the rights of Authority are concerned) have the right, at its option within ninety (90) days after the receipt of the notice, to commence and thereafter to diligently proceed to cure or remedy such default and add the cost thereof to the security interest debt and the lien on its security interest. Any holder completing the improvements in accordance with this Agreement shall be entitled to a Release of Construction Covenants upon written request made to Authority. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 16 4.7 Refinancing of Senior Loans. Developer shall have the right to refinance the senior loan from the Conventional Lender, provided that Authority previously approves such refinancing in writing, which approval shall not be unreasonably withheld. Developer shall not obtain, and Authority shall have no obligation to approve, a new loan in an amount greater than $196,912. Any net proceeds obtained as a result of a refinancing must be used exclusively to implement physical improvements to the Site. 4.8 Developer Fee. Developer shall be entitled to receive a fee of ZERO DOLLARS ($0) to be earned and paid as follows: (1) upon close of Escrow for acquisition of the Site, (2) upon 100% qualification and acceptance of Eligible Tenants for the Affordable Very Low Income Units, and (3) upon recordation of the Release of Construction Covenants. Developer agrees to defer any unpaid portion of its Developer Fee to the extent needed to pay for any cost overruns not funded and contingencies not otherwise funded by the sources of funds as described herein (the "Deferred Developer Fee"). The Deferred Developer Fee will be payable from Net Operating Income as described in Section 5.10 of this Agreement. 4.9 Legal Requirements. Developer hereby agrees to carry out acquisition, rehabilitation, construction (as defined by applicable law) and operation of the Project on the Site, including, without limitation, any and all public works (as defined by applicable law), in conformity with all applicable local, state and federal laws, including, without limitation, all applicable federal and state labor laws (including, without limitation, any requirement to pay state prevailing wages). It is the intent of the parties that, notwithstanding any other provisions of this Agreement, Developer's obligation applies only to the extent that a particular statute or regulation referenced herein or in the Regulatory Agreement applies to the Project. Developer hereby expressly acknowledges and agrees that the Authority has not previously affirmatively represented to the Developer or its contractor(s) for the Project in writing or otherwise, in a call for bids or otherwise, that the work to be covered by the bid or contract is not a"public work," as defined in Section 1720 of the Labor Code. Developer hereby agrees that it shall have the obligation to provide any and all disclosures, representations, statements, re-bidding, and/or identifications to the extent the Project triggers a requirement under Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer hereby agrees that it shall have the obligation to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which to the extent the Project triggers a requirement under the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer hereby agrees that it shall have the obligation, at its sole cost, risk and expense, to obligate any party to the extent the Project triggers a requirement under Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer shall indemnify, protect, defend and hold harmless Authority and City and their respective. officers, employees, contractors and agents, with counsel reasonably acceptable to Authority, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs" (including labor costs, penalties, reasonable attorney's fees, court and litigation costs, and fees of expert witnesses) which, in direct connection with the acquisition, construction (as defined by applicable law) and/or operation of the Project, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (1) OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 17 the noncompliance by Developer of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (2) the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (3) failure by Developer to provide any required disclosure, representation, statement, re-bidding and/or identification which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; (4) failure by Developer to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; and/or (5) failure by Developer to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. It is agreed by the parties that, in connection with the acquisition, construction (as defined by applicable law) and operation of the Project, including, without limitation, any public work(as defined by applicable law), Developer shall bear all risks of payment or non-payment of state prevailing wages and/or the implementation Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs" as used in this Section shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing indemnity shall survive termination of this Agreement. 4.10 Release of Construction Covenants. (a) Promptly after completion of the rehabilitation of the Units, as generally and specifically required by this Agreement and in particular the Scope of Development, the Authority shall furnish Developer with a Release of Construction Covenants in the form of Exhibit "J" to this Agreement upon written request therefor by Developer. Completion of the rehabilitation of the Units is understood and agreed to mean the point in time that: (1) the entire rehabilitation work, including all minor corrective items, is fully and finally complete, including full and final completion of the work of the general contractor and all subcontractors on the Project; (2) all approvals, inspections and certificates required to be issued by governmental authorities for the full occupancy and use of the Project have been issued; (3) all clean up at the Site is complete; and (4) the Project has been accepted by the City and the Authority as having been completed in accordance with the approved Rehabilitation Plan. The Authority shall unreasonably withhold such Release of Construction Covenants and such Release of Construction Covenants shall be issued so long as Developer has rehabilitated the Units in accordance with this Agreement and the Rehabilitation Plan approved by the Authority pursuant hereto. Such Release of Construction Covenants shall be, and shall so state, conclusive determination of satisfactory completion of all of the construction required by this Agreement. (b) The Release of Construction Covenants shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. A Release of Construction Covenants for construction of less than the completed rehabilitation of all of the Units in the Project shall not be recorded. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 18 (c) If the Authority refuses or fails to furnish a Release of Construction Covenants after written request from Developer, the Authority shall, within twenty (20) working days of the written request, provide Developer with a written statement of the reasons the Authority refused or failed to furnish a Release of Construction Covenants. The statement shall also contain the Authority's opinion of the action Developer must take to obtain a Release of Construction Covenants. If the reason for such refusal is confined to the immediate availability of specific items or materials for landscaping, and/or minor items, the Authority will issue its Release of Construction Covenants upon the posting of a bond by Developer in an amount representing the fair value of the work not yet completed. If the Authority shall have failed to provide such written statement within said 20-working-day period, the Authority shall be deemed to have furnished the Release of Construction Covenants and, notwithstanding the last sentence of Section 4.10(b), shall execute same for recordation. (d) Such Release of Construction Covenants shall not constitute evidence of compliance with, or satisfaction of any obligation of Developer to the beneficiary of any Deed of Trust securing third party financing of the Project. A Release of Construction Covenants is not a notice of completion under Section 3093 of the California Civil Code. SECTION 5. USE OF THE SITE 5.1 No Inconsistent Uses. Developer covenants and agrees, for itself, its successors, its assigns, and every successor in interest to the Site, or any part thereof, that for the period beginning on the Close of Escrow and ending on the expiration date of the Regulatory Agreement, Developer and such successors shall not devote the Site to uses inconsistent with the applicable zoning restrictions, this Agreement, and the Regulatory Agreement; provided that, in the event of any inconsistency, the provisions of the Regulatory Agreement shall prevail over this Agreement. 5.2 Regulatory Agreement. At the Close of Escrow the Regulatory Agreement and the Notice of Affordability Restrictions shall be recorded against the Site in the Priority set forth in the Section 3.5(d). 5.3 Relocation (a) Relocation Plan. Developer shall use reasonable efforts to avoid displacing any existing tenants and/or persons residing in or on the Site. In the event, however, that off-Site relocation of existing tenants and/or persons residing in or on the Site becomes necessary as a result of Developer's implementation of the Project, Developer, prior to such off- Site relocation, shall submit a relocation plan to Authority for review and approval ("Relocation Plan"). The Relocation Plan shall comply with the requirements of the Uniform Relocation Act and the California Relocation Assistance Act and any guidelines promulgated in connection therewith and shall also include the name, gender, age, ethnicity, household income, and amount of relocation payment to be paid; provided, however, that Developer shall not be obligated to provide any of the foregoing referenced personal information about relocatees if such relocatees refuse to provide such information or the gathering or provision of such information is contrary to applicable law. Developer shall comply with the requirements of all applicable relocation OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 19 laws, including, but not limited to, the Uniform Relocation Act and the California Relocation Assistance Act, and shall comply with related tenant notice requirements and shall provide the City and Authority with true and correct copies of such notices to tenants. Developer shall also retain all required records and the originals and/or copies of tenant notices in its files as mandated by applicable law. The relocation requirements of this Section do not apply to any tenants who qualify as Eligible Tenants (as such term is defined in the Regulatory Agreement) at the initiation of their tenancy but who are later required to move as a result of an increase in such tenant's household income. (b) Relocation Cost. Developer shall endeavor to relocate existing tenants who do not qualify as Eligible Tenants to units in Developer's or Orange County Community Housing Corporation's other properties. Developer shall submit an application for disbursement of relocation payments supported by documentation acceptable to the Authority supporting the amount and use of such funds. The Authority will work with Developer to ensure that an adequate budget is provided for temporary or permanent relocation benefits as required by applicable relocation laws, including but not limited to, the Uniform Relocation Act and the California Relocation Assistance Act. The Authority will make all reasonable efforts to fund relocation draws within 30 days of receipt of a draw request from the Developer. 5.4 Maintenance of the Site. After acquisition and rehabilitation of the Site and for the remaining term of this Agreement, all Units must be maintained in compliance with Federal Housing Quality Standards (24 CFR § 982.401) and other applicable state and local laws and codes. In addition, Developer shall maintain the Site in accordance with the terms of the Regulatory Agreement. The Authority shall have the right at all reasonable times to enter and inspect the Site in order to ensure compliance with the foregoing requirements. In the event Developer fails to maintain the Site as required by this Section, Developer shall, within thirty (30) days after Authority's notification or Developer's own discovery of any deficiency, take all necessary steps to correct such deficiency, provided that, if such deficiency is not reasonably capable of being cured within thirty (30) days, Developer shall commence to cure said deficiency within thirty (30) days and diligently and in good faith continue to take all necessary steps to correct such deficiency. 5.5 Nondiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, age, class, income, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, or in the awarding of contracts for the Project, nor shall Developer, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof, or in the awarding of contracts for the Project. Developer shall comply with all applicable federal, state and local nondiscrimination, fair housing, and equal opportunity requirements. In addition, Developer shall conduct affirmative marketing and minority outreach activities as required by Federal regulations. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 20 5.6 Form of Nondiscrimination and Nonsegregation Clauses. The Developer shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, age, class, income, religion, sex, sexual orientation, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In Deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph(1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (b) In Leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision(a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In Contracts: "There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the land." 5.7 Effect and Duration of Covenants. The Developer has, concurrently with the execution of this Agreement, executed in recordable form the Regulatory Agreement. Every covenant and condition and restriction contained in the Regulatory Agreement shall remain in effect for fifty-five (55) years from the Effective Date of this Agreement (regardless of whether OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 21 the Authority Loan has been repaid prior to the end of such 55-year period), except that the covenants against discrimination set forth in Sections 5.5 and 5.6 shall remain in effect in perpetuity. If, at the end of the 55-year period, an unpaid balance remains on the Authority Loan, Developer may choose to do either of the following: (a) Developer may choose to continue to maintain the covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement, in which case the Authority shall not require repayment of the balance of the Authority Loan and the Authority Loan shall not accrue any interest for the period during which said covenants, conditions and restrictions are maintained; or (b) Developer may choose not to maintain the covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement, in which case the entire principal balance of the Authority Loan plus all accrued interest on such loans shall immediately become due and payable. 5.8 Creation of Capital Reserve Account. No later than thirty (30) days after the Close of Escrow, Developer shall create a "Capital Reserve Account" in the initial amount shown on the Project Budget. No later than thirty (30) days after the Capital Reserve Account has been created, Developer shall provide to Authority a pro forma statement concerning the account, for review and approval. At any time thereafter during the term of this Agreement, Authority, on ten (10) days prior written notice to Developer, may request that Developer submit to it updated, revised Capital Reserve Account statement. Authority, at its own expense, may audit any updated, revised Capital Reserve Account statement submitted to it by Developer. 5.9 Capital Reserves. Commencing with calendar year 2017, and every succeeding year during the term of this Agreement, Developer shall deposit a minimum of SEVEN HUNDRED FIFTY DOLLARS ($750) (subject to annual adjustments not to exceed three percent (3%) per year) to the extent available from Net Operating Income (defined below) into the Capital Reserve Account for repairs to the Site. The Capital Reserve Account shall only be used to fund the cost of repairs and improvements to the Site and to maintain the Site in compliance with the requirements of Section 5.4. Developer shall exhaust funds in the Capital Reserve Account prior to utilizing operating revenues to pay for repairs and improvements to the Site. Interest earned on the Capital Reserve Account shall remain in said account and be used as Capital Reserves. 5.10 Payment of Portion of Residual Receipts. (a) Payment to Authority. . Commencing on the first anniversary of the Effective Date of this Agreement, and every succeeding year during the term of this Agreement, Developer must utilize TWENTY-FIVE PERCENT (25%) of Net Operating Income for the previous one-year period ("Available Net Operating Income") to repay the Authority Loan. If a payment on the Authority Note is required by Developer pursuant to the terms hereof, Developer shall make such payment no later than one hundred twenty (120) days following the end of the applicable calendar year. (b) Definition of Net Operating Income. As used herein, the term "Net Operating Income" shall mean, for any reporting period (typically a calendar year), all income derived from the Site, including without limitation all tenant rent, fees and charges (excepting tenants' security deposits but including deposits forfeited by tenants), any rental subsidy OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 22 payments received for the Units, the proceeds of business interruption and similar insurance, and the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project but excluding any interest income earned on the Capital Reserve Account and the tenant security deposits, less (i) payments of principal and interest, if any, required to be paid in such year by Developer with respect to any note, mortgage, or deed of trust (excepting the Authority Note) with respect to the Site or Project, (ii) all reasonable and customary expenses actually incurred (or to be incurred if accounted for on an accrual basis) in leasing, managing, operating, maintaining, and repairing the Site, (iii) all capital expenses incurred pertaining to the Site excepting those to be paid from the Capital Reserve Account, (iv) the required deposits into the Capital Reserve Account, and (v) reasonable and customary property management fees, social services and resident services fees, administrative costs, salaries, benefits, overhead costs, and such other and further reasonable and customary operating and management expenses incurred in operating the Site. Depreciation expenses shall not be a reduction against Net Operating Income. 5.11 Financial Statements. On a yearly basis, Developer shall submit copies of its annual tax return and copies of Orange County Community Corporation's annual audit. Developer shall also submit to Authority, on a yearly basis, a true and correct copy of Developer's financial statements for the Project clearly identifying the Project revenues, operating expenses, deposits to and withdrawals from the Project's Capital Reserve Account, and cash flow available for residual receipts payments. Before such statements are submitted, they must be reviewed and certified by Developer to have been prepared in accordance with Generally Accepted Accounting Principles. In addition, during such time as Developer, or Developer and any affiliate of Developer, owns a total of at least thirty (30) residential rental units in the Oakview community, the annual statements required by this Section 5.11 must be reviewed and certified by an independent accounting or auditing firm to have been prepared in accordance with Generally Accepted Accounting Principals. After receipt of financial statements for the Project, Authority may request additional financial analyses or obtain a third party review at Authority's own expense, of financial statements for the Project to verify the accuracy of the payments by Developer on the Authority Note pursuant to Section 5.10 or the deposits into the Capital Reserve Account pursuant to Section 5.9. 5.12 Operation of Project. Borrower shall lease, operate and manage the Project in full conformance with the terms of this Agreement and specifically the Regulatory Agreement. Further, all of the Units in the Project shall be designated as Affordable Very Low Income Units. Rents for the Affordable Very Low Income Units shall not exceed the applicable Affordable Rents. Not later than sixty (60) days after Close of Escrow, and for every year thereafter during this Agreement's term, Developer shall submit an annual, proposed budget to Authority for review and approval. 5.13 Lead-Based Paint. Developer shall ensure that it and its contractors and subcontractors shall not use lead-based paint in the construction or maintenance of the Project. Developer shall insert this provision in all contracts and subcontracts for work performed on the Project which involves the application of paint. 5.14 Barriers to the Disabled. Developer shall ensure that the Project shall be rehabilitated and operated to comply with all federal, state, and local requirements for access for OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 23 disabled persons that apply to the acquisition and rehabilitation of existing multi-family rental units. SECTION 6. DEFAULTS AND REMEDIES 6.1 Developer Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Developer hereunder if, after receiving written notice from Authority as provided in Section 6.4 below identifying such event, Developer fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within thirty (30) days, it shall not be a Material Default if Developer commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default: (a) Developer has failed to Close Escrow to acquire fee title to the Site within sixty (60) days after the time set forth in the Schedule of Performance; (b) Developer fails to complete rehabilitation of the Units within the time set forth in the Schedule of Performance, as such time may be extended pursuant to this Agreement; (c) Developer fails to observe or perform any material term of this Agreement or any agreement incorporated hereunder by reference including, but not limited to, the Regulatory Agreement, the Authority Note, the Authority Deed of Trust, or the Subordination Agreement (if applicable), within the time set forth in this Agreement or any of the documents referred to herein; or (d) Developer knowingly and intentionally makes or delivers to Authority any statement, report, or certificate that is not true or correct in any material respect. In no event shall Authority be precluded from exercising remedies if the default is not cured within one hundred twenty (120) days, or Authority's rights under this Agreement become or are about to become materially jeopardized by any failure to cure a default. 6.2 Authority Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Authority hereunder if, after receiving written notice from Developer as provided in Section 6.4 below identifying such event, Authority fails to cure said event within thirty (30) days; provided that if such default is not reasonably capable of being cured within thirty (30) days, it shall not be a Material Default if Authority commences to cure said event within thirty (30) days and diligently and in good faith continues to cure the event of default: (a) Authority fails to observe or perform any material term of this Agreement within the time set forth in this Agreement, including but not limited to timely deposit into Escrow of the required portion of Authority Loan funds; or (b) Authority knowingly and intentionally makes or delivers to Developer any statement, report, or certificate that is not true or correct in any material respect. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 24 In no event shall Developer be precluded from exercising remedies, if the default is not cured within one hundred twenty (120) days, or Developer's rights under this Agreement become or are about to become materially jeopardized by any failure to cure a default. 6.3 Notice of Default. The non-defaulting party shall give written notice of any default under this Section to the defaulting party, clearly specifying the default. Copies of any notice of default given to the defaulting party shall also be given to any permitted lender requesting such notice. Any failure or delay in giving such notice or in asserting any of any party's rights and remedies as to any default shall not constitute a waiver of any default, nor shall it change the time of default, nor shall it deprive any party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 6.4 Authority's Remedies. (a) The Authority, at its option, may terminate this Agreement prior to the Close of Escrow in the event of any Material Default that the Developer fails to cure within the time set forth in Section 6.1 (subject to the right of notice and expiration of applicable cure periods). (b) Following the Close of Escrow, in the event of any Material Default that the Developer fails to cure within the time set forth in Section 6.1 (subject to the right of notice and expiration of applicable cure periods), the entire principal balance of the Authority Loan including all interest shall immediately become due and payable, and Authority shall have the option to: (a) demand full payment of the principal balance of the Authority Loan including all interest; (b) take over ownership and management of the Site; or (c) foreclose on the Site under the Authority Deed of Trust. 6.5 Developer's Remedies. Subject to any applicable cure periods and the general right to notice provided for in this Agreement, upon a default or breach of this Agreement by Authority, Developer may bring an action for specific performance of this Agreement or any term or provision hereof, or, if prior to the Close of Escrow, may terminate this Agreement. Developer may not sue for monetary damages. 6.6 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties hereto are cumulative, and the exercise by any party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. SECTION 7. GENERAL PROVISIONS 7.1 Developer's Warranties. Developer represents and warrants (1) that it has access to professional advice and support to the extent necessary to enable Developer to fully comply with the terms of this Agreement; (2) that it is duly organized, validly existing and in good standing under the laws of the State of California; (3) that it has the full power and OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 25 authority to undertake the Project and to execute this Agreement; (4) that the persons executing and delivering this Agreement are authorized to execute and deliver such documents on behalf of Developer; (5) except as disclosed to the Authority in writing, there are no actions or proceedings pending or, to the best of the Developer's knowledge, threatened against the Developer before any court or administrative Authority in any way connected with the Site or the Project which could adversely affect the Developer's ability to perform the activities contemplated hereunder; (6) neither this Agreement nor anything provided to be done hereunder violates or shall violate any contract, agreement or instrument to which the Developer is a party or which affects the Project or any part thereof, (7) the Developer is not in default in respect of any of its obligations or liabilities pertaining to this Agreement, nor is there any state of facts or circumstances or conditions or events which, after notice, lapse of time, or both, would constitute or result in any such default under this Agreement; and (8) the Developer has not entered into any agreements which will adversely affect the title to the Project or the Developer's right to develop and use the Project as provided in this Agreement, and the Developer will not enter into any such agreements after the date hereof. 7.2 Governing Law. The internal laws of the State of California shall govern the interpretation and enforcement of this Agreement. 7.3 Attorneys' Fees. In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 7.4 Notices, Demands, and Communications Between the Parties. Formal notices, demands, and communications between Authority and Developer shall be sufficiently given if: (i) personally delivered; (ii) delivered by same day or overnight courier (acknowledged by receipt showing date and time of delivery); or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the addresses set forth below: If to Developer: Orange County Community Housing Corporation 501 North Golden Circle, suite 200 Santa Ana, CA 92705 Attn: Executive Director If to Authority: The City of Huntington Beach Housing Authority 2000 Main Street Huntington Beach, CA 92648 Attn: Executive Director Notices personally delivered or delivered by courier shall be effective upon receipt or refusal to accept delivery. Mailed notices shall be effective on the earlier of(i) receipt of refusal to accept delivery, or(ii) noon on the second business day following deposit in the United States mail. 7.5 Acceptance of Service of Process. In the event that any legal action is commenced by Developer against Authority, service of process on Authority shall be made by OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 26 personal service upon the Executive Director or the Authority Secretary, or in such other manner as may be provided by law. In the event that any legal action is commenced by Authority against Developer, service of process on Developer shall be made by in any manner provided by law, and shall be valid whether made within or without the State of California. 7.6 Conflicts of Interest. No member, official, or employee of Authority or City shall have any personal interest in this Agreement, nor participate in any decision relating to this Agreement, that is in violation of any applicable law, regulation or ordinance. 7.7 Titles and Captions. Titles and captions are for convenience only and shall not be construed to limit or extend the meaning of this Agreement. 7.8 Gender. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. 7.9 Modifications. Any amendment, alteration, change, or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. 7.10 Merger of Prior Agreements and Understandings. This Agreement and all documents incorporated herein contain the entire understanding among the parties hereto relating to the transactions contemplated herein and all prior or contemporaneous agreements, understandings, representations, and statements, oral or written. 7.11 No Third Parties Benefited. This Agreement shall create no third-party beneficiary rights or any other rights in favor of any persons, firms or corporations, except as may be expressly stated in this Agreement. This Agreement is for the sole use and benefit of the parties hereto and is not for the use or benefit of any other person or entity. 7.12 Assurances to Act in Good Faith; Approval by Authority. Developer and Authority each agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to accomplish the acquisition and rehabilitation of the Site in accordance with the provisions hereof. 7.13 Warranty gainst Payment of Consideration for Agreement. Except as provided in this Agreement, Developer warrants that it has not paid or given, and will not pay or give, any person any money or other consideration for obtaining this Agreement that is in violation of any law. 7.14 Nonliability of Authority. o�y Officials and Employees. No member, official, or employee of the Authority or City shall be personally liable to the Developer or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the Developer or to its successor, or on any obligations under the terms of this Agreement. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 27 7.15 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against any party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 7.16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 7.17 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 7.18. Extension of Times of Performance. Notwithstanding the foregoing, in addition to the specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in default during an event of Force Majeure. An extension of time for an event of Force Majeure shall be limited to the period of such event, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause. In the event of such delay, the party delayed shall continue to exercise reasonable diligence to minimize the period of delay. Times of performance under this Agreement may also be extended by mutual written agreement by Authority and Developer. In addition, the Authority Executive Director shall have the authority on behalf of Authority to approve extensions of time not to exceed a cumulative total of one (1) year. 7.19 Inspection of Books and Records. The Authority or its designees have the right at all reasonable times to inspect the books, records and/or other documents of the Developer pertaining to the Site and/or the Project as pertinent to the purposes of this Agreement. 7.20 Waivers. The waiver by Authority or Developer of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. SECTION 8. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE This Agreement consists of twenty-nine (29) pages and eleven (11) attachments which constitute the entire understanding and agreement of the parties. This Agreement does not take effect until executed by the Developer and Authority. This Agreement, when executed by the Developer and delivered to the Authority, must be authorized, OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 28 executed and delivered by the Authority within thirty (30) days after the date of signature by the Developer, or this Agreement may be terminated by the Developer on written notice to the Authority. The Authority Executive Director is hereby authorized and directed to take such other and further actions, and sign such other and further agreements and documents on behalf of the Authority as may be necessary or proper to effect the terms of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. "DEVELOPER" "AUTHORITY" ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH HOUSING CORPORATION, HOUSING AUTHORITY, a public body a California Non Profit Public Benefit corporate and politic Corporation By: By: Chairperson Its: vr ATTEST: By: Clerk of the Housing Authority COUNTERPART APPROVED AS TO FORM: By: Authority Counsel �-*m toN%-QW,0 OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 29 executed and delivered by the Authority within thirty (30) days after the date of signature by the Developer, or this Agreement may be terminated by the Developer on written notice to the Authority. The Authority Executive Director is hereby authorized and directed to take such other and further actions, and sign such other and further agreements and documents on behalf of the Authority as may be necessary or proper to effect the terms of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. "DEVELOPER" "AUTHORITY" ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH HOUSING CORPORATION, HOUSING AUTHORITY, a public body a California Non Profit Public Benefit corporate and politic Corporation By: By: a'rp n Its: ATTEST: By- COUNTERPART �` Clerk of the Housing Authority APPROVED AS TO FO By: Authority Counsel DWo ko\%QWO nti✓ OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT PAGE 29 EXHIBIT A Legal Description [behind this page] OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT A-LEGAL DESCRIPTION PAGE EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT A—LEGAL DESCRIPTION PAGE 2 EXHIBIT B Site Map [behind this page] OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT B-SITE MAP PAGE 711111,M1.� upau'•v.■11■NIIIIUN� uunnl•►� _ .iwiiiiiuli� IIIIIIIIIIIIINIIII� ��i rrIr1NUHNHrp unplpm PUlyl■ NFAMARN MpMpYrNr1• via 41161 •� ap pa p` ■ �n«w xulnnurxx /f..� -� .. 1•• �� INIIM rlrrllrlrr1111111 �• �. �\ \N„Ir IIIIIINnI1r1111 . -�--I ,{ Ir1 I,r 11�• ,\` %�,1111 NIII«rllplrrll :: IN•1. y �. �:Q In,N�HO1•` III ■ nlrrN11111111UIllllxl :: I Iwl Fran.1.1141. • _��� :111 ■ unnnw�� .. -- IIIIIN H I•xl.. ► �rrr• IIII _ ry:: �� :i�i:O Illllx p ru. Nxl np ��• -= i= %O�I11pr111N�%n•urpnx 1111211,-Im ■���• u•nl � N�� rU01P■ �i � ■ �■ I, ■ mwl� �'�6�nu�lu � j1 f'■� iiii� uxln ��. ILI ■-. � � III, f IIN11■tl t_ .___w1r . IMIIIr NINI�■ p 11111111 �� -x1. -a1-pin- .■� n. Y III uwu•N•. _ IIIrN11p1 � ,NUMI H��N_m IIIII.I _�_�__�_ �_ umnwl �_•__ _: •�IIN __ r 111H. d«IIUr • IIII Inx1r r1„N f .� ■■!NMIIIINr1N11 N111 O11x111NN •�:_�: Fry . '1111N-11. ■� _, plauuw pm pxpuum . uuuuuun «m upm : ��►•►•► :NN�11:� •rulHnpum uuau.. �•.. • '. - :7:::I� =IIII � �,I .unpuw,. JI 7 's •1111111111 : �lnumuur� \•runnmri�nxpNlN► � ■� .����__ .� � � � �� IuunwnH. --:Ya uu:� ■x .:p :pap pp �c _ - _ 111x1 rUIUS : �••1N ��pP� _._ � I■. � iU r1U N,I O1r, ■■■: �1►� np1N. N n - I:v wxnd ■ i1,v �_�"�- �O:438 J.Illlly I117 O@llll� uppNnl_ ��IMF�■� ■ ��6x mmN.�I■111 .1� Ipluplp: + �..■�. rxunm 7 ,� 111111111■111■■ �� p�\• N1v/ ,11111N11 7 � �,■.��I, �7N111■{IIIIIIIII■ �� �.«u1 O�\•um 1 ir1111111 ■��� ■■11111111■IIIII11111■! N � �1111111= �■/��� ■I■�IIIIIIIIIIIINII■■ .I■■1 11 0=INN111: ® .�'i��������■INIIIIIIIIIIIIIIIIIIC iI �h—� �■■■gllNlllllllllllpl■ � �►; ���ii���■ �w:x■:IIIIIIIIIIIII'1_ slowage fa I . xx ��. nll.�i ni'�_i� Inxwluuul Ni Ohl � `us_ :INIIII IIIII�ino -•m -� �� :;,Nx I�OIIII11p1�� IIIIx1111«n1M :P" ows ■_.tIN NNUN1�.� f111NN.�_ �3_s .. IN On Phs Ave 11 • f EXHIBIT C Scope of Development [behind this page] OCCHC--7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT C-SCOPE OF DEVELOPMENT PAGE EXHIBIT C Scope of Development 7792 Barton Drive, Huntington Beach, CA 92647 Rehabilitation Project Description Work Specification 1. Landscaping Remove all landscaping abutting structure, remove any shrubs that are too close to structure, replace damage sprinklers 2. Exterior Provide required correction to prevent water intrusion to subfloor area. Secure all vents and access openings. 3. Exterior Stucco Provide and install foam E.F.I.S. detail and stucco around windows times 24-allowance 4. Exterior Scaffolding Provide scaffolding for removal of stucco 5. Roof Repairs Provide and install new fascia boards, Reroof- complete building and carports 6. Exterior Paint Paint all exterior including carport 7. Stairs Remove rotted posts ad stair treads and replace to repair stairs. Provide and install missing pickets in handrails and fencing. Provide and install metal mesh along handrails and stairs to meet ADA 8. Laundry Room Patch and repair drywall as needed, paint walls and ceiling, replace base board and floor, replace window, install new water heaters and re-plumb 9. Carport Driveway Saw cut and remove existing asphalt and replace 10 Electrical Repairs Correct wiring issues in each unit, provide and install GFI outlets as required, repair faulty toggle switches and duplex outlets. Replace face plates as needed. Replace lights as needed. 11 Electrical Repairs Replace exterior lighting with energy efficient lighting. 12 Permit Allowance Provide permits for all required trades. 13 Abatement Funds to cover abatement issues regarding lead, Contingency asbestos or mold. 14 Kitchen (4 units) Provide and install new drywall resurface ready for paint. Paint all walls and ceilings, Provide and install new cabinets, countertops, stove and sink and garbage disposal, smoke detector. Provide new baseboard and install new flooring. OCCHC -7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT C-SCOPE OF DEVELOPMENT PAGE 15 Living Room (4 units) Provide and install new drywall resurface ready for paint. Paint all walls and ceiling. Provide new baseboard, install new flooring, window treatment, replace front door and locks. Replace wall heater and install gas shut off. 16 Hallway (4 units) Resurface walls and ceilings and paint all walls, ceilings and doors. provide and replace flooring and base, install smoke detector, remove pad locks and install new closet handle. 17 Hallway Bathroom (4 Provide and install damage drywall, replace units) ceiling, install bathroom lights with exhaust fans. Remove and replace bathtub, bath walls, shower door, shower head and valves. Install new sink, faucet, vanity, medicine cabinet and decorative mirror. New door and hardware. Replace base, flooring and paint all walls and ceiling. 18 Bedroom 1 (4 units) Install new carpet, new base, remove texture from ceiling, resurface drywall, paint all walls and ceiling, install new window treatment, closet doors-slider, install doors and replace hardware. 19 Master Bathroom (4 Remove and replace damage drywall, remove units) and replace ceiling, shower walls, shower door, shower head and valves, exhaust fan, lights, medicine cabinet. Install new toilet, pedestal sink, faucet valves, connector trap and drain. New door and hardware, install flooring and base, paint all walls and ceiling. 20 Bedroom 2 (4 units) Install new carpet, new base, resurface drywall, paint all walls and ceiling, install new window treatment, closet doors-slider, install new doors and replace hardware. OCCHC - 7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT C-SCOPE OF DEVELOPMENT PAGE 3 EXHIBIT D Project Budget [behind this page] OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT D-PROJECT BUDGET PAGE 1 EXHIBIT D Project Budget Kitchen Provide and install new drywall resurface ready for paint $ 250.00 Paint walls and ceiling $ 400.00 Provide and install new cabinets $ 1,370.00 Provide and install new countertops $ 1,160.00 Provide and install new exhaust hood $ 350.00 Provide and install new light $ 100.00 Provide and install new sink,plumbing to make up $ 650.00 Garbage disposal $ 200.00 replace floor $ 600.00 Provide and install new base and paint $ 200.00 Living Rm Paint walls and ceiling $ 400.00 Provide and install new carpet $ 700.00 Provide and install new drywall resurface ready for paint $ 150.00 Provide and install new window treatment $ 200.00 Clean Up front Entry Door and Frame $ 75.00 Replace wall heater and install gas shut off $ 1,200.00 Provide and install new base and paint $ 200.00 Hallway Provide resurface of walls and ceiling ready to paint $ 100.00 Paint wall, ceilings and doors $ 250.00 Clean up existing Doors and Frames $ 50.00 Replace floor $ 200.00 Remove padlocks and install new closet handle $ 35.00 Paint walls and ceiling $ I50.00 Provide and install new base and paint $ 200.00 Bedroom I Remove texture from ceilings $ 50.00 Provide and install new carpet $ 600.00 Provide and install new drywall resurface ready for paint $ 125.00 Provide and install new window treatment- $ 150.00 Clean Upfront Door and Frame $ 50.00 Install new door handle-no lock $ 85.00 Install closet doors-slider $ 200.00 Paint walls and ceiling and door $ 500.00 Provide and install new base and paint $ 200.00 Hallway Bathroom Remove and replace ceiling and around tub drywall $ 3,400.00 Provide and install new exhaust fan $ 250.00 Provide and install (1) new electrical outlet and plate $ 65.00 Remove and replace bath tub with new faucet $ 200.00 OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT D-PROJECT BUDGET PAGE 2 Provide and install new light $ 150,00 Provide and install new paint $ 500.00 Remove old tile and replace with New fiberglass bath walls $ 300.00 Provide and install new bathtub doors $ 300.00 Provide and install new toilet with new water stop $ 350.00 Provide and install new cabinet and countertop $ 1,000.00 Provide and install new sink and faucet $ 400.00 Install new door handle with passage lock $ 90.00 Provide and install new base and paint $ 200.00 Master Bathroom Remove and replace ceiling and around shower install drywall $ 3,000.00 Provide and install new exhaust fan $ 250.00 Provide and install new light $ 150.00 Patch and paint bathroom walls $ 300.00 Remove old tile and replace with New fiberglass shower walls $ 300.00 Provide and install new shower doors $ 300.00 Replace shower head and valves $ 600.00 Provide and install new toilet with new water stop $ 350.00 Provide and install new pedestal sink,faucet valves, connectors trap and drain $ 500.00 Install new door handle with passage lock $ 90.00 Provide and install new floring and base board $ 300.00 Bedroom 2 Remove and resurface of walls and ceiling ready to paint $ 75.00 Paint walls and ceiling and door $ 500.00 Provide and install new carpet $ 600.00 Provide and install new window treatment- $ 150.00 Clean Up front Door and Frame $ 50.00 Install new door handle—no lock $ 90.00 Install closet doors $ 200.00 Provide and install new base and paint $ 200.00 E` 5, z Tvi"al intr�err. Exterior Reroof-complete building and carports $ 15,000.00 Provide and install new fascia boards Included in roof Provide and install foam E.F.i.S. detail and stucco around windows times 24- $ 24,000.00 allowance Provide and install missing pickets in handrails and fencing $ 1,050.00 Provide and install metal mesh along handrails and stairs to meet ADA $ 1,000.00 Provide and replace wood 7 steps $ 700.00 Paint exterior $ 3,080.00 Laundry room Patch drywall wall as needed,paint walls and ceiling, replace base board and $ 1,500.00 flooring Provide and install new water heaters times land re-plumb $ 2,000.00 OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT D-PROJECT BUDGET PAGE 3 General Conditions Replace carport driveway $ 8,000.00 Landscaping $ 3,000.00 Pull permits-electrical,plumbing, drywall, roof $ 500.00 Permit fees- allowance $ 1,000.00 Dumpster and f nal clean up $ 5,000.00 Lead abatement $ 6,000.00 Scaffolding $ 12,000.00 ON Interior 4 units $ 105,440.00 Exterior $ 83,830.00 Contractor overhead & profit 15% $ 28,390.00 Tenant relocation $20,000.00 contingency $12,340.00 Project Total $ 250,000.00 OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT D- PROJECT BUDGET PAGE 4 EXHIBIT E Schedule of Performance [behind this page] OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT E-SCHEDULE OF PERFORMANCE PAGE EXHIBIT E SCHEDULE OF PERFORMANCE ITEM OF PERFORMANCE TIME OF PERFORMANCE REFERENCE 1. Developer and Authority each execute all Not later than twelve noon on the § 3.5(b); § 3.5(c). documents and deposit all documents and business day immediately prior to the funds into Escrow as required by this scheduled Closing Date. Agreement. 2. Closing Date. Not later than [ 1,2009. § 3.5(a). 3. Developer obtains the Approved Project Within one hundred eighty (180) days §4.2 Plans and Permits for the Project and after the Closing Date. commences the rehabilitation work on the Site. 4. Developer submits a Management Plan and Within ninety (90) days after the § 4.4 of Regulatory Rehabilitation Plan to the Authority. Closing Date. Agreement (Exhibit H) 5. Developer completes rehabilitation of the Within one year after commencement of §4.2 improvements on the Site and achieves rent the rehabilitation work on the Site. up of the Units. 6. Developer submits annual financial Within one hundred twenty (120) days § 5.11 statements and rent records/tenant eligibility after the end of each calendar year. certifications to the Authority. It is understood that this Schedule of Performance is subject to all of the terms and conditions of the text of the Agreement. The summary of the items performance in this Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any conflict or inconsistency between this Schedule of Performance and the text of the Agreement, the text shall govern. The time periods set forth in this Schedule of Performance may be altered or amended only by written agreement signed by the Developer and the Authority. The Authority Executive Director shall have the authority to approve extensions of time without action of the Authority's governing board, not to exceed a cumulative total extension of one (1) year. OCCHC—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT E—SCHEDULE OF PERFORMANCE PAGE 2 EXHIBIT F Authority Promissory Note [behind this page] OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT F-PROMISSORY NOTE PAGE 1 RLS 16-5414/7792 Barton Drive/144857/DO [AUTHORITY LOAN] PROMISSORY NOTE SECURED BY DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED THERETO DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust securing same, must be surrendered to Trustee for cancellation before reconveyance will be made. PROMISSORY NOTE SECURED BY DEED OF TRUST Principal Loan Amount: $218,780.00 Interest: 0% Huntington Beach, California Note Date: moo✓ 9 2016 FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body corporate and politic ("Holder"), at a place designated by Holder, the principal sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.00) or such portion thereof as is advanced from Holder to Maker pursuant to an Affordable Housing Agreement (the "Agreement") dated as of �8� /it , 2016 by and between Maker ("Developer" therein) and Holder ("Authority" therein), plus interest at the rate of ZERO PERCENT (0%) simple interest. The Agreement is hereby incorporated by reference as though fully set forth herein. Any capitalized terms not defined herein shall have the meanings ascribed to them in the Agreement. The obligation of the Maker to the Holder hereunder shall be secured by a deed of trust made by the Maker encumbering the Site to be developed (the "Site") pursuant to the Agreement and the Deed of Trust and Assignment of Rents dated ,�/�y r'Z 2016, executed by the Maker ("Trustor" therein) and recorded in the Recorder's Office of Orange County, California on 1,foje&w-ke' /8r Zvi to , as Document No. Z01/d pnoyk7/ -z-Y (the "Authority Deed of Trust"). The obligation of the Maker set forth in this Note is subject to acceleration as set forth in the Agreement. The Agreement and the Authority Deed of Trust are public records on file in the offices of the Holder. 1. Authority Loan. This Note evidences the obligation of the Maker to the Holder for the repayment of Set Aside Funds loaned to the Maker by the Holder (the "Authority Loan") to finance the acquisition of the Site and implementation of the Project pursuant to the Agreement. The Maker shall not make any sale, assignment,or conveyance, or transfer in any other form, of the Site, or any part thereof, or interest therein without the express written consent of the Holder as set forth in Section 2.5 of the Agreement. 2. Payment of Obligation. Commencing on the third anniversary of the Effective Date of the Agreement, and every succeeding year during the 55-year term of this OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT F-PROMISSORY NOTE PAGE RLS I6-5414/7792 Barton Drive/I 44857/DO Note, Maker must utilize TWENTY FIVE PERCENT (25%) of Net Operating Income for the previous one-year period ("Available Net Operating Income") to repay the Authority Loan. However, Maker may first utilize 100% of Available Net Operating Income to make payment of any theretofore unpaid portion of the Deferred Developer Fee, until paid in full. If a payment on this Note is required by Maker pursuant to the terms hereof, Maker shall make such payment no later than one hundred (120) days following the end of the applicable calendar year. The term "Net Operating Income" shall mean all income derived from the Site, including without limitation all tenant rent, fees and charges (excepting tenants' security deposits but including deposits forfeited by tenants), any rental subsidy payments received for the Units, the proceeds of business interruption and similar insurance, and the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project, but excluding any interest income earned on the Capital Reserve Account and on the tenant security deposits, less (i) payments of principal and interest, if any, required to be paid in such year by Maker with respect to any note, mortgage, or deed of trust (excepting this Note) with respect to the Site or Project, (ii) all reasonable and customary expenses actually incurred (or to be incurred if accounted for on an accrual basis) in leasing, managing, operating, maintaining, and repairing the Site, (iii) all capital expenses incurred pertaining to the Site excepting those to be paid from the Capital Reserve Account, (iv) the required deposits into the Capital Reserve Account, and (v) reasonable and customary property management fees, social services and resident services fees, administrative costs, salaries, benefits, overhead costs, and such other and further reasonable and customary operating and management expenses incurred in operating the Site. Depreciation expenses shall not be a reduction against Net Operating Income. 3. Prepayment (a) Penalties. Maker may prepay the principal balance of this Note at any time without penalty. In the event Maker prepays the entire balance of this Note including all accrued interest, the covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement shall remain in full force and effect for the full 55-year term as specified therein. (b) Effect on Covenants. If, at the end of the 55-year term of this Note, an unpaid balance remains on this Note, Maker may choose to do either of the following: (a) Maker may choose to continue to maintain the covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement, in which case the Holder shall not require repayment of the balance of this Note and the Authority Loan shall not accrue any interest for the period during which said covenants, conditions and restrictions are maintained; or (b) Maker may choose not to maintain the covenants, conditions and restrictions imposed on the Site by the Regulatory Agreement, in which case the entire principal balance of the Authority Loan plus all accrued interest on the Authority Loan shall immediately become due and payable. 4. Acceleration of Obli ag tion. Upon the occurrence of a uncured Material Default of Maker under this Note, the Authority Deed of Trust or any obligation secured thereby (including the OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT F-PROMISSORY NOTE PAGE 3 RLS 16-5414/7792 Barton Drive/144857/DO obligations in the Agreement and the Regulatory Agreement), or in any other instrument.now or hereafter securing the obligations evidenced hereby, then, and in any of such events, Holder may, at its option, declare this Note and all the obligations hereby evidenced to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity. 5. Default Interest. If any event occurs giving Holder the right to accelerate this Note pursuant to Section 4 above, the entire unpaid and unforgiven principal owing hereunder shall, as of the date of such default, commence to accrue interest at a rate equal to two percentage points above the reference rate published by Bank of America N.A., or the maximum non-usurious interest rate permitted by law, whichever is less. 6. Collection Costs; Attorneys' Fees. If any attorney is engaged by Holder because of any event of an uncured Material Default under this Note or the Authority Deed of Trust or to enforce any provision of either instrument, whether or not suit is filed hereon, Holder shall bear its own attorney's fees and costs. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. 9. Usury. Notwithstanding any provision in this Note, Authority Deed of Trust or other document securing same, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. 10. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT F-PROMISSORY NOTE PAGE RLS 16-5414/7792 Barton Drive/144857/DO IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above written. "MAKER" ORANGE COUNTY COMMUNITY HOUSING AUTHORITY, a California non-profit public benefit corporation B OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT F-PROMISSORY NOTE PAGE 4 RLS 16-5414/7792 Barton Drive/144857/DO EXHIBIT G Deed of Trust [Behind this page] OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE 1 - Recorded in Official Records, Orange County Hugh N1guyen, Clerk-Recorder � r-Sherman Oaks IE 1[1 11�It 1111111 I 111111 d $ 111 NO FEE * $ R 0 0 0 8 8 6 4 6 3 1 $ Order-No. r3�2-b� ) 2016000587128 4:25 pm 11/18/16 C ) 217 405 T07 15 Escrow No. c1O VA,-I"1_ ) 0.00 0.00 0.00 0.00 42.00 0.00 0.00 0.00 Loan No. ) ) WHEN RECORDED MAIL TO: ) The City of Huntington Beach ) Housing Authority 2000 Main Street ) Huntington Beach, CA 92648 ) Attn: Authority Secretary ) SPACE ABOVE THIS LINE FOR RECORDER'S USE] EXEMPT FROM RECORDING FEE PER GOV.CODE§61031 [AUTHORITY LOAN] SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. This SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO ("Deed of Trust"), made Dr/ , 2016, between ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California non-profit public benefit corporation, herein called TRUSTOR, whose address is 501 Golden Circle, Suite 200, Santa Ana, California 92605; and THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic, herein called TRUSTEE, and THE CITY OF HUNTINGTON BEACH HOUSING AUTHORTIY, a public body, corporate and politic, herein called BENEFICIARY, WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Huntington Beach, County of Orange, State of California, described as: SEE EXHIBIT"A" ATTACHED HERETO together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.00) with OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE 2 gSheaman .Oaks Order No. Escrow No. Loan No. ) WHEN RECORDED MAIL TO: ) The City of Huntington Beach ) Housing Authority ) 2000 Main Street ) Huntington Beach, CA 92648 ) Attn: Authority Secretary ) SPACE ABOVE THIS LINE FOR RECORDER'S USE] EXEMPT FROM RECORDING FEE PER GOV. CODE §6103] [AUTHORITY LOAN] SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. This SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO ("Deed of Trust"), made / ? 2016, between ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California non-profit public benefit corporation, herein called TRUSTOR, whose address is 501 Golden Circle, Suite 200, Santa Ana, California 92605; and THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic, herein called TRUSTEE, and THE CITY OF HUNTINGTON BEACH HOUSING AUTHORTIY, a public body, corporate and politic, herein called BENEFICIARY, WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Huntington Beach, County of Orange, State of California, described as: SEE EXHIBIT "A" ATTACHED HERETO together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.00) with OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE 2 interest thereon, according to the terms of that certain promissory note of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof; (2) the performance of Trustor's obligations under that certain "Affordable Housing Agreement" by and among Trustor ("Developer"therein), the City of Huntington Beach, and Beneficiary ("Authority" therein) dated 0!MAis i /1, 2016; (3) the performance of Trustor's obligations under that certain "Regulatory Agreement and Declaration of Covenants and Restrictions", by and among Trustor ("Owner" therein), the City of Huntington Beach, and Beneficiary ("Authority" therein) dated ,Up L/ � , 2016; (4) the performance of each agreement of Trustor incorporated by reference or contained herein; and (5) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County September 17, 1964, and in all other counties September 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 566 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427 Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56 Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San,Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoe 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6625 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964,Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 4, 5 and 6 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BEING SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. Signature of Trustor ORANGE COUNTY COMMUNITY HOUSING AUTHORITY a California non-profit public benefit corporation By: N7rc:Me �� Its: Executive Director STATE OF CALIF'ORNIA ) )ss. COUNTY OF ) On before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. / WITNESS my hand and official seal. Signature (Seal) G✓ OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness, accuracy, or validity of that document. State of California ) County of CO(Z-4ae e, On 110 0-7 . �cvl �' before me, 6j►'Y1 PC' t e: Date Here Insert Name and Title of the officer personally appeared no,,, _-- Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(a) whose name( mare subscribed subscribed to the within instrument and acknowledged to me that he/sey executed the same in his `fie heir authorized ca aci (ids), and that by his/.er heir signatures)on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand oncl official seal. a!? CATHY GAMBINO rrR� Comm.# 2051586 N\I '• NOTARY PUBLIC-CALIFORNIA UI ° Los ANGELES COUNTY Signature MY COMM E%P.DEC. 12,2017'j Sign tune of Notary Public Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached D cume t d ,�- t�h d5 ;� Ae a�h . Title or Type of Document: 16 - � � Document Date: Number of Pages: 4_ Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signers) Signer's Name: Signer's Name: ❑Corporate Officer — Title(s): ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑General ❑ Partner — ❑ Limited ❑General Xndividual ❑Attorney in Fact ❑ Individual ❑Attorney in Fact ❑Trustee ❑ Guardian or Conservator ❑Trustee ❑ Guardian or Conservator ❑Other: ❑ Other: Signer Is Representing: Signer Is Representing: fD2014 National Notary Association • www.NatienaMotar/.crg • 1-800—LIS NOTARY(1-800-876-6827) Item #5907 DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof, not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder to invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same is such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE 5 B. It is mutually agreed: 1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition or proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof;join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid and that all other obligations secured hereby, including but not limited to Trustor's obligations under the Regulatory Agreement and Declaration of Covenants and Restrictions, have been performed as agreed, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or be a receiver to the appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE 6 demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledges, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE 7 DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO , TRUSTEE: The undersigned is the legal owner and holder of the note or notes of all indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied and all other obligations secured by the foregoing Deed of Trust, including but not limited to Trustor's obligations under the Regulatory Agreement and Declaration of Covenants and Restrictions, have been performed as agreed; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, and all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note and Reconveyance to Do not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE 8 DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY a public body, corporate and politic TRUSTEE OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE 9 i f RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS RIDER TO SUBORDINATED DEED OF TRUST WITH RIDER ATTACHED ("Rider"), is made as of A Io V ;�' , 2016, by ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California non-profit public benefit corporation ("Trustor"), and THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic ("Beneficiary"), as follows: 1. Part of Deed of Trust. This Rider is made a part of that certain Subordinated Deed of Trust With Assignment of Rents ("Deed of Trust"), of even date hereof, to which this Rider is attached. 2. Conflict. In the event of any conflict between the terms of this Rider and the terms of the Deed of Trust, the terms of this Rider shall control. 3. Priority; Subordination. Trustor, the City of Huntington Beach, and Beneficiary entered into that certain Affordable Housing Agreement, dated Oeypj6&-rU /7 , 2016 (the "Agreement"), pursuant to which Beneficiary (referred to as "Authority" in the Agreement) agreed to subordinate this Deed of Trust to the liens of the deeds of trust identified in the Agreement as the Conventional Lender's deed of trust, and to such other and further documents as such lenders may be required including but not limited to regulatory agreements, not to exceed an indebtedness in an amount to be determined by the Beneficiary. The lien of this Deed of Trust therefore shall be junior and subordinate to the lien of the foregoing listed deed of trust and such other and further documents as such lenders may require. Beneficiary agrees to execute such subordination agreements, in the form attached as Exhibit "J" to the Agreement, as are necessary to effect such subordination of the lien of this Deed of Trust. 4. Condemnation. Section B.1 of the Fictitious Deed of Trust incorporated into the Deed of Trust shall be modified to provide that Beneficiary shall not be entitled to any awards or damages payable directly or indirectly by reason of a condemnation or proposed condemnation affecting all or any part of, or any interest in, the Property, brought by or pursuant to the direction of Beneficiary. 5. Default. The term "default" as used in the Deed of Trust shall mean a"Material Default" as defined in the Agreement or Regulatory Agreement. IN WITNESS WHEREOF, Trustor and Beneficiary have executed this Rider to Subordinated Deed of Trust with Assignment of Rents as of the date of Trustor's acknowledgement hereinbelow, to be effective for all purposes as of the day and year first set forth above. [end— signature page follows] OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE 10 "TRUSTOR" ORANGE COUNTY COMMUNITY HOUSING AUTHORITY a California non-profit public benefit corporation By: Its: Executive Director "BENEFICIARY" THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY a public body, corpora! rij politic B y:4 -/�,a' / - - ai on-- .T, ATTEST: By: � Authority Secretary �,,)bi 51c1V REVIEWED AND APPROVED AS TO FORM: By General Counsel � OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G—DEED OF TRUST PAGE II CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness,accuracy,or validity of that document. State of California County of Orange On Nov. 07, 2016 before me, CATHY GAMBINO ,Notary Public, (Here insert name and title of the officer) personally appeared - NORA MENDEZ - who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. �- CATHY GAMBINO WITNESS my hand and official seal. ;n Comm,# 2051586 /�pp UI NOTARY PU8LIC•CALIFORNIA U! Los ANGELES COUNTY MY Comm EXP.DEC. 12,2017 (Notary Seal) Signature of otdry Public ADDITIONAL OPTIONAL INFORMATION INSTRUCTIONS FOR COMPLETING THIS FORM Any acknowledgment completed in California must contain verbiage exactly as DESCRIPTION OF THE ATTACHED DOCUMENT appears above in the notary section or a separate acknowledgment form must be properly completed and attached to that document. The only exception is if a Rider To Subordinated Deed of Trust With Assignment of Rents document is to be recorded outside of California.In such instances,any alternative (Title or description of attached document) acknowledgment verbiage as may be printed on such a document so long as the verbiage does not require the notary to do something that is illegal for a notary in California (i.e. certifying the authorized capacity of the signer). Please check the (Title or description of attached document continued) document carefully for proper notarial wording and attach this form if required Number of Pages Document Date • State and County information must be the State and County where the document signer(s)personally appeared before the notary public for acknowledgment. • Date of notarization must be the date that the signer(s)personally appeared which must also be the same date the acknowledgment is completed. (Additional information) • The notary public must print his or her name as it appears within his or her commission followed by a comma and then your title(notary public). • Print the name(s) of document signer(s) who personally appear at the time of notarization. CAPACITY CLAIMED BY THE SIGNER • Indicate the correct singular or plural forms by crossing off incorrect forms(i.e. El Individual(S) he/she/t4@y-is/are)or circling the correct forms.Failure to correctly indicate this information may lead to rejection of document recording. ❑ Corporate Officer • The notary seal impression must be clear and photographically reproducible. Impression must not cover teat or lines. If seal impression smudges,re-seal if a (Title) sufficient area permits,otherwise complete a different acknowledgment form. ❑ Partner(s) • Signature of the notary public must match the signature on file with the office of the county clerk. ❑ Attorney-in-Fact Additional information is not required but could help to ensure this ❑ Trustee(s) acknowledgment is not misused or attached to a different document. ❑ Other Indicate title or type of attached document,number of pages and date. Indicate the capacity claimed by the signer. If the claimed capacity is a corporate officer,indicate the title(i.e.CEO,CFO,Secretary). • Securely attach this document to the signed document C 2004-2015 Prot.ink Signing Service,Inc.-All Rights Reserved www.TheProl,ink.com-Nationwide Notary.Service notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On October 24, 2016 before me, P. L. Esparza, Notary Public, personally appeared Robin Estanislau and Jim Katapodis 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 z Orange County M Comm.Expires Aug 4, 2 117 (Seal) (Notary Signatu ) EXHIBIT "A" TO DEED OF TRUST LEGAL DESCRIPTION OF REAL PROPERTY [behind this page] OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G-DEED OF TRUST PAGE 13 ' r a EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT G—DEED OF TRUST PAGE 14 EXHIBIT H Regulatory Agreement [behind this page] OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE I Recorded in Official Records, Orange County Hugh Nguyen, Clerk-Recorder Fadeilty-Sherman Oaks 1111 II II 1111111 I 1$1111 III II No FEE * $ R 0 0 0 8 8 6 4 6 3 2 $ FREE RECORDING REQUESTED BY 2016000587129 4:25 pm 11/18/16 AND WHEN RECORDED MAIL TO: 217 405 Al2 20 0.00 0.00 0.00 0.00 57.00 0.00 0.00 0.00 The City of Huntington Beach Housing Authority 2000 Main Street Huntington Beach, CA 92648 Attn: Authority Secretary (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code § 6103) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this r7- day of \/ , 2016, by and among THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), and ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California non-profit public benefit corporation ("Owner"). RECITALS: A. Authority is responsible for the use of certain very low and low income housing funds pursuant to California's Community Redevelopment Law [California Health & Safety Code§§33000, et seq.] ("Set Aside Funds"). B. Authority and Owner ("Developer" therein) have entered into that certain Affordable Housing Agreement, dated Der*QW_,,o / 2016 (the "Housing Agreement"), concerning Owner's acquisition and rehabilitation of that certain real property, to be owned in fee by Owner, more particularly described in Attachment No. 1 attached hereto and incorporated by reference herein (the "Site"). The Housing Agreement describes the "Project" which generally consists of Owner's acquisition of the existing apartment building consisting of a total of four (4) two-bedroom dwelling units on the Site and subsequent rehabilitation and management thereof as an affordable rental housing complex, each of the dwelling units to be restricted to Very Low and Low Income Households. The Housing Agreement is hereby incorporated herein by this reference as though fully set forth herein. Any capitalized terms not defined herein shall have the meanings ascribed to such terms in the Housing Agreement. C. Owner has executed that certain promissory note (the "Authority Note") dated _ 0/ F , 2016, pursuant to which Authority has provided Owner with a loan of Set OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H—REGULATORY AGREEMENT PAGE 2 RLS 16-5414/7792 Barton Drive/144859/DO .ielit -Sherman Oaks FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The City of Huntington Beach Housing Authority 2000 Main Street Huntington Beach, CA 92648 Attn: Authority Secretary (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code§ 6103) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this _ ,7- day of 2016, by and among THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), and ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California non-profit public benefit corporation ("Owner"). RECITALS: A. Authority is responsible for the use of certain very low and low income housing funds pursuant to California's Community Redevelopment Law [California Health & Safety Code §§33900, et seq.] ("Set Aside Funds"). B. Authority and Owner ("Developer" therein) have entered into that certain Affordable Housing Agreement, dated &97*Aea(J /7-2— , 2016 (the "Housing Agreement"), concerning Owner's acquisition and rehabilitation of that certain real property, to be owned in fee by Owner, more particularly described in Attachment No. I attached hereto and incorporated by reference herein (the "Site"). The Housing Agreement describes the "Project" which generally consists of Owner's acquisition of the existing apartment building consisting of a total of four (4) two-bedroom dwelling units on the Site and subsequent rehabilitation and management thereof as an affordable rental housing complex, each of the dwelling units to be restricted to Very Low and Low Income Households. The Housing Agreement is hereby incorporated herein by this reference as though fully set forth herein. Any capitalized terms not defined herein shall have the meanings ascribed to such terms in the Housing Agreement. C. Owner has executed that certain promissory note (the "Authority Note") dated //D1/ F- 2016, pursuant to which Authority has provided Owner with a loan of Set OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H—REGULATORY AGREEMENT PAGE 2 RLS 16-5414/7792 Barton Drive/144859/DO Aside Funds in the principal amount of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780) ("Authority Loan"). The Authority Note is secured by a Subordinated Deed of Trust With Assignment of Rents With Rider Attached dated on or about the date of the Note, naming Authority as beneficiary ("Authority Deed of Trust"). D. Authority and Owner now desire to place restrictions upon the use and operation of the Project, in order to ensure that the Project shall be operated continuously as an affordable housing project available for rental to very low and low income households in accordance with the terms set forth below for the term of this Agreement. AGREEMENT: NOW, THEREFORE, the Owner and Authority declare, covenant and agree, by and for themselves, their heirs, executors, administrators and assigns, and all persons claiming under or through them, that the Site, for the term of this agreement, shall be held transferred, encumbered, used, sold, conveyed, leased and occupied, subject to the covenants and restrictions hereinafter set forth: I. DEFINITIONS. 1.1 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall mean, for Affordable Very Low and Low Income Units, rental rates not to exceed "very low income" or "low income" affordable rent as defined by California Health & Safety Code Section 50053(b)(2), or its successor. Affordable Rent shall include a reasonable utility allowance for tenant-paid utilities based on the Orange County Housing Authority's published utility schedules. 1.2 Affordable Very Low Income Unit. As used in this Agreement, the term "Affordable Very Low Income Unit" shall mean two of the four (4) rental dwelling units in the Project restricted to occupancy by Very Low Income Households. 1.3 Affordable Low Income Unit. As used in this Agreement, the term "Affordable Low Income Unit" shall mean two of the four (4) rental dwelling units in the Project restricted to occupancy by Low Income Households. 1.4 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall refer to Eligible Very Low Income Tenants and Eligible Low Income Tenants. 1.5 Eligible Very Low Income Tenant. As used in this Agreement, the term "Eligible Very Low Income Tenant" shall mean a Very Low Income Household entitled to rent an Affordable Very Low Income Unit as set forth herein. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 3 RLS 16-5414/7792 Barton Drive/144859/DO 1.6 Eligible Low Income Tenant. As used in this Agreement, the term "Low Income Tenant" shall mean a Low Income Household entitled to rent an Affordable Low Income Unit as set forth herein. 1.7 Low Income Households. As used in this Agreement, the term "Low Income Households" shall mean a family or individual whose annual income, determined pursuant to 24 C.F.R. Section 92.2, does not exceed eighty percent (80%) of median income. 1.8 Median Income or Orange County Median Income. For purposes of this Agreement, the terms "Median Income" and "Orange County Median Income" shall mean the median income for the Orange County Primary Metropolitan Statistical Area, with adjustment for household size. 1.9 Unit and Units. As used in this Agreement, the term "Unit" shall mean one of the four (4) dwelling units in the Project, and the term "Units" shall mean two or more of the four (4) dwelling units in the Project. The term "Unit" and "Units" shall be used as the context mandates and shall be reasonably interpreted in light of the context in which the term appears. 2.0 Very Low Income Households. As used in this Agreement, the term "Very Low Income Household" shall mean a family or individual whose annual income, determined pursuant to 24 C.F.R. Section 92.203, does not exceed fifty percent (50%) of Median Income. 2. TERM OF AGREEMENT; USE OF PROPERTY. In accordance with the formula set forth in 24 CFR 92.252(e) and as required by California Health and Safety Code Section 33334.3, this Agreement shall remain in effect for not less than fifty five (55) years from the date on which a Release of Construction Covenants for the Project is issued by the Authority. Owner hereby agrees that the Project is to be owned, managed, and operated as a project for Eligible Very Low and Low Income Tenants for the term of this Agreement. To that end, and for the term of this Agreement, the Owner hereby represents, covenants, warrants and agrees as follows: 2.1 Purpose; Disbursement and Use of Set Aside Funds.The Site has been acquired and the Project developed for the purposes of providing Eligible Tenants affordable rental housing. a. Schedule. The Project activities shall be accomplished within the time provided in the Schedule of Performance, which is attached to the Housing Agreement. b. Tasks and Budget. The tasks to be performed with the use of the Set Aside Funds, and the Project Budget, which specifies the line items for which Set Aside Funds will be used, are set forth in the Project Budget attached to the Housing Agreement. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 4 RLS 16-5414/7792 Barton Drive/144859/DO C. Compliance With Regulations. Owner, its successor and assigns, covenant and agree that the Project shall at all times during the 55-year term of this Agreement comply with applicable requirements set forth in Subpart F of Part 92 of Title 24 of the Code of Federal Regulations. It is the intent of the parties that, notwithstanding any other provisions of this Agreement, Owner's obligation exists only to the extent that a particular statute or regulation referenced herein or in the Affordable Housing Agreement applies to the Project. Owner certifies that it is not a primarily religious organization subject to 24 C.F.R. Section 92.257. d. Construction Covenant. Owner hereby covenants and agrees on behalf of itself and its successors and assigns in the Site or any portion thereof or any improvements thereon or any interest therein that Owner and such successors and assigns shall rehabilitate the Units in accordance with the Housing Agreement (including but not limited to the Scope of Development), the Huntington Beach Redevelopment Housing Authority Project, this Agreement, and plans approved by the City of Huntington Beach. 2.2 Facilities. All of the Units in the Project shall contain facilities adequate for living, sleeping, eating, cooking and sanitation in accordance with all applicable federal, state and local laws and codes. The rehabilitation and maintenance of the Units shall comply with the City's building code, as applicable, and all other applicable local codes, rehabilitation standards, ordinances and zoning ordinances in effect, and the Units shall be decent, safe and sanitary and shall conform to the building, electrical, plumbing, mechanical and energy codes that have been adopted by the City of Huntington Beach. To the extent applicable, the Project shall comply with the accessibility requirements at 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and, if applicable, the design and construction requirements at 24 CFR 100.205 for covered multifamily dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act (42 U.S.C. 3601-3619). 2.3 Residential Use. None of the Units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, or any other use that is inconsistent or incompatible with this Regulatory Agreement. 2.4. Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation nor shall the Owner take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership without prior written approval by Authority. Any such conversion shall comply with the requirements of 24 C.F.R. Section 92.255. 2.5 Tenant Preference. All of the Affordable Units will be made available to Eligible Tenants for rental in accordance with the terms of this Agreement, and the Owner shall not give preference to any particular class or group in renting the Affordable Units in the Project, except to the extent that the Affordable Units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.6 below. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 5 RLS 16-5414/7792 Barton Drive/144859/DO 2.6 Tenant Protections. Owner shall comply with the tenant protections provisions of 24 C.F.R. Section 92.253, including but not limited to: a. The lease of an Affordable Unit must be for not less than one year, unless by mutual agreement between tenant and Owner. b. The lease may not contain any of the following provisions: (1) Agreement by the tenant to be sued, to admit guilt or to a judgment in favor of Owner in a lawsuit brought in connection with the lease; C. Agreement by the tenant that the Owner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the Unit after the tenant has moved out of the Unit. The Owner may dispose of this personal property in accordance with state law. d. Agreement by the tenant not to hold the Owner or the Owner's agents legally responsible for any action or failure to act, whether intentional or negligent; e. Agreement by the tenant that the Owner may institute a lawsuit without notice to the tenant; f. Agreement by the tenant that the Owner may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; g. Agreement by the tenant to waive any right to a trial by jury; h. Agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and i. Agreement by the tenant to pay attorney's fees or other legal costs if the tenant wins in a court proceeding by the Owner against the tenant. The tenant, however, may be obligated to pay costs if the tenant loses. 2.7 Termination of Tenancy. Owner, its successors or assigns, may not terminate the tenancy or refuse to renew the lease of a tenant, except (i) for serious or repeated violation of the terms and conditions of the lease; (ii) for violation of applicable federal, state, or local law; (iii) [intentionally omitted]; or (iv) for other good cause. Pursuant to 24 C.F.R. 92.253(c), any termination or refusal to renew must be preceded by not less than 30 days by the Owner's service upon the tenant of a written notice specifying the grounds for the action. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 6 RLS 16-5414/7792 Barton Drive/144859/DO 3. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS. Owner hereby represents, warrants, and covenants as follows: 3.1 Income Restrictions. Except as expressly provided herein, throughout the term of this Agreement, the Affordable Units shall be rented only to, and occupied only by, Eligible Very Low or Low Income tenants. Each Affordable Unit shall be rented at a rate not to exceed the applicable Affordable Rent. 3.2 Rental Rates. Owner shall rent the Affordable Units to Eligible Tenants at no more than the allowable Affordable Rents for a household size appropriate to the unit, which is the number of bedrooms plus one. Therefore, a two-bedroom Affordable Unit shall be rented at no more than the Affordable Rent for a three-person household. The rental rates for the Affordable Units shall be adjusted annually based upon annual updates of the applicable income and rent standards, including but not limited to the California Housing and Community Development Department and the office of Housing and Urban Development. In no event shall any of the Affordable Units be rented at a rate greater than the Affordable Rent. Failure to comply with the affordability requirements of this Agreement is an event of default under the terms of the Agency Loan. Subject to the right to cure, the Agency Loan of Set Aside Funds will be due and payable immediately if the Affordable Units do not meet the affordability requirements of this Agreement. 3.3 Occupancy by Eligible Tenant. An Affordable Unit initially occupied by an Eligible Tenant shall be deemed occupied by an Eligible Tenant until such Affordable Unit is vacated, even if the Eligible Tenant's household income subsequently increases to an amount that exceeds the maximum allowable income level under this Agreement. While an increase in an Eligible Tenant's household income may, after initially qualifying, subsequently exceed allowable income levels, such a subsequent increase in household income shall not exceed 80% of Area Median Income adjusted for household size.. An Affordable Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until reoccupied, so long as Owner is using its best efforts to re-rent such Affordable Unit to another Eligible Tenant. If at any time a tenant's household income increases, resulting in disqualification of such tenant as an Eligible Very Low or Low Income Tenant, such tenant shall have a period of ninety (90) days to relocate from the Site. The disqualified tenant shall be fully responsible for the costs and expenses related to the relocation. Should such tenant face extraordinary hardship in relocating from the Site, the tenant may submit a written appeal to the Authority requesting an extension of the time period within which the tenant must relocate. If the Authority's Executive Director or authorized designee determines in his or her sole discretion that a hardship exception is justified by the circumstances, he or she may extend the relocation period for up to a maximum of ninety (90) additional days. 3.4 Maximum Occupancy. The maximum number of persons residing in a single residential (two-bedroom) unit may not exceed five persons. Owner shall be responsible OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE RLS 16-5414/7792 Barton Drive/144859/DO for enforcing this maximum occupancy limit. Upon discovery of a violation of this Section 3.4, Owner shall immediately notify the Eligible Tenant of record in writing ("Occupancy Violation Notice"). In the Occupancy Violation Notice, Owner shall inform the Eligible Tenant of the occupancy violation and provide the Eligible Tenant with an opportunity to cure the violation within thirty (30) days from the date of the Notice. 3.5 Income Computation. Immediately prior to a prospective Eligible Tenant's occupancy of an Affordable Unit, Owner shall obtain and maintain on file an income computation and certification form from each such prospective Eligible Tenant dated immediately prior to the date of initial occupancy of an Affordable Unit by such prospective Eligible Tenant. Owner shall use reasonable efforts to verify that the income information provided by an applicant is accurate by taking one or more of the following steps as a part of the verification process: (i) obtain two (2) pay stubs from the most recent pay periods; (ii) obtain a written verification of income and employment from applicant's current employer; (iii) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant's income as is reasonably satisfactory; or (v) obtain such other information as may be reasonably required. Owner shall update the foregoing records annually and shall provide copies of updated tenant eligibility records and monthly rental records to Agency for review. Upon a review of such records, Agency may at its option and at its own expense perform an independent audit of the tenant eligibility records and monthly rental records submitted to Authority for review. Upon review of such records, Authority may at its option and at its own expense perform an independent audit of the tenant eligibility records in order to verify compliance with the income and affordability requirements set forth herein. Owner shall retain the documentation submitted pursuant to 24 C.F.R. 92.203(a)(1) in addition to the records described in this Section for a period of three years after the date the respective records were created. 3.6 Rental Priority. Tenants living in the Project prior to Owner's rehabilitation of the Units as contemplated by the Housing Agreement ("Initial Rehabilitation") who are Eligible Tenants meeting the income restrictions of the Affordable Units as set forth in Section 3.1 shall be given first priority in re-leasing Affordable Units in the Project following completion of the Initial Rehabilitation. Except as otherwise set forth below, Affordable Units shall be rented to Eligible Tenants on a first-come, first-served basis; provided, however, that Owner shall maintain an "interest list" or "eligibility list" of potential tenants; provided, however, that Owner shall not be liable under this Agreement to Agency or any person, firm, or entity in the event an Affordable Unit is rented to a person who is not on any such list or is on such list but is listed lower than another person on such list. 3.7 Renting Vacant Affordable Units. Subject to Owner's policies and procedures for screening potential tenants, which must be approved by the Agency, when an Affordable Unit becomes available as a result of a tenant vacation, Owner shall rent the OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 8 RLS 16-5414/7792 Barton Drive/144859/DO Affordable Unit to an Eligible Tenant who otherwise meets Owner's approved screening and prequalification criteria in accordance with the following procedure: (a) First, Owner shall rent the Affordable Unit to persons who have been displaced by activities of the Agency, pursuant to California Health & Safety Code Section 33411.3, provided that Agency provides Owner with reasonable notice. (b) Second, Owner shall rent any vacant Affordable Unit in the order of priority as set forth in Section 3.5. 3.8 Maintenance of Records. Owner shall maintain complete and accurate records pertaining to the Affordable Units, and shall permit any duly authorized representative of the Authority to inspect the books and records of Owner pertaining to the Project including, but not limited to, those records pertaining to tenant eligibility and occupancy of the Affordable Units. Records pertaining to the Project and Affordable Units shall be retained for a period of five (5) years after the termination of this Agreement; records pertaining to tenant eligibility shall be retained for the period set forth in Section 3.5. To assist the Authority in meeting its recordkeeping and reporting requirements, Owner shall prepare, maintain and submit to the Authority, as appropriate, the following records and reports: a. Records which demonstrate that the Site meets the property standard specified in 24 CFR 92.251 and the lead-based paint requirements of 24 CFR 92.355; b. Records which demonstrate that each family occupying a unit is income eligible in accordance with 24 CFR 92.203; C. Records which demonstrate that the Site meets the affordability and income targeting requirements of 24 CFR 92.252 for the duration of this Agreement. Records shall be kept for each family occupying a unit; d. Records which demonstrate that each lease complies with the tenant and participant protections, as specified in 24 CFR 92.253. Records shall be kept for each family; e. Equal opportunity and fair housing records, including, as applicable: (1) data on the extent to which each racial and ethnic group and single-headed household (by gender of household head) have applied for, participated in, or benefited from, any program or activity funded in whole or in part with Authority funds; (2) documentation of actions undertaken to meet the requirements of 24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u); OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 9 RLS 16-5414/7792 Barton Drive/144859/DO (3) documentation of the actions taken to affirmatively further fair housing; f. Affirmative Marketing and MBE/WBE records, including, as applicable: (1) if applicable, records documenting compliance with the affirmative marketing procedures and requirements of 24 CFR 92.351; (2) if applicable, documentation and data on the steps taken by Owner to implement the Authority's outreach programs as set forth in applicable Authority policies and procedures; g. if applicable, records which demonstrate compliance with the requirements of 24 CFR 92.353 relating to displacement, relocation and real property acquisition, including project occupancy lists identifying the name and address of all persons occupying or moving into the Site on and after the date on which Owner obtained site control; h. if applicable, records demonstrating compliance with the labor requirements of 24 CFR 92.354, including contract provisions and payroll records; i. records demonstrating compliance with the lead-based paint requirements of 24 CFR 92.355; j. if applicable, records which support any exceptions to the conflict of interest prohibition pursuant to 24 CFR 92.356; k. debarment and suspension certifications required by 24 CFR Parts 24 and 91. Owner shall retain all books and records relevant to the Housing Agreement for a minimum of five years after the project completion date, except that records of individual tenant income verifications, project rents and project inspections shall be retained for the most recent five year period until five years after the affordability period terminates, or until the conclusion or resolution of any and all audits or litigation relevant to the Housing Agreement, whichever is later. The Authority, and any of its representatives, shall have the right of access to any pertinent books, documents, papers or other records of the Owner, in order to make audits, examinations, excerpts and transcripts. 3.9 Reliance on Tenant Representations: Each tenant lease shall contain a provision to the effect that Owner has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of an Affordable Unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 10 RLS 16-5414/7792 Barton Drive/144859/DO 3.10 Conflicts. The rental priority provision set forth in Section 3.6 shall apply only in the event, and to the extent, such provisions are not in conflict with any applicable federal or state law or any regulatory agreement affecting the Project that is recorded in superior priority to this Agreement. 3.11 Prohibition against Occupying Agency-Assisted Units. No officer, employee, agent, official or consultant of Owner may occupy the Site. 4. MAINTENANCE 4.1 Maintenance Covenant. Owner agrees to maintain all interior and exterior improvements, including landscaping, on the Site in good condition and repair (and, as to landscaping, in a healthy condition), reasonable wear and tear excepted, and in accordance with all applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction (including, but not limited to, Federal Housing Quality Standards as set forth in 24 C.F.R. 982.401). In addition, Owner shall keep the Site free from all graffiti and any accumulation of debris or waste material. Owner shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable materials. The maintenance covenant contained in this Section shall remain in effect for the term of this Agreement. The Project shall comply with the lead-based paint standards in 24 C.F.R. §92.355. Pursuant to Section 92.355 of the Regulations, the Owner hereby agrees to and shall be responsible for testing and abatement activities specified in the Lead-Based Paint Poisoning Prevention Act and the regulations set forth at 24 Code of Federal Regulations Part 35 with respect to the rehabilitation of the Site. 4.2 Authority Rights. Authority shall have the right to enter upon the Site to inspect the Site and both the interiors and exteriors of the Units, upon seventy-two (72) hours notice to Owner. Authority may, but are not required to, each perform or cause to be performed the maintenance necessary to cure any default of these maintenance covenants and Owner shall be liable for payment of reasonable costs (excluding staff salaries and overhead and other similar costs) to perform such required maintenance; provided, however, that Owner first be given written notice of the actions required to cure any default, and Owner, after receipt of such notice, shall have thirty (30) days to cure such defaults, but Owner shall not be deemed in default of the foregoing maintenance covenant if such default cannot reasonably be cured within the thirty (30) day period referenced above so long as Owner has commenced to cure such default within the same thirty (30) day period and is diligently proceeding with the work to cure such default. Notwithstanding the foregoing, if any property conditions are reasonably identified by City or Authority after a property inspection attended by a representative of Owner that pose an immediate danger to life or limb, Owner shall have three (3) days to effect corrections of such condition(s) to Authority's reasonable satisfaction. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 11 RLS I6-5414/7792 Barton Drive/144859/DO 4.3 Annual Report. Owner covenants and agrees to submit to the Authority an annual report (the "Annual Report"), which shall include the information required by Section 3.4 of this Agreement and by California Health & Safety Code Section 33418. The Annual Report shall include for each Affordable Unit the rental rate and the income and family size of the occupants, and shall also include the records described in Section 3.5 herein and the financial statements described in Section 5.11 of the Housing Agreement. The income information shall be supplied by the tenant in a certified statement on a form provided by the Authority. The Owner shall submit the Annual Report on or before April 30 of the year following the year covered by the Annual Report. The Owner shall provide for the submission of such information in its leases with tenants. 4.4 Management Plan. Owner shall prepare, submit to Authority within ninety (90) days after recordation of this Agreement and maintain in effect a management plan in accordance with the following ("Management Plan"): (a) The Management Plan, including such amendments as may be approved in writing by the Authority, shall remain in effect for the term of this Agreement. Owner shall not amend the Management Plan or any of its components without the prior written consent of the Authority. The components of the Management Plan shall include: (1) Management Agent. The name and qualifications of the proposed management agent, which may include but shall not be limited to Orange County Community Corporation. The Authority shall approve or disapprove the proposed management agent, if other than Orange County Community Housing Corporation, in writing based on the experience and qualifications of the management agent. The management agent shall have demonstrated experience in operating affordable housing comparable to the Project. (2) Management Program. A description of the proposed management, maintenance, tenant selection and occupancy policies and procedures for the Affordable Units. (3) Management Agreement. A copy of the proposed management agreement specifying the amount of the management fee and the relationship and division of responsibilities between Owner and management agent. (4) Tenant Lease or Rental Agreement. A copy of the proposed tenant lease or rental agreement to be used in renting the Affordable Units. (5) Annual Operating Budget. Prior to the completion of rehabilitation of the Units and annually thereafter not later than fifteen (15) days prior to the beginning of the next fiscal or calendar year of the Project, Owner shall submit a projected operating budget to the Agency for review and approval. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 12 RLS 16-5414/7792 Barton Drive/144859/DO The Authority shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder, and such matter shall be deemed approved unless the Authority provides to Owner its written disapproval within thirty (30) days after receipt of a request for approval, provided Owner includes with its request, a written notice, in capital letters and at least 12-point typeface, stating as follows: NOTICE: PURSUANT TO SECTION 4.4 OF THE REGULATORY AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY AND ORANGE COUNTY COMMUNITY HOUSING CORPORATION, FAILURE BY THE AUTHORITY TO APPROVE OR DISAPPROVE THE MATTER SUBMITTED WITH THIS REQUEST WITHIN 30 DAYS SHALL BE DEEMED AN APPROVAL. Any disapproval shall be in writing and contain the Authority's reasons for disapproval. (b) Owner hereby covenants and agrees the Authority shall have the right, at any time and from time to time, to give notice to Owner if the Authority determines that the Project is not being managed or maintained in accordance with the Management Plan. The Authority may require the Owner to change management practices or to terminate the management agent and retain a different management agent, approved by the Authority. The Authority agrees that prior to requiring the Owner to change its management agent or the management practices the Authority shall informally consult with Owner, in an attempt to resolve the dispute. If the Authority determines that such an attempt at informal resolution has been unsuccessful, it shall give the Owner thirty (30) days written notice to change the management agent or practice, as the case may be. If Owner fails to do as requested by the Authority in the written notice, the Authority may then require the immediate change of the management practice or agent, as the case may be. The management agreement shall provide that it is subject to termination by the Owner without penalty, upon thirty (30) days prior written notice. Within ten (10) business days following a direction of the Agency to replace the management agent, the Owner shall select another management agent or make other arrangements satisfactory to the Authority for continuing management of the Project. The Owner shall notify the Authority upon learning that there is a voluntary change in the management or control of the management agent, and, if the change is unsatisfactory to the Authority, the Authority shall be entitled to require the Owner to change the management agent in accordance with the terms of this paragraph. 5. ENFORCEMENT. In the event Owner defaults in the performance or observance of any covenant, agreement or obligation of Owner pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) days after written notice thereof (or such longer period as may apply to the specific alleged default) shall have been given by Authority, or, in the event said default cannot be cured within said time period, Owner has failed to commence to cure such default within said thirty (30) days and diligently prosecute said cure OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 13 RLS 16-5414/7792 Barton Drive/144859/DO to completion, then Authority shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: (a) By mandamus or other suit, action or proceeding at law or in equity, require Owner to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of this Agreement; or (b) Take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants and agreements of participant hereunder, including foreclosure of the Deed of Trust. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. 6. NONDISCRIMINATION. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, age, class, income, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, or in the awarding of contracts for the Project, nor shall participant, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof, or in the awarding of contracts for the Project (except as permitted by this Agreement). Owner shall comply with all applicable federal, state and local nondiscrimination, fair housing, and equal opportunity requirements. In addition, Owner shall conduct affirmative marketing and minority outreach activities as required by federal regulations. 6.1 Form of Nondiscrimination and Nonse regation Clauses. The Owner shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, age, class, income, religion, sex, sexual orientation, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 14 RLS 16-5414/7792 Barton Drive/144859/DO permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts: There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the land." 7. COVENANTS TO RUN WITH THE LAND. Owner hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Authority and Owner hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land and shall pass to and be binding upon the Owner's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire, except the nondiscrimination covenants contained in Section 6 and Section 6.1 shall remain in perpetuity. All covenants without regard to technical classification or designation shall be binding for the benefit of the Authority, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Authority is or remains an owner of any land or interest therein to which such covenants relate. 8. ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any covenant in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 15 RLS 16-5414/7792 Barton Drive/144859/DO recover from the other reasonable attorneys' fees and costs. Attorneys' fees shall include attorneys' fees on any appeal, and in addition a party entitled to attorneys' fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery, and expert witness fees. 9. AMENDMENTS. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Orange. 10. NOTICE. Any notice required to be given hereunder shall be made in writing and shall be given by (i) personal delivery, (ii) courier service that provides a receipt showing date and time of delivery, or (iii) certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: Agency: The City of Huntington Beach Housing Authority 2000 Main Street Huntington Beach, CA 92648 Attn: Authority Secretary Owner: Orange County Community Housing Authority 501 North Golden Circle Suite 200 Santa Ana, CA 92705 Notices personally delivered or delivered by courier shall be effective upon receipt. Mailed notices shall be effective on the earlier of receipt or Noon on the second business day following deposit in the United States mail. 11. SEVERABILITY/WAIVEWINTEGRATION. 11.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 11.2 Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 16 RLS 16-5414/7792 Barton Drive/144859/DO 11.3 Integration. This Agreement contains the entire Agreement between the parties and neither party relies on any warranty or representation not contained in this Agreement. 12. GOVERNING LAW. This Agreement shall be governed by the internal laws of the State of California. 13. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. 14. SUBORDINATION. Authority may agree to subordinate this Agreement to superior deeds of trust, regulatory agreements and other related documents including but not limited to those required by the Conventional Lender, if satisfactory written commitments are obtained from such Conventional Lender to protect the Authority's investments in the event of a default by Owner. Any such Subordination Agreement shall provide for: (i) A right of the Authority to cure a default on the Conventional Lender's First Deed(s) of Trust; (ii) A right of the Authority to negotiate with any lenders after notice of default from the lender; (iii) An agreement that if prior to foreclosure of any lenders' loans, the Authority takes title to the Site and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan by reason of the transfer of title to the Authority; and (iv) A right of the Authority to purchase the Site from the Developer at any time after a default on the loan that remains uncured after expiration of the applicable cure period. If, from time to time and at one or more times, Owner chooses to refinance the loan secured by any deed of trust which is superior to this Agreement, Authority agrees to subordinate this Agreement to the refinancing lender's deed of trust under the same terms and conditions as set forth herein on the condition that the amount of the new loan is no greater than the original principal balance of the refinanced note. [SIGNATURES APPEAR ON NEXT PAGE] OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 17 RLS 16-5414/7792 Barton Drive/144859/DO IN WITNESS WHEREOF, the Agency and Owner have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. "OWNER" "AUTHORITY" ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON HOUSING CORPORATION BEACH HOUSIN THORITY, a California non-profit public benefit a publ' b9dy, cor d po 'tic corporation airp ATTEST: , ts: President Agency Secretary kv-)f-S a trl�S�U� /Yd/L✓� /��i✓�Z APPROVED AS 'ORM: General Counsel aca 00 0 OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT H-REGULATORY AGREEMENT PAGE 18 RLS 16-5414/7792 Barton Drive/144859/DO CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to I which this certificate is attached,and not the truthfulness,accuracy,or validity of that document. State of California County of Orange On Nov. 07, 2016 before me, CATHY GAMBINO , Notary Public, (Here insert name and title of the officer) personally appeared - NORA MENDEZ - who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I 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 an official seal. CATHY GAMBINO Comm.# 2051586 r�pp I �► NOTARY PUBLIC•CALIFORNIA UI Los ANGELES COUNTY (Notary Seal) / MY Coma.Exp.DEC.12,2017 Signature ii / ry Pu is l ADDITIONAL OPTIONAL INFORMATION INSTRUCTIONS FOR COMPLETING THIS FORM Any acknowledgment completed in California must contain verbiage exactly as DESCRIPTION OF THE ATTACHED DOCUMENT appears above in the notary section or a separate acknowledgment form must be properly completed and attached to that document. The only exception is if a Regulatory Agreement&Declaration of Covenants&Restrictions document is to be recorded outside of California. /n such instances,any alternative acknowledgment verbiage as may be printed on such a document so long as the (Title or description of attached document) verbiage does not require the notary to do something that is illegal for a notary in California (i.e. certifying the authorized capacity of the signer). Please check the (Title or description of attached document continued) document carefully for proper notarial wording and attach this form if required. Number of Pages 18 Document Date • State and County information must be the State and County where the document signer(s)personally appeared before the notary public for acknowledgment. • Date of notarization must be the date that the signer(s)personally appeared which must also be the same date the acknowledgment is completed. (Additional information) • The notary public must print his or her name as it appears within his or her commission followed by a comma and then your title(notary public). • Print the name(s) of document signer(s) who personally appear at the time of notarization. CAPACITY CLAIMED BY THE SIGNER • Indicate the correct singular or plural forms by crossing off incorrect forms(i.e. ❑✓ Individual(s) he/she/they-is/are)or circling the correct forms.Failure to correctly indicate this information may lead to rejection of document recording. ❑ Corporate Officer t'p The notary seal impression must be clear and photographically reproducible. Impression must not cover text or lines. If seal impression smudges,re-seal if a (Title) sufficient area permits,otherwise complete a different acknowledgment form. ❑ Partner(s) • Signature of the notary public must match the signature on file with the office of the county clerk. ❑ Attorne -yin-Fact Additional information is not required but could help to ensure this ❑ Trustee(s) acknowledgment is not misused or attached to a different document. ❑ Other Indicate title or type of attached document,number of pages and date. Indicate the capacity claimed by the signer. If the claimed capacity is a corporate officer,indicate the title(i.e.CEO,CFO,Secretary). • Securely attach this document to the signed document C 2004-2015 Prounk Signing Service,Inc.-All Rights Reserved w w.TheProl,ink.corn-Nationande Notary Service A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On October 24, 2016 before me, P. L. Esparza, Notary Public, personally appeared Robin Estanislau and Jim Katapodis 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 11 WITNESS my hand and official seal. Commission#2032750 ni a �a Notary Public California Orange County My Comm.Expires Aug 4,2017 t (Seal) (Notary Sigriatur , , r ATTACHMENT NO. 1 LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 EXHIBIT I Subordination Agreement [behind this page] OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I-SUBORDINATION AGREEMENT PAGE 1 i Recorded in Official Records, Orange County FIDELITY NATIONAL TITLE Hugh Nguyen, Clerk-Recorder II I I II II II I III II I I II II II II 51.00 RECORDING REQUESTED BY: _ * $ R 0 0 0 9 3 3 1 5 4 6 $ fEdel I p 2017000236397 11:50 am 06/09/17 �f'�I � ' WHEN RECORDED MAIL TO: 7405S13F13 15 The City of Huntington Beach 0.00 0.00 0.00 0.00 42.00 0.00 0.00 0.00 2000 Main Street Huntington Beach, CA 92648 DOCUMENT TITLE (S) AUTHORITY LOAN SUBORDINATION AGREEMENT FIDELITY NATIONAL TITLE RECORDING REQUESTED BY: 5&0 �O waj i i—fie WHEN RECORDED MAIL TO: The City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 DOCUMENT TITLE(S) AUTHORITY LOAN SUBORDINATION AGREEMENT WHEN RECORDED RETURN TO: The City of Huntington Beach Housing Authority 2000 Main Street Huntington Beach, CA 92648 Attn: Authority Secretary 1 ZZ _' [AUTHORITY LOAN] SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT("Agreement") is entered into this 7`h day of November, 2016, by and among the CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic(the "Authority"), ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California non-profit public benefit corporation("Developer"); and CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION, a ' ("Lender"). RECITALS A. Developer owns fee title to the real property described on Attachment No. "1" (the "Property") attached hereto and incorporated herein by reference. The Authority, the City of Huntington Beach ("City"), and Developer have entered into that certain Affordable Housing Agreement dated as of October 17, 2016 (the "Housing Agreement"). Pursuant to the terms of the Housing Agreement, Developer has executed a Note in favor of the Agency in the amount of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.00) ("Authority Load')to assist Developer in the acquisition and rehabilitation of the Property as an affordable housing complex. The Authority Loan is to be secured by a Subordinated Deed of Trust With Assignment of Rents With Rider Attached encumbering the Property and naming the Authority as Beneficiary (the "Authority Deed of Trust"). The Housing Agreement is hereby incorporated by reference as though fully set forth herein. All capitalized terms not defined herein shall have the meanings ascribed to them in the Housing Agreement. OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT PAGE 2 16-5414/7792 Barton Drive/147160/DO R. City, Authority and Developer have also entered into that certain Regulatory ,Agreement and Declaration of Covenants and Restrictions recorded against the Property ("Regulatory Agreement"), which Regulatory Agreement contains, among other terms, certain use restrictions affecting the Property. C. Developer has obtained a loan from Lender in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00) (the "Lender Loan"). To repay the Lender Loan, Developer has executed or is about to execute a deed of trust encumbering the Property to secure a promissory note in the sum of the Lender Loan, payable upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). -,�- ZecordG ©yl I bee z6J6 2ol6 --000 �- '-pz D. Lender is willing to make the Lender Loan provided the Lender Deed of Trust is a lien or charge upon the Property prior and superior to the lien or charge of the Authority Deed of Trust and provided that the Authority will subordinate the lien or charge of the Authority Deed of Trust to the lien or charge of the Lender Deed of Trust. E. It is to the mutual benefit of the lender, Authority, and Developer that the Lender make the Lender Loan to Developer; and the Authority has agreed that the Lender Deed of Trust shall, when recorded, constitute a lien or charge upon the Property which is prior and superior to the lien or charge of the Authority deed of Trust subject to and conditioned upon the specific terms and provisions of this Subordination Agreement. NOW, THEREFORE, in consideration of the mutual benefits according to the Authority, Lender and Developer, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: 1. Subordination by Authority 1.1 Subordination of Authority Deed of Trust and Regulatory Agreement to Lender Deed of Trust. The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder) (except amendments which increase the loan amount) shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior to (i) the lien or charge of (a) the Authority Deed of Trust, (b) the Regulatory Agreement, (c) Section 2.5 of the Housing Agreement and (d) all options, rights of first refusal, rights of reverter and termination and construction obligations set forth in the Housing Agreement, (ii) all present and future indebtedness and obligations secured thereby, and (iii) all rights and privileges of Authority hereunder, provided that the indebtedness secured by the Lender Deed of Trust does not exceed Two Hundred Fifty Thousand Dollars ($250,000.00). If Developer chooses to refinance the Lender Loan, Agency agrees to subordinate the Authority Deed of Trust and the Regulatory Agreement to the refinancing Lender's Deed of Trust under the same terms and conditions as set forth in this Agreement, on the condition OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I-SUBORDINATION AGREEMENT PAGE 16-5414/7792 Barton Drive/147160/DO that the amount of the new loan is no greater than the original principal balance of the Lender Loan. 1.2 Covenants of Authority. The Authority declares, agrees and acknowledges that: (a) The Authority consents to all provisions of the Lender Note and the Lender Deed of Trust. (b) To Authority's actual knowledge, there is no breach, event of default or default existing under the Authority Deed of Trust or any circumstances, event, omission or failure of condition which would constitute such a breach, default or event of default after notice or lapse of time, or both. 2. Reliance by Lender and Authority. The Lender would not make the Lender Loan and the Authority would not have agreed to subordinate the Authority Deed of Trust without this Subordination Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination, specific loans or advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for the such reliance upon this waiver, relinquishment and subordination. 3. Notice to Authority. In the event of a breach or default by Developer under the terms of the Lender Deed of Trust, Lender shall provide the Authority with written notice of such breach or default concurrently with providing such notice to Developer. Upon receipt of such notice of breach or default, the parties hereto agree that Authority shall have each of the following rights so long as the Authority Deed of Trust encumbers any portion of the Property or interest therein: (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of Trust or other lien prior to the date that is thirty (30) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonmonetary default, the Lender shall not foreclose its Lender Deed of Trust or other lien prior to the date that is one hundred twenty (120) days after the date that the Lender would otherwise be legally entitled to foreclose the Lender Deed of Trust. OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT PAGE 4 I6-5414/7792 Barton Drive/147160/DO (b) To negotiate with the Lender in good faith regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien (without any party having an obligation to continue or enter into any final agreement). (c) To negotiate with the Developer in good faith to purchase the Property from Developer, subject to the Lender Deed of Trust without the consent of the holder of the Lender Deed of Trust (without any party having an obligation to continue or enter into any final agreement). The Lender agrees that the exercise of any of the rights set forth in this Section by Authority shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan. 3.1 Foreclosure of Authority Deed of Trust. The Lender hereby agrees that in the event that Authority forecloses the Authority Deed of Trust, said foreclosure shall not, in and of itself, give rise to any right on the part of the Lender to accelerate the amounts due under the Lender Loan. 3.2 Disbursements. Lender, in making disbursements of the proceeds of the Lender Loan, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing the Lender Loan shall not defeat the subordination herein made in whole or in part. 4. Miscellaneous 4.1 Entire Agreement. This Subordination Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust on the one hand, and the Authority Deed of Trust and the Regulatory Agreement on the other hand, any prior agreement as to such subordination including, but not limited to, those provisions, if any contained in the Authority Deed of Trust and the Regulatory Agreement, which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assigns. This Subordination Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law. This Subordination Agreement shall be construed according to the internal laws of the State of California. OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT PAGE 5 16-5414/7792 Barton Drive/147160/DO 4.4 Severability. If any tenn, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument., or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice. Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by (i)personal delivery, (ii) by courier service that provides a receipt showing date and time of delivery, or(ill) by registered or certified mail, return receipt requested, postage prepaid. Notices shall be directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be deemed given upon receipt if by personal delivery or courier service, or if by mail the earlier or (x) actual receipt or (y) forth-eight (48) hours after deposit in the United States mail. If to Authority: The City of Huntington Beach Housing Authority 2000 Main Street Huntington Beach, CA 92648 Attention: Executive Director If to Developer: Orange County Community Housing Corporation 501 North Golden Circle Suite 200 Santa Ana, CA 92705 Attention: President If to Lender: Attention: 4.6 Attorney's Fees. In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Counterparts. This Subordination Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT PAGE 6 16-5414/7792 Barton Drive/I 47160/DO IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "DEVELOPER" "AUTHORITY" ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH HOUSING CORPORATION HOUSING AUTHORITY a California non-profit public benefit a blic body, corporate a C APPROVE FO d politic corporation Chairperson CU ATTEST: a By oIts: President v Agency Secretary c co G eral Counsel D�10 7IM51i "LENDER" CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION, a By: Vice President OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING.AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT PAGE 7 16-5414/7792 Barton Drive/]47160/DO IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "DEVELOPER" "AUTHORITY" ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH HOUSING CORPORATION HOUSING AUTHORITY a California non-profit public benefit a blic body, corporate aiud politic r corporation 1 Chairperson P*A�6F� A uro, >✓Iz cz a ATTEST: a Its: President / v :el IE�C,UT 1v'G T) VR't�C_70 Agency Secretary 202► �S ANiS` AV c c APPROVE, FO G eral Counsel 1) 7,a�Si(1 "LENDER" CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION, a By: Vice President OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT PAGE 7 16-5414/7792 Barton Drive%147160/DO IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "DEVELOPER" "AUTHORITY" ORANGE COUNTY COMMUNITY TIIE CITY OF HUNTINGTON BEACIL HOUSING CORPORATION HOUSING AUTHORITY a California non-profit public benefit a public body, corporate and politic corporation Chairperson ro ATTEST: By: _ ci Its: President - 5 Agency Secretary APPROVED AS TO FORM: General Counsel "LENDER" C;C.,EARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL, INSTITUTION, a - I n V-ice-President WIA VaV CAVI Vg "T-Pa--y rya;2. OCCIIA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EYJJI131T I—SUBORDINATION AGREEMENT PAGE 7 ]6-5414/7792 Barton Drive/147160/DO "nc,:unw,.enn.r us�•r ncrw,.c,.r:ne�,r:wr,cw�o.vr.r.ur.>,r.�-rn:rsuw,.F:n;w<v ,rnvo.v,.,on,:.0 r:xr..,r.�arn.rsn: u:v,•..,,.nv nv,.,znr:.n.:�•r.<wvuw,.r:nr.>,r.:n^r new�r,rcr.,.:un>,rv.r. California All-Purpose Certificate of Acknowledgment A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness,accuracy,or validity of that document. - State of California County of S.S. l"'t`V 66 r7 V LAIC t`►l.'� Nota Public On fL o�1) , � t I before me, ry - �p Name of Notary Public.Title personally appeared Name of Signer(1) j s r Name of Signer(2) who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. - I certify under PENALTY OF PERJURY under the laws •IM of the State of California that the foregoing paragraph is l� t1i Amp Pub k•CaMonft true and correct. Z pry C z Cotraftsion*2171637 WITOtEss n y<ha d nd official seal. My Comm.Ex isreo No t/ 2� Seal Signature of Notary Public OPTIONAL INFORMATION Although the information in this section is riot required by law, it could prevent fraudulent removal and reattachment of this acknowledgment to an unauthorized document and may prove useful to persons relying on the attached document. e Description of Attached Document The preceding Certificate of Acknowledgment is attached to a Method of Signer Identification document titled/for the purpose of " ~ Proved to me on the basis of satisfactory evidence: ,�, ��o � t✓1 (N ❑forms)of identification ❑credible witness(es) containing pages, and dated Notarial event is detailed in notary journal on: Page# Entry# T The signer(s)capacity or authority is/are as: ❑ Individual(s) Notary contact: ❑ Attorney-in-fact r ❑ Corporate Officer(s) Other Title(s) ❑ Additional Signer ❑ Signer(s)Thumbprints(s) El ❑ Guardian/Conservator ❑ Partner-Limited/General ❑ Trustee(s) ❑ Other: representing: N,—e(s)of Person(s)Enlily(iest Signe-is Representing i C 2009-2015 Notary Learning Center-All Rights Reserved You can purchase copies of this form from our web site at wvw.TheNotarysStore.com 3-in-1 CERTIFICATION Pursuant to the provisions of Government Code 27361.7, 1 certify under penalty of perjury that the Notary Seal on the document to which this statement is attached reads as follows: Name of Notary: I C Commission no.: Z 1 1 County where bond is filed: Commission expiration date: Vendor/Manufacturer's no: . ti� Pursuant to the provisions of Government Code 27361.7, 1 certify under penalty of perjury that the illegible portion of this document to which this statement is attached reads as follows: Pursuant to the provisions of Government Code 27361.7, I certify under penalty of perjury that the illegible portion of this document to which this statement is attached reads as follow: State of County of On before me, A NOTARY PUBLIC, personally appeared ,who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s)on the instrument the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) PLACE OF EXECUTION: DATE: SIGNATURE: DPS Agent A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On February 22, 2017 before me, P. L. Esparza, Notary Public, personally appeared Robin Estanislau and Barbara Delgleize 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 Z : ._ Notary Public- California Z Orange County D My Comm. Expires Aug 4, 2017 (Seal) (Notary Sign re) CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness,accuracy,or validity of that document. State of Calif�ocr'niia� ) County of UY � ,vim--• ), 1_ On �� before me ` Y\e�. b1� v � Date (Here Insert Name and Title of the Officer personally appeared IPA r hP a t-e e(NC, v�Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that lh/she/they executed the same in ki's-/_her/th,6ir authorized capacity(ieg), and that by N!V7her/their signature,(s)-on the instrument the person(s)" or the entity upon behalf of which the perso/n(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS m hand and official seal. /EN°`TM Signat KATHY JO BNEY ON re"� 'm COMM. #2 ig2543 �� Signa(ure of Notary Public13 o NOTARY PUBLIC-CALIFORNIA u I ORANGE COUNTY tU ifY CONK EXP.APRIL 25,21)21 Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Corporate Officer — Title(s): ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Partner — ❑ Limited ❑ General ❑ Individual ❑Attorney in Fact ❑ Individual ❑Attorney in Fact ❑Trustee ❑ Guardian or Conservator ❑Trustee ❑ Guardian or Conservator ❑ Other: ❑ Other: Signer Is Representing: Signer Is Representing: ©2014 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY(1-800-876-6827) Item #5907 LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT Esparza, Patty From: Bazant, Denise Sent: Thursday, January 19, 2017 10:54 AM To: Ohl, Dan Cc: Naideth, Joan; Fritzal, Kellee; Esparza, Patty Subject: OCCHC - Barton Agreement Approved by Council on 10/17/16 Attachments: 20170119104229952.pdf Good Morning - We received the documents back from escrow regarding the above mention project. However, during escrow the Subordination (Authority Loan) document was changed to another subordination document (attached) . The lender did not want to sign the original subordination submitted. So a new document was prepared and sent to escrow. When the document was recorded it was missing page 6. Therefore, please provide page 6 so I can send to escrow to have the document rerecorded and returned to the City. If you have any questions, please feel free to contact me. Thanks, Denise Denise Bazant Office of Business Development City of Huntington Beach 2000 Main Street, 5th Floor Huntington Beach, CA 92648 714-536-5470 dbazant(@surfcity-hb.org -----Original Message----- From: fire admin copier(@surfcity.org [mailto:fire admin copierpsurfcity.org] Sent: Thursday, January 19, 2017 10:43 AM To: Bazant, Denise Subject: Message from "RNP002673BF5209" This E-mail was sent from "RNP002673BF5209" (MP 5054). Scan Date: 01.19.2017 10:42:29 (-0800) Queries to: fire admin copierpsurfcity.org 1 EXHIBIT I Subordination Agreement [behind this page] r 3 t� µA jIY jl J t� f N J y8 3 I I t X OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I-SUBORDINATION AGREEMENT PAGE WHEN RECORDED RETURN TO: The City of Huntington Beach Housing Authority 2000 Main Street a Huntington Beach, CA 92648 Attn: Authority Secretary a� [AUTHORITY LOAN] SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT/RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. �i THIS SUBORDINATION AGREEMENT (,"Agreement") is entered into this day of , 2016, by and among THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic (the "Authority") ORANGE COUNTY COMMUNITY HOUSING CORPORATION , a California non-profit public benefit corporation ("Developer"); and , a ("Lender"). � r RECITALS A. Developer owns fee title to the real property described on Attachment No. "1" (the "Property") attached hereto and incorporated herein by reference. The Authority, the City of Huntington Beach ("City"), and Developer have entered into that certain Affordable Housing Agreement dated as of �C �L— 2016 (the "Housing Agreement"). Pursuant to the terms of the Housing Agreement, Developer has executed a Note in favor of the Agency in the amount of TWO HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED EIGHTY DOLLARS ($218,780.00) ("Authority Loan") to assist Developer in the acquisition and rehabilitation of the Property as an affordable housing complex. The Authority Loan is to be secured by a Subordinated Deed of Trust With Assignment of Rents With Rider Attached encumbering the Property and naming the Authority as Beneficiary (the "Authority Deed of Trust"). The Housing/Agreement is hereby incorporated by reference as though fully set forth herein. All capitalized terms not defined herein shall have the meanings ascribed to them in the Housing Agreement OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT PAGE 2 RLS 16-5414/7792 Barton Drive/144856/DO B. City, Authority and Developer have also entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions recorded against the Property ("Regulatory Agreement"), which Regulatory Agreement contains, among other terms, certain use restrictions affecting the Property. C. Developer has obtained a loan from Lender in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00) (the "Lender Loan"). To repay the Lender Loan, Developer has executed or is about to execute a deed of trust encumbering the Property to secure a promissory note in the sum of the Lender Loan, payable upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). In connection with the Lender Loan, Developer may also be required by Lender to execute a regulatory agreement to be recorded against the Property, which may contain among other terms,.,use restrictions affecting the Property (the "Lender Regulatory Agreement"). D. Lender is willing to make the Lender Loan provide Ahe Lender Deed of Trust and Lender Regulatory Agreement are a lien or charge upon the Property prior and superior to the lien or charge of the Authority Deed of Trust and provided that the Authority will subordinate the lien or charge of the Authority Deed of Trust to the lien/or charge of the Lender Deed of Trust and the Lender Regulatory Agreement. ; X�t f E. It is to the mutual benefit of the Lender, Authority, and Developer that the Lender make the Lender Loan to Developer; and the Authority.has agreed that the Lender Deed of Trust and Lender Regulatory Agreement shall, when recor, ed, constitute a lien or charge upon the Property which is prior and superior to the lien or charge of the Authority Deed of Trust subject to and conditioned upon the specific terms and provisions of this Subordination Agreement. NOW THEREFORE, in con sideration,of the mutual benefits accruing to the Authority, Lender and Developer, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: 1. Subordination by Authority 1.1 Subordination of Authority Deed of Trust and Regulatorygreement to Lender Deed of Trust and Lender Regulatory Agreement. The Lender Deed of Trust (and any renewals or extensions of, or` advances, including interest, thereunder), and the Lender Regulatory Agreement (and any amendments or modifications thereto) (except amendments which increase the loan amount) shall unconditionally be and remain at all times a lien or charge on the Property, prior andsuperior to (i) the lien or charge of(a) the Authority Deed of Trust, (b) the Regulatory Agreement, (c) Section 2.5 of the Housing Agreement and (d) all options, rights of first refusal, rights Hof reverter and termination and construction obligations set forth in the Housing Agreement, (ii) all present and future indebtedness and obligations secured thereby, and OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT �f EXHIBIT I—SUBORDINATION AGREEMENT f PAGE RLS 16-5414/7792 Barton Drive/144856/DO r (iii) all rights and privileges of Authority thereunder, provided that the indebtedness secured by the Lender Deed of Trust does not exceed Two Hundred fifty Dollars ($250,000.00). If Developer chooses to refinance the Lender Loan, Agency agrees to subordinate the Authority Deed of Trust and the Regulatory Agreement to the refinancing Lender's Deed of Trust under the same terms and conditions as set forth in this Agreement, on the condition that the amount of the new loan is no greater than the original principal balance of the Lender Loan. 1.2 Covenants of Authority. The Authoritydec"hies, agrees and acknowledges that: / (a) The Authority consents to all provisions of the Lender Note and the Lender Deed of Trust, and (ii) all provisions of the Lender Regulatory Agreement. (b) To Authority's actual knowledge," there is no breach, event of default or default existing under the Authority Deed of Tr st or any circumstances, event, omission or failure of condition which would constitute such a breach, default or event of default after notice or lapse of time, or both. 2. Reliance by Lender and Authority. The�,'Lerider would not make the Lender Loan and the Authority would not have agreed to subordinate the Authority Deed of Trust without this Subordination Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this waiver, relinquishmentrand subordination. ,, 3. Notice to Authority. In the..,/event of a breach or default by Developer under the terms of the Lender Deed of Trust, Lender shall provide the Authority with written notice of such breach or default concurrently with providing such notice to Developer. Upon receipt of such notice of breach or default, the ,parties hereto agree that Authority shall have each of the following rights so long as the Authority Deed of Trust encumbers any portion of the Property or interest therein: (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or any!lien under the Lender Regulatory Agreement. In connection therewith, the Lender agrees`'that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of Trust or other lien prior to the date that is thirty (30) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonmonetary default, the Lender shall not foreclose its Lender Deed of Trust or other lien prior to the,d11 ate that is one hundred twenty (120) days after the date that the Lender would otherwise be legally entitled to foreclose the Lender Deed of Trust. 3' OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT PAGE 4 RLS 16-5414/7792 Barton Drive/144856/DO (b) To negotiate with the Lender in good faith regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien (without any/arty having an obligation to continue or enter into any final agreement). (c) To negotiate with the Developer in good faith to purchase At-4 Property from Developer, subject to the Lender Deed of Trust without the consent of the/holder of the Lender Deed of Trust or enforcing party under the Lender Regulatory Agreement (without any party having an obligation to continue or enter into any final agreement). The Lender agrees that the exercise of any of the rights set forth in this Section by Authority shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan. A F� 3.1 Foreclosure of Authority Deed of Trust. ,The Lender hereby agrees that in the event that Authority forecloses the Authority Deed of Trust, said foreclosure shall not, in and of itself, give rise to any right on the part of the Lender,,to accelerate the amounts due on the Lender Loan. 3.2 Disbursements. Lender, in making disbursements of the proceeds of the Lender Loan, is under no obligation or duty to, nor.has Lender represented that it will, see to t the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing the Lender Doan shall not defeat the subordination herein made in whole or in part. ' f 4. Miscellaneous 4.1 Entire Agreement./ This Subordination Agreement shall be the whole and only agreement with regard to thd natters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and Lender Regulatory Agreement on the one hand, and the Authority Deed of Trust and the Regulatory Agreement on the other hand, any prior agreement as to such subordination including, but not limited to, those provisions, if any contained in the Authority Deed of Trust and the Regulatory Agreement, which provide fornhe subordination of the lien or charge thereof to another deed or deeds of trust or to another m4ortgage or mortgages, upon the Property. 4.2 Successors and Assigns. This Subordination Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 7 4.3 �� California Law. This Subordination Agreement shall be construed according to the in' laws of the State of California. OCCHA—7792 BARTON DRIVE ' AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT PAGE 5 RLS 16-5414/7792 Barton Drive/144856/DO 4.4 Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and/each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice. Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by (i) personal delivery, (ii) by courier service that provides a receipt showing date and time of delivery, or (iii) by registered or c„ortified mail, return receipt requested, postage prepaid. Notices shall be directed at the address;of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be deemed given upon receipt if by personal delivery or courier service, or if by mail the earlier or (x) actual receipt or (y) forth-eight (48)`"hours after deposit in the United States mail. ° i` If to Authority: The City of Huntington Beach Housing Authority 2000 Main Street 'I Huntington Beach, CA 92648 Attention: Executive Director A If to Developer: Orange County Community Housing Corporation 501 North Golden Circle Suite 200 11 Santa Ana, CA,92705 Attention: President �4 If to Lender: g a Attention: 4.6 Attorney's Fees. � In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Counterp rts. This Subordination Agreement may be executed in any number of counterparts, each of.which shall be an original, but all of which shall constitute one and the same document. Y; [Remainder of Page Intentionally Left Blank] OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT PAGE 6 RLS 16-5414/7792 Barton Drive/144856/DO IN WITNESS WHEREOF, the parties have executed this Agreement as of the date .first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER„PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. r m;Y "DEVELOPER" "AUTHORITY" ' ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH HOUSING CORPORATION HOUSING AUT TY a California non-profit public benefit a pu, lic body, tea d politic corporation h rper goK ATTEST: By. , Its: President . Agency Secretary APPROVED e al Counsel6(mLO\t0\l" f "LENDER" a f By: Vice President OCCHA—7792 BARTON DRIVE 1 AFFORDABLE HOUSING AGREEMENT t EXHIBIT I—SUBORDINATION AGREEMENT / PAGE 7 RLS 16-5414/7792 Barton Drive/144856/DO A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 9 ACKNOWLEDGMENT ` F STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On October 24, 2016 before me, P. L. Esparza, Notary Public, personally appeared Robin Estanislau and Jim Katapodis 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. rya 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 #Zo327so a -`� Notary Public -California z z : �_� z �' Orange County D My Comm. Expires Aug 4, 2017 i` (Seal) (Notary Signatur 1 r i i EXHIBIT A s T LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS�FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH; COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. s' Plotted Easements' APN: 165-223-02 t, <d` h° �r f f�) fY J l Jfy /1 A VJ� I lei !M N I OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT I—SUBORDINATION AGREEMENT RLS 16-5414/7792 Barton Drive/144856/DO EXHIBIT J Release of Construction Covenants [behind this page] OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT J-RELEASE OF CONSTRUCTION COVENANTS PAGE 1 16-5414/7792 Barton Drive/144885/DO • I WHEN RECORDED MAIL TO: Recorded in Official Records, Orange County Hugh Nguyen, Clerk-Recorder NO FEE * $ R 0 0 1 0 1 7 1 7 6 5 $ * 201800022818511:34 am 06/21/18 j City of Huntington Beach 276 404 R08 4 J 2000 Main Street 0.00 0.00 0.00 0.00 9.00 0.00 0.000.000.00 0.00 Huntington Beach,CA 92648 Attn: City Clerk (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov.Code§27283) This doM+w fs solely for the oMeid b*00 of the City of ftWngWn/arch. APN: ss anownpil"d under Gowrrrn A Code Sac—27M end should-be recorded tree RELEASE OF CONSTRUCTION COVENANTS I Release Party: The City of Huntington Beach Housing Authority Party Released: Orange County Community Housing Corporation WHEREAS, Orange -County Community Housing Corporation, a California non-profit public benefit corporation (the "Developer") is the owner of that certain real property situated in the City of Huntington Beach, California described in Exhibit "A" which is attached hereto and made a part hereof(the "Site"), and has agreed to rehabilitate the existing improvements thereon(the"Improvements';and WHEREAS, pursuant to the Affordable .Housing Agreement("Housing Agreement") entered into by and between the City'of Huntington Beach Housing Authority (the "Authority"} and the Developer dated as of 6, the - - Authority has agreed to furnish the Developer with a Release of onstruction Covenants ("Release") upon the., completion of the rehabilitation of the improvements, and such certificate is to be in such form as to permit it to be recorded in the Reco er's Of ce of Or a County; d.4 unfee4w61A reB� pear i�Au- bnAj 1 fiM - 5 anti Ir"(ounu l 2e5 Vh� MD.2010-10 WHEREAS,the Housing Agreement states that the Release shall be conclusive determination of satisfactory completion of the rehabilitation, fthe Improvements as required by the-Housing Agreement; and WHEREAS,the Authority has each determined that the rehabilitation of the Improvements on the Site.as required by the Housing Agreement has been satisfactorily completed. i OCCHA-7792 BARTON DRIVE 1 AFFORDABLE HOUSING AGREEMENT EXHIBIT J=RELEASE'OF CONSTRUCTION COVENANTS PAGE 2 16-541417792 Barton Drive114488500 5 NOW THEREFORE,it.is hereby acknowledged and agreed by the parties hereto that: 1. The Authority hereby certifies that the rehabilitation of the Improvements on the Site has been fully and satisfactorily performed and completed as required by the Housing Agreement. 2. The Authority hereby releases Orange County Community Housing Corporation from its obligations under the Housing Agreement to rehabilitate the Improvements on the Site. 3. Nothing contained in this instrument shall modify any provisions of the Housing Agreement or release Developer from any of its obligations under the Housing Agreement except the obligation to rehabilitate the Improvements. IN WITNESS WHEREOF, the City of Huntington Beach Housing Authority executed this Release this day of -7-Ll��/ �g 01g "AUTHORITY" THE CITY OF HUNTINGTON BEACH HOUSING AUTHORITY, a public body corporate and pol'tic By: Chairpersa� ATTEST: BY: Agency Secretary APPROVED AS TO FO By: _ General Counsel 40W to kQ-%SO OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT J-RELEASE OF CONSTRUCTION COVENANTS PAGE 3 16-5414n792 Barton Drive/]44885/DO EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 OCCHA—7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT)—RELEASE OF CONSTRUCTION COVENANTS PAGE 5 1 6-54 1 417792 Barton Drive/1448851DO A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On June 18, 2018 before me, P. L. Esparza, Notary Public, personally appeared Robin Estanislau and Mike Posey 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 m hand and official seal. a... P.L.E y Notary Public -California _•. Orange County Commission#2204197 My Comm.Expires Aug 4,2021 (Seal) (Notary Signat re) U EXHIBIT K Notice of Affordability Restrictions [behind this page] OCCHA-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT K-NOTICE OF AFFORDABILITY RESTRICTIONS PAGE 1 n Recorded in Official Records, Orange County Hugh Nguyen, Clerk-Recorder � � III I I I II II III II I II IIII II II II 18.00 * $ R 0 0 0 8 8 6 4 6 3 4 $ FREE RECORDING REQUESTED BY 2016000587131 4:25 pm 11/18/16 AND WHEN RECORDED MAIL TO: 0.0 4 NO3 F13 4 0.00 0..00 0 0.00 0.00 9.00 0.00 0.00 0.00 The City of Huntington Beach Housing Authority 2000 Main Street Huntington Beach, CA 92648 Attn: Authority Secretary (Space Above This Line for Recorder's Office Use Only) Notice of HOME Affordability Restrictions on Transfer of Property NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f) as amended effective January 1, 2008, the City of Huntington Beach Housing Authority is recording this Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 7792 Barton Drive, Huntington Beach, California and more particularly described in Exhibit "A" attached hereto (the "Property"). The Property is subject to the Regulatory Agreement and Declaration of Covenants and Restrictions (the "Regulatory Agreement") recorded concurrently herewith, which restricts the use of the Property as follows: (1) Two of the four (4) 2-bedroom units shall be rented exclusively to Very.Low Income households and two of the four (4) 2 bedroom units shall be rented exclusively to Low Income households at an Affordable Rent as provided in California Health and Safety Code Section 50053. (2) The maximum incomes of eligible Very Low and Low Income tenants shall be determined on the basis of the income limits for households in the Anaheim-Santa Ana-Garden Grove, CA SMSA, published approximately annually by the California Department of Housing and Community Development ("HCD"). OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 12—NOTICE OF HOME AFFORDABILITY RESTRICTIONS PAGE RLS 16-5414/7792 Barton DriveJ144855/DO 7 h�".j Sherman Oaks FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The City of Huntington Beach Housing Authority 2000 Main Street Huntington Beach, CA 92648 Attn: Authority Secretary (Space Above This Line for Recorder's Office Use Only) Notice of HOME Affordability Restrictions on Transfer of Property NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f) as amended effective January 1, 2008, the City of Huntington Beach Housing Authority is recording this Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 7792 Barton Drive, Huntington Beach, California and more particularly described in Exhibit "A" attached hereto (the "Property"). The Property is subject to the Regulatory Agreement and Declaration of Covenants and Restrictions (the "Regulatory Agreement") recorded concurrently herewith, which restricts the use of the Property as follows: (1) Two of the four (4) 2-bedroom units shall be rented exclusively to Very Low Income households and two of the four (4) 2 bedroom units shall be rented exclusively to Low Income households at an Affordable Rent as provided in California Health and Safety Code Section 50053. (2) The maximum incomes of eligible Very Low and Low Income tenants shall be determined on the basis of the income limits for households in the Anaheim-Santa Ana-Garden Grove, CA SMSA, published approximately annually by the California Department of Housing and Community Development ("HCD"). OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 12—NOTICE OF HOME AFFORDABILITY RESTRICTIONS PAGE 2 RLS 16-5414/7792 Barton Drive/144855/DO The affordability restrictions imposed on the Property by the Regulatory Agreement are scheduled to expire on the date that is fifty-five (55) years after the issuance of the permanent certificate of occupancy for the initial construction of the housing on the Property. This Notice is recorded for the purpose of providing notice only and it in no way modifies the provisions of the Regulatory Agreement. THE CITY OF HUNTINGTON BEACH HOUSING AUTHORIT public body corporate and polit' By: Tlvo je a,da�ov((s ATTEST: By: � C��ttGa �J Agency Secretary Rol j n , APPROVED AS TO FORM: By: General Counsel ow t oWdWo OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 12—NOTICE OF HOME AFFORDABILITY RESTRICTIONS PAGE RLS 16-5414/7792 Barton Drive/144855/DO A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On October 24, 2016 before me, P. L. Esparza, Notary Public, personally appeared Robin Estanislau and Jim Katapodis 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 Commission # 2032750 WITNESS my hand and official seal. < Notary Public -California z "� Orange County My Comm.Expires Aug 4, 2017 (Seal) otary Signatur EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 12—NOTICE OF HOME AFFORDABILITY RESTRICTIONS RLS 16-5414/7792 Barton Drive/144855/DO ATTAC H M E N T #2 RESOLUTION NO. 2016- 70 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING A HOME AFFORDABLE HOUSING AGREEMENT BETWEEN THE CITY AND ORANGE COUNTY COMMUNITY HOUSING CORPORATION WHEREAS, Orange County Community Housing Corporation("Developer") is the owner of real property located at 7792 Barton Drive in the City of Huntington Beach ("Property"), which is improved with four housing units and is currently operated by Owner as affordable rental housing for very low and low income households. WHEREAS, Developer proposes to acquire and rehabilitate the units for continued operation as affordable housing for very low and low income households for an extended period of fifteen years. WHEREAS, the City of Huntington Beach ("City") administers HOME Investments Partnership Program ("HOME Program") funds made available to it by the United States Department of Housing and Urban Development, and seeks to provide a loan of HOME Program funds to Developer in the amount of$781,220 Dollars ("HOME Loan"), for payment of Developer's costs of acquiring and rehabilitating the units. WHEREAS, the project is categorically excluded from the enviromnental review requirements of the National Environmental Policy Act as rehabilitation of multifamily residential buildings (with five or more units) under 24 CFR 58.35(a). WHEREAS, the project is categorically exempt from the enviromnental review requirements of the California Environmental Quality Act("CEQA"), as rehabilitation of an existing facility under State CEQA Guidelines Section 15301(c). NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Huntington Beach as follows: Section 1. The Home Affordable Housing Agreement hereto as Exhibit A is approved and adopted. 1 16-5414/144861/DO Resolution No. 2016--7 0 — Section 2. The City Manager, or designee, is authorized to execute the Home Affordable Housing Agreement and to execute all instruments and take all actions necessary and convenient to carry out and implement the Home Affordable Housing Agreement and to administer the City's obligations, responsibilities and duties to be performed thereunder. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 17TH day of OCTOBER, 2016 Mayor REVIEWED AND APPROVED: APPROVED AS TO r.OIZM: Cit r Cit Attorney Oki INITIATED AND APP OVED: 6� Id Y Deputy"Directo� f Economic Development 16-5414/144861.doc/DO 2 /yQ%T HOME AFFORDABLE HOUSING AGREEMENT By and Between THE CITY OF HUNTINGTON BEACH a municipal corporation of the State of California and ORANGE COUNTY COMMUNITY HOUSING CORPORATION a California nonprofit public benefit corporation 7792 Barton Drive Table of Contents 1. Definitions .............................................................................................................................. 2 1.1 Defined Terms .............................................................................................................. 2 1.2 Singular and Plural Terms ............................................................................................ 9 1.3 Accounting Principals................................................................................................... 9 1.4 References and Other Terms......................................................................................... 9 1.5 Attachments Incorporated; Attachments Additional Consideration........................... 10 2. Subject of This Agreement................................................................................................. 10 2.1 Purpose of the Agreement........................................................................................... 10 2.2 City.............................................................................................................................. 10 2.3 Developer.................................................................................................................... 11 2.4 Prohibition Against Transfers; Right of First Refusal................................................ 11 3. Relocation Obligations........................................................................................................ 13 3.1 Relocation Plan........................................................................................................... 13 3.2 Relocation Activities and Costs.................................................................................. 13 4. Financing.............................................................................................................................. 13 4.1 The Project Budget..................................................................................................... 13 4.2 The City Assistance .................................................................................................... 14 4.3 Priority City Lien........................................................................................................ 14 4.4 Disbursement of HOME Loan.................................................................................... 14 4.5 Conditions Precedent to Closing................................................................................. 15 5. Rehabilitation of the Improvements................................................................................... 16 5.1 Scope of Work............................................................................................................ 16 5.2 Construction Drawings and Related Documents........................................................ 16 5.3 City Approval of Plans, Drawings and Related Documents....................................... 17 5.4 Cost of Work............................................................................................................... 17 5.5 Schedule of Performance............................................................................................ 18 5.6 Accessibility Requirements ........................................................................................ 18 5.7 Local, State and Federal Laws 18 .................................................................................... 5.8 Hazardous Substances................................................................................................. 20 5.8.1 Lead-Based Paint and Asbestos Containing Materials................................ 20 5.8.2 Indemnification............................................................................................ 20 5.9 Nondiscrimination During Construction..................................................................... 20 5.10 Insurance..................................................................................................................... 20 5.10.1 Worker's Compensation Insurance.............................................................. 21 5.10.2 General Liability and Auto Insurance.......................................................... 21 5.10.3 Property Insurance....................................................................................... 21 5.10.4 Certificate of Insurance; Additional Insured Endorsements........................ 22 5.10.5 Flood Disaster Protection Act of 1973......................................................... 22 5.11 Indemnification........................................................................................................... 22 5.12 Disclaimer of Responsibility by the City.................................................................... 23 5.13 Rights of Access ......................................................................................................... 23 5.14 Taxes, Assessments, Encumbrances and Aliens......................................................... 23 5.15 Rights to Plans............................................................................................................ 23 5.16 Hazardous Materials ................................................................................................... 24 6. Use of Property.................................................................................................................... 24 6.1 Uses............................................................................................................................. 24 6.2 Management Plan; Annual Project Budget; Management Reports............................ 25 6.3 Maintenance of Property............................................................................................. 26 6.4 Lead-Based Paint........................................................................................................ 26 6.5 Barriers to the Disabled .............................................................................................. 27 6.6 Creation of Capital Reserve Account ......................................................................... 27 6.7 Capital Reserves.......................................................................................................... 27 6.8 Obligation to Refrain from Discrimination................................................................. 27 6.9 Effectiveness and Duration of Covenants................................................................... 28 6.10 Effect of Violation of Covenants................................................................................ 28 6.11 CHDO Provisions....................................................................................................... 28 7. HOME Covenants ............................................................................................................... 29 7.1 Qualification as Affordable Housing.......................................................................... 29 7.2 Use of HOME Funds .................................................................................................. 29 7.3 Affordable Housing Requirements............................................................................. 29 7.3.1 HOME Designated Units............................................................................. 29 7.3.2 Household Income Requirements................................................................ 29 7.3.3 HOME Rents................................................................................................ 30 7.3.4 Duration of HOME Affordability Requirements......................................... 30 7.4 Selection of Qualified Tenants.................................................................................... 30 7.5 Lease Requirements.................................................................................................... 30 7.6 Affirmative Marketing................................................................................................ 31 7.7 Annual Reporting Requirements................................................................................. 31 7.8 Handicapped Accessibility.......................................................................................... 31 7.9 Lead-Based Paint........................................................................................................ 31 7.10 Equal Opportunity and Fair Housing.......................................................................... 32 7.11 Property Standards...................................................................................................... 32 7.12 Displacement and Relocation ..................................................................................... 32 7.13 Faith Based Activities................................................................................................. 32 7.14 Records and Reports................................................................................................... 33 7.15 Labor Standards (Davis-Bacon).................................................................................. 34 7.16 Use of Debarred, Suspended, or Ineligible Participants............................................. 35 7.17 Maintenance of Drug-Free Workplace ....................................................................... 35 7.18 Other Program Requirements ..................................................................................... 35 7.19 Requests for Disbursements of Funds......................................................................... 36 7.20 Eligible Costs.............................................................................................................. 37 7.21 Conflict of Interest...................................................................................................... 37 7.22 Project Requirements.................................................................................................. 37 7.23 Other HOME Program Requirements......................................................................... 38 8. Defaults, Remedies and Termination ................................................................................ 38 8.1 Defaults; Notice of Cure; Cure Rights........................................................................ 38 8.2 Institution of Legal Actions........................................................................................ 39 8.3 Applicable Law........................................................................................................... 39 8.4 Acceptance of Service of Process............................................................................... 39 8.5 Rights and Remedies Are Cumulative........................................................................ 39 8.6 Specific Performance.................................................................................................. 39 8.7 Termination Due to Failure of Financing Event......................................................... 40 8.8 Termination by Either Party........................................................................................ 40 8.9 Limited Recourse Obligations.................................................................................... 40 8.10 Developer's Remedies................................................................................................ 41 8.11 Attorney's Fees...........................................................................................................41 9. General Provisions ............................................................................................................... 41 9.1 Developer's Warranties .............................................................................................. 41 9.2 Notices. Demands. and Communications Between the Parties.................................. 42 9.3 Conflicts of Interest..................................................................................................... 42 9.4 Titles and Captions ..................................................................................................... 42 9.5 Gender......................................................................................................................... 42 9.6 Modifications.............................................................................................................. 42 9.7 Merger of Prior Agreements and Understandings......................................................43 9.8 No Third Parties Benefited......................................................................................... 43 9.9 Assurances to Act in Good Faith................................................................................ 43 9.10 Warranty Against Payment of Consideration for Agreement; No Real Estate Commissions..................................................................................................................... 43 9.11 Nonliability of City Officials and Employees ............................................................ 44 9.12 Interpretation............................................................................................................... 44 9.13 Counterparts................................................................................................................ 44 9.14 Severability ................................................................................................................. 44 9.15 Extension of Times of Performance ........................................................................... 44 9.16 Inspection of Books and Records ............................................................................... 44 9.17 Waivers....................................................................................................................... 45 10. Execution of agreement; Time for Acceptance................................................................. 45 Exhibit 1 Legal Description Exhibit 2 Site Map Exhibit 3 Scope of Work Exhibit 4 Project Budget Exhibit 5 Schedule of Performance Exhibit 6 HOME Promissory Note Exhibit 7 HOME Deed of Trust Exhibit 8 HOME Regulatory Agreement Exhibit 9 Environmental Indemnity Exhibit 10 Assignment of Agreements Exhibit 11 Assignment of Rents& Leases Exhibit 12 Notice of HOME Affordability Restrictions Exhibit 13 Section 3 Acknowledgement DOME AFFORDABLE DOUSING AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND ORANGE COUNTY COMMUNITY HOUSING CORPORATION (HOME PROGRAM - 7792 BARTON DRIVE) THIS HOME AFFORDABLE HOUSING AGREEMENT ("Agreement"), dated as of October a, 2016, is entered into by and between THE CITY OF HUNTINGTON BEACH, a municipal corporation of the state of California("City"), and ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation ("Developer"). RECITALS A. City is responsible for the use of certain funds ("HOME Funds") made available to the City by the United States Department of Housing and Urban Development ("HUD") under the Home Investment Partnership Program (the"HOME Program"). B. Developer is certified with the City as a Community Housing Development Organization ("CHDO"). C. The property subject to this and other applicable HOME Agreements is the real property commonly known as 7792 Barton Drive, Huntington Beach, CA 92647, which is four units of Affordable Rental Housing, consisting of four two-bedroom units, to be restricted to two very low and two low income households. D. City and Developer now desire to place restrictions upon the use and operation of the property, through various HOME Agreements, as referenced herein, in order to ensure that the property shall be operated continuously as an Affordable Housing Project available for rental by very low and low income persons in accordance with HOME regulations and the terms set forth below. NOW THEREFORE, in consideration of the promises and covenants contained herein, the above recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 1 AGREEMENT 1. DEFINITIONS 1.1 Defined Terms The following terms, as used in this Agreement, will have the meaning given unless expressly provided to the contrary: "Affiliate" means(i) any party directly or indirectly controlling, controlled by or under common control with another party, (ii) any party owning or controlling 10% or more of the outstanding voting securities of such other party, (iii) any officer, director or partner of such party, or (iv) if such other party is an officer, director or partner, any company for which such party acts in any such capacity. "Agreement" or any reference to this "Agreement'' means this HOME Affordable Housing Agreement executed by and between City and Developer, including all exhibits attached hereto, which exhibits are incorporated herein by this reference and all other documents incorporated herein by reference. "Approved Title Conditions" means title that is subject to current property taxes and assessments, easements and other encumbrances specifically approved by the City Manager. "Area Median Income" means the area median income of the Orange County primary metropolitan statistical area(PMSA), with adjustments for household size, as estimated annually by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937, as amended. "Assignment of Agreements" means the assignments by Developer to City of plans, contracts and permits, substantially in the form attached hereto as Exhibit 10. "Assignment of Rents and Leases" means a document substantially in the form attached hereto as Exhibit 11. "City" means the City of Huntington Beach, a municipal corporation of the State of California, and any assignee of, or successor to, the rights, powers, and responsibilities of City. "City Manager" means the individual duly appointed to the position of City Manager of the City, or authorized designee. Whenever an administrative action is required by City to implement the terms of this Agreement, the City Manager, or an authorized designee, will have authority to act on behalf of City, except with respect to matters reserved under California law or the City's Charter wholly for City Council determination. "Completion" means, with regard to rehabilitation of the Improvements, the satisfaction of each of the following events: (1) the City will have determined that rehabilitation of the Improvements has been completed substantially in accordance with the plans approved by the City (as may be modified in accordance herewith), (ii) certification by the Project architect, or if there is no Project architect, by the Developer, that rehabilitation of the Improvements (with the exception of minor"punch list" items) has been completed in a good and workmanlike manner OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 2 and substantially in accordance with the approved plans and specifications; (iii) if required by the City in its regulatory capacity, temporary or permanent certificates of occupancy will have been issued by the City with respect to all of the Units, (iv) the time for Developer's contractor, suppliers and subcontractors to file a claim pursuant to Civil Code Sections 3115-3117 has expired or Developer has delivered to the City unconditional lien releases for its contractor, suppliers and subcontractors, and any mechanic's liens that have been recorded or stop notices that have been delivered have been paid, settled or otherwise extinguished, discharged, released, waivered, bonded around or insured against, (v) a notice of completion pursuant to Civil Code Section 3117 has been duly recorded in the land records of Orange County, and (vi) the units are fit for occupancy. Upon Completion of the Project, the City and Developer will attach an addendum to this Agreement setting forth the date of Completion for purposes of determining the maturity date of the HOME Loan and the termination date of the HOME Affordability Period. "County" means Orange County. "Days" means calendar days and the statement of any time period herein will be calendar days and not working days, unless otherwise specified. "Developer" means ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation, and any assignee of or successor to its rights, powers and responsibilities approved by the City or permitted by this Agreement. "Effective Date" means the date this Agreement is executed by the City, which date will be set forth opposite the signature of the City Manager. "Eligible Tenant" means any person entitled to rent a HOME Designated Unit as set forth in the HOME Regulatory Agreement "Environmental Indemnity" means an instrument substantially in the form attached to this Agreement as Exhibit 9. "Financing Event"means the point in time when all conditions precedent to the recording of the City's HOME Loan Documents have been satisfied. "Force Majeure" or"Force Majeure Event" means the following events, provided that they actually delay and interfere with the timely performance of the matter to which it would apply and despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such interference: war; insurrection; strikes; lock- outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction of any element thereof, unusually severe weather; inability to secure necessary labor, materials or tools, provided that such inability is not caused by the party claiming a Force Majeure Delay; delays of any contractor, subcontractor, or suppliers, provided that such delay is not caused by the party claiming a Force Majeure Delay; acts of the other party; acts or failure to act of any Governmental Agency (except acts or failure to act of the City will not excuse performance by the City); the imposition of any applicable moratorium by a Governmental Agency; or any other causes which despite the exercise of diligence and good business practices are or would be OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 3 beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events will constitute a Force Majeure Event unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Maj cure Delay will deliver such written notice within ten (10) business days after it obtains actual knowledge of the event. "Force Majeure Delay" means any delay in taking any action required by this Agreement, proximately caused by the occurrence of any Force Majeure Event. "Governmental Approvals" means and include any and all general plan amendments, zoning approvals or changes, required approvals and certifications under the California Environmental Quality Act, tentative and final tract maps, variances, conditional use permits, demolition permits, excavation/foundation permits, grading permits, building permits, inspection reports and approvals, certificates of occupancy, and other approvals, permits certificates, authorizations, consents, orders, entitlements, filings or registrations, and actions of any nature whatsoever required from any Governmental Agency in order to commence and complete the Proj ect. "Governmental Agency" means the United State, the State of California, the County of Orange, the City of Huntington Beach or any other political subdivision in which the Property is "Hazardous Materials" has the meaning set forth in the Environmental Indemnity. "HOME Deed of Trust" means the Deed of Trust securing the HOME Loan, substantially in the form attached hereto as Exhibit 7. "HOME Designated Units" means the "floating" four (4) two bedroom units that shall be rented during the HOME Affordability Period as set forth herein and in accordance with the HOME Program. As permitted by 24 CFR §92.252(b), the City is requiring that two of the HOME Designated Units be occupied by Very Low Income Households at Low HOME Rents, an amount which is in excess of the twenty percent(20%) of the total Units assisted by HOME funds required by the HOME Program to be rented at Low HOME Rents. "HOME Funds" means the City's allocation of funds from the HOME Investment Partnership Program created by the National Affordable Housing Act of 1990. "HOME Loan" means the City's loan of HOME Funds to Developer in a principal amount of SEVEN HUNDRED EIGHTY-ONE THOUSAND TWO HUNDRED TWENTY DOLLARS ($781,220), as evidenced by the HOME Promissory Note and secured by the HOME Deed of Trust pursuant to this Agreement. "HOME Loan Documents" means this Agreement, the HOME Promissory Note, the HOME Deed of Trust, the HOME Regulatory Agreement, the Environmental Indemnity, the Assignment of Rents and Leases, the Assignment of Agreements and the UCCI Financing Statement. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 4 "HOME Promissory Note" means that certain Promissory Note evidencing the HOME Loan, substantially in the form attached hereto as Exhibit 6. "HOME Regulatory Agreement" means the Regulatory Agreement and Declaration of Covenants and Restriction substantially in the form attached hereto as Exhibit 8, to be recorded at the Financing Event. The HOME Regulatory Agreement will unconditionally be and at all times remain prior and superior to any lien hereafter recorded against the Property. "HOME Regulations" means 24 CFR Part 92, as amended from time to time. "HOME Rent" means rental rates not to exceed the applicable rent limits set forth by the HOME Program in 24 CFR 92.252(a) and 24 CFR 92.252(b). HOME Rent must include a reasonable utility allowance for tenant paid utilities based on. (1) In the case of Very-Low Income Unit, the rent must meet the following: The rent does not exceed the lesser of(1) 30 percent of the annual income of a family whose income equals 50 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families, as provided by HUD (Low HOME Rent); or (2)the fair market rent for existing housing for comparable units in the area as established by HUD under 24 CFR 888.111, with adjustments for the number of bedrooms in the unit; or (2) In the case of Low Income Unit, the rent must meet the following: a. The rent does not exceed the lesser of(1) 30 percent of the annual income of a family whose income equals 60 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families, as provided by HUD (High HOME Rent); or(2) the fair market rent for existing housing for comparable units in the area as established by HUD under 24 CFR 888.111, with adjustments for the number of bedrooms in the unit. "HOME Restricted Period" means fifteen(15) years from the date of Completion of the Project. "Improvements" means and includes any construction, demolition, remediation and grading existing or done on the Property, if any, as well as all buildings, structures, fixtures, foundations, excavation, parking, landscaping, underground installations, and any other off site work or improvement existing on the Property, and construction and improvement of whatsoever character undertaken or constructed on, around, under, over or adjacent to the Property by Developer. "Lease" means the lease entered into between Developer and an Eligible Tenant of a Unit. "Low Income Household" means an adjusted income which does not exceed sixty percent (60%) of the Area Median Income, adjusted for household size, as published by HUD. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 5 "Net Proceeds" means the amount, if any, by which a refinancing exceeds the amount needed to repay a Senior Loan in full, including principal and interest, any early redemption or prepayment penalty, and customary and reasonable fees and costs of the transaction. "Operating Costs" has the same meaning as the definition of Annual Operating Expenses set forth in the HOME Promissory Note. "Permitted Transfer" means any Transfer that is approved by the city or expressly permitted by the terms of this Agreement. "Plans" means any architectural and construction plans and drawings prepared on behalf of Developer for the Project in accordance with this Agreement. "Person" means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company or other entity, domestic or foreign. "Project" means the acquisition of the Site and rehabilitation of the Improvements on the Property as described in the Scope of Work and the subsequent rental of the HOME Designated Units to Eligible Tenants at HOME Rent for a period of not less than 15 years, as more particularly described in the HOME Regulatory Agreement. "Project Budget" means the anticipated sources and uses of funds for the Project as set forth in Exhibit 4. The Project Budget and Developer's proposed method of financing will be subject to change from time-to-time, subject to the prior written approval of Developer and the City Manager or designee, which will not be unreasonably withheld, and subject to and conditioned on such further review and approval by the City Council as is needed to satisfy applicable law, policies and procedures, upon which approval the Project Budget will be replaced by the approved revised Project Budget. "Project Costs" means all costs which are actually incurred by Developer for the Project, and will include, without limitation, all of the items of cost set forth in the Project Budget and similar costs, fees and expenses as approved by the City Manager, but not including Operating Costs. "Property" means certain real property located in the City of Huntington Beach, County of Orange, State of California, commonly known as 7792 Barton Drive, Huntington Beach, Californian, and legally described in Exhibit 1 and depicted on the Site Map attached hereto as Exhibit 2. "Property Manager" means a property manager engaged by Developer to manage the Property and approved by City. "Schedule of Performance" means that certain schedule attached hereto as Exhibit 5 setting forth the times upon which performance by the parties under this Agreement is due. "Scope of Work" means that certain exhibit attached hereto as Exhibit 3. "Section 3" means and refers to Section 3 of the Housing and Urban Development Act of 1968, 12 USC 1701u, as amended. "Section 3 Acknowledgment" means an acknowledgement in the form of Exhibit 13. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 6 "Section 3 Business" means a business where fifty-one percent (51%) or more of the business is owned by a Section 3 Resident, or a business that has thirty percent(30%) or more of its full-time employees who are Section 3 Residents. "Section 3 Clause" means the following: For purposes of this Section 3 Clause definition and compliance thereto, whenever the word "contractor" is used it shall mean and include, as applicable, Developer, contractor(s), and subcontractor(s). The particular text to be utilized in (a) any and all contracts of any contractor doing work covered by Section 3 entered into on or after the Effective Date and (b) notices to contractors doing work covered by Section 3 pursuant to contracts entered into prior to the Effective Date, if any, shall be substantially in the form of the following, as reasonably determined by City, or as directed by HUD or its representative, and shall be executed by the applicable contractor under penalty ofperjury: (i) "The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 170lu ("Section 3"). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing. (ii) The Parties to this contract agree to comply with HUD's regulations in 24 CFR Part 135, which implement Section 3. As evidenced by their execution of this contract, the Parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the Part 135 regulations. (iii) The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this Section 3 clause, and will post copies of notices in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number of job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of person(s) taking applications for each of the positions; and the anticipated date the work shall begin. (iv) The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR Part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR Part 135. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR Part 135. (v) The contractor will certify that any vacant employment positions, including training positions, that are filled (a) after the contractor is selected but before the contract is executed, and (b) with persons other than those to whom the regulations of 24 CFR Part 135 require employment opportunities to be directed, were not filled to OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 7 circumvent the contractor's obligations under 24 CFR Part 135. (vi) Noncompliance with HUD's regulations in 24 CFR Part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts. (vii) With respect to work performed in connection with Section 3 covered Indian Housing assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract. Section 7(b) requires that to the greatest extent feasible, (a) preference and opportunities for training and employment shall be given to Indians, and (b) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian- owned Economic Enterprises. Parties to this contract that are subject to the provisions of Section 3 and section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with section 7(b)." "Section 3 Resident" means a resident of the City of Huntington Beach who is living in public housing, or receiving housing assistance vouchers, or whose Household meets HUD's definition of a low income Household (e.g., a Household whose annual income does not exceed eighty percent (80%) of the County median income adjusted for Household size as determined by HUD). "Senior Loan" means a loan from a third parry for the purchase and rehabilitation of the Property in the approximate amount of$250,000. "State" means the State of California. "Title Company" means Fidelity National Title Company or another title insurance company mutually acceptable to City and Developer. "Transfer" means: (1) Developer's assignment or attempted assignment of this Agreement or any right herein. (2) The sale, agreement to sell, transfer or conveyance of the Property, the Project or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment sale contract or similar instrument affecting all or a portion of the Property or Project, the lease of all or substantially all of the Property or Project, except as provided in subparagraph (iv) below, or the appointment of a receiver or trustee to operate or exercise direct or indirect control over any portion of or interest in the Project or to operate or exercise direct or indirect control over Developer or any interest in Developer. (3) "Transfer" also includes the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Developer, or any conversion of Developer to an entity form other than that of Developer at the time of execution of this Agreement, except that, neither(a) a cumulative change in ownership interest of Developer of forty-nine percent (49%) or less, or(b) transfer to a limited liability company (LLC) of which OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 8 Orange County Community Housing Corporation is, and remains, the sole member, will be deemed a "Transfer" for purposes of this Agreement. (4) Notwithstanding paragraphs (1) and (2), "Transfer" will not include the following Permitted Transfers: a. The leasing for occupancy of all or any part of the Property or Project in accordance with this Agreement and the HOME Regulatory Agreement; and b. Any refinancing that repays any portion of a Senior Loan (referred to herein as a"Take-out Loan"), if the City Manager or designee reasonably determines (which determination shall not be unreasonably withheld, conditioned or delayed) that the resulting loan-to-value ratio (including the Take-out Loan, any of the remaining Senior Loan not repaid by the refinancing, and the HOME Loan) will not exceed the loan to value ratio in effect at the time of the Financing Event for the Project, and the repayment terms of the Take-out Loan do not materially impair the Trustor's ability to repay the HOME Loan. "UCCI Financing Statement" means the financing statement(s) to be filed with the California Secretary of State's Office at the Financing Event in connection with the HOME Loan. The Developer hereby consents to the filing of the UCC 1 Financing Statement. "Units" means four (4) two-bedroom dwelling units comprising the Project. "USA Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107- 56, 115 Stat. 272 (2001), as amended from time to time. "Very-Low Income Household" means an adjusted income which does not exceed fifty percent (50%) of the Area Median Income, adjusted for household size, as published by HUD. 1.2 Singular and Plural Terms Any defined term used in the plural herein shall refer to all members of the relevant class and any defined term used in the singular shall refer to any number of the members of the relevant class. 1.3 Accounting Principals Any accounting term used and not specifically defined herein shall be construed in conformity with, and all financial data required to be submitted herein shall be prepared in conformity with, generally accepted accounting principles applied on a consistent basis or in accordance with such other principles or methods as are reasonably acceptable to the City Manager. 1.4 References and Other Terms Any reference to any document shall include such document both as originally executed and as it may from time to time be modified. References herein to Sections and Attachments shall be construed as references to this Agreement unless a different document is OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 9 named. References to subparagraphs shall be construed as references to the same Section in which the reference appears. The term "document" is used in its broadest sense and encompasses agreements, certificates, opinions, consents, instruments and other written material of every kind. The terms "including" and "include" mean "including (include), without limitation." 1.5 Attachments Incorporated; Attachments Additional Consideration All Attachments, as now existing and as the same may from time to time be modified, are incorporated herein by this reference. Each Attachment or agreement delivered by Developer or another party substantially in the form of an Attachment hereto in connection with this Agreement is required as and constitutes consideration for City to make the HOME Loan. 2. SUBJECT OF THIS AGREEMENT 2.1 Purpose of the Agreement Developer has applied to the City for certification as a Community Housing Development Organization ("CHDO"), and has submitted a proposal for use of HOME Program funds for a CHDO-eligible project under HOME Program regulations and that proposal has been approved by the City, subject to and conditioned upon the terms of this Agreement. The purpose of this Agreement is to promote affordable housing by providing the HOME Loan to assist Developer in the acquisition and rehabilitation of the Improvements on the Property for its operation as affordable rental housing for Very-Low and Low Income Households. The Project pursuant to this Agreement and the fulfillment generally of this Agreement are in the best interest of the City and the welfare of its residents, and are in accordance with the public purposes and provisions of applicable federal, state and local laws and requirements under which the Project is being undertaken and is being assisted. The HOME Loan is conditioned upon the use and operation of the Property for not less than fifteen (15) years as rental housing, with all four of the Units restricted to occupancy by Very-Low and Low Income Households in accordance with the HOME Regulatory Agreement. 2.2 City The City is THE CITY OF HUNTINGTON BEACH, CALIFORNIA, a municipal corporation, and includes any assignee or nominee. The address of the City for the purpose of receiving notices pursuant to this Agreement is: The City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Facsimile Number: 714-374-1590 Attention: Deputy Director of the Office of Business Development OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 10 With a copy to: City Attorney's Office City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 2.3 Developer The Developer is ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation and includes any permitted assignee or nominee. The address of Developer for the purpose of receiving notices pursuant to this Agreement is: Orange County Community Housing Corporation 501 Golden Circle, Suite 200 Santa Ana, CA 92705 Facsimile number: 714-558-0423 Attention: Executive Director 2.4 Prohibition Against Transfers; Right of First Refusal. A. The qualifications and identity of the Developer are of particular concern to the City. It is because of those qualifications and identity that the City has entered into this Agreement with the Developer. No voluntary or involuntary successor in interest of the Developer will acquire any rights or powers under this Agreement except as expressly set forth herein. B. Developer agrees that Developer will not sell the Property during the term of the HOME Regulatory Agreement, unless and until Developer has given to City notice in writing of its intent to sell, specifying the identity of the prospective buyer and the price and terms of the contemplated sale. Within ninety (90) days after Developer gives City written notice of Developer's intent to sell, City will have the right to purchase the Property at the same price and on the same terms and conditions set forth in Developer's written notice of intent to sell. The City may assign the right granted to it under this paragraph to an entity of its choosing. To exercise this right, City or its assignee must, within the same ninety (90) day period, deposit in escrow with any escrow company in Orange County, California, all moneys and instruments required by the terms of the Developer's notice of intent to sell to be paid or delivered to Developer on close of escrow and will also give Developer written notice of the deposit. If City or its assignee does not exercise the right in accordance with the provisions of this Section, Developer may sell the Property to the prospective buyer for the price and on the terms contained in the notice; provided, however, that City must have reasonably approved such prospective buyer in advance in writing, including the City's determination that the prospective buyer is a certified CHDO and has satisfactory experience in the field of low-income housing (including OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 11 the management of properties with income and affordability restrictions). If for the reason the Property is not sold to the prospective buyer, on receiving any subsequent offer from any third party that is acceptable to Developer, Developer will give City a right to purchase the Property on the same terms as set forth above. C. For the reasons cited above, the Developer represents and agrees for itself and any successor in interest that, except for the Permitted Transfers set forth in the definition of "Transfer" or as otherwise expressly permitted under this Agreement, without the prior written approval of the City (not to be unreasonably withheld, conditioned or delayed), there will be no significant change in the ownership of the Developer. D. The Developer will promptly notify the City of any and all changes whatsoever in the identity of the parties in ownership and/or in control of the Developer or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. The City may exercise any and all available remedies, including termination of this Agreement, if there is any significant change (voluntary or involuntary) in membership, ownership, management or control, of the Developer, including but not limited to the appointment of a receiver, (other than changes occasioned by the death or incapacity of any individual or as otherwise expressly permitted by this Agreement), without the prior written consent of the City. E. Developer will not Transfer this Agreement, the Property or the Project, without prior written approval of the City Manager, except as expressly permitted by this Agreement. Any proposed transferee will have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the City to fulfill the obligations undertaken in this Agreement by the Developer. Any such proposed transferee, by instrument in writing satisfactory to the City and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the City will expressly assume all of the obligations of the Developer under this Agreement and agree to be subject to all conditions and restrictions applicable to the Developer in this Agreement. There will,be submitted to the City for review all instruments and other legal documents proposed to affect any such Transfer, and if approval is required and if such Transfer is approved by the City Manager, the City's approval will be indicated to the Developer in writing. F. In the absence of specific written agreement by the City, no Transfer, or approval thereof by the City, will be deemed to relieve the Developer or any other party from any obligations under this Agreement. G. Consent to any Transfer will not be deemed to be a waiver of the right to require consent to future or successive Transfers. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 12 H. The provisions of this Section 204 will be of no force or effect as of the expiration of the HOME Regulatory Agreement. 3. RELOCATION OBLIGATIONS 3.1 Relocation Plan If temporary or permanent relocation of existing tenants and/or persons residing in or on the Property is required to implement the Project, Developer will comply with the provisions of a relocation plan prepared by Developer and reviewed and approved by the City ("Relocation Plan"). The Relocation Plan will comply with the requirements of the Uniform Relocation Act and the California Relocation Assistance Act and any guidelines promulgated in connection therewith. 3.2 Relocation Activities and Costs Developer will comply with the requirements of all applicable relocation laws, including, but not limited to, the Uniform Relocation Act and the California Relocation Assistance Act, and will comply with related tenant notice requirements and will provide the City with true and correct copies of such notices to tenants. Developer will also retain all required records and the originals and/or copies of tenant notices in its files as mandated by applicable law. The cost of complying with all applicable relocation requirements for the Project will be the responsibility of Developer. 4. FINANCING 4.1 The Project Budget The cost of the Rehabilitation is set forth in the Project Budget attached to this Agreement as Exhibit 4. The Project Budget and Developer's proposed method of financing will be subject to change from time-to-time, subject to the prior written approval of Developer and the City Manager or designee, which will not be unreasonably withheld, and subject to and conditioned on such further review and approval by the City Council as is needed to satisfy applicable law, policies and procedures, upon which approval the Project Budget will be replaced by the approved revised Project Budget. Developer has proposed, and the City has approved, the Project budget appended to this Agreement. Developer acknowledges that the City is relying on Developer's experience and expertise in establishing the costs for the Project and Developer represents that the Project Budget is based on Developer's best, good faith estimate of the costs that are likely to be incurred for the Project. Developer will be responsible during the Rehabilitation to provide funds if and as needed to pay for cost overruns and contingencies not otherwise funded by the HOME Loan. Developer acknowledges and agrees that the City will have no obligation to increase the amount of the HOME Loan. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 13 4.2 The City Assistance The City agrees to lend to Developer, and Developer agrees to borrow from the City, the HOME Loan, with interest as provided in the HOME Promissory Note. The HOME Loan will be secured by the HOME Deed of Trust. Developer agrees to repay the HOME Loan as set forth in the HOME Promissory Note. Developer agrees to use the HOME Loan exclusively to pay eligible Project costs approved by the City. 4.3 Priority City Lien The HOME Deed of Trust will be senior to any other lien or security interest in the Property with the sole exception of the following senior encumbrances (referred to herein as a"Senior Loan"): (1) any deed of trust or other encumbrance of record as of the date of the Financing Event which is shown in the title insurance policy described in the following paragraph and approved by the City as a permitted encumbrance; or(ii) a deed of trust or other encumbrance securing any additional loan of funds to be used in the rehabilitation work, as shown in the Project Budget and approved in advance by the City. Without the express written consent of the City Manager or his or her designee, Developer will not place any encumbrances, or permit any encumbrances to be placed, on or against title to the Project, including security interests that are subordinate to the HOME Deed of Trust. On or prior to the Financing Event; the Title Company will record the HOME Deed of trust, the HOME Regulatory Agreement and such other instruments and documents as the City and Developer may reasonably request, or will issue to the City, if requested by City, a the City's sole discretion and at the expense of Developer: an ALTA lender's policy of the HOME Loan, insuring that Developer is the fee owner of the Property and that the HOME Deed of Trust constitutes a valid lien over the Property, and all right, title, interest and estate of Developer therein, subordinate and subject only to the Senior Loan, if any, and other exceptions which the City approves in writing in its sole discretion. 4.4 Disbursement of HOME Loan No portion of the HOME Loan will be disbursed until all conditions precedent to the disbursement of the HOME Loan described in Section 4.5, below have been satisfied. Upon satisfaction of all conditions precedent, the City will disburse the HOME Loan, as needed, for the payment of acquisition costs, provided in the Project Costs as set forth in the Project Budget, in accordance with procedures approved by the City Manager or his designee. All of the HOME Loan proceeds shall be disbursed through Escrow to finance the acquisition of the Property. The HOME Loan proceeds shall not be used for any purpose other than for acquisition costs of the Property. The City allows for eligible costs to be paid by HOME Funds that were incurred not more than 24 months prior to the HOME Funds commitment date of the HOME Promissory Note execution in accordance with HOME Regulations. Developer will carry out the acquisition and rehabilitation work, and manage and operate the Property in conformity with all applicable requirements of the HOME Program as set forth in the HOME Regulatory Agreement. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 14 4.5 Conditions Precedent to Closing The City will not be obligated to make any disbursements of any portion of the HOME Loan unless and until all of the following conditions precedent are satisfied on or before the date set forth in the Schedule of Performance: (1) Developer will have satisfied all of the HOME Regulation and City requirements to be certified as a CHDO. (2) Developer will submit, and the City Manager or designee will have approved, the rehabilitation contract described in Section 5.1. (3) Developer will prepare and submit, and the City Manager or designee will have approved, a final Project Budget, to be current as of the Financing Event, demonstrating to the satisfaction of the City Manager or designee that the HOME Loan will be sufficient to pay all Project Costs. (4) Developer will obtain all licenses, franchises, permits, governmental approvals and agreements required for the rehabilitation work. (5) Developer will deliver to the City Manager or designee a loan draw-down schedule showing a detailed breakdown of the estimated periods of commencement and completion of the rehabilitation work. (6) Developer will have executed and delivered to the City Manager or designee the HOME Regulatory Agreement, the HOME Promissory Note, the HOME Deed of Trust, the Assignment of Rents, the Environmental Indemnity and the other HOME Loan Documents. (7) Developer will have delivered evidence acceptable to the City Manager or designee that Developer has obtained the insurance policies required by Section 5.10 and will have delivered the required endorsements. (8) If required for Developer's compliance with applicable relocation laws, Developer will have delivered evidence satisfactory to the City Manager or designee that the Developer has completed the relocation of existing tenants on the Property in accordance with the Relocation Plan approved by the City. (9) The City Manager or designee will have determined that Developer is in full compliance with the terms and conditions of this Agreement and all documents and instruments referred to herein or executed by Developer in furtherance of this Agreement. (10) The title insurance company will be prepared to issue to the City the lender's title policy. (11) Developer will prepare and submit, and the City Manager or designee will approve, the Maintenance Program required by Section 6.3 and the Management Plan required by Section 6.2 of this Agreement. (12) Developer will prepare and submit, and the City Manager or designee will approve, the Annual Project Budget required by Section 6.2C. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 15 (13) Developer will prepare and submit, and the City Manager or designee will approve, a form of tenant lease that conforms to the requirements of the HOME Regulatory Agreement. The City may waiver any condition of closing set forth herein, however, any such waiver must be expressly made in writing. The decision to waiver any condition of closing will be in the sole discretion of the City and the decision to waiver any requirement may be conditioned upon its satisfaction at a later date and/or upon the substitution of another condition. The disbursement of any portion of the HOME Loan prior to fulfillment of one or more of the foregoing conditions will not be construed as a waiver of such conditions, and the City reserves the right to require their fulfillment prior to making any subsequent disbursements. 5. REHABILITATION OF THE IMPROVEMENTS 5.1 Scope of Work The Improvement will be rehabilitated in accordance with and within the limitations established in the Scope of Work and plans approved by the City pursuant to this Agreement and permits issued by the City. It is anticipated that Developer will contract for performance of specific activities, including but not limited to activities such as rehabilitation work and management of the Units. Such contracts will not in any way diminish or waive Developer's obligations under this Agreement. 5.2 Construction Drawings and Related Documents A. If construction drawings are required for City permitting purposes, Developer will prepare and submit construction drawings and related documents for the rehabilitation of the Improvements to the City for review (including, but not limited to, architectural review) and written approval at the times established in the Schedule of Performance. The construction drawings and related documents will be submitted in two stages, preliminary and final drawings, plans, and specifications. Final drawings, plans, and specifications are hereby defined as those in sufficient detail to obtain a building permit. Any items so submitted and approved in writing by the City will not be subject to subsequent disapproval. City approval will not be unreasonably withheld, conditioned or delayed. B. Progressively detailed plans will be approved by the City if exterior spaces and areas open to public view do not vary and the plans otherwise do not materially vary from previously approved plans, and if they are a logical evolution of previously approved plans and conform to the Scope of Work. In the event of disapproval by the City of any plans submitted by Developer, City will promptly communicate in writing to Developer all reasons for such disapproval and all requirements for subsequent approval of revised plans. C. During the preparation of all drawings and plans, City staff and Developer will hold regular progress meetings to coordinate the preparation of, submission to, and review of construction plans and related documents by the City. City staff and Developer will OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 16 communicate and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the City can receive prompt and speedy consideration. D. If any revisions or corrections of plans approved by the City will be required by another governmental official, agency, department or bureau having jurisdiction over the Property, Developer and the City will reasonably cooperate in efforts to obtain waiver of such requirements or to develop a mutually acceptable alternative. Neither the City nor Developer will unreasonably withhold approval of a mutually acceptable alternative. 5.3 City Approval of Plans, Drawings and Related Documents As provided in Section 5.2, the City will have the right of reasonable review (including, but not limited to, architectural review) of all plans, drawings and related documents for the construction of the Property, including any proposed changes therein. The City Manager or designee will approve or disapprove such plans, drawings, and related documents referred to in this Agreement (and any proposed changes therein), in writing, within the times established in the Schedule of Performance. Any disapproval will state, in writing, the reasons for disapproval. Developer, upon receipt of disapproval will revise such portions of the plans, drawings or related documents in a manner that satisfactorily addresses the reasons for disapproval and resubmit such revised portions to the City as soon as possible after receipt of the notice of disapproval. The City will approve or disapprove such revised portions in the same manner and within the same times as provided in this Section for approval or disapproval of plans, drawings, and related documents initially submitted to the City. No matter once approved will be subsequently disapproved. 5.4 Cost of Work Except as otherwise expressly set forth in this Agreement, the cost of acquisition and rehabilitating the Improvements will be the responsibility of Developer. The Project Costs are set forth in the Project Budget and the Scope of Work, which will be subject to change from time-to-time as mutually agreed by the City and Developer. Transfers of funds between the line items described in the Scope of Work will require the prior approval of the City Manager or his or her designee. If Developer determines that the funds designated for abatement of hazardous substances will not be required for that purpose, Developer may propose another use for those funds, which could include work not described in the Scope of Work, but which must be approved in advance by the City. The Developer has proposed, and the City has approved, the Project Budget appended to this Agreement. Developer acknowledges that the City is relying on Developer's experience and expertise in establishing the costs for the Project and Developer represents that the Project Budget is based on the best, good faith estimate of the Developer of the costs that are likely to be incurred for the Project based upon the information now available to the Developer. The Developer will use the City's loan of HOME Funds exclusively for the payment of acquisition costs. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 17 5.5 Schedule of Performance A. Developer and City will perform all acts respectively required of such party in this Agreement within the times provided in the Schedule of Performance. B. After the Construction Financing Event, Developer will promptly begin and thereafter diligently prosecute to completion the rehabilitation of the Improvements as provided in the Scope of Work. Developer will begin and complete all rehabilitation work within the times specified in the Schedule of Performance, with such reasonable extensions of said times as may be granted by the City. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing by Developer and the City Manager. C. During periods of construction, Developer will submit to the City a written report of the progress of the construction when and as requested by the City. The report will be in such form and detail as may be reasonably required by the City and will include a reasonable number of construction photographs (if requested) taken since the last report by Developer. 5.6 Accessibility Requirements Developer must ensure that the Project will be rehabilitated and operated to comply with all federal, state, and local requirements for access for disabled persons that apply to the rehabilitation of existing multi-family rental units. 5.7 Local, State and Federal Laws A. Developer hereby agrees to carry out development, construction (as defined by applicable law) and operation of the Project on the Property, including, without limitation, any and all public works (as defined by applicable law), in conformity with all applicable local, state and federal laws, rules and regulations and all applicable federal and state labor laws (including, without limitation, any requirement to pay state prevailing wages). Developer hereby expressly acknowledges and agrees that the City has never previously affirmatively represented to the Developer or its contractor(s) for the Project in writing or otherwise, in a call for bids or otherwise, that the work to be covered by the bid or contract is not a"public work," as defined in Section 1720 of the Labor Code. Developer hereby agrees that Developer will 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 will 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. The Developer hereby agrees that the Developer will have the obligation, at the Developer's sole cost, risk and expense, to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer will indemnify, protect, defend and hold OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 18 harmless the City and its officers, employees, contractors and agents, with counsel reasonably acceptable to City, from and against any and all loss, liability, damage, claim, cost, expense, and/or"increased costs" (including labor costs, penalties, reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction (as defined by applicable law) and/or operation of the Project, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (1) the noncompliance by Developer of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (2) the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (3) failure by Developer to provide any required disclosure, representation, statement, 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; (4) failure by Developer to provide and maintain any and all bonds to secure he 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; and/or (5) failure by the Developer to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. It is agreed by the parties that, in connection with the development, construction (as defined by applicable law) and operation of the Project, including without limitation, any public work(as defined by applicable law), Developer will bear all risks of payment or non-payment of state prevailing wages and/or the implementation of 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 will 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 will survive termination of this Agreement and will continue after Completion. B. Developer will be responsible for obtaining all Permits and land use approvals required by the City for the construction of the Project, ensuring that the use of the Property for the purposes described in this Agreement complies with the zoning and other City land use regulations (including any applicable exemptions and/or exceptions) applicable to the Property at the time of Construction Financing Event. C. Prior to or concurrently with the Construction Financing Event, Developer will satisfy all conditions to the issuance of any Permit required for the construction of the Property. The City will provide reasonable assistance to Developer in obtaining permits from other governmental agencies with jurisdiction over the Project but will have no liability to Developer in the event such permits are not obtained in a timely manner. D. This Agreement is not a"Development Agreement" as provided in Section 65864 et seq. of the California Government Code. Developer will comply with all applicable conditions of approval required by the City of Huntington Beach in its regulatory capacity. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 19 5.8 Hazardous Substances 5.8.1 Lead-Based Paint and Asbestos Containing Materials If the presence of lead-based paint or asbestos hazards on the Property is discovered during the course of the rehabilitation of the Improvements pursuant to this Agreement and Developer determines that, with the taking of appropriate precautions and in compliance with all applicable Hazardous Materials Laws (as such term is defined in the Environmental Indemnity), Developer can carry out the Project without disturbing such hazards, then Developer may proceed to do so. If Developer determines that it will not be able to carry out the Project without disturbing such hazards or if the removal of such hazards is required by applicable Hazardous Materials Laws, then Developer will prepare and submit to the City a plan, in compliance with all applicable Hazardous Materials Laws, for the abatement of any such hazards. Implementation of the plan must qualify the Property for a closure letter or similar clearance from the appropriate government entity having jurisdiction over the Property indicating that all lead-based paint and asbestos hazards have been fully abated to the satisfaction of such governmental entity. 5.8.2 Indemnification Developer will indemnify, defend, and hold harmless the City and its officers, employees, agents and representatives (collectively, the "Indemnified Parties") from and against any and all liabilities (including penalties, fines and monetary sanctions) arising from a violation of state or federal law occurring after the Construction Financing Event, pertaining to (i) the storage of Hazardous Substances on the Property or(ii) contamination of the Property by a release of Hazardous Substances. As a condition precedent to the Construction Financing Event, Developer will execute and deliver to the City an Environmental Indemnity, substantially in the form of Exhibit 9 to this Agreement. 5.9 Nondiscrimination During Construction Developer, for itself and its successors and assigns, agrees that during the rehabilitation of the Improvements provided for in the Agreement, Developer will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. 5.10 Insurance Developer will procure and maintain, during the term of this Agreement, at its sole cost and expense, until the date that City waives any such insurance requirement or requirements in writing, the following policies of insurance on a Project specific basis: OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 20 5.10.1 Worker's Compensation Insurance Developer will procure and maintain, during the term of this Agreement, at its sole cost and expense, until the date that City waives any such insurance requirement or requirements in writing, the following policies of insurance on a Project specific basis: 1. Workers' Compensation Insurance. Pursuant to California Labor Code Section 1861, Developer acknowledges awareness of Section 3700 el seq. of said code, which requires every employer to be insured against liability for workers' compensation. Developer covenants that it will comply with such laws and provisions prior to commencing any work of construction or construction on the Property. To the extent Developer directly employs personnel at the Project, Developer will maintain such Workers' Compensation Insurance in an amount not less than the statutory requirements in California for bodily injury and disease and must maintain employer's liability coverage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00). Developer will require all contractors to provide such Workers' Compensation Insurance for all of the contractors' and subcontractors' employees. Developer will furnish City with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Developer will similarly require all contractors and subcontractors to waive subrogation. 5.10.2 General Liability and Auto Insurance Developer will carry general commercial liability insurance, including coverage for bodily injury, property damage, products/completed operations and blanket contractual liability in an amount not less than TWO MILLION DOLLARS ($2,000,000.00)per occurrence and FOUR MILLION DOLLARS ($4,000,000.00) annual aggregate, combined single limit for bodily injury and property damage. All such insurance will be provided by insurance companies admitted in California, or if not admitted in California, then reasonably acceptable to City. Such insurance will name the City and its officers, agents, and employees acting in their official capacity, as additional insureds. Developer will carry automobile insurance, including liability coverage for bodily injury and property damage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00)per occurrence. Developer will require its insurer to waive its subrogation rights against City and will provide certificates of insurance evidencing same. 5.10.3 Property Insurance Developer will obtain and maintain in force, all-perils (to include fire and vandalism protection) property insurance with extended coverage endorsements thereon, on the Property, in an amount equal to the full replacement costs and/or value thereof; this policy will contain a replacement cost endorsement naming City as the insured and will not contain a coinsurance penalty provision. The policy will contain a lender's loss payable endorsement that such proceeds will be used to repair or rebuild any Units or other improvements situated on the Property so damaged or destroyed; and, if not so used, such proceeds will be paid to City. The proceeds of any such insurance payable to City will be used for rebuilding or repair as necessary OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 21 to restore the site at the sole discretion of City. The policy will name City and its officers, agents, and employees acting in their official capacity as additional insureds. 5.10.4 Certificate of Insurance; Additional Insured Endorsements Prior to the Construction Financing Event, Developer will furnish to City certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement. Such certificates and endorsements will be subject to the reasonable approval of the City Attorney and will provide the name and policy number of each carrier and policy and will state that the policy is currently in force and will promise to provide that such policies will not be cancelled without thirty (30) days prior written notice to City. 5.10.5 Flood Disaster Protection Act of 1973 In accordance with the requirements of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4001), the Developer will assure that for activities located in an area identified by the Federal Emergency Management Act (FEMA) as having special flood hazards, flood insurance under the National Flood Insurance Program is obtained and maintained as a condition of financial assistance for acquisition or construction purposes (including construction). If Developer fails or refuses to procure or maintain insurance as required by this Agreement, City will have the right, at City's election, and upon ten (10) days prior notice to Developer, to procure and maintain such insurance. The premiums paid by City will 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. City will give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s). 5.11 Indemnification During the term of this Agreement, Developer agrees to and will protect, defend, indemnify and hold harmless the City and its members, officers, officials, employees, agents, representatives, servants, contractors, successors and assigns from and against all liability, loss, damage, cost or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of(i) Developer's failure to perform any obligations as and when required by this Agreement or any document referred to herein, and (h) the death of any person or any accident, injury, loss, or damage whatsoever caused to any person or to the property of any person which will occur on the Property and which will be directly or indirectly caused by the acts of, or any errors or omissions of, the Developer or its officers, shareholders, directors, meriibers, agents, servants, employees, contractors, or invitees. Developer will not be responsible for, and the City will protect, defend, hold harmless and indemnify Developer against any liability, loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result of the gross negligence or willful misconduct of the City or its members, officers, officials, employees, agents, representatives, servants, or contractors. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 22 5.12 Disclaimer of Responsibility by the City Except as otherwise expressly provided in this Agreement, the City neither undertakes nor assumes nor will have any responsibility, right 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 Property, whether with respect to the quality, adequacy or suitability of the plans, any labor, service, equipment or material furnished to the Project, any person furnishing the same or otherwise. Developer and all third parties will rely upon its or their own judgment or information supplied to Developer or to any third party by the City in connection with such matter is for the public purpose of providing affordable housing, and neither Developer(except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon. 5.13 Rights of Access The City will have the right, at its sole risk and expense, to enter the Property or any part thereof at reasonable times and with as little interference as possible, for the purpose of inspecting the property to determine Developer's compliance with this Agreement. To the fullest extent allowed by law, all residential leases will provide for such right of the City. The representatives of the City entering the Property will be identified in writing in advance by the City Manager (or his or her designee). Any such entry will be made only after reasonable notice to Developer, and the City will indemnify and hold Developer harmless from any claims or liabilities pertaining to such entry. Any damage or injury to the Property proximately caused by such entry will be promptly repaired at the sole expense of the City. 5.14 Taxes, Assessments, Encumbrances and Aliens Subject to Developer's right to claim any exemption to which it may be entitled under State or local law, Developer will be responsible for paying when due all real estate taxes and assessments, if any, assessed and levied on or against the Property or any portion thereof or interest therein. Developer will not place, or allow to be placed, on the Property or any portion thereof or interest therein, any mortgage, trust deed, encumbrance (excluding easements not unreasonably interfering with the use of the Property) or lien (excluding mechanic's liens paid prior to foreclosure or liens for current year property taxes not paid) except for Permitted Transfers. Developer will remove, or will have removed, any levy or attachment made on the Property (or any portion thereof or interest therein), or will assure the satisfaction thereof within a reasonable time but in any event prior to foreclosure. Nothing herein contained will be deemed to prohibit Developer from contesting the validity or amount of any tax, assessment, encumbrance or lien, nor to limit the remedies available to Developer in respect thereto. The covenants of Developer set forth in this Section 514 relating to the placement of any unauthorized mortgage, trust deed, encumbrance or lien, will remain in effect until Completion. 5.15 Rights to Plans A, All work product prepared pursuant to this Agreement, including (but not limited to), all Plans, construction documents, soil tests and similar reports, Permits and other OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 23 entitlements are hereby assigned to the City as security for Developer's obligations hereunder. In the event that this Agreement is terminated by the City following an uncured event of default, Developer will, within ten (10) days of such termination, transmit all such work product to the City to the fullest extent possible without representation and warranty. B. To effectuate the assignment described in the preceding paragraph, prior to the Construction Financing Event, Developer will execute and deliver to the City an Assignment of Agreements substantially in the form attached to this Agreement as Exhibit 10 in a form that is acceptable to the City Manager, granting to the City all of Developer's rights to: (1) the Plans prepared pursuant to this Agreement; (2) the contracts between Developer and its architect and between Developer and its general contractor; (3) all Permits relating to the Project; and all similar rights and property interests. 5.16 Hazardous Materials Developer, from and after the Construction Financing Event will indemnify, defend, and hold harmless City and its officers, employees, agents and representatives (collectively, the "Indemnified Parties") from and against any and all liabilities (including penalties, fines and monetary sanctions) arising from a violation of state or federal law pertaining to (i) the storage of Hazardous Materials on the Property or (ii) contamination of the Property by a release of Hazardous Materials, except to the extent of the Indemnified Parties' gross negligence or willful misconduct. Developer, prior to the Construction Financing Event, will provide to City a copy of any notices, orders, or reports concerning the presence of any Hazardous Materials on or affecting the Property that is in Developer's possession. As a condition precedent to the Construction Financing Event, Developer will execute and deliver to the City an Environmental Indemnity, substantially in the form of Exhibit 9 to this Agreement. 6. USE OF PROPERTY 6.1 Uses Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof, that during the HOME Affordability Period, the Developer shall devote the Property to the uses specified in, and otherwise comply with the terms and conditions of, the HOME Regulatory Agreement. Developer further covenants and agrees for itself and its successors and assigns that the HOME Designated Units shall be continuously occupied or held vacant and made available to Qualified Tenants at an HOME Affordable Rent during the HOME Affordability Period. All uses conducted on the Property, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to all applicable provisions of the Huntington Beach Municipal Code. Maximum Occupancy will be two (2) people per room plus one (1). Example for a two-bedroom unit, five (5) people would be maximum occupancy. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 24 6.2 Management Plan; Annual Project Budget; Management Reports A. Prior to the Construction Financing Event, Developer will submit for City Manager approval a Management Plan describing the Developer's proposal for managing and operating the Property. The Management Plan will include, without limitation, a description of the proposed social and supportive services to be made available to Project tenants. Any modifications to the approved Management Plan will be subject to the prior written approval (not to be unreasonably withheld or delayed) of the City Manager or designee, for the entire Restricted Period. B. Approval of the Management Plan by the City Manager or designee will be a condition precedent to the Construction Financing Event. Developer will manage and operate the Property in accordance with the approved Management Plan, including such amendments as may be approved in writing from time to time by the Developer and the City Manager or designee for the entire Restricted Period. C. In addition, the Developer must submit on or before the first day of each fiscal year of the Restricted Period an estimated annual budget for management of the Property (the "Annual Project Budget") in accordance with the Management Plan. The Annual Project Budget will include all necessary operating expenses, current maintenance charges, expenses of reasonable upkeep and repairs, taxes and special assessment levies, prorated amount required for insurance and all other expenses incident to the operation of the Project; and will show the expected revenues to pay such expenses, including annual debt service requirements and reserve fund deposits and balances. The Annual Project Budget, including any amendments proposed by Developer, will be subject to the approval of the City Manager not to be unreasonably withheld or delayed. , D. For each fiscal year of the Restricted Period, Developer must also submit on an annual basis, and upon the written request of the City on a quarterly basis, a report for the management of the Property (the "Management Report"). The Management Report will include a profit and loss statement, budget to date figures, and occupancy report and will clearly show project revenues, operating expenses, deposits to and withdrawals from the Project's reserve accounts, and cash flow available for residual receipts payments, all of which will be certified by Developer. The Management Report will be in a form that is reasonable acceptable to the City Manager. The City Manager, in his/her sole discretion may waive the requirement of the Management Report for one or more quarterly reporting periods. However, such waiver will not operate to waive any subsequent requirement of the Management Report during the Restricted Period. After receipt of such certified financial statements for the Project, City may request additional financial analyses or obtain a third party review at City's own expense, of financial statements for the Project to verify the accuracy of the payments by Developer on the HOME Note; provided, however, that if such review reveals underpayment on the HOME Note greater than ten percent (10%) of the correct payment amount, in addition to the other remedies available to the City, Developer will promptly reimburse the City for the reasonable cost of conducting the review, and the City will have the right to exercise all remedies for such underpayment available under law or in equity. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 25 6.3 Maintenance of Property A. Priouto the Construction Financing Event, Developer must prepare and submit to the City Manager or his designee for review and approval a program, including a proposed budget, (the 'Maintenance Program") for the exterior and interior maintenance of the Property and the Improvements. The City will have the right at all reasonable times and upon 72 hours advance written notice (except in the case of an emergency) to enter and inspect the Property in order to ensure compliance with the foregoing requirements. B. The Maintenance Program must describe in reasonable detail the standards to be followed in maintaining the interior and exterior of the Improvements, including a schedule indicating the proposed frequency of each element of maintenance, and will include, at a minimum, the following: periodic cleaning of the interior and exterior of the Improvements, including windows; removing graffiti; removing debris and waste materials and otherwise maintaining indoor and outdoor areas of the Property; maintaining any lawns, plants, shrubs and trees or other landscaping planted on the Property; performing inspections of all exterior features to determine whether repairs are required; conducting periodic protective treatments such as rust removal and caulking; conducting repairs to facades, roof, doors, windows and other exterior features; maintaining fencing and other security devices and systems; periodic repainting of the exterior; periodic repainting of the interior units and common areas; periodic replacing of the interior unit carpets; checking building systems, including, but not limited to the heating and cooling systems, smoke alarms and water heaters; checking interior unit appliances; and monitoring interior unit bathrooms for mold/mildew. The Maintenance Program, including any amendments proposed by Developer, will be subject to the approval of the City Manager. C. At all times during the Restricted Period, Developer will maintain the Property and the Improvements in accordance with the approved Maintenance Program and in compliance with Federal Housing Quality Standards (24 CFR § 982.401) and other applicable state and local laws and codes. To implement this requirement, Developer agrees to budget sufficient funds to pay for all reasonably anticipated costs (as indicated in the Annual Maintenance Budget). In the event Developer fails to maintain the Property as required by this Section, Developer will, within thirty (30) days after City's notification or Developer's own discovery of any deficiency, take all necessary steps to correct such deficiency, provided that, if such deficiency is not reasonably capable of being cured within thirty (30) days, Developer will commence to cure said deficiency within thirty (30) days and diligently and in good faith continue to take all necessary steps to correct such deficiency. In the event the Developer fails to cure said deficiency within the time allowed, the City will have the right, but not the obligation, to enter the Property, correct any violation, and hold Developer responsible for the cost thereof, and such cost, until paid, will constitute a lien on the Property. 6.4 Lead-Based Paint Developer will ensure that it and its contractors and subcontractors will not use lead-based paint in the construction or maintenance of the Project. Developer will insert this OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 26 provision in all contracts and subcontracts for work performed on the Project which involves the application of paint. 6.5 Barriers to the Disabled Developer will ensure that the Project will be operated to comply with all federal, state, and local requirements for access for disabled persons that apply to existing multi-family rental units. 6.6 Creation of Capital Reserve Account Concurrently with or prior to the Permanent Financing Event, Developer will create a "Capital Reserve Account" in the initial amount shown on the Project Budget. No later than thirty (30) days after the Capital Reserve Account has been created, Developer will provide to City a pro forma statement concerning the account, for review and approval. At any time thereafter during the term of this Agreement, City, on ten (10) days prior written notice to Developer, may request that Developer submit to it an updated, revised Capital Reserve Account statement. City, at its own expense, may audit any updated, revised Capital Reserve Account statement submitted to it by Developer; provided that, if such audit reveals a substantial underfunding of the Capital Reserve Account, Developer will promptly reimburse the City for the cost of conducting the audit. 6.7 Capital Reserves Beginning at Completion and every succeeding year during the Restricted Period, Developer will deposit the amount set forth in the definition of Operating Expenses in the HOME Note, into the Capital Reserve Account for repairs to the Property. The Capital Reserve Account will only be used to fund the cost of repairs and improvements to the Property and to maintain the Property in compliance with the requirements of Section 6.3. Developer will exhaust funds in the Capital Reserve Account prior to utilizing operating revenues to pay for capital repairs and improvements to the Property. Interest earned on the Capital Reserve Account will remain in said account and be used as Capital Reserves. Upon repayment in full of the HOME Loan and to the extent that maintenance of the Capital Reserve Account is not required by another lender, the Developer may request the City's approval for the release of those funds, with such approval not to be unreasonably withheld. At the expiration of the Restricted Period, the City's approval of the release of the Capital Reserves will no longer be required. 6.8 Obligation to Refrain from Discrimination There will be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, age, class, source of income, religion, sex, sexual orientation, gender identity, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any part thereof, or in the awarding of contracts for the Project, nor will Developer, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 27 with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property, or any part thereof; or in the awarding of contracts for the Project. Developer will comply with all applicable federal, state and local nondiscrimination, fair housing, and equal opportunity requirements. In addition, Developer will conduct affirmative marketing and minority outreach activities if and as required by Federal regulations. 6.9 Effectiveness and Duration of Covenants The covenants established in this Agreement will, without regard to technical classification and designation, be binding on Developer and any successor in interest to the Property or any part thereof or interest therein for the benefit and in favor of the City of Huntington Beach. Every covenant and condition and restriction contained in the HOME Regulatory Agreement will remain in effect for fifteen (15) years from the Effective Date of the HOME Regulatory Agreement (regardless of whether the HOME Loan has been repaid prior to the end of such 15-year period), except that the covenants against discrimination set forth in the HOME Regulatory Agreement and in Section 6.8 hereof will remain in effect in perpetuity. 6.10 Effect of Violation of Covenants The City is deemed beneficiary of the terms and provisions of this Agreement and the covenants herein, both for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, for whose benefit this Agreement and the covenants running with the land have been provided. The City will have the right if the covenants contained in this Agreement are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants are entitled. 6.11 CHDO Provisions Developer shall maintain CHDO (Community Housing Development Organization) status for the term of this Agreement and the HOME Regulatory Agreement in accordance with 24 CFR 92. Developer agrees to provide information as may be requested by the City to document its continued compliance, including but not limited to an annual board roster and certification of continued compliance. Any funds advanced as CDHO pre-development funds must be in compliance with 24 CFR 92.301, and are forgivable only under the terms in 24 CFR 92301. Any funds advanced to Developer as CHDO Operating Expenses must be expended in compliance with 24 CFR 92.208. Any funds that Developer is permitted to retain as CHDO proceeds from this Project shall be used in compliance with 24 CFR 92.300(a)(2) or as specified in this Agreement. Developer will create and follow a tenant participation plan, as required in 24 CFR 92.303. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 28 7. HOME COVENANTS 7.1 Qualification as Affordable Housing As more particularly provided in the HOME Regulatory Agreement, Developer shall use, manage and operate the Property in accordance with the requirements of the HOME Program and 24 CFR 92.252 so as to qualify the housing on the Site as affordable housing until the later of the date the HOME funds are repaid or the expiration of the HOME Affordability Period. Developer hereby covenants and agrees to comply with all applicable requirements of the HOME Program, including, without limitation, those set forth herein. 7.2 Use of HOME Funds In accordance with 24 CFR 92.205(a)(1) and 92.2016(c), the HOME Funds shall be used exclusively for acquisition of the Property, which constitutes improved real property as well as permanent rental housing as required thereby. 7.3 Affordable Housing Requirements 7.3.1 HOME Designated Units The HOME Designated Units are composed of four (4) two-bedroom units. The HOME Designated Units will be floating units. 7.3.2 Household Income Requirements In order to assure compliance with the rent and occupancy restrictions set forth in this Agreement and the HOME Regulatory Agreement, the Developer shall, prior to the initial leasing of a HOME Designated Unit and on an annual basis thereafter throughout the HOME Affordability Period, obtain and cause to be submitted to City, at Developer's expense, a verification of all household sources of income as required by the HOME Regulatory Agreement demonstrating that such household qualifies as a either Very-Low Income Household or Low Income Household in accordance herewith and meets the eligibility requirements established for the HOME Designated Unit. Such income verification shall be submitted on such forms prepared and submitted in accordance with the HOME Regulatory Agreement, HOME Program and/or such other form approved by City. Rental housing qualifies as affordable housing despite a temporary noncompliance of this Agreement, if the noncompliance is caused by increases in the incomes of existing tenants and if actions satisfactory to HUD care being taken to ensure that all vacancies are filled in accordance with this Agreement until the noncompliance is corrected. Tenants who no longer qualify as Very-Low or Low Income Households must apply as rent the lesser of the amount payable by the tenant under State or local law, or thirty percent (30%) of the family's adjusted monthly income, as recertified annually. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 29 7.3.3 HOME Rents During the HOME Affordability period, two (2) HOME Designated Units (two-bedroom units) shall be leased to or held vacant for occupancy by Very-Low Income Households at Low HOME Rent and two (2) HOME Designated Units (two-bedroom units) shall be leased to or held vacant for occupancy by Low Income Households and High HOME Rent. On an annual basis, the City shall provide the Developer with the maximum allowable schedule of rents for the Property. In no event can Developer charge any tenant more than that amount. Any tenant-paid utilities must be deducted from the gross HOME Rent, based on the HUD Utility Schedule Model. 7.3.4 Duration of HOME Affordability Requirements The HOME Designated Units shall be subject to the requirements of this Section throughout the HOME Affordability Period. 7.4 Selection of Eligible Tenants Prior to selecting any tenants for the HOME Designated Units, Developer shall submit to City the Management Plan which shall include proposed tenant selection policies and criteria for the HOME Designated Units. The tenant selection criteria shall be subject to City's approval or disapproval thereof in writing. The tenant selection policies and criteria for the HOME Designated Units shall require that applicable federal and state fair housing, the HOME Program, and other applicable Governmental Regulations, preference be given to applicants in the following order: first to existing income qualified tenants of 7792 Barton Drive, second to persons who live or work in the City. In addition, the tenant selection policies and criteria shall: (1) Be consistent with the purpose of providing housing for Very-Low and Low HOME Households; (2) Be reasonably related to program eligibility and the applicants' ability to perform the obligations of the lease; (3) Provide for the selection of tenants from a written waiting list in the chronological order of their application, insofar as is practical; and (4) Give prompt written notification to any rejected applicant of the grounds for any rejection. Developer shall comply with the requirements of 24 CFR 92.253. 7.5 Lease Requirements Prior to rental of any of the HOME Designated Units after closing, the Developer shall submit a standard lease form to City for City's approval, which approval shall not unreasonably be withheld or delayed. The standard lease agreement shall not be amended in any material respects (except as required by applicable laws) without prior written City OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 30 approval. The Developer shall enter into a lease in the form approved by City,and containing those provisions required by the HOME Regulatory Agreement, with each Qualified Tenant of a HOME Designated Unit. 7.6 Affirmative Marketing Developer shall implement and perform such affirmative marketing procedures and requirements (24 CFR 92.351) for the Project as adopted by City and delivered to Developer in its Affirmative Fair Housing Marketing Plan. 7.7 Annual Reporting Requirements On or before April 1 of each year, the Developer shall submit to City a certification of compliance with the terms and conditions of this Agreement and the HOME Regulatory Agreement and such other reports as required thereby on forms prescribed by City. Each annual report shall cover the immediately preceding calendar year. Developer further agrees to provide annually to City true and accurate copies of all reports, audits and compliance forms prepared by Developer. On April 1 of each year, Developer shall determine and submit an updated Rent Schedule to City showing the proposed Affordable Rent amount for each Affordable Unit for the following twelve (12) months with supporting documentation that such amounts are consistent with the applicable method for calculating Affordable Rent as set forth herein. Unless otherwise agreed to in writing by City and Developer, during the Affordability Period, Developer shall annually prepare, and on or before April 1 (or 180 days after end of fiscal year) of each year, shall submit to City, an audited Annual Financial Statement for Developer and General Partner. Accompanying such Annual Financial Statements shall be copies of such entity's revised organizational and/or governing corporate documents if any changes to such documents were effected during the fiscal year covered by the Annual Financial Statement. 7.8 Handicapped Accessibility If and to the extent applicable, Developer shall comply with (a) Section 504 of the Rehabilitation Act of 1973, and implementing regulation at 24 CFR Part 8C governing accessibility of projects assisted under the HOME Program; and (b) the Americans with Disabilities Act of 1990, and implementing regulations at 28 CFR Parts 35-36 in order to provide handicapped accessibility to the extent readily achievable. 7.9 Lead-Based Paint Developer shall maintain the Affordable Units in compliance with the applicable Property Standards as set forth in 24 CFR 92.251. Developer shall comply with the requirements, as applicable, of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821- 4846) and Residential Lead-Based Paint Hazard Reduction Act of 1992 and implementing regulations at 24 CFR Part 35, including testing and abatement activities. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 31 7.10 Equal Opportunity and Fair Housing Developer shall carry out the construction and perform its obligation under.this Agreement in compliance with all of the federal laws and regulations regarding equal opportunity and fair housing described in 24 CFR 92.350. 7.11 Property Standards Developer shall comply with 24 CFR 92.251. (1) The development of the Property shall comply with the City's building code and all other applicable local codes, rehabilitation standards, ordinances and zoning ordinances in effect at the time of project completion, and the Property shall be decent, safe and sanitary shall conform to the following codes that have been adopted by the City of Huntington Beach: Uniform Building Code (UBC) as adopted by the State of California (California Building Code [Title 24 Part 2], National Electrical Code (NEC), Uniform Plumbing Code (UPC), Uniform Mechanical Code (UMC) and California Energy Code(CEC). (2) The Property shall comply with the,accessibility requirements at 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and, if applicable, the design and construction requirements at 24 CFR 100.205 for covered multifamily dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act (42 U.S.C. 3601-3619). 7.12 Displacement and Relocation Developer acknowledges and agrees that, pursuant to 24 CFR 92.253 and consistent with the other goals and objectives of this parry, City must ensure that it has taken all reasonable steps to minimize the displacement of persons as a result of the Project, if any. Furthermore, to the extent applicable and to the extent feasibility, residential tenants must be provided a reasonable opportunity to lease and occupy a suitable, decent, safe, sanitary and affordable dwelling unit on the subject Property upon completion of construction. Developer agrees to cooperate fully and completely with City in meeting the requirements of 24 CFR 92.253 and shall take all actions and measures reasonable required by the City Manager in connection therewith. To the extent applicable to the Project, Developer agrees that any relocation assistance and/or benefits to which any occupant of the Property becomes entitled as a consequence of this Agreement, whether under state or federal law, shall be the obligation of Developer, and Developer agrees to defend, indemnify and hold City harmless therefrom. 7.13 Faith Based Activities To the extent applicable to the Project, in accordance with 24 CFR 92.257, Developer will comply with the restrictions on the use of HOME Funds for faith based activities as set forth in Section 92.257. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 32 7.14 Records and Reports Developer shall maintain and from time to time submit to City such records, reports and information as the City Manager may reasonably require in order to permit City to meet the recordkeeping and reporting requirements required of it pursuant to 24 CFR 92.508, including, without limitation, the following (such reports may be combined with and/or incorporated in the reports required elsewhere in this Agreement): (1) Records which demonstrate that the Property meets the property standard specified in 24 CFR 92.251 and the lead-based paint requirements of 24 CFR 92.355; (2) Records which demonstrate that each family occupying the Property is income eligible in accordance with 24 CFR 92.203; (3) Records which demonstrate that the Property meets the affordability and income targeting requirements of 24 CFR 92.252 for the Rental period. Records shall be kept for each family assisted; (4) Records which demonstrate that each lease complies with the tenant and participant protections, as specified in 24 CFR 92.253. Records shall be kept for each family; as applicable. (5) Equal opportunity and fair housing records,including, as follows: a. data on the extent to which each racial and ethnic group; b. and single-headed household (by gender of household head) have applied for, participated in, or benefitted from, any program or activity funded in whole or in part with HOME funds; C. documentation of actions undertaken to meet the requirements of 24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u); d. documentation of the actions the City has taken to affirmatively further fair housing; (6) Affirmative Marketing and MBE/WBE records, including, as applicable: a. if applicable, records documenting compliance with the affirmative marketing procedures and requirements of 24 CFR 92.351; b. if applicable, documentation and data on the steps taken by Developer to implement the City's outreach programs to minority-owned and female-owned businesses including data indicating the racial/ethnic or gender character of each business entity receiving a contract or subcontract of$25,000 or more paid, or to be paid, with HOME funds; the amount of the contract or subcontract, and documentation of the Developer's affirmative steps to assure that minority business and women's business enterprises have an equal opportunity to obtain or compete for contracts and subcontracts as sources of supplies, equipment, construction and services; OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 33 C. if applicable, records which demonstrate compliance with the requirements of 24 CFR 92.353 relating to displacement, relocation and real property acquisition, including project occupancy lists identifying the name and address of all persons occupying or moving into the Property on and after the date on which Developer obtained site control; d. if applicable, records demonstrating compliance with the labor requirements of 24 CFR 92.354, including contract provisions and payroll records; e. records demonstrating compliance with the lead-based paint requirements of 24 CFR 92.355; f. if applicable, records which support any exceptions to the conflict of interest prohibition pursuant to 24 CFR 92.356; g. debarment and suspension certifications required by 24 CFR Parts 24 and 91. h. Developer shall retain all books and records relevant to the HOME Loan for a minimum of ten years after the project completion date, except that records of individual tenant income verifications, project rents and project inspections shall be retained for the most recent ten-year period until ten years after the affordability period terminates, or until the conclusion or resolution of any and all audits or litigation relevant to the HOME Loan, whichever is later. The City, HUD and the Controller General of the United States, and any of their representatives, shall have the right of access to any pertinent books, documents, papers or other records of the Developer, in order to make audits, examinations, excerpts and transcripts. i. Developer shall retain at all times the documentation submitted pursuant to 24 CFR 92.203(a)(1), which provided the basis for determining income eligibility. 7.15 Labor Standards (Davis-Bacon) If required by applicable Governmental Regulations, any contract for the work of Developer in connection with the Project shall contain a Prevailing Wage Clause requiring that not less than the wages prevailing in the locality, as predetermined by the Secretary of the United States Department of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 276a-5), will be paid to all laborers and mechanics employed in the construction of the Project, and such contract(s) shall also be subject to the overtime provisions, as applicable, of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-332). Participating contractors, subcontractors, and other participants must comply with regulations issued under these Acts and with other federal laws and regulations pertaining to labor standards and HUD Handbook 1344.1 (Federal Labor Standards Compliance in Housing and Community Development Programs), as applicable. The Developer shall supply to City a certification, in form and substance satisfactory to HUD and the City Manager, as to compliance with the provisions.of this section before receiving any disbursement of HOME Loan funds. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 34 Developer shall comply with the provisions of 24 CFR 24 relating to the employment, engagement of services, awarding of contracts, or funding of any contractor or subcontractor during any period of debarment, suspension, or placement in ineligibility status. 7.16 Use of Debarred, Suspended, or Ineligible Participants Developer shall comply with the provisions of 24 CFR 24 relating to the employment, engagement of services, awarding of contracts, or funding of any contractor or subcontractor during any period of debarment, suspension, or placement in ineligibility status. 7.17 Maintenance of Drug-Free Workplace Developer shall comply with the provisions of 24 CFR 24 relating to the employment, engagement of services, awarding of contracts, or funding of any contractor or subcontractor during any period of debarment, suspension, or placement in ineligibility status. 7.18 Other Program Requirements Developer shall carry out each activity in compliance with all federal laws and regulations described in subpart H of 24 CFR 92, except that Developer does not assume City's responsibilities for environmental review in 24 CFR 92.352 or the intergovernmental review process in 24 CFR 92.359. Developer shall comply with all applicable federal requirements set forth in Subpart H of the HOME regulations, including the following: (1) Other Federal Requirements and Nondiscrimination. 24 CFR 92. (2) 92.350. Developer acknowledges that 24 CFR 92.350 provides that the Federal requirements set forth in 24 CFR Part 5, subpart A, are applicable to participants in the HOME Program, and that these Federal requirements include the following: (3) Nondiscrimination and Equal Opportunity. (4) Civil Rights, Fair Housing, and Age and Disability Discrimination Acts Assurances: Developer assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, national origin, sex, age, handicap, religion, or religious preference, under any program or activity funded by this Agreement, as required by the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR part 100 et seq.; Executive Order 11063, as amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing Programs) and implementing regulations at 24 CFR part 107; title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-4) (Nondiscrimination in Federally Assisted Programs) and implementing regulations at 24 CFR part 1; the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and implementing regulations at 24 CFR part 146; section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8; Title VI of the Civil Rights Act of 1964, the Fair OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 35 Housing Act(42. U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations. (5) Training, Employment, and Contracting Opportunities Assurance of Compliance: The Project activities to be performed under this Agreement are assisted under a program providing direct federal financial assistance from HUD which is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u("Section 3"), and the regulations issued by HUD to implement Section 3 (24 CFR Part 135) (the "Section 3 Regulations"). Pursuant to 24 CFR 135.3, the requirements of the Section 3 Regulations apply to the recipient of such financial assistance only where the amount of federal assistance exceeds $200,000, and apply to a contractor or subcontractor of such recipient only where the amount of assistance exceeds $200,000 and the amount of the contract or subcontract exceeds $100,000. Developer shall provide, to the greatest extent feasible, training, employment and contracting opportunities generated by the financial assistance to low- and very-low income persons and business concerns owned by low- or very-low income persons, or which employ low- or very-low income persons. (6) MBE/WBE Affirmative Action Outreach Program Developer hereby agrees to comply with the City's minority and women business outreach program in accordance with Executive Order 11625, as amended by Executive Order 12007 (3 CFR, 1971-1975 Comp., p. 616 and 3 CFR, 1977 Comp., p. 139) (Minority Business Enterprises); Executive Order 12432 (3 CFR, 1983 Comp., p. 198) (Minority Business Enterprise Development); and Executive Order 12138, as amended by Executive Order 12608 (3 CFR, 1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women's Business Enterprise). (7) Disclosure Requirements. The disclosure requirements and prohibitions of 31 USC 1352 and implementing regulations at 24 CFR Part 87; and the requirements for funding competitions established by the Housing and Urban Development Reform Act of 1989 (42 USC 3531 et. seq.). (8) Displacement, Relocation and Acquisition. 24 CFR 92.353. Developer shall cooperate with the City in connection with any project- specific relocation plan to be prepared by the City, and shall certify that, to the extent applicable, it will comply or has complied with the federal relocation, displacement and acquisition rules governing the HOME Program, which are contained in the Uniform Relocation Act, 49 CFR Part 24, and applicable program regulations. 24 CFR Section 92.353 requires that tenants who are displaced from housing units demolished or converted as a result of HOME-funded activities be provided with relocation assistance. 7.19 Requests for Disbursements of Funds Notwithstanding anything contained in this Agreement to the contrary, Developer may not request disbursements of funds under this Agreement until the funds are needed to OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 36 permanently finance Eligible Costs (as defined by the HOME Program). The amount of each request shall be limited to the amount needed. 7.20 Eligible Costs Developer shall use HOME Loan proceeds only to pay costs defined as "eligible costs" pursuant to 24 CFR 92.206. 7.21 Conflict of Interest Developer shall comply with any applicable conflict of interest provisions set forth at 24 CFR 570.611. (1) Interest of Employees, Officers and Officials. No employee, agent, consultant, officer or elected official or appointed official of the City, or employee, agent, consultant of officer of Developer, and no other public official of the City who exercises any functions or responsibilities with respect to the activities assisted with HOME funds or who are in a position to participate in a decision making process or gain inside information with regard to these activities, during their tenure and for one year thereafter, may obtain a financial interest or benefit from a HOME assisted activity or have an interest in any contract or subcontract, or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties. Developer shall incorporate, or cause to be incorporated, in all such contractors or subcontracts a provision prohibiting such interest pursuant to the purposes of this Section. Fulfillment of"sweat equity" obligations as defined in Section 8201 of the HOME regulations shall not be considered a violation of this prohibition. (2) Prohibition Against Occupying HOME-Assisted Units. No officer, employee, agent, official or consultant of Developer may occupy a HOME assisted Unit. (3) Consultant Activities. 24 CFR 92.358. No person providing consultant services in an employer-employee type relationship shall receive more than a reasonable rate of compensation for personal services paid for with HOME funds. In no event, however, shall such compensation exceed the limits in effect under the provisions of any applicable statute (e.g., annual HUD appropriations acts which have set the limit at the equivalent of the daily rate paid for Level IV of the Executive Schedule). Such services shall be evidenced by written agreements between the parties which detail the responsibilities, standards and compensation. Consultant services provided under an independent contractor relationship are not subject to the compensation limitation Level IV of the Executive Schedule. 7.22 Project Requirements In accordance with 24 CFR 92 Subpart F (92.250-92.258, 92.504(c)(3)(iii), Developer shall comply with all applicable requirements set forth in Subpart F of the HOME Regulations, as provided elsewhere in this Agreement and also including the following: Maximum Per-Unit Subsidy. 24 CFR 92.250. The amount of the HOME loan does not exceed the per unit dollar limits established by HUD pursuant to section 221(d)(3)(11) OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 37 of the National Housing Act, as implemented in regulations issued by HUD, 24 CFR 221.514(b)(1) and(c). 7.23 Other HOME Program Requirements Developer shall comply with all other applicable requirements of the HOME Program. 8. DEFAULTS, REMEDIES AND TERMINATION 8.1 Defaults; Notice of Cure; Cure Rights A. Subject to Force Majeure Delay, as such term is defined in this Agreement, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who fails or delays must immediately commence to cure, correct or remedy such failure or delay and will complete such cure, correction or remedy with reasonable diligence. B. The injured party will give written notice of default to the party in default, specifying the default. Failure or delay in giving such notice will not constitute a waiver of any default, nor will 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 will not operate as a waiver of any default or any such rights or remedies. Delays by either party in asserting any of its rights and remedies will not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. C. If a monetary event of default occurs, prior to exercising any remedies hereunder, the injured party will give the party in default written notice of such default. The party in default will have a period of fifteen (15) days after such notice is given within which to cure the default prior to exercise of remedies by the injured party. D. If a non-monetary event of default occurs, prior to exercising any remedies hereunder, the injured party will 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 will have such period to effect a cure prior to exercise of remedies by the injured 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 will have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the injured party. In no event will the injured party be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety (90) days after the first notice of default is given. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 38 8.2 Institution of Legal Actions Subject to the notice and cure provisions of Section 701 and the limited recourse provisions.of Section 709, 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 recover damages for any default, or to obtain any other remedy 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. 8.3 Applicable Law The internal laws of the State of California, without reference to the principles relating to conflicts of laws, will govern the interpretation and enforcement of this Agreement. 8.4 Acceptance of Service of Process A. In the event that any legal action is commenced by City against Developer, service of process on Developer will be made by personal service upon Developer (or upon an officer of Developer) and will be valid whether made within or without the State of California, or in such manner as may be provided by law. B. In the event that any legal action is commenced by Developer against the City, service of process on the City will be made by personal service upon the City Manager or the City Clerk or in such other manner as may be provided by law. 8.5 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 party of one or more of such rights or remedies will 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. 8.6 Specific Performance If either party defaults with regard to any of the provisions of this Agreement, subject to the notice and cure provisions of Section 8.1, the non-defaulting party, at its option, may, after such notice and opportunity to cure (but not before) commence an action for specific performance of the terms of this Agreement pertaining to such default. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 39 8.7 Termination Due to Failure of Financing Event Notwithstanding anything in this Agreement to the contrary, the City will have the right to terminate this Agreement, in its sole discretion and without further notice to Developer and without requirement of the expiration of any cure period, in the event that, subject to Force Majeure Delay, the Construction Financing Event fails to occur within the time specified in the Schedule of Performance (as such Schedule of Performance may be amended pursuant to the terms hereof). 8.8 Termination by Either PartX Prior to the Construction Financing Event, any party will have the right to terminate this Agreement in the event any other party is in default of any material term or provision of this Agreement, and, following notice, fails to cure such default within the time provided in Section 8.1. 8.9 Limited Recourse Obligations Each obligation of the Developer under this Agreement is a nonrecourse obligation of the Developer. Except as provided otherwise in this Agreement, Developer will have no personal liability for payment of Developer's obligations to the City. The sole recourse of the City will be the exercise of its rights against the Property and the improvements thereon and any related security for the HOME Loan. Provided, however, that the foregoing will not (a) constitute a waiver of any obligation evidenced by this Agreement; (b) prevent or in any way hinder the City from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, any remedy prescribed by law or in equity in case of default, other than repayment of the HOME Loan; or (c) relieve Developer of any of its obligations under any indemnity delivered by Developer to the City. The foregoing provisions of this paragraph are limited by the provision that in the event of the occurrence of a default, Developer and its successors and assigns will have personal liability hereunder for any deficiency judgment, but only if and to the extent Developer, its principals, shareholders, or its successors and assigns, received rentals, other revenues, or other payments or proceeds in respect of the mortgaged Property after the occurrence of such default, which rentals, other revenues, or other payments or proceeds have not been used for the payment of ordinary and reasonable operating expenses of the mortgaged Property, ordinary and reasonable capital improvements to the mortgaged Property, debt service, real estate taxes in respect of the mortgaged Property and basic management fees, but not incentive fees, payable to an entity or person unaffiliated with Developer in connection with the operation of the mortgaged Property, which are then due and payable. Notwithstanding the foregoing, the City may obtain a judgment or order (including, without limitation, an injunction) requiring any person to perform (or refrain from) specified acts other than repayment of the HOME Loan; may proceed against any Person whatsoever with respect to the enforcement of any guarantees, surety bonds, letters of credit, OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 40 reimbursement agreements or similar rights to payment or performance; and may recover directly from any Person: 1. any damages, costs and expenses incurred by City as a result of fraud or any criminal act or acts of Developer or any member, shareholder, officer, director, agent or employee of Developer; 2. any damages, costs and expenses incurred by City as a result of any misappropriation of funds provided for the Project, rents and revenues from the operation of the Project, or proceeds of insurance policies or condemnation proceeds by Developer or any member, partner, shareholder, officer, director or employee of Developer; 3. any and all amounts owing by Developer pursuant to Developer indemnification regarding Hazardous Substances; and 4. all court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. 8.10 Developer's Remedies Subject to any applicable cure periods and the right to notice provided for in this Agreement, upon a default or breach of this Agreement by City, Developer may bring an action for specific performance of this Agreement or any term or provision hereof, or, if prior to the Construction Financing Event, may terminate this Agreement. Developer may not sue for monetary damages and hereby fully and finally releases the City from any claims for monetary damages arising directly or indirectly from City's breach of its obligations under this Agreement. 8.11 Attorney's Fees Except as otherwise expressly provided in this Agreement, in the event that any action, suit or other proceeding is brought to enforce the obligations of any party under this Agreement, each party will bear its own costs and expenses of suit, including attorneys' fees expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 9. GENERAL PROVISIONS 9.1 Developer's Warranties Developer represents and warrants (1) that it has access to professional advice and support to the extent necessary to enable Developer to fully comply with the terms of this Agreement; (2) that it is duly organized, validly existing and in good standing under the laws of the State of California; that it has the full power and authority to undertake the Project and to execute this Agreement; (4) that the persons executing and delivering this Agreement are authorized to execute and deliver such documents on behalf of Developer; (5) except as disclosed to the City in writing, there are no actions or proceedings pending or, to the best of OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 41 the Developer's knowledge, threatened against the Developer before any court or administrative agency in any way connected with the Property or the Project which could adversely affect the Developer's ability to perform the activities contemplated hereunder; (6) neither this Agreement nor anything provided to be done hereunder violates or will violate any contract, agreement or installment to which the Developer is a party or which affects the Project or any part thereof, (7) the Developer is not in default in respect of any of its obligations or liabilities pertaining to this Agreement, nor is there any state of facts or circumstances or conditions or events which, after notice, lapse of time, or both, would constitute or result in any such default under this Agreement; and (8) the Developer has not entered into any agreements which will adversely affect the title to the Project or the Developer's right to develop and use the Project as provided in this Agreement, and the Developer will not enter into any such agreements after the date hereof. 9.2 Notices, Demands, and Communications Between the Parties Formal notices, demands, and- communications between City and Developer will be sufficiently given if. (i) personally delivered; (ii) delivered by same day or overnight courier (acknowledged by receipt showing date and time of delivery); or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the address for the City and Developer set forth in -Section 2.2 and Section 2.3, respectively. Notices personally delivered or delivered by courier will be effective upon receipt or refusal to accept delivery. Mailed notices will be effective on the earlier of (i) receipt of refusal to accept delivery, or (ii) noon on the second business day following deposit in the United States mail. 9.3 Conflicts of Interest No member, official, or employee of City will have any personal interest in this Agreement, nor participate in any decision relating to this Agreement, that is in violation of any applicable law, regulation or ordinance. 9.4 Titles and Captions Titles and captions are for convenience only and will not be construed to limit or extend the meaning of this Agreement. 9.5 Gender As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number will each be deemed to include the others wherever and whenever the context so dictates. 9.6 Modifications Any amendment, alteration, change, or modification of or to this Agreement, in order to become effective, will be made by written instrument or endorsement thereon and in OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 42 each such instance executed on behalf of each party hereto. The City Manager or designee is authorized to approve revisions to this Agreement and the attachments hereto, subject to the approval of City's legal counsel, to the extent that such revisions: (a) are required to conform this Agreement and the attachments hereto to HOME Regulations; (b) do not materially adversely affect the economic feasibility of the Project; (c) do not impose a material additional burden on the City; and (d) do not substantially reduce any benefit to the City or the community. 9.7 Merger of Prior Agreements and Understandings This Agreement and all documents incorporated herein contain the entire understanding among the parties hereto relating to the transactions contemplated herein and all prior or contemporaneous agreements, understandings, representations, and statements, oral or written. 9.8 No Third Parties Benefited This Agreement will create no third-party beneficiary rights or any other rights in favor of any persons, firms or corporations, except as may be expressly stated in this Agreement. This Agreement is for the sole use and benefit of the parties hereto and is not for the use or benefit of any other person or entity. 9.9 Assurances to Act in Good Faith Developer and City agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and will use their respective good faith efforts to accomplish the acquisition and construction of the Property in accordance with the provisions hereof. 9.10 Warranty gainst Payment of Consideration for Agreement;No Real Estate Commissions Developer warrants that it has not paid or given, and will not pay or give, any person any money or other consideration for obtaining this Agreement that is in violation of any law. Neither the City nor the Developer will be liable for any real estate commissions, brokerage fees or finder's fees which may arise from this transaction. The Developer and the City each represent to the other that it has employed no broker, agent, or finder in connection with this transaction. Developer and City will each indemnify, defend, or hold harmless the other from any claims or damages for payment of any real estate commissions or broker's fees or finder's fees arising out of the acts or representations of the other with respect to any of the transactions contemplated by this Agreement. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 43 9.11 Nonliabilit of f City Officials and Employees No member, official, or employee of the City will be personally liable to the Developer or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Developer or this Agreement. 9.12 Interpretation The terms of this Agreement will be construed in accordance with the meaning of the language used and will not be construed for or against any party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 9.13 Counterparts This Agreement may be executed in two or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. 9.14 Severability Wherever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law. If, however, any provision of this Agreement will be prohibited by or invalid under applicable law, such provision will be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 9.15 Extension of Times of Performance A. Notwithstanding the foregoing, in addition to the specific provisions of this Agreement, performance by any party hereunder will not be deemed to be in default during an event of Force Majeure. An extension of time for an event of Force Majeure will be limited to the period of such event, and will commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause. In the event of such delay, the party delayed will continue to exercise reasonable diligence to minimize the period of delay. B. Times of performance under this Agreement may also be extended by mutual written agreement by City and Developer. In addition, the City Manager will have the authority on behalf of City to approve extensions of time not to exceed a cumulative total of one (1) year. 9.16 Inspection of Books and Records The City or its designee will have the right at all reasonable times to inspect the books, records and/or documents of the Developer pertaining to the Property and/or the Project as pertinent to the purposes of this Agreement. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 44 9.17 Waivers The waiver by City or Developer of any term, covenant, or condition herein contained will not be a waiver of such term, covenant, Or condition on any subsequent breach. 10. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE This Agreement and the attachments hereto, which are incorporated by this reference, constitute the entire understanding and agreement of the parties. This Agreement does not take effect until executed by the Developer and City. This Agreement, when executed by the Developer and delivered to the City, must be authorized, executed and delivered by the City within thirty (30) days after the date of signature by the Developer, or this Agreement may be terminated by the Developer on written notice to the City. The City Manager is hereby authorized and directed to take such other and further actions, and sign such other and further agreements and documents on behalf of the City as may be necessary or proper to effect the terms of this Agreement. [SIGNATURES APPEAR ON FOLLOWING PAGE] OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 45 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date. "DEVELOPER" "CITY" ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH, HOUSING CORPORATION, a municipal corporation of the State of a California nonprofit public benefit corporation California By: By: NORA MENDEZ Mayor Its Executive Director ATTEST: By: City Clerk APPROVED AS TO FORM: By: City Attorney DJ(PCOUNTERPART 1 a\col tw INITIATED AND APPROVED: By: Assistant City Manager REVIEWED AND APPROVED:.. By: City Manager EFFECTIVE DATE: OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 46 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date. "DEVELOPER" "CITY" ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON BEACH, HOUSING CORPORATION, a municipal corporation of the State of a California nonprofit public benefit corporation California 1 L By: By: NORA MENDEZ yor Its Executive Director ATTEST: Y City Clerk APPROVED AST . COUNTERPART ZIRO orney D10 10lkG 4 ^,v ty Manager REVIEW APPROVED: By: City Manager EFFECTIVE DATE: OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT 16-5414/145020/DO PAGE 46 EXHIBIT 1 LEGAL DESCRIPTION 16-5414/145020/1)0 EXHIBIT 1 LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 1 —LEGAL DESCRIPTION PAGE 1 EXHIBIT 2 SITE MAP 16-5414/145020/DO EXHIBIT 3 SCOPE OF WORK 16-5414/145020/DO EXHIBIT 3 Scope of Work 7792 Barton Drive, Huntington Beach, CA 92647 Rehabilitation Project Description Work Specification 1. Landscaping Remove all landscaping abutting structure, remove any shrubs that are too close to structure, replace damage sprinklers 2. Exterior Provide required correction to prevent water intrusion to subfloor area. Secure all vents and access openings. 3. Exterior Stucco Provide and install foam E.F.I.S. detail and stucco around windows times 24-allowance 4. Exterior Scaffolding Provide scaffolding for removal of stucco 5. Roof Repairs Provide and install new fascia boards, Reroof- complete building and carports 6. Exterior Paint Paint all exterior including carport 7. Stairs Remove rotted posts ad stair treads and replace to repair stairs. Provide and install missing pickets in handrails and fencing. Provide and install metal mesh along handrails and stairs to meet ADA 8. Laundry Room Patch and repair drywall as needed, paint walls and ceiling, replace base board and floor, replace window, install new water heaters and re-plumb 9. Carport Driveway Saw cut and remove existing asphalt and replace 10. Electrical Repairs Correct wiring issues in each unit, provide and install GFI outlets as required, repair faulty toggle switches and duplex outlets. Replace face plates as needed. Replace lights as needed. 11. Electrical Repairs Replace exterior lighting with energy efficient lighting. 12. Permit Allowance Provide permits for all required trades. 13. Abatement Funds to cover abatement issues regarding lead, Contingency asbestos or mold. 14. Kitchen (4 units) Provide and install new drywall resurface ready for paint. Paint all walls and ceilings, Provide and OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 3-SCOPE OF WORK PAGE I install new cabinets, countertops, stove and sink and garbage disposal, smoke detector. Provide new baseboard and install new flooring. 15. Living Room (4 units) Provide and install new drywall resurface ready for paint. Paint all walls and ceiling. Provide new baseboard, install new flooring, window treatment, replace front door and locks. Replace wall heater and install gas shut off. 16. Hallway (4 units) Resurface walls and ceilings and paint all walls, ceilings and doors. provide and replace flooring and base, install smoke detector, remove pad locks and install new closet handle. 17. Hallway Bathroom (4 Provide and install damage drywall, replace ceiling, units) install bathroom lights with exhaust fans. Remove and replace bathtub, bath walls, shower door, shower head and valves. Install new sink, faucet, vanity, medicine cabinet and decorative mirror. New door and hardware. Replace base, flooring and paint all walls and ceiling. 18. Bedroom 1 (4 units) Install new carpet, new base, remove texture from ceiling, resurface drywall, paint all walls and ceiling, install new window treatment, closet doors-slider, install doors and replace hardware. 19. Master Bathroom (4 Remove and replace damage drywall, remove and units) replace ceiling, shower walls, shower door, shower head and valves, exhaust fan, lights, medicine cabinet. Install new toilet, pedestal sink, faucet valves, connector trap and drain. New door and hardware, install flooring and base, paint all walls and ceiling. 20. Bedroom 2 (4 units) Install new carpet, new base, resurface drywall, paint all walls and ceiling, install new window treatment, closet doors-slider, install new doors and replace hardware. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 3-SCOPE OF WORK PAGE 2 EXHIBIT 4 PROJECT BUDGET 16-5414/145020/DO EXHIBIT 4 Project Budget 7792 Barton Drive Kitchen Provide and install new drywall resurface ready for paint $ 250.00 Paint walls and ceiling $ 400.00 Provide and install new cabinets $ 1,370.00 Provide and install new countertops $ 1,160.00 Provide and install new exhaust hood $ 350.00 Provide and install new light $ 100.00 Provide and install new sink,plumbing to make up $ 650.00 Garbage disposal $ 200.00 replace f oor $ 600.00 Provide and install new base and paint $ 200.00 Living Rm Paint walls and ceiling $ 400.00 Provide and install new carpet $ 700.00 Provide and install new drywall resurface ready for paint $ I50.00 Provide and install new window treatment $ 200.00 Clean Upfront Entry Door and Frame $ 75.00 Replace wall heater and install gas shut off $ 1,200.00 Provide and install new base and paint $ 200.00 Hallway Provide resurface of walls and ceiling ready to paint $ 100.00 Paint wall, ceilings and doors $ 2.50.00 Clean up existing Doors and Frames $ 50.00 replace f oor $ 200.00 Remove pad locks and install new closet handle $ 35.00 Paint walls and ceiling $ I50.00 Provide and install new base and paint $ 200.00 Bedroom 1 Remove texture from ceilings $ 50.00 Provide and install new carpet $ 600.00 Provide and install new drywall resurface ready for paint $ 125.00 Provide and install new window treatment- $ I50.00 Clean Upfront Door and Frame $ 50.00 Install new door handle—no lock $ 85.00 Install closet doors-slider $ 200.00 Paint walls and ceiling and door $ 500.00 OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 4- PROJECT BUDGET PAGE 1 Provide and install new base and paint $ 200.00 Remove and replace ceiling and around tub drywall $ 3,400.00 Provide and install new exhaust fan $ 250.00 Provide and install (1) new electrical outlet and plate $ 65.00 Remove and replace bath tub with new faucet $ 200.00 Provide and install new light $ 150.00 Provide and install new paint $ 500.00 Remove old the and replace with New fiberglass bath walls $ 300.00 Provide and install new bathtub doors $ 300.00 Provide and install new toilet with new water stop $ 350.00 Provide and install new cabinet and countertop $ 1,000.00 Provide and install new sink and faucet $ 400.00 Install new door handle with passage lock $ 90.00 Provide and install new base and paint $ 200.00 Muster Remove and replace ceiling and around shower install drywall $ 3,000.00 Provide and install new exhaust fan $ 250.00 Provide and install new light $ 150.00 Patch and paint bathroom walls $ 300.00 Remove old tile and replace with New fiberglass shower walls $ 300.00 Provide and install new shower doors $ 300.00 replace shower head and valves $ 600.00 Provide and install new toilet with new water stop $ 350.00 $ 500.00 Install new door handle with passage lock $ 90.00 Provide and install new floring and base board $ 300.00 Bedroom 2 Remove and resurface of walls and ceiling ready to paint $ 75.00 Paint walls and ceiling and door $ 500.00 Provide and install new carpet $ 600.00 Provide and install new window treatment- $ 150.00 Clean Up front Door and Frame $ 50.00 Install new door handle-no lock $ 90.00 Install closet doors $ 200.00 Provide and install new base and paint $ 200.00 0 a� i o-�' P" k ¢mNPI r I( o { IIi� .a'CN�ui� "�` .ti�iiiMai� i��Fi ' jOt'a7G�7"Tn1"'�G`OS,.aIl .� .„? @/• 1 Exterior lReroof-complete building and carports $ 15,000.00 OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.4- PROJECT BUDGET PAGE Provide and install new fascia boards Included in roof Provide and install foam E.FI.S. detail and stucco around windows $ 24,000.00 times 24-allowance Provide and install missing pickets in handrails and fencing $ 1,050.00 $ 1,000.00 Provide and replace wood 7 steps $ 700.00 Paint exterior $ 3,080.00 patch drywall wall as needed,paint walls and ceiling, replace base $ I,500.00 boardoor'n Provide and install new water heaters times 2and re-plumb $ 2,000.00 Menerai replace carport driveway $ 8,000.00 Landscaping $ 3,000.00 Pull permits- electrical,plumbing, drywall, roof $ 500.00 Permit fees-allowance $ 1,000.00 Dumpster and final clean up $ 5,000.00 Lead abatement $ 6,000.00 scaffolding $ 12,000.00 f _ F 7 al Exertor cost $�'I_ il _ & 830. (7 Interior 4 units $ 105,440.00 Exterior $ 83,830.00 Contractor overhead & profit 15% $ 28,390.00 Tenant relocation $20,000.00 contingency $12,340.00 Project Total $ 250,000.00 OCCHC-7792 BARTON DRIVE AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 4- PROJECT BUDGET PAGE EXHIBIT 5 SCHEDULE OF PERFORMANCE 16-5414-145020/DO EXHIBIT 5 SCHEDULE OF PERFORMANCE Action Item Time of Performance Reference 1. Submittal— Evidence of Insurance. At least 30 days prior to Section of the Developer shall submit to the City for closing Agreement approval the evidence of insurance 2. Submittal—Final Construction Drawings At least 5 days prior to Section of the and Specifications. If necessary for City closing Agreement permitting of the Project, Developer shall prepare and submit to the City for approval the Final Construction Drawings and Specifications 3. Submittal—Management Plan. Developer At least 5 days prior to Section_of the shall submit to the City for approval the closing. Agreement and Section proposed Management Plan. _of HOME Regulatory Agreement. 4. Submittal—Annual Project Budget. At least 5 days prior to Section_of the Developer shall submit to the City for closing. Agreement and Section approval the proposed Annual Project _of HOME Regulatory Budget for the first year of operation. Agreement. 5. Submittal— Maintenance Program. At least 5 days prior to Section_of the Developer shall submit to the City for closing. Agreement and Section approval the proposed Maintenance _of HOME Regulatory Program for the Project. Agreement. 6. Closing. All conditions precedent to the Not later than Section_of the Financing Event shall have been satisfied. Agreement. 7. Commencement of Construction. The Not later than fifteen (15 Section of the Developer shall commence rehabilitation of days after the Financing Agreement the Improvements on the Site. Event. 8. Completion of Construction. The Not later than_ Section of the Developer shall achieve Completion of months following Agreement. rehabilitation of the improvements on the commencement of Site in accordance with the Scope of Work construction. and approved plans. 16-5414/145020/DO OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 5—SCHEDULE OF PERFORMANCE PAGE 1 9. Submission—Tenant Lease. The Developer At least 30 days prior to Section_of HOME shall prepare and submit to the City for closing. Regulatory Agreement. approval the proposed tenant lease in the conformance with the HOME Regulatory Agreement. 10. Submission—Annual Reports. The Within 120 days after the Sections and Developer submits annual financial end of each calendar of HOME Regulatory statements and rent records/tenant year. Agreement eligibility certifications to the City. 11 RELOCATION RELATED 12 ACQUISITION RELATED NOTES: It is understood that this Scheduled of Performance is subject to all of the terms and conditions of the text of the Agreement. The summary of the items in this Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any conflict or inconsistency,between this Schedule of Performance and the text of the Agreement, the of the Agreement shall govern. The time periods set forth in this Schedule of Performance may be altered or amended only by written agreement signed by the Developer and the City. The City Manager shall have the authority, in his/her sole discretion to approve extension of times. 16-5414/145020/DO OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 5—SCHEDULE OF PERFORMANCE PAGE 2 EXHIBIT 6 HOME PROMISSORY NOTE 16-5414-145020/DO RESIDUAL RECEIPTS PROMISSORY NOTE SECURED BY DEED OF TRUST TO THE CITY OF HUNTINGTON BEACH, CALIFORNIA (HOME PROGRAM) DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust securing same (if the Restricted Period has expired), must be surrendered to Trustee for cancellation before reconveyance or partial reconveyance will be made. 3% Interest Huntington Beach $781,220 Hay 7-Z , 2016 FOR VALUE RECEIVED, ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public health corporation (`Borrower"), hereby promises to pay to THE CITY OF HUNTINGTON BEACH ("City"), a municipal corporation of the State of California, or order, a principal amount of Seven Hundred Eighty-one Thousand, Two Hundred Twenty and No/100 Dollars ($781,220.00), or so much thereof as may be advanced by the City to the Borrower as the HOME Loan pursuant to the Affordable Housing Agreement dated as of October, 2016 (the "HOME Housing Agreement") between Borrower ("Developer" therein) and the City, incorporated herein by this reference. The HOME Housing Agreement is a public record on file in the offices of the City. The Borrower will pay interest at the rate, in the amount and at the time hereinafter provided. 1. Definitions. Any capitalized term not otherwise defined herein will have the meaning ascribed to such term in the HOME Housing Agreement. "Annual Operating Expenses," with respect to each calendar year means the costs reasonably and actually incurred for operation and maintenance of the Project, which may include, without limitation, the following, to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles: property and other taxes and assessments imposed on the Project; premiums for property damage and liability insurance; utility services not paid for directly or reimbursed by tenants, including but not limited to water, sewer, trash collection, gas and electricity; maintenance and repair including but not limited to pest control, landscaping and grounds maintenance, painting and decorating, cleaning, common systems repairs, general repairs, janitorial, supplies, and similar customary utility services; any license or certificate of occupancy fees required for operation of the Project; general administrative expenses including but not limited to advertising and marketing, security services and systems, professional fees for legal, audit, accounting and tax returns, and similar customary administrative expenses; property management fees, expenses and costs, not exceed $55 per unit per month in the first year with annual increases not to exceed three percent (3%) thereafter, and pursuant to a management contract approved by the City; cash deposited into a replacement OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 6—HOME PROMISSORY NOTE Page 1 l 6-5414/145128/DO reserve in the amount of$750 per unit per year, subject to annual increases not to exceed three percent (3%); cash deposited into an operating reserve in such reasonable amounts as are required by the City from time to time; and, fixed debt service payments (excluding debt service contingent upon the availability of residual receipts or surplus cash of the Project) on loans associated with the Project and approved by the City. "Annual Operating Expenses" will not include the following: depreciation, amortization, depletion or other non-cash expenses or any amount expended from a reserve account. Annual Operating Expenses will be subject to the reasonable approval of the City. "Gross Revenue," with respect to each calendar year, means all revenue income, receipts, and other consideration actually received from operation or leasing of the Project. "Gross Revenue" will include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project; and condemnation awards for a taking of part or all of the Project for a temporary period. "Gross Revenue" will also include the fair market value of any goods or services provided in consideration for the leasing or other use of any portion of the Project, except that the value of services provided by on-site manager(s) will not be treated as "Gross Revenue" if no more than one dwelling unit is leased to or otherwise used by on-site manager(s). "Gross Revenue" will not include tenants' security deposits, proceeds from the HOME Loan or other borrowed funds, Owner Equity, including capital contributions or similar advances, or interest that is earned on and allocated to reserve accounts. "HOME Loan Documents" means the HOME Housing Agreement, this HOME Promissory Note, the HOME Deed of Trust, the HOME Regulatory Agreement, the Environmental Indemnity, the Assignment of Rents and Leases, and the Assignment of Agreements. "Net Proceeds" means the amount, if any, by which a refinancing exceeds the amount needed to repay a Senior Loan, in full, including principal and interest, any early redemption or prepayment penalty, and customary and reasonable fees and costs of the transaction. "Residual Receipts" means, in each calendar year, the amount by which Gross Revenue (as defined below) exceeds Annual Operating Expenses (as defined below), as determined by an audit to be completed not later than ninety (90) days after the end of each calendar year by an independent certified public accountant first approved in writing by the City, using generally accepted accounting principles and based on the accrual method (the "Audit"). OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 6—HOME PROMISSORY NOTE Page 2 1 6-54 14/145 128/DO 2. This HOME Promissory Note evidences the obligation of the Borrower to the City for the repayment of the HOME Loan. Borrower may prepay the principal balance of this HOME Promissory Note at any time without penalty. However, even if Borrower prepays the entire balance of this HOME Promissory Note including all accrued interest, costs and penalties, the covenants, conditions and restrictions imposed on the Site by the HOME Regulatory Agreement will remain in full force and effect for the full 15-year term as specified therein. 3. This HOME Promissory Note is payable at the principal office of City, 2000 Main Street, Huntington Beach, California 92648, or at such other place as the holder hereof may inform the Borrower in writing, in lawful money of the United States. 4. This HOME Promissory Note is secured by the HOME Deed of Trust. 5. This HOME Promissory Note will, accrue simple interest at the rate of three percent (3%) per annum on the principal amount outstanding, from the date of disbursement. Interest under this HOME Promissory Note will be computed on the basis of a year of 365 days and the actual number of days elapsed. However, if any event occurs giving the City the right to accelerate repayment of this HOME Promissory Note, the entire unpaid principal balance,owing hereunder will, as of the date of such default, commence to accrue interest at a rate equal to two percentage points above the reference rate published by Bank of America N.A., or the maximum non-usurious interest rate permitted by law, whichever is less (the "Default Rate"). Further, in the event Borrower fails to reimburse the City for any amount advanced by or for the account of the City which is due hereunder or under the HOME Deed of Trust within ten (10) days after written notice of such advance is made by the City to Borrower, then such unreimbursed amount will thereafter bear interest at the Default Rate until paid. 6. If the Borrower is in compliance with the terms of the HOME Loan Documents on the earlier to occur of. (a) k 1 A ; or (b) the fifteenth (15t') anniversary of the date of Completion of the Project, (which will be referred to herein as the "Maturity Date"), the principal and accrued interest shall be deemed paid by the Developer's compliance and no further funds shall be due from the Borrower under this HOME Promissory Note. Notwithstanding the foregoing, all principal and accrued interest on the Loan shall be due and payable on the occurrence of either of the following events: (a) the date the Property or the improvements thereon or any portion thereof or interest therein is sold, transferred, assigned or refinanced, without the prior written approval of the City, except as permitted by the provisions of the HOME Housing Agreement; or (b) the date on which there is a Default by the Borrower under the terms of this HOME Promissory Note, the Housing Agreement, the HOME Deed of Trust, the HOME Regulatory Agreement, the Environmental Indemnity, or any deed of OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 6—HOME PROMISSORY NOTE Page 3 16-5414/145128/DO trust or other instrument securing a Senior Loan, which is not cured or waived within the respective time period provided herein and therein. 7. Prior to the Maturity Date, Borrower will be obligated to repay the HOME Loan as follows: (a) Borrower must utilize twenty percent (20%) of Residual Receipts with respect to each calendar year to repay the HOME Loan. Payments due hereunder must be made no later than one hundred twenty (120) days following the end of the applicable calendar year. (b) In the event Borrower refinances a Senior Loan at any time prior to the Maturity Date, twenty percent (20%) of the Net Proceeds must be allocated and paid to the City to reduce the HOME Loan. (c) All payments to the City will be applied first to the payment of all expenses, charges, costs and fees incurred by or payable to City by Borrower pursuant to the terms of the HOME Loan Documents (in such order and manner as City, in its sole discretion, may elect), then to the payment of all interest accrued to the date of such payment, and then to reduce the principal amount owed. All prepayment of principal on this HOME Promissory Note will be applied to the most remote principal installment or installments until paid. Notwithstanding anything to the contrary contained herein, after the occurrence and during the continuation of an uncured default under the HOME Deed of Trust, all amounts received by the City from any party will be applied in such order as the City, in its sole discretion, may elect. 8. Any breach by Borrower of the provisions of Section 204 (entitled "Prohibition Against Transfers; Right of First Refusal") of the HOME Housing Agreement, unless otherwise permitted by the terms thereof, will constitute a default under this HOME Promissory Note. The cure periods under the HOME Housing Agreement and this HOME Promissory Note in connection with such a default will run concurrently. 9. Borrower waives presentment for payment, demand, protest, and notices of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. Borrower hereby agrees to pay all costs and expenses, including reasonable attorney's fees, which may be incurred by the holder hereof, in the enforcement of this HOME Promissory Note, the HOME Deed of Trust or any term or provision of either. OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 6—HOME PROMISSORY NOTE Page 4 16-5414/145128/DO 10. Upon the failure of Borrower to perform or observe any term or provision of this HOME Promissory Note, or upon the occurrence of any event of default after the expiration of any applicable notice and cure periods under the terms of any of the other HOME Loan Documents, the holder may exercise its rights or remedies hereunder,or thereunder. All such rights and remedies will be cumulative. Upon the event of a default that is not cured or waived within the time provided therefore, the whole of the unpaid principal and interest owing on this HOME Promissory Note will, at the option of City and without notice, become immediately due and payable. This option may be exercised at any time after any such event and the acceptance of one or more payments from any person thereafter will not constitute a waiver of City's option. City's failure to exercise said option in connection with any particular event or series of events will not be construed as a waiver of the provisions hereof as regards that event or any subsequent event. 11. (a) Subject to the extensions of time set forth in Section 12, and, subject to the further provisions of this Section 11, failure or delay by Borrower to perform any material term or provision of the HOME Loan Documents constitutes a default under this HOME Promissory Note. (b) City will give written notice of default to Borrower, specifying the default complained of by the City. Delay in giving such notice will not constitute a waiver of any default nor will it change the time of default. (c) Any failures or delays by City in asserting any.of its rights and remedies as to any default will not operate as a waiver of any default or of any such rights or remedies. Delays by City in asserting any of its rights and remedies will not deprive City 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. (d) If a monetary event of default occurs, prior to exercising any remedies hereunder, the City will give the Borrower written notice of such a default. The Borrower will have a period of fifteen (15) days after such notice is given within which to cure the default prior to exercise of remedies by the City. (e) If a non-monetary event of default occurs, prior to exercising any, remedies hereunder, the injured party will 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 will have such period to effect a cure prior to exercise of remedies by the injured 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 will have such additional time as is reasonably necessary to cure the OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 6—HOME PROMISSORY NOTE Page 5 16-5414/145128/DO default prior to exercise of any remedies by the injured party. In no event will the injured party be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety (90) days after the first notice of default is given. (f) Any notice of default will be deemed given only if either (i) dispatched by first class mail, registered or certified, postage prepaid, return receipt requested, to the address specified for the Borrower in Section 16 of this HOME Promissory Note, followed by delivery by the method described in clause (i), or (iii) by personal delivery (including by means of professional messenger or courier service such as United Parcel Service or Federal Express) to the address specified for the Borrower in Section 16 of this HOME Promissory Note. Receipt will be deemed to have occurred on the earlier of (i) the date of successfully completed electronic facsimile transmission or (ii) the date marked on a written postal service or messenger or courier service receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable). If either party gives notice of a change of address in the manner specified in this paragraph, all notices, demands and communications originated after receipt of the change of address (or the effective date specified in the notice of change of address, if later) will be transmitted, delivered or sent to the new address. 12. Notwithstanding specific provisions of this HOME Promissory Note, non- monetary performance hereunder will not be deemed to be in default where delays are due to causes beyond the control and without the fault of the party claiming an extension of time to perform (a "Force Majeure Delay"), provided that they actually delay and interfere with the timely performance of the matter to which they would apply and despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such interference, including 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 including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any Governmental agency (except acts or failure to act of the City will not excuse performance by the City); the imposition of any applicable moratorium by a Governmental Agency; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events will constitute Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay will deliver such written notice within ten (10) business days after it obtains actual knowledge of the event. OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 6—HOME PROMISSORY NOTE Page 6 16-5414/145128/DO 13. If the rights created by this HOME Promissory Note will be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the remaining obligations must be completely performed and paid. 14. [Intentionally Omitted.] 15. (a) The obligation to repay the HOME Loan is a nonrecourse obligation of the Borrower. Except as provided otherwise in this Note, Borrower will have no personal liability for payment of the HOME Loan. The sole recourse of the City will be the exercise of its rights against the Property and the improvements thereon and any related security for the HOME Loan. Provided, however, that the foregoing will not (a) constitute a waiver of any obligation evidenced by this HOME Promissory Note; (b) prevent or in any way hinder the City from exercising, or constitute a defense, an affirmative defense,.a counterclaim, or other basis for relief in respect of the exercise of, any remedy prescribed by law or in equity in case of default, other than repayment of the HOME Loan; or (c) relieve Borrower of any of its obligations under any indemnity delivered by Borrower to the City. The foregoing provisions of this paragraph are limited by the provision that in the event of the occurrence of a default, Borrower and its successors and assigns will have personal liability hereunder for any deficiency judgment, but only if and to the extent Borrower, its principals, shareholders, or its successors and assigns, received rentals, other revenues, or other payments or proceeds in respect of the mortgaged Property after the occurrence of such default, which rentals, other revenues, or other expenses of the mortgaged Property, ordinary and reasonable capital improvements to the mortgaged Property, debt service, real estate taxes in respect of the mortgaged Property and basic management fees, but not incentive fees, payable to an entity or person unaffiliated with Borrower in connection with the operation of the mortgaged Property, which are then due and payable. (b) Notwithstanding the foregoing, the City may obtain a judgment or order (including, without limitation, an injunction) requiring any Person to perform (or refrain from) specified acts other than repayment of the HOME Loan; may proceed against any Person whatsoever with respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement agreements or similar rights to payment or performance; and may recover directly from any Person: (i) any damages, costs and expenses incurred by City as a result of fraud or any criminal act or acts of Borrower or any member, shareholder, officer, director, agent or employee of Borrower; (ii) any damages, costs and expenses incurred by City as a result of any misappropriation of funds provided for the Project, rents and revenues from the operation of the Project, or proceeds of insurance policies or condemnation proceeds by Borrower or any member, partner, shareholder, officer, director or employee of Borrower; OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 6—HOME PROMISSORY NOTE Page 7 16-5414/145128/DO (iii) any and all amounts owing by Borrower pursuant to Borrower's indemnification regarding Hazardous Substances; and (iv) all court costs and attorney's fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. 16. The address of Borrower for purposes of receiving notices pursuant to this Note is as follows: Orange County Community Housing Corporation 501 Golden Circle, Suite 200 Santa Ana, CA 92705 Attention: Executive Director 17. In addition to the other terms of this HOME Promissory Note, the Borrower hereby agrees and acknowledges that notwithstanding any internal accounting procedures or provision pertaining to the use of receipts, payments, reserves and distributions contained in its governing documents, the terms of this Note and the HOME Housing Agreement will control as to the use of the City funds provided under the HOME Housing Agreement and all operating income from the Project. 18. Neither this HOME Promissory Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor will any waiver of any provision hereof be effective except by an instrument in writing signed by City and Borrower. 19. Notwithstanding any provision in this HOME Promissory Note, the HOME Deed of Trust or other document securing same, the total liability for payment in the nature of interest will not exceed the limit now imposed by applicable laws of the State of California. 20. This HOME Promissory Note has been executed and delivered by Borrower in the State of California and is to be governed and construed in accordance with the internal laws thereof. 21. Every provision of this HOME Promissory Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction to be illegal, invalid or unenforceable for any reason whatsoever, such illegality, invalidity or unenforceability will not affect the balance of the terms and provisions hereof, which terms and provisions will remain binding and enforceable, and this HOME Promissory Note will be construed as if such illegal, invalid or unenforceable term or provision had not been contained herein. 22. Time is of the essence in the performance of each provision hereof. OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 6—HOME PROMISSORY NOTE Page 8 16-5414/145128/DO IN WITNESS WHEREOF, Borrower has executed tis Note as of the day and year set forth above. "BORROWER" ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation By: Nora Mendez Its: Executive Director OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 6—HOME PROMISSORY NOTE Page 9 16-5414/145 128/DO EXHIBIT 7 HOME DEED OF TRUST 16-5414/145020/DO Recorded in Official Records, Orange County \ Hugh Nguyen, Clerk-Recorder idelky-She man Oaks IE 1E1 I IE�IE�1111111 P��111111 I I I NO FEE * $ R 0 0 0 8 8 6 4 6 3 5 $ 11 2016000587132 4:25 pm 11/18/16 FREE RECORDING REQUESTED BY 217 405 T07 180.00 0.00 0.00 0.00 51.00 0.00 0.00 0.00 AND WHEN RECORDED MAIL TO: THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager (Space Above This Line-for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code§27383) APN: 165-223-02 DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS) BY ORANGE COUNTY COMMUNITY HOUSING CORPORATION FOR THE BENEFIT OF THE CITY OF HUNTINGTON BEACH [HOME PROGRAM] This Deed of Trust,Security Agreement and Fixture Filing(With Assignment of Rents)is made this . ,,7-day of 1VOW , 2016 by ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation (hereinafter referred to as "Trustor") (whose address is 501 Golden Circle, Suite 200, Santa Ana, CA 92605, Attention: Executive Director),to Fidelity National Title Company,(hereinafter called"Trustee"),for the benefit of THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California (hereinafter called"Beneficiary"),whose address is 2000 Main Street,Huntington Beach,California 92648. Witnesseth: That Trustor IRREVOCABLY GRANTS,TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION all present and future right, title and interest of Trustor in and to the following property(the"Trust Estate"): (1) All of Trustor's rights,title and interest in and to that certain real property in the City of Huntington Beach, County of Orange, State of California more particularly described in Exhibit OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.7—HOME DEED OF TRUST PAGE 1 `i -1lk ®G ee m Oaks FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager (Space Above This Line for Recorder's Office Use Only) APN: 165-223-02 DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS) BY ORANGE COUNTY COMMUNITY HOUSING CORPORATION FOR THE BENEFIT OF THE CITY OF HUNTINGTON BEACH [HOME PROGRAM] This Deed of Trust, Security Agreement and Fixture Filing(With Assignment of Rents)is made this 7- day of l✓O1/ , 2016 by ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation (hereinafter referred to as "Trustor") (whose address is 501 Golden Circle, Suite 200, Santa Ana, CA 92605, Attention: Executive Director),to Fidelity National Title Company,(hereinafter called"Trustee"),for the benefit of THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California (hereinafter called`Beneficiary"),whose address is 2000 Main Street,Huntington Beach, California 92648. Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION all present and future right, title and interest of Trustor in and to the following property(the "Trust Estate"): (1) All of Trustor's rights,title and interest in and to that certain real property in the City of Huntington Beach, County of Orange, State of California more particularly described in Exhibit OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7—HOME DEED OF TRUST PAGE "A" attached hereto and by this reference made a part hereof(hereafter referred to as the "Subject Property"); (2) All buildings, structures and other improvements now or in the future located or to be constructed on the Subject Property(the "Improvements"); (3) all tenements, hereditaments, appurtenances, privileges, franchises and other rights and interests now or in the future benefiting or otherwise relating to the Subject Property or the Improvements, including easements, rights-of-way and development rights (the "Appurtenances"). (The Appurtenances,together with the Subject Property and the Improvements,are hereafter referred to as the"Real Property"); (4) subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise derived from the Trust Estate or the ownership, use, management, operation, leasing or occupancy of the Trust Estate, including those past due and unpaid (the"Rents'); (5) all inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform Commercial Code(the"UCC"),and whether existing now or in the future)now or in the future located at, upon or about, or affixed or attached to or installed in,the Real Property, or used or to be used in connection with or otherwise relating to the Real Property or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces,water tanks,heating ventilating and air conditioning equipment and all other types of tangible personal property of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and substitutions of or to any of such property, but not including personal property that is donated to Trustor(the"Goods," and together with the Real Property, the"Property"); and (6) all accounts, general intangibles, chattel paper, deposit accounts,money,instruments and documents (as those terms are defined in the UCC) and all other agreements,obligations, rights and written material (in each case whether existing now or in the future)now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing, occupancy, sale or financing of the property or any other part of the Trust Estate, including (to the extent applicable to the Property or any other portion of the Trust Estate) (1) permits, approvals and other governmental authorizations,(ii)improvement plans and specifications and architectural drawings, (iii) agreements with contractors, subcontractors, suppliers, project managers, supervisors, designers, architects,engineers,sales agents,leasing agents,consultants and OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7-HOME DEED OF TRUST PAGE 2 property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance payments and unearned insurance premiums, (vi) claims, demands, awards, settlements, and other payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage to,trespass on or taking, condemnation(or conveyance in lieu of condemnation)or public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale agreements and purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred payments,refunds,rebates, discounts, cost savings, escrow proceeds, sale proceeds and other rights to the payment of money, trade names, trademarks, goodwill and all other types on intangible personal property of any kind or nature, and (ix) all supplements, modifications, amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such property(the "Intangibles"). Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all present and future right,title and interest of Trustor in and to all Goods and Intangibles and all of the Trust Estate described above in which a security interest may be created under the UCC (collectively, the"Personal Property"). This HOME Deed of Trust constitutes a security agreement under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary. Trustee and Beneficiary will have, in addition to all rights and remedies provided herein, all the rights and remedies of a"secured party"under the UCC and other applicable California law. Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing under Sections 9502(c)and 9604 of the UCC. FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect, all of the following: (1) Due,prompt and complete observance,performance and discharge of each and every condition, obligation, covenant and agreement contained herein or contained in the following: (a) a promissory note in the original principal amount of$781,220.00, executed by Trustor (`Borrower" therein) of even date herewith (the "HOME Promissory Note"); (b) the HOME Affordable Housing Agreement dated as of October , 2016, by and between Trustor("Developer"therein) and Beneficiary("City"therein) (the "HOME Housing Agreement"); and (c) the HOME Regulatory Agreement and Declaration of Covenants and Restrictions dated on or about the date hereof, by and between Trustor OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7-HOME DEED OF TRUST PAGE 3 ("Developer"therein) and Beneficiary ("City" therein) and recorded concurrently herewith in the Official Records of the County Recorder of Orange County, California("HOME Regulatory Agreement"). (2) Payment of indebtedness of the Trustor to the Beneficiary in the principal sum of Seven Hundred Eighty One Thousand, Two Hundred Twenty and No/100's Dollars($781,220.00), or so much thereof as may be advanced by Beneficiary for the benefit of Trustor, evidenced by the HOME Promissory Note, with interest, according to the terms of the HOME Promissory Note. (3) Payment and performance of all future advances and other obligations that the then record owner of all or part of the Property may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when such future advance or obligation is evidenced by a writing which recites that it is secured by this HOME Deed of Trust. The HOME Housing Agreement, including all Attachments thereto, and the documents and instruments executed by Trustor in connection with the Project, including the HOME Regulatory Agreement, the HOME Promissory Note, the Assignment of Rents, and the Assignment of Agreements, all as described in the Housing Agreement (collectively referred to as the"Secured Obligations")and all of their terms are incorporated herein by reference and this conveyance will secure any and all extensions, amendments,modifications or renewals thereof however evidenced. Any capitalized term that is not otherwise defined in this HOME Deed of Trust will have the meaning ascribed to such term in the HOME Housing Agreement. AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: 1. That Trustor will pay the HOME Promissory Note at the time and in the manner provided therein, and perform the obligations of the Trustor as set forth in the Secured Obligations at the time and in the manner provided therein; 2. That Trustor will not permit or suffer the use of any of the Property for any purpose other than the uses permitted by the Secured Obligations; 3. That the Secured Obligations are incorporated in and made a part of this HOME Deed of Trust. Upon default of a Secured Obligation,and after the giving of notice and the expiration of any applicable cure period, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable; OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7-HOME DEED OF TRUST PAGE 4. That, subject to the prior rights,if any,of a lender whose lien is senior to this Deed of Trust ("Senior Lender"), all rents, profits and income from the Trust Estate are assigned to the Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration of any applicable cure period, to collect such rents, profits and income for use in accordance with the provisions of the Secured Obligations; 5. That upon default hereunder or under the aforementioned agreements, and after the giving of notice and the expiration of any applicable cure period, Beneficiary will be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the Trust Estate and operate same and collect the rents, profits and income therefrom; 6. That Trustor will keep the Improvements insured against loss by fire and such other hazards, casualties, and contingencies as may reasonably be required in writing from time to time by the Beneficiary, and all such insurance will be evidenced by standard fire and extended coverage insurance policy or policies. In no event will the amounts of coverage be less than 100 percent of the replacement value of the Property. Such policies will be endorsed with standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies of original policies will be deposited with the Beneficiary; 7. To pay, at least 10 days before delinquency, any taxes and assessments affecting the Property;to pay,when due, all encumbrances,charges and liens,with interest,on the Property or any part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of this Trust. Notwithstanding anything to the contrary contained in this Deed of Trust,Trustor will not be required to pay and discharge any such tax, assessment, charge or levy so long as Trustor is contesting the legality thereof in good faith and by appropriate proceedings,and Trustor has adequate funds to pay any liabilities contested pursuant to this Section 7; 8. To keep the Property in good condition and repair, subject to ordinary wear and tear, casualty and condemnation, not to remove or demolish any buildings thereon without the prior written consent of Beneficiary,not to be unreasonably withheld,conditioned or delayed;to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon(subject to Trustor's right to contest the validity or applicability of laws or regulations); not to commit or permit waste thereof; not to commit, suffer or permit any act upon the Property in violation of law and/or covenants, conditions and/or restrictions affecting the Property; not to permit or suffer any material alteration of or addition to the Improvements without the consent of the Beneficiary; OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7-HOME DEED OF TRUST PAGE 9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses,including cost of evidence of title and reasonable attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear; 10. Should Trustor fail to make any payment or do any act as herein provided, then Beneficiary or Trustee,but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof Following default, after the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee being authorized to enter upon said property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee;may pay, purchase,contest,or compromise any encumbrance,charge,or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay reasonable attorney fees. Notwithstanding the foregoing, in the event of default under this HOME Deed of Trust, the Beneficiary may also require Trustor to maintain and submit additional records. Beneficiary will specify in writing the particular records that must be maintained and the information or reports that must be submitted; 11. Beneficiary will have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by the Beneficiary will be added to the principal sum secured hereby; 12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this HOME Deed of Trust, with interest from date of expenditure at the rate specified in the HOME Promissory Note; 13. That the funds to be advanced hereunder are to be used in accordance with the Secured Obligations and upon the failure of Trustor to keep and perform all the covenants, conditions, and agreements of said agreements,the principal sum and all arrears of interest,and other charges provided for in the HOME Promissory Note will at the option of the Beneficiary of this HOME Deed of Trust become due and payable, anything contained herein to the contrary notwithstanding; 14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be created against the property subject to this HOME Deed of Trust any lien or liens except as permitted by the Secured Obligations or otherwise approved by Beneficiary, and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.7-HOME DEED OF TRUST PAGE which will enter into the construction of any and all buildings now being erected or to be erected on said premises. Notwithstanding anything to the contrary contained in this HOME Deed of Trust, Trustor will not be obligated to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting, provided that Trustor will, at Beneficiary's written request, within thirty(30) days after the filing of any claim or lien (but in any event, and without any requirement that Beneficiary must first provide a written request, prior to foreclosure) record in the Office of the Recorder of Orange County, a surety bond in an amount one-and-one-half(1 '/z) times the amount of such claim item to protect against a claim of lien, or provide such other security reasonably satisfactory to Beneficiary; 15. That any and all improvements made or about to be made upon the premises covered by the HOME Deed of Trust, and all plans and specifications, comply in all material respects with all applicable municipal ordinances and regulations and all other applicable regulations made or promulgated,now or hereafter,by lawful authority,and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office; and 16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of the Beneficiary a reasonable charge for providing a statement regarding the obligation secured by this HOME Deed of Trust as provided by Section 2954, Article 2, Chapter 2 Title 14, Division 3, of the California Civil Code. IT IS MUTUALLY AGREED THAT: 17. Should the Property or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, subject to the rights of any senior lender that has been approved by Beneficiary,Beneficiary will be entitled to all compensation, awards, and other payments or relief therefor which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, and will be entitled at its option to commence,appear in and prosecute in its own name,any action or proceedings, or to make any compromise or settlement, in connection with such taking or damage. Subject to the rights of any senior lender that has been approved by Beneficiary, all such compensation, awards, damages, rights of action and proceeds which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, including the proceeds of any policies of fire and other insurance affecting the Property, are hereby assigned to Beneficiary. After deducting therefrom all its expenses, including reasonable attorney's fees, the balance of the proceeds which are not used to reconstruct,restore or otherwise improve the Property or part thereof that was taken or damaged,will be applied to the amount due under the HOME OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7-HOME DEED OF TRUST PAGE 7 Promissory Note secured hereby. No amount applied to the reduction of the principal will relieve the Trustor from making payments as required by the HOME Promissory Note. If the HOME Note has been repaid in full, the remainder of the balance will revert to the Trustor; 18. Upon default by Trustor in making any payments provided for in the HOME Promissory Note secured hereby or in this HOME Deed of Trust, or in performing any obligation set forth in any of the Secured Obligations, and if such default is not cured within the respective time provided therefor in Section 34 of this HOME Deed of Trust, below, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause the property to be sold, which notice Trustee will cause to be duly filed for record and Beneficiary may foreclose this HOME Deed of Trust. Beneficiary will also deposit with Trustee this HOME Deed of Trust, the HOME Promissory Note and all documents evidencing expenditures secured hereby; 19. a. Prior to the repayment in full of the HOME Loan,the Trustor must not assign or attempt to assign the HOME Housing Agreement or any right therein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the Improvements, or any portion thereof or interest therein (referred to hereinafter as a"Transfer"), without prior written approval of the Beneficiary, except as otherwise permitted in the Secured Obligations. Consent to one such transaction will not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary will not unreasonably withhold or delay its consent. If consent should be given, any such transfer will be subject to this Section 19, and any such transferee must assume all obligations hereunder and agree to be bound by all provisions contained herein. b. Any such proposed transferee must have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Beneficiary, to fulfill the obligations undertaken by Trustor in the Secured Obligations. Any such proposed transferee,by instrument in writing satisfactory to the Beneficiary and in form recordable among the land records of Orange County, for itself and its successors and assigns, and for the benefit of the Beneficiary must expressly assume all of the obligations of the Trustor under the Secured Obligations,and agree to be subject to all conditions and restrictions applicable to the Trustor in this HOME Deed of Trust. There will be submitted to the Beneficiary for review all instruments and other legal documents proposed to effect any such transfer; and if approved by the Beneficiary its approval will be indicated to the Trustor in writing. C. In the absence of specific written agreement by the Beneficiary,no Transfer, or approval thereof by the Beneficiary,will be deemed to relieve the Trustor or any other party from any obligations under the Secured Obligations. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7-HOME DEED OF TRUST PAGE 8 d. In the event of a Transfer prior to the time the HOME Loan is paid in full and without the prior written consent of the Beneficiary,the net proceeds of such Transfer,will be paid to the Beneficiary to the extent necessary to pay in full the accrued interest and remaining principal balance of the HOME Loan. e. (1) As used herein,"Transfer"includes the sale,agreement to sell,transfer or conveyance of the Property, the Project, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment sale contract or similar instrument affecting all or a portion of the Property or Project,the lease of all or substantially all of the Property or Project, except as provided in subparagraph (3) below, or the appointment of a receiver or trustee to operate or exercise direct or indirect control over any portion of or interest in the Project or to operate or exercise direct or indirect control over Trustor or any interest in Trustor. (2) "Transfer" also includes the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Trustor, or any conversion of Trustor to an entity form other than that of Trustor at the time of execution of this Deed of trust,except that, a cumulative change in ownership interest of trustor of forty-nine percent(49%) or less will not be deemed a"Transfer" for purposes of this HOME Deed of Trust. (3) Notwithstanding paragraphs (1) and (2), "Transfer" will not include any of the following Permitted Transfers: (i) The leasing for occupancy of all or any part of the Property or Project in accordance with the Housing Agreement and the HOME Regulatory Agreement; and (ii) A refinancing that repays any portion of a Senior Loan(referred to herein as a "Take-out Loan"), if the City Manager or designee reasonably determines (which determination will not be unreasonably withheld, conditioned or delayed)that the resulting loan-to- value ratio (including the Take-out Loan, any of the remaining Senior Loan not repaid by the refinancing, and the HOME Loan)will not exceed the loan-to-value ratio in effect at the time of the Construction Financing Event for the Project, and the repayment terms of the Take-out Loan do not materially impair the Trustor's ability to repay the HOME Loan. f. Beneficiary will not unreasonably withhold,condition or delay its approval of any matter for which its approval is required hereunder. Any disapproval will be in writing and contain Beneficiary's reasons for disapproval. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7-HOME DEED OF TRUST PAGE 9 20. After the lapse of such time as may then be required by law following the recordation of a notice of default, and notice of sale having been given as then required by law, Trustee,without demand on Trustor,will sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels, and in such,order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee will deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts will be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee will apply the proceeds of sale to payment of(1) the expenses of such sale,together with the reasonable expenses of this trust including therein reasonable Trustee's fees or attorney's fees for conducting the sale,and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee's deed; (3) all sums expended under the terms hereof, not then repaid,with accrued interest at the rate specified in the HOME P r o in i s s o r y Note; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto; 21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance to the successor trustee, the latter will be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution will be made by written instrument executed by Beneficiary,containing reference to this H O M E Deed of Trust and its place of record,which, when duly recorded in the proper office of the county or counties in which the property is situated, will be conclusive proof of proper appointment of the successor trustee; 22. The pleading of any statute of limitations as a defense to any and all obligations secured by this HOME Deed of Trust is hereby waived to the full extent permissible by law; 23. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been satisfied, including but not limited to the obligations set forth in the HOME Regulatory Agreement,and upon surrender of this H OME Deed of Trust and any note, instrument or instruments setting forth all obligations secured hereby to Trustee for cancellation and retention and upon payment of its fees, Trustee will reconvey,without warranty,the Property then held hereunder. The recitals in such reconveyance of any matters or fact will be conclusive proof of the truthfulness thereof. To the extent permitted by law, the grantee in such OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7 HOME DEED OF TRUST PAGE 10 reconveyance may be described as "the person or persons legally entitled thereto." Neither Beneficiary nor Trustee will have any duty to determine the rights of persons claiming to be rightful grantees of any reconveyance. When the Property has been fully reconveyed, the last such reconveyance will operate as a reassignment of all future rents, issues and profits of the Property to the person or persons legally entitled thereto; 24. The trust created hereby is irrevocable by Trustor; 25. This HOME Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term `Beneficiary"will include not only the original Beneficiary hereunder but also any future owner and holder including pledgees,of the HOME Promissory Note secured hereby. In this HOME Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of Trustor hereunder are joint and several; 26. Trustee accepts this Trust when this HOME Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale under this HOME Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee will be a party unless brought by Trustee. Beneficiary, at its option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law; 27. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to Trustor at the address set forth on the first page of this H O ME Deed of Trust; 28. Trustor agrees at any time and from time to time upon receipt of a written request from Beneficiary, to fun-tish to Beneficiary detailed statements in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the premises and their use as may be requested by Beneficiary; 29. Trustor agrees that the loan secured by this HOME Deed of Trust is made expressly for the purpose of financing the rehabilitation of the Property for the purpose of providing nine dwelling units of affordable housing for Very Low and Low Income OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7-HOME DEED OF TRUST PAGE I I Households, and such dwelling units will be occupied exclusively by such persons; 10. Trustor agrees that, except as otherwise provided in the HOME Promissory Note, upon sale or refinancing of the Property, the entire principal balance of the debt secured by this HOME Deed of Trust, plus any accrued but unpaid interest thereon, will at the option of Beneficiary be immediately due and payable; 31. (a) The obligation to repay the HOME Loan is a nonrecourse obligation of Trustor. Except as provided otherwise in the HOME Promissory Note,Trustor will have no personal liability for payment of the HOME Loan. The sole recourse of Beneficiary will be the exercise of its rights against the Property and the improvements thereon and any related security for the HOME Loan. Provided,however,that the foregoing will not(a)constitute a waiver of any obligation evidenced by the HOME Promissory Note; (b) prevent or in any way hinder Beneficiary from exercising, or constitute a defense, an affirmative defense,a counterclaim,or other basis for relief in respect of the exercise of, any remedy prescribed by law or in equity in case of default, other than repayment of the HOME Loan; or (c) relieve Trustor of any of its obligations under any indemnity delivered by Trustor to Beneficiary. The foregoing provisions of this paragraph are limited by the provision that in the event of the occurrence of a default, Trustor and its successors and assigns will have personal liability hereunder for any deficiency judgment, but only if and to the extent Trustor, its principals, shareholders, or its successors and assigns, received rentals, other revenues, or other payments or proceeds in respect of the mortgaged Property after the occurrence of such default, which rentals, other revenues, or other payments or proceeds have not been used for the payment of ordinary and reasonable operating expenses of the mortgaged Property, ordinary and reasonable capital improvements to the mortgaged Property, debt service, real estate taxes in respect of the mortgaged Property and basic management fees, but not incentive fees, payable to an entity or person unaffiliated with Trustor in connection with the operation of the mortgaged Property,which are then due and payable. (b) Notwithstanding the foregoing, Beneficiary may obtain a judgment or order (including, without limitation, an injunction) requiring any Person to perform (or refrain from) specified acts other than repayment of the HOME Loan;may proceed against any Person whatsoever with respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement agreements or similar rights to payment or performance; and may recover directly from any Person: (i) any damages, costs and expenses incurred by Beneficiary as a result of fraud or any criminal act or acts of Trustor or any member, shareholder, officer, director, agent or employee of Trustor; (ii) any damages, costs and expenses incurred by Beneficiary as a result of any misappropriation of funds provided for the Project,rents and revenues from the operation of the OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7-HOME DEED OF TRUST PAGE 12 Project, or proceeds of insurance policies or condemnation proceeds by Trustor or any member, partner, shareholder, officer, director or employee of Trustor; (iii) any and all amounts owing by Trustor pursuant to Trustor's indemnification regarding Hazardous Substances; and (iv) all court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. 32. Notwithstanding specific provisions of this HOME Deed of Trust, non-monetary performance hereunder will not be deemed to be in default where delays or defaults are proximately caused by any of the following Force Majeure events, provided such event actually delays and interferes with the timely performance of the matter,and,despite the exercise of diligence and good business practices, such event is beyond the reasonable control of Trustor: 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 including litigation challenging the validity of this transaction or any element thereof, unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any Governmental Authority (except acts or failure to act of the Beneficiary will not excuse performance by the Beneficiary); the imposition of any applicable moratorium by a Governmental Authority; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing,none of the foregoing events will constitute a Force Majeure Event unless and until Trustor delivers to Beneficiary written notice describing the event, its cause, when and how Trustor obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Trustor must deliver such written notice within ten (10) business days after it obtains actual knowledge of the event; 33. If the rights and liens created by this HOME Deed of Trust are held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the Secured Obligations, the unsecured portion of such obligations must be completely performed and paid prior to the performance and payment of the remaining and secured portion of the obligations, and all performance and payments made by Trustor will be considered to have been performed and paid on and applied first to the complete payment of the unsecured portion of the obligations; 34. (a) Subject to the extensions of time set forth in Section 32, and subject to the further provisions of this Section 34, failure or delay by Trustor to perform any term or provision OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.7-HOME DEED OF TRUST PAGE 13 respectively required to be performed under the Secured Obligations or this HOME Deed of Trust constitutes a default under this HOME Deed of Trust. (b) Beneficiary will give written notice of default to Trustor and Investor Limited Partner, specifying the default complained of by the Beneficiary. Failure or delay in giving such notice will not constitute a waiver of any default nor will it change the time of default. (c) Any failures or delays by Beneficiary in asserting any of its rights and remedies as to any default will not operate as a waiver of any default or of any such rights or remedies. Delays by Beneficiary in asserting any of its rights and remedies will not deprive Beneficiary 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. (d) If a monetary event of default occurs, prior to exercising any remedies hereunder,Beneficiary will give Trustor written notice of such default. Trustor will have a period of fifteen (15) days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary. (e) If a non-monetary event of default occurs, prior to exercising any remedies hereunder, Beneficiary will give Trustor notice of such default. If the default is reasonably capable of being cured within thirty(30)days, Trustor will have such period to effect a cure prior to exercise of remedies by Beneficiary. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Trustor (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect cure as soon as possible,then Trustor will have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. In no event will Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety(90) days after the first notice of default is given. (f) Except as otherwise required to comply with the provisions of California Civil Code Section 2924 et seq. that are applicable thereto, any notice of default that is transmitted by electronic facsimile transmission followed by delivery of a "hard" copy, will be deemed delivered upon its transmission; any notice of default 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),will be deemed received on the documented date of receipt by Trustor; and any notice of default that is sent by registered or certified mail, postage prepaid, return receipt required will be deemed received on the date of receipt thereof OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 7-HOME DEED OF TRUST PAGE 14 35. In the event of a default or breach by Trustor of any security instrument securing a senior loan, Beneficiary will have the right to cure the default prior to completion of any foreclosure. In such event, Beneficiary will be entitled to reimbursement by Trustor of all costs and expenses incurred by Beneficiary in curing the default. The amount of any such disbursements will be a lien against the Property and added to the obligation secured by this HOME Deed of Trust until repaid, with interest at the highest rate permitted by law; IN WITNESS WHEREOF Trustor has executed this HOME Deed of Trust as of the day and year set forth above. "TRUSTOR" ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation B"y: a endez Its: Executive Director APPROVED BY: THW GTON BEACH, a munthe State of California By: R{c( r� UV �Suh ATTEST: By: � f�•-���-v 7�7�l�u��� City Clerk £5 kckv1 i S�xu APPROVED AS TO FO By: City Attorney Dkw �O\�ollb OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.7-HOME DEED OF TRUST PAGE 15 i CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness,accuracy,or validity of that document. State of California County of Orange i On Nov. 07, 2016 before me, CATHY GAMBINO ,Notary Public, (Here insert name and title of the officer) personally appeared - NORA MENDEZ - who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. I WITNESS my hand and offic' I seal. CATHY GAMBINO Comm.# 2051586 NOTARY PUBLIC-CALIFORNIA \ Los ANGELES COUNTY (Notary Seal) ` MY Comm.EXP.DEC.12.2017 Signature of Notary Public ADDITIONAL OPTIONAL INFORMATION INSTRUCTIONS FOR COMPLETING THIS FORM Any acknowledgment completed in California must contain verbiage exactly as DESCRIPTION OF THE ATTACHED DOCUMENT appears above in the notary section or a separate acknowledgment form must be properly completed and attached to that document. The only exception is if a Deed of Trust,Security Agmt&Fixture Filing(with Assignment of Rents) document is to be recorded outside of California.In such instances,any alternative (Title or description of attached document) acknowledgment verbiage as may be printed on such a document so long as the verbiage does not require the notary to do something that is illegal for a notary in By Orange Co.Community Housing Corp.For the Benefit of The California (i.e. certifying the authorized capacity of the signer). Please check the (Title or description of attached document continued) document carefully for proper notarial wording and attach this form if required. 15 • State and County information must be the State and County where the document Number of Pages Document Date signer(s)personally appeared before the notary public for acknowledgment. • Date of notarization must be the date that the signer(s)personally appeared which City of Huntington Beach(Home Program) must also be the same date the acknowledgment is completed. (Additional information) • The notary public must print his or her name as it appears within his or her commission followed by a comma and then your title(notary public). • Print the name(s) of document signer(s) who personally appear at the time of notarization. CAPACITY CLAIMED BY THE SIGNER • Indicate the correct singular or plural forms by crossing off incorrect forms(i.e. ❑✓ Individual(s) he/she/they-is/are)or circling the correct forms.Failure to correctly indicate this information may lead to rejection of document recording. ❑ Corporate Officer • The notary seal impression must be clear and photographically reproducible. Impression must not cover text or lines. If seal impression smudges, re-seal if a (Title) sufficient area permits,otherwise complete a different acknowledgment form. ❑ Partner(s) • Signature of the notary public must match the signature on file with the office of the county clerk. ❑ Attorney-in-Fact Additional information is not required but could help to ensure this ❑ Trustee(s) acknowledgment is not misused or attached to a different document. ❑ Other Indicate title or type of attached document,number of pages and date. Indicate the capacity claimed by the signer. If the claimed capacity is a corporate officer,indicate the title(i.e.CEO,CFO,Secretary). • Securely attach this document to the signed document C 2004.2015 Prol.ink Signing Service,Inc.-All Rights Reserved www.T'heProl.ink.com-Nationwide Notary Service A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On October 25, 2016 before me, P. L. Esparza, Notary Public, personally appeared Robin Estanislau 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 zemycom Notary Public-CaliforniazOrange County m.Expires Aug 4,2017 r (Seal) (No ary Signature EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS.- LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 EXHIBIT 8 HOME REGULATORY AGREEMENT 16-5414/145020/DO Recorded in Official Records, Orange County Hugh Nguyen, Clerk-Recorder mdae, -sheman as nss �� jj�jj�11�1� 1�[ Ij I 1$1 I]l I II NO FEE )-jq 2,V7 * $ R 0 0 0 8 8 6 4 6 3 6 $ FREE RECORDING REQUESTED BY 2016000587133 4:25 pm 11/18116 AND WHEN RECORDED MAIL TO: 217 405 NO3 F13 39 0.00 0.00 0.00 0.00 114.00 0.00 0.00 0.00 THE CITY OF HUNI'INGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager (Space Above This Line for Recorder's Office Use Only) APN: 165-223-02 HOME REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS (HOME PROGR VA) CONMUNITY HOUSING DEVELOPMENT ORGANIZATION(CHDO) (24 CFR§92504 THIS HOME REGULATORY AGREEMENT AND DECLARAT19N OF� �VENANTS AND RESTRICTIONS (HOME PROGRAM) ("Agreement"), dated as of-Beteber ;t-, 2016, is''�'� made and entered into by and between THE CITY OF HUNTINGTON BEACH, a municipal corporation of the state of California("City"), and ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation ("Developer"), in furtherance of the regulations issued by the United States Department of Housing and Urban Development set forth in 24 CFR Part 92 (the"HOME Regulations"). RECITALS A. City is responsible for the use of certain funds ("HOME Funds")made available to the City by the United States Department of Housing and Urban Development("HUD") under the HOME Investment Partnerships Program (the "HOME Program"). B. Developer is certified with the City as a Community Housing Development Organization("CHDO"). C. Property description D. City and Developer have entered into that certain HOME Affordable Housing Agreement dated as of October Z?, 2016 (the"HOME Agreement"), concerning Developer's acquisition and rehabilitation of the improvements located on the Property, including four units of rental housing (consisting of four 2-bedroom units) , and Developer's use of the Property as OCCHC—7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO.8 l PAGE1 Fidel ity-Shef man OaKS FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager (Space Above This Line for Recorder's Office Use Only) APN: 165-223-02 HOME REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS (HOME PROGRAM) COMMUNITY HOUSING DEVELOPMENT ORGANIZATION(CHDO) (24 CFR§92.504 THIS HOME REGULATORY AGREEMENT AND DECLARATIQN OF COVENANTS AND RESTRICTIONS (HOME PROGRAM) ("Agreement"), dated as of , 2016, is made and entered into by and between THE CITY OF HUNTINGTON BEACH, a municipal corporation of the state of California("City"), and ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation ("Developer"), in furtherance of the regulations issued by the United States Department of Housing and Urban Development set forth in 24 CFR Part 92 (the "HOME Regulations"). RECITALS A. City is responsible for the use of certain funds ("HOME Funds") made available to the City by the United States Department of Housing and Urban Development("HUD") under the HOME Investment Partnerships Program (the "HOME Program"). B. Developer is certified with the City as a Community Housing Development Organization ("CHDO"). C. Property description D. City and Developer have entered into that certain HOME Affordable Housing Agreement dated as of October/.?, 2016 (the "HOME Agreement"), concerning Developer's acquisition and rehabilitation of the improvements located on the Property, including four units of rental housing (consisting of four 2-bedroom units) , and Developer's use of the Property as OCCHC—7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO.8 PAGE 1 affordable rental housing to be restricted to Low and Very-Low Income Households. The HOME Agreement is incorporated herein by this reference as though fully set forth herein. Any capitalized terms not defined herein shall have the meanings ascribed to such terms in the HOME Agreement. E. Developer has executed a promissory note (the "HOME Note") dated on or about the date hereof, evidencing a loan of HOME Funds from the City to Developer in the principal amount of SEVEN HUNDRED EIGHTY-ONE THOUSAND TWO HUNDRED TWENTY DOLLARS ($781,220) ("HOME Loan"). The HOME Note is secured by a Deed of Trust With Assignment of Rents dated on or about the date hereof, naming City as beneficiary ("HOME Deed of Trust"). In consideration of the HOME Loan and in satisfaction of HOME Program requirements, all four of the Units are designated as HOME Units. F. City and Developer now desire to place restrictions upon the use and operation of the Property, in order to ensure that the Property shall be operated continuously as an affordable housing project available for rental to Low and Very-Low Income persons in accordance with HOME Regulations and the terms set forth below. AGREEMENT NOW THEREFORE, the Developer and City declare, covenant and agree, by and for themselves, their heirs, executors, administrators and assigns, and all persons claiming under or through them, that the Property, for the term of this agreement, shall be held transferred, encumbered, used, sold, conveyed, leased and occupied, subject to the covenants and restriction hereinafter set forth: 1. DEFINITIONS The following terms, as used in this Agreement, will have the meaning given unless expressly provided to the contrary: "HOME Rent" means rental rates not to exceed the applicable rent limits set forth by the HOME Program in 24 CFR 92.252(a) and 24 CFR 92.252(b). HOME Rent must include a reasonable utility allowance for tenant paid utilities.. (1) In the case of Very-Low Income Unit, the rent must meet the following: The rent does not exceed the lesser of(1) 30 percent of the annual income of a family whose income equals 50 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families, as provided by HUD (Low HOME Rent); or(2) the fair market rent for existing housing for comparable units in the area as established by HUD under 24 CFR 888.111, with adjustments for the number of bedrooms in the unit; or (2) In the case of Low Income Unit, the rent must meet the following: a. The rent does not exceed the lesser of(1) 30 percent of the annual income of a family whose income equals 60 percent of the median income for the area, as OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 2 determined by HUD, with adjustments for smaller and larger families, as provided by HUD (High HOME Rent); or(2) the fair market rent for existing housing for comparable units in the area as established by HUD under 24 CFR 888.111, with adjustments for the number of bedrooms in the unit. "Area Median Income" means the area median income of the Orange County primary metropolitan statistical area(PMSA), with adjustments for household size, as estimated annually by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937, as amended. "Eligible Tenant" mans any person entitled to rent a HOME Designated Unit as set forth in the HOME Regulatory Agreement "HOME Restricted Period"means fifteen (15) years from the date of Completion of the Proj ect. "Low Income Household" means an adjusted income which does not exceed sixty percent (60%) of the Area Median Income, adjusted for household size, as published by HUD. "Table of Rents" The parties agree that if the Project were placed in service on the date of this Agreement, the maximum gross rent that would be paid by Low and Very-Low Income households would be as set forth in the table of rents appended as Exhibit No. 2 . The HOME rents in Exhibit No. 2 will be adjusted to not exceed the maximum rent limits provided by HUD at the Completion of the Project and will be adjusted periodically thereafter in accordance with 24 CFR Part 92.252(f) and(g). "Utility Allowance" means an allowance for tenant paid utilities as calculated by using either the HUD Utility Schedule Model (HUSM) or a project-specific methodology, as described in HOMEfires—Vol. 13 No. 2, May 2016. "Very-Low Income Household" means an adjusted income which does not exceed fifty percent (50%) of the Area Median Income, adjusted for household size, as published by HUD. 2. TERM OF AGREEMENT; PRIORITY OF AGREEMENT In accordance with the formula set forth in 24 CFR 92.252(e) and as required by 24 CFR 92.504(c)(3)(ix), this Agreement shall remain in effect for the HOME Program required term of fifteen (15) years following the date of Completion of the Project (the HOME Term"). This Agreement shall remain in effect throughout its 15 year term, notwithstanding the payment in full of the HOME Loan. This Agreement is secured by the HOME Deed of Trust and Developer shall not be entitled to a reconveyance of the HOME Deed of Trust prior to the expiration of the 15-year term, of this Agreement. This Agreement shall unconditionally be and remain at all times prior and superior to the lien created by any deed of trust securing construction and/or permanent financing for the Project and all of the terms and conditions contained in the loan documents relating to such financing and to the lien of any new mortgage debt which is for the purpose of refinancing all or any part of such financing. Owner hereby agrees that the Property is to be owned, managed, and operated as four units of affordable rental housing for Eligible Tenants for the 15 year term of this OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 3 Agreement. To that end, the Developer hereby represents, covenants, warrants and agrees as follows: 2.1 Compliance with HOME Regulations. Developer, its successor and assigns, covenant and agree that the Project shall at all times during the term of this Agreement comply with applicable requirements set forth in Subpart F of Part 92 of Title 24 of the Code of Federal Regulations. 2.2 Maximum Per-Unit Subsidy The amount of the HOME Loan will not exceed the per unit dollar limits established by HUD pursuant to section 221(d)(3)(ii) of the National Housing Act, as implemented in regulations issued by HUD, 24 CFR 221.514(b)(1) and (c). 2.3 Rehabilitation The rehabilitation of the Property shall be accomplished within the time provided in the Schedule of Performance, which is attached to the HOME Agreement as Exhibit 5 . 2.4 Tasks, Budget, and Disbursement The HOME Funds shall be used exclusively for the payment of costs approved by the City and incurred in connection with the Project (sometimes referred to herein as the "project Activities") in accordance with the HOME Agreement. The tasks to be performed with the use of the HOME Funds, and the Project Budget, which specifies the line items for which HOME Funds will be used, are set forth in the Project Budget attached to the HOME Agreement as Exhibit 4 Developer shall not request disbursement of HOME Funds until the funds are needed to apply eligible costs. The City shall have the right to disapprove any request if the City determines the request is for an ineligible item or is otherwise not in compliance with or inconsistent with the HOME Agreement and this Agreement. 2.5 CHDO Proceeds CHDO Proceeds are funds generated by the Project receiving CHDO set-aside funds. CHDO Proceeds include funds generated from activities such as the permanent financing of the CHDO project that are used to pay off a CHDO financed construction Iona, or proceeds generated from the sale of Property to a second non-profit. CHDO Proceeds do not include rental income generated by the Project. The receipt of CHDO Proceeds by Developer must be reported to the City within thirty (30) days after receipt. Pursuant to 24 CFR 92.300(a)(2), the City agrees that Developer may retain CHDO Proceeds that are not required to be paid to the City under the terms of the HOME Note, on the condition that Developer use such proceeds for affordable housing activities that benefit Very-Low and Low Income households in the City of Huntington Beach. The following will be considered allowable activities for which CHDO Proceeds may be expended: emergency repairs to the Project, Project operating costs and reserves, construction or rehabilitation of additional affordable rental housing for Very-Low or Low Income households, and Developer's OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 4 operating costs directly related to the foregoing activities. CHDO Proceeds must be expended for allowable activities within two (2) years of their receipt by Developer. Developer must maintain, and submit to the City upon request, accurate and reasonably detailed accounts of the receipt and expenditure of CHDO Proceeds, including at a minimum the purpose of the expenditure, the identity of the party receiving the expenditure and the amount. The requirements of this paragraph shall survive the termination of this Agreement and shall apply to all CHDO Proceeds received by Developer, even if such proceeds are received after the expiration of the term of this Agreement. Developer shall retain all books and records relevant to CHDO Proceeds for a minimum of five years after the expenditure of such proceeds. The City, HUD and the Comptroller General of the United States, and any of their representatives, shall have the right of access to any pertinent books, documents, papers or other records of the Developer, in order to make audits, examinations, excerpts and transcripts. 2.6 Property Standards Developer shall comply with 24 CFR 92.251. (1) All of the Units in the Project shall contain facilities adequate for living, sleeping, eating, cooking and sanitation in accordance with all applicable federal, state and local laws and codes. (2) The rehabilitation of the Property shall comply with the City's building code and all other applicable local codes, rehabilitation standards, ordinances and zoning ordinances in effect at the time of Project Completion and the Property shall be decent, safe and sanitary and shall conform to the building, electrical, plumbing, mechanical and energy codes that have been adopted by the City of Huntington Beach. (3) The Property shall comply with the accessibility requirements at 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (24 USC 794) and, if applicable, the design and construction requirements at 24 CFR 100.205 for covered multifamily dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act (42 USC 3601- 3619) (4) Developer shall maintain the housing in compliance with applicable property standards as required by Section 92.251. (5) The Project shall comply with the lead-based paint standards in Section 92.355. Housing assisted with HOME Program funds constitutes HUD-associated housing for the purpose of Lead-Based Paint Poisoning Prevention Act (42 USC Section 4821, et seq.) and is therefore, subject to 24 Code of Federal Regulations Part 35. Accordingly, and pursuant to Section 92.355 of the Regulations, the Developer hereby agrees to and shall be responsible for testing and abatement activities specified in the Lead-Based Paint Poisoning Prevention Act and the regulations set forth at 24 Code of Federal Regulations part 225 with respect to the rehabilitation of the Property. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 5 2.7 Residential Use Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that Developer, and such successors and assigns, shall use, maintain and operate the Property during the HOME Affordability Period as a housing development containing four (4) Units, including four(4) HOME Units, parking, community room, laundry rooms, and such other ancillary uses as specified in the HOME Loan Agreement. All uses undertaken by Developer on the Property shall conform to this HOME Regulatory Agreement and to all applicable provisions of the Huntington Beach Municipal Code and Governmental Regulations. During the HOME Affordability Period, none of the Units on the Property shall at any time be utilized on a transient basis, nor shall the Property or any portion thereof ever be used as a hotel, motel, dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium or rest home. 2.8 Conversion of Units No part of the Project will at any time be owned by a cooperative hosuing copropartion nor shall the Developer take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership without prior written approval by the City. Any such conversion shall comply with the requirements of 24 CFR Section 92.255. 2.9 Tenant Preference 2.10 All of the HOME Units will be made available to Eligible Tenants for rental in accordance with the terms of this Agreement, and the developer shall not givepreference to any particular class or group in renting the HOME Units except to the extent that the HOME Units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.6. 2.11 Tenant Protections Owner shall comply with the tenant protections provisions of 24 C.F.R. Section 92.253, including but not limited to: a. The lease of an Affordable Unit must be for not less than one year, unless by mutual agreement between tenant and Owner. b. The lease may not contain any of the following provisions: (1) Agreement by the tenant to be sued, to admit guilt or to a judgment in favor of Owner in a lawsuit brought in connection with the lease; OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE (2) Agreement by the tenant that the Owner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the Unit after the tenant has moved out of the Unit. The Owner may dispose of this personal property in accordance with state law. (3) Agreement by the tenant not to hold the Owner or the Owner's agents legally responsible for any action or failure to act, whether intentional or negligent; (4) Agreement by the tenant that the Owner may institute a lawsuit without notice to the tenant; (5) Agreement by the tenant that the Owner may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; (6) Agreement by the tenant to waive any right to a trial by jury; (7) Agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and (8) Agreement by the tenant to pay attorney's fees or other legal costs if the tenant wins in a court proceeding by the Owner against the tenant. The tenant, however, may be obligated to pay costs if the tenant loses. As required by 24 C.F.R. 92.303, Owner shall adhere to a fair lease and grievance procedure approved by the City and provide a plan for and follow a program of tenant participation in management decisions. 2.12 Termination of Tenancy Owner, its successors or assigns, may not terminate the tenancy or refuse to renew the lease of a tenant, except (i) for serious or repeated violation of the terms and conditions of the lease; (ii) for violation of applicable federal, state, or local law; or for other good cause. Pursuant to 24 C.F.R. 92.253(c), any termination or refusal to renew must be preceded by not less than 30 days by the Owner's service upon the tenant of a written notice specifying the grounds for the action. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 7 3. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS Developer hereby represents, warrants and covenants as follows: 3.1 Income Restrictions Except as expressly provided herein, throughout the term of this Agreement, the HOME Units shall be rented only to, and occupied only by, Eligible Tenants. 3.2 Rent Schedules and Rent Increases All HOME Units shall be rented at an HOME Rent until the expiration of the HOME Affordability Period. Developer shall rent the HOME Units to Eligible Tenants at no more than the allowable HOME Rents. The Developer is responsible for ensuring that the current operative income limits, program rents, and utility allowance which are effective at the time of tenant applicable are used to determine initial tenant eligibility and conformance with affordability requirements.; and that each tenant recertification is performed using current income limits, program rents, and utility allowances that assure compliance with the affordability requirements. The rental rates for the HOME Units shall be adjusted annually based upon annual updates of the applicable income and rent standards, including but not limited to updates published by the United States Department of Housing and Urban Development. Developer shall submit to the City for review and approval its initial rent schedule and utility allowances, thirty(30) days prior to initial rental of the Units, and on an annual basis as determined by the date of the initial rent schedule and utility allowance schedule submission. Rental rates are adjusted, and income determinations are performed annually at the time of lease renewal. Any increase in rents for the HOEM Units is subject to the provision of outstanding leases, including the provision that rents are not adjusted until their leases are renewed. The Developer must provide tenants of those units not less than thirty (30) days prior written notice before implementing any increase in rents. In no event shall any of the HOME Units be rented at a rate greater than the applicable HOME Rent. Failure to comply with the affordability requirements of this Agreement is an event of default under the terms of the HOME Loan. Subject to the right to cure, the HOME Loan will be due and payable immediately if the HOME Units do not meet the requirements of this Agreement. 3.3 Occupancy by Eligible Tenant An Affordable Unit initially occupied by an Eligible Tenant shall be deemed occupied by an Eligible Tenant until such Affordable Unit is vacated, even if the tenant's household income subsequently increases to an amount that exceeds the maximum allowable income for a Low Income Household, so long as satisfactory actions are taken to ensure that all vacancies are filled in accordance with this Agreement until the noncompliance is corrected. To the extent provided by HOME Regulations, Owner shall not terminate or refuse to renew the OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO.8 PAGE 8 lease of a tenant who initially qualified as an Eligible Tenant but whose income subsequently increases to an amount that exceeds the maximum allowable income for a Low Income Household. However, if the tenant's income increases to one hundred forty percent (140%) or more of the income limit for a Low Income Household, Owner shall raise the tenant's rent (including a reasonable utility allowance) to an amount equal to thirty percent (30%) of the tenant's gross household income. 3.4 Maximum Occupancy The maximum number of persons residing in a Unit may not exceed a number equal to two times the number of bedrooms in the Unit plus one. For example, no more than five persons may reside in a two-bedroom Unit. Owner shall be responsible for enforcing this maximum occupancy limit. Upon discovery of a violation of this Section 3.4, Owner shall immediately notify the Eligible Tenant of record in writing ("Occupancy Violation Notice"). In the Occupancy Violation Notice, Owner shall inform the Eligible Tenant of the occupancy violation and provide the Eligible Tenant with an opportunity to cure the violation within thirty (30) days from the date of the Notice. 3.5 Income Determination Immediately prior to a prospective tenant's occupancy of an Affordable Unit, Owner shall obtain and maintain on file an income computation and certification form from such prospective tenant dated immediately prior to the date of initial occupancy of an Affordable Unit by such prospective tenant. Owner shall verify that the income information provided by an applicant is accurate by following all applicable City policies and procedures and by taking one or more of the following steps as a part of the verification process: (i) obtain two (2) pay stubs from the most recent pay periods; (ii) obtain a written verification of income and employment from applicant's current employer; (iii) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant's income as is reasonably satisfactory; or (v) obtain such other information as may be reasonably required. Owner shall update the foregoing records annually and shall provide copies of updated tenant eligibility records and monthly rental records to City for review, subject to redaction only to the extent deemed necessary by Owner, after consultation with the City, to comply with applicable federal and state privacy laws. Upon review of such records, City may at its option perform an independent audit of the tenant eligibility records in order to verify compliance with the income and affordability requirements set forth herein. Costs for such an audit performed by the City shall be deemed a Project Operating Expense, deductible from the Project's Revenue (as such term is defined in the HOME Note). Owner shall retain the records described in this Section, including the documentation submitted pursuant to 24 C.F.R. 92.203(a)(1), for a period of five (5) years after the date the respective records were created. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO.8 PAGE 9 3.6 Rental Priority Subject to Owner's policies and procedures for screening potential tenants, which must be approved by the City, the Affordable Units shall be rented according to the following priorities: a. When an Affordable Unit becomes available as a result of a tenant vacation, Owner shall give first priority in renting the Affordable Unit to an Eligible Tenant who has been displaced by activities of the City. Except as otherwise set forth above, Affordable Units shall be rented to Eligible Tenants on a first-come, first-served basis; provided, however, that Owner shall maintain an "interest list" or "eligibility list" of potential tenants. The rental priority provision set forth in this Section 3.6 shall apply only to the extent such provisions are not in conflict with any applicable federal or state law or any regulatory agreement affecting the Project that is approved by the City and recorded in superior priority to this Agreement. 3.7 Maintenance of Records Owner shall maintain complete and accurate records pertaining to the Affordable Units, and shall permit any duly authorized representative of the City to inspect the books and records of Owner pertaining to the Project including, but not limited to, those records pertaining to tenant eligibility and occupancy of the Affordable Units. Records pertaining to the Project and Affordable Units shall be retained for a period of five (5) years after the termination of this Agreement; records pertaining to tenant eligibility shall be retained for the period set forth in Section 3.5. To assist the City in meeting its HOME Program recordkeeping and reporting requirements and to document compliance with the requirements of Section 230.26 of the City of Huntington Beach Zoning Code, Owner shall prepare, maintain and submit to the City, as appropriate, the following records and reports: a. Records which demonstrate that the Property meets the property standard specified in 24 CFR 92.251 and the lead-based paint requirements of 24 CFR 92.355; b. Records which demonstrate that each family occupying a HOME Unit is income eligible in accordance with 24 CFR 92.203; C. Records which demonstrate that the Property meets the affordability and income targeting requirements of 24 CFR 92.252 for the duration of this Agreement. Records shall be kept for each family occupying an Affordable Unit; OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 10 d. Records which demonstrate that each lease complies with the tenant and participant protections, as specified in 24 CFR 92.253. Records shall be kept for each family occupying an Affordable Unit; e. Equal opportunity and fair housing records, including, as applicable: (1) data on the extent to which each racial and ethnic group and single- headed household (by gender of household head) have applied for, participated in, or benefited from, any program or activity funded in whole or in part with HOME funds; (2) documentation of actions undertaken to meet the requirements of 24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u); (3) documentation of the actions taken to affirmatively further fair housing £ Affirmative Marketing and MBE/WBE records, including,as applicable: (1) if applicable, records documenting compliance with the affirmative marketing procedures and requirements of 24 CFR 92.351; (2) if applicable, documentation and data on the steps taken by Owner to implement the City's outreach programs as set forth in applicable City policies and procedures including data indicating the racial/ethnic or gender character of each business entity receiving a contract or subcontract of $25,000 or more paid, or to be paid, with HOME funds; the amount of the contract or subcontract, and documentation of the Owner's affirmative steps to assure that minority business and women's business enterprises have an equal opportunity to obtain or compete for contracts and subcontracts as sources of supplies, equipment, construction and services; g. if applicable, records which demonstrate compliance with the requirements of 24 CFR 92.353 relating to displacement, relocation and real property acquisition, including project occupancy lists identifying the name and address of all persons occupying or moving into the Property on and after the date on which Owner obtained site control; OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 11 h. if applicable, records demonstrating compliance with the labor requirements of 24 CFR 92.354, including contract provisions and payroll records; i. records demonstrating compliance with the lead-based paint requirements of 24 CFR 92.355; j. if applicable, records which support any exceptions to the conflict of interest prohibition pursuant to 24 CFR 92.356; k. debarment and suspension certifications required by 24 CFR Parts 24 and 91; and 1. Equal opportunity and fair housing records, including, as applicable: (1) data on the extent to which each racial and ethnic group and single- headed household (by gender of household head) have applied for, participated in, or benefited from, any program or activity funded in whole or in part with HOME funds; (2) documentation of actions undertaken to meet the requirements of 24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u); (3) documentation of actions the Owner has taken to affirmatively further fair housing. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 12 Owner shall retain all books and records relevant to the Housing Agreement for a minimum of five years after the project completion date, except that records of individual tenant income verifications, project rents and project inspections shall be retained for the most recent five year period until five years after the affordability period terminates, or until the conclusion or resolution of any and all audits or litigation relevant to the Housing Agreement, whichever is later. The City, HUD and the Comptroller General of the United States, and any of their representatives, shall have the right of access to any pertinent books, documents, papers or other records of the Owner, in order to make audits, examinations, excerpts and transcripts. in. Records, data and documentation as required for the City's performance of its reporting obligations under the Federal Funding Accountability and Transparency Act of 2006 (FFATA), to the full extent applicable to the Project, which may include but is not necessarily limited to reporting of executive compensation received by executives of Owner and/or executives of Owner's partners or members and/or executives of partners or members of any of Owner's partners or members. 3.8 Termination of Tenancy Owner, its successors or assigns, may not terminate the tenancy or refuse to renew the lease of a tenant, except(i) for serious or repeated violations of the terms and conditions of the lease; (ii) for violation of applicable federal, state, or local law; or (Ili) for other good cause. Pursuant to 24 C.F.R. 92.253(c) any termination or refusal to renew must be preceded by not less than 30 days by the Owner's service upon the tenant of a written notice specifying the grounds for the action. 3.9 Tenant Selection Prior to selecting any tenants for the HOME Designated Units, Developer shall submit to City the Management Plan which shall include proposed tenant selection policies and criteria for the HOME Designated Units. The tenant selection criteria shall be subject to City's approval or disapproval thereof in writing. The tenant selection policies and criteria for the HOME Designated Units shall require that applicable federal and state fair housing, the HOME Program, and other applicable Governmental Regulations, preference be given to applicants in the following order: first to existing income qualified tenants of 77922 Barton Drive, second to persons who live or work in the City. In addition, the tenant selection policies and criteria shall: (1) Be consistent with the purpose of providing housing for Very-Low and Low HOME Households; (2) Be reasonably related to program eligibility and the applicants' ability to perform the obligations of the lease; OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO.8 PAGE 13 (3) Provide for the selection of tenants from a written waiting list in the chronological order of their application, insofar as is practical; and (4) Give prompt written notification to any rejected applicant of the grounds for any rejection. Developer shall comply with the requirements of 24 CFR 92.253. 3.10 Reliance of Tenant Representations Each tenant lease shall contain a provision to the effect that Developer has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of a HOME Unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. 4. MAINTENANCE 4.1 Maintenance Covenant (a) Owner agrees to maintain all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition), reasonable wear and tear excepted, and in accordance with all applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction (including, but not limited to, Federal Housing Quality Standards as set forth in 24 C.F.R. 982.401). In addition, Owner shall keep the Property free from all graffiti and any accumulation of debris or waste material. Owner shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable materials. The maintenance covenant contained in this Section shall remain in effect for the term of this Agreement. (b) The Project shall comply with the lead-based paint standards in 24 C.F.R. §92.355. Housing assisted with HOME Program funds constitutes HUD-associated housing for the purpose of Lead-Based Paint Poisoning Prevention Act (42 U.S.C. Section 4821, et sea.) and is, therefore, subject to 24 Code of Federal Regulations Part 35. 4.2 Maintenance Program Owner must maintain the Property in conformance with an approved Maintenance Program, including a maintenance budget. The Maintenance Program must describe in reasonable detail the standards to be followed in maintaining the interior and exterior of the Improvements, including a schedule indicating the proposed frequency of each element of maintenance, and will include, at a minimum, the following: periodic cleaning of the interior and exterior of the Improvements, including windows; removing graffiti; removing debris and waste materials and otherwise maintaining indoor and outdoor areas of the Property; maintaining any lawns, plants, shrubs and trees or other landscaping planted on the Property; performing OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 14 inspections of all exterior features to determine whether repairs are required; conducting periodic protective treatments such as rust removal and caulking; conducting repairs to facades, roof, doors, windows and other exterior features; maintaining fencing and other security devices and systems; periodic repainting of the exterior; periodic repainting of the interior units and common areas; periodic replacing of the interior unit carpets; checking building systems, including, but not limited to the heating and cooling systems, smoke alarms and water heaters; checking interior unit appliances; and monitoring interior unit bathrooms for mold/mildew. The Maintenance Program, including any amendments proposed by Owner, will be subject to the approval of the City Manager. 4.3 Construction Contracts If Developer engages in any construction work with respect to the Project, to the greatest extent feasible, and to the extent not prohibited by any applicable Governmental Regulations, Developer shall provide, and shall require its contractors and their subcontractors to provide, opportunities to the lower income residents of the City for training and employment arising in connection with the development of the Project. In addition, Developer shall provide, and shall require its contractors and their subcontractors to provide, opportunities for contracts for work to be performed in connection with development of the Project to residents of the City, to business concerns which are located in or owned in substantial part by residents of the City and to persons displaced, if any, as a result of the development of the Project. Developer shall include the language required by this paragraph to be included in any contract with the general contractor for the Project and shall require the general contractor to include such language in all subcontracts. With respect to that portion, if any, and only such portion, of the Project for which prevailing wages are required to be paid, within thirty (30) days after the request of the City Manager, Developer shall provide to the City Manager payroll information related to the development of the Project certified by an officer of Developer to be true and correct. In addition, Developer shall require its contractors and subcontractors to provide such certified payroll information within ten (10) days of the City Manager's request. Upon the request of City, Developer shall deliver to City a written report setting forth its compliance with the requirements of this Section. 4.4 Labor Standards Developer shall carry out any construction on the Property in conformance with all applicable laws, including all applicable federal and state labor standards which such standards shall include, without limitation: (a)the payment of not less than the wages prevailing in the locality as determined by the Secretary of Labor pursuant to the Davis Bacon Act (40 U.S.C. 276a to 276a-5), to all laborers and mechanics employed in the development of any part OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 15 of the Project if required by applicable Governmental Regulations; (b) the overtime provisions, as applicable, of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327 332); and (c) Labor Code § 1720 et seq., including without limitation the payment of prevailing wage and maintenance of payroll records in accordance with Labor Code §§ 1776 and 1812, and employment of apprentices in accordance with Labor Code § 1777.5. Developer further agrees that all public work (as defined in Labor Code § 1720) performed pursuant to this Agreement (the "Work") shall comply with the requirements of Labor Code § 1770 et seq. In all bid specifications, contracts and subcontracts for the Work, Developer (or its general contractor, in the case of subcontracts) shall obtain the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in this locality for each craft, classification or type of worker needed to perform the work, and shall include such rates in the bid specifications, contract or subcontract. Such bid specifications, contract or subcontract must contain the following provision: "It shall be mandatory for the contractor to pay not less than the said prevailing rate of wages to all workers employed by the contractor in the execution of this contract. The contractor expressly agrees to comply with the penalty provisions of Labor Code § 1775 and the payroll record keeping requirements of Labor Code § 1776." The provisions of Labor Code §§ 1775 and 1813 regarding penalties to be paid upon the failure to pay prevailing wage and for failure to comply with the hours laws respectively shall be enforced. As set forth in Labor Code § 1810, eight (8) hours labor constitutes a legal day's work. In accordance with the provisions of Labor Code § 3700, Developer is required to secure payment of compensation to its employees. Developer shall include in every contract for the development of the Project: (a) a statement that in accordance with the provisions of Labor Code § 3700, the contractor will be required to secure the payment of compensation to its employees; and (b) copies of Labor Code §§ 1771, 1775, 1776, 1777.5, 1813 and 1815. Within ten (10) business days after the request of the City Manager, Developer shall provide to the City Manager payroll information related to the Project certified by an officer of Developer to be true and correct. In addition, Developer shall require its contractors and subcontractors to provide such certified payroll information within ten (10) business days of any request by the City Manager. Developer shall indemnify and hold the City Indemnitees harmless from and against any and all claims, damages, demands, causes of action, obligations, liabilities, costs and expenses, including reasonable attorneys' fees and costs, that may be asserted against or incurred by City Indemnitees with respect to or in any way arising from Developer's compliance with or failure to comply with all applicable laws, including all applicable federal and state labor standards, including, without limitation,the requirements of Labor Code § 1720. OCCHC—7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 16 4.5 Section 3 Any construction work performed in connection with the Project is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u ("Section 3"). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low- and very low- income persons (inclusive of members of Very Low Income Senior Households served by the Project), particularly persons who are recipients of HUD assistance for housing. Developer agrees to comply with HUD's regulations in 24 CFR Part 135, which implement Section 3. As evidenced by its execution of this contract, Developer certifies that it is under no contractual or other impediment that would prevent it from complying with the Part 135 regulations. If Developer engages in any construction activities in connection with the Project to the extend required by any Governmental Regulations, Developer agrees to send to each labor organization or representative of workers with which Developer or its contractors has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the Developer's or contractor's commitments under this Section 3 clause, and will post copies of notices in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number of job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of person(s) taking applications for each of the positions; and the anticipated date the work shall begin. Developer agrees to include this Section 3 clause in every contract or subcontract subject to compliance with regulations in 24 CFR Part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the contractor or subcontractor is in violation of the regulations in 24 CFR Part 1.35. The Developer will not subcontract with any contractor or subcontractor where the Developer has written notice or actual knowledge that the contractor or subcontractor has been found in violation of the regulations in 24 CFR Part 135. Developer will certify to the best of its knowledge that any vacant employment positions, including training positions, that are filled (a) after the contractor is selected but before the contract is executed, and (b) with persons other than those to whom the regulations of 24 CFR Part 135 require employment opportunities to be directed, were not filled to circumvent'the contractor's obligations under 24 CFR Part 135. Noncompliance with HUD's regulations in 24 CFR Part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 17 With respect to work performed in connection with Section 3 covered Indian Housing assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract. Section 7(b) requires that to the greatest extent feasible, (a) preference and opportunities for training and employment shall be given to Indians, and (b) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises. Parties to this contract that are subject to the provisions of Section 3 and section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with section 7(b). 4.6 Compliance with Governmental Regulations Developer shall carry out the operation and maintenance of the Project, and any construction thereon, in conformity with applicable Governmental Regulations, including without limitation, all applicable labor standards, City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. § 12101, et seq., as currently exists or as may be amended from time to time, Government Code § 4450, et seq., as currently exists or as may be amended from time to time, Government Code § 11135, et seq., as currently exists or as may be amended from time to time, and the California Building Standards Code, Health and Safety Code § 18900, et seq. as currently exists or as may be amended from time to time. 4.7 Capital Replacement Reserve Requirements Developer shall, or shall cause the Property Manager to, commence annual deposits aggregating Eighteen Thousand Dollars ($3,000), or such greater amount as required by other lender or investor, if any, into a separate interest-bearing trust account (the "Replacement Reserve"). Funds in the Replacement Reserve shall be used for capital replacements to the Project, such as structural and equipment repairs and replacements for fixtures and equipment which are normally capitalized under generally accepted accounting principles, and shall exclude ordinary maintenance items such as interior paint. Except for emergency expenditures, any expenditure by Developer from the Replacement Reserve in excess of Five Thousand Dollars ($5,000) over any individual amount set forth in the approved Operating Budget must be approved in writing by City prior to its expenditure. Budgeted expenditures of Two Thousand Dollars ($2,000) or more must be documented by paid invoices and submitted to City within thirty (30) days of disbursement from the Replacement Reserve. The non-availability of funds in the Replacement Reserve shall not in any manner relieve the Developer of the obligation to undertake necessary capital repairs and improvements and to continue to maintain the Project in the manner prescribed herein. Not less than once per year, Developer, at its expense, shall submit to City an accounting for the Replacement Reserve. The adequacy of deposits into the Replacement Reserve shall be reviewed annually by Developer and City, and the amount of such deposits and the limit on expenditures OCCHC—7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 18 without prior City approval may be adjusted annually in writing by City in its reasonable discretion based upon an analysis of the reserves and the condition of the Site and any improvements thereon, but subject to (1) the approval, if applicable, of TCAC, and (ii) consideration of the cash flow of the Project at that time. 4.8 City Rights The City shall have the right to enter upon the Property to inspect the Property and both the interiors and exteriors of the Units, upon seventy-two (72) hours prior written notice to Owner. City may, but is not obligated to, perform or cause to be performed the maintenance necessary to cure any default of these maintenance covenants and Owner shall be liable for payment of reasonable costs to perform such required maintenance; provided, however, that Owner first be given written notice of the actions required to cure any default, and Owner, after receipt of such notice, shall have thirty(30) days to cure such defaults, but Owner shall not be deemed in default of the foregoing maintenance covenant if such default cannot reasonably be cured within the thirty (30) day period referenced above so long as Owner has commenced to cure such default within the same thirty (30) day period and is diligently proceeding with the work to cure such default. Notwithstanding the foregoing, if any property conditions are reasonably identified by City after a property inspection attended by a representative of Owner that pose an immediate danger to life or limb, Owner shall have three (3) days to effect corrections of such condition(s) to City's reasonable satisfaction. 4.9 Annual Report Owner covenants and agrees to submit to the City an annual report (the "Annual Report"), which shall include the information required by Section 3.5 of this Agreement. The Annual Report shall include for each Affordable Unit the rental rate and the income and family size of the occupants, and shall also include the records described in Section 3.5 herein and any financial statements required by the Housing Agreement. The income information shall be supplied by the tenant in a certified statement on a form provided by the City. The Owner shall submit the Annual Report on or before April 30 of the year following the year covered by the Annual Report. The Owner shall provide for the submission of household information and certification in its leases with tenants. 4.10 Management Report Beginning on the date of first occupancy, and for each fiscal year thereafter during the term of this Agreement, Owner shall also submit on an annual basis, and upon the written request of the City on a quarterly basis, a report for the management of the Property (the "Management Report"). The Management Report shall include a profit and loss statement, budget to date figures, and occupancy report and shall clearly show project revenues, operating expenses, deposits to and withdrawals from the Project's Capital Reserve Account, and cash flow available for residual receipts payments, all of which shall be certified by Developer. The Quarterly Report shall be in a form that is reasonably acceptable to the City Manager. The City Manager, in his/her sole discretion may waive the requirement of the OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 19 Management Report for one or more quarterly reporting periods. However, such waiver shall not operate to waive any subsequent requirement of the Management Report for the Restricted Period. After receipt of such certified financial statements for the Project, City may request additional financial analyses or obtain a third party review at City's own expense, of financial statements for the Project to verify the accuracy of the payments by Developer on the HOME Note or the required deposits into the Capital Reserve Account; provided, however that if such review reveals a substantial underpayment on the HOME Note in the City's reasonable discretion, in addition to the other remedies available to the City, the Developer shall promptly reimburse the City for the reasonable cost of conducting the review. 4.11 Management Plan Within the time set forth in the Schedule of Performance attached to the HOME Agreement, Developer shall prepare and submit to the City for approval a management plan in accordance with the following ("Management Plan"): 4.11.1 Management Plan The Management Plan, including such amendments as may be approved in writing by the City (if applicable), shall remain in effect for the term of this Agreement. Developer shall not amend the Management Plan or any of its components without the prior written consent of the City. The components of the Management Plan shall include: (1) Management Agent. The name and qualifications of any proposed management agent. The City shall approve or disapprove the proposed management agent in writing based on the experience and qualifications of the management agent. The management agent shall have demonstrated experience in operating affordable housing comparable to the Proj ect. (2) Management Program. A description of the proposed management, maintenance, tenant selection and occupancy policies and procedures for the HOME Units. (3) Management Agreement. A copy of the proposed management agreement specifying the amount of the management fee and the relationship and division of responsibilities between Developer and management agent. (4) Tenant Lease or Rental Agreement. A copy of the proposed tenant lease or rental agreement to be used in renting the HOME Units. The rental agreement/lease shall not contain any of the following provisions: a. Agreement to be sued. Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor of the Developer in a lawsuit brought in connection with the lease; b. Treatment of property. Agreement by tenant that the Developer may take, hold, or sell personal property of household members without notice to OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 20 the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the Unit after the tenant has moved out of the Unit. The Developer may dispose of this personal property in accordance with state law; C. Excusing Developer from responsibility. Agreement by the tenant not to hold Developer or Developer's agents legally responsible for any action or failure to act, whether intentional or negligent; d. Waiver of notice. Agreement of the tenant that the Developer may institute a lawsuit without notice to the tenant; e. Waiver of legal proceedings. Agreement by the tenant that the Developer may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; f. Waiver of a jury trial. Agreement by the tenant to waive any right to a trial by jury. g. Waiver of right to appeal court decision. Agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and h. Tenant chargeable with cost of legal actions regardless of outcome. Agreement by the tenant to pay attorneys' fees or other legal costs even if the tenant wins in a court proceeding by the Developer against the tenant. The tenant, however, may be obligated to pay attorneys' fees and other legal costs if the tenant loses. (5) Annual Operating Budget Within the time set forth in the Schedule of Performance attached to the Housing Agreement and annually thereafter not later than fifteen (15) days prior to the beginning of the next fiscal or calendar year of the Project, Owner shall submit a projected operating budget to the City for review and approval. After Owner's initial projected operating budget submittal, Owner shall annually reconcile each previous year's projected budget with actual operating results for the Project ("Budget Reconciliation"). In each Budget Reconciliation, Owner shall set forth an explanation for any major discrepancies between projected and actual budgets. For purposes of this Agreement, a "major discrepancy" shall mean a line item difference between projected and actual budgets of 20% or more. The City shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder, but such matter shall be deemed disapproved unless the City provides to Owner its written approval within thirty (30) days after receipt of a request for approval. Any express disapproval shall be in writing and contain the City's reasons for disapproval. Notwithstanding the foregoing, if the City has not expressly approved or disapproved Owner's projected operating budget within thirty (30) days after its submittal to the OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 21 City, then Owner shall provide a written notice to the City, sent by registered mail, that it intends to operate pursuant to the projected operating budget and the City shall have an additional thirty (30) days within which to approve or disapprove such budget. If the City has not expressly approved or disapproved the projected operating budget by the end of the second 30-day period, then Owner may operate the Project under its projected operating budget so long as discretionary line items do not exceed one hundred ten percent (110%) of the amount of that line item in the previous year's approved operating budget. 4.11.2 Notices to Developer Owner hereby covenants and agrees the City shall have the right, at any time and from time to time, to give notice to Owner if the City determines that the Project is not being managed or maintained in accordance with the Management Plan. The City may require the Owner to change management practices or to terminate the management agent and retain a different management agent, approved by the City. The City agrees that prior to requiring the Owner to change its management agent or the management practices the City shall identify in writing the deficiencies complained of and shall informally consult with Owner for a period not to exceed thirty (30) days, in an attempt to resolve the dispute and achieve a cure of such deficiencies. If the City determines that such an attempt at informal resolution and/or cure has been unsuccessful, it shall give the Owner thirty (30) days written notice to change the management agent. If Owner fails to do as requested by the City in the written notice, the City may then require the immediate change of the management agent. The management agreement shall provide that it is subject to termination by the Owner without penalty, upon thirty (30) days prior written notice. Within ten (10) business days following a direction of the City to replace the management agent, the Owner shall select another management agent or make other arrangements satisfactory to the City for continuing management of the Project. The Owner shall notify the City upon learning that there is a voluntary change in the management or control of the management agent, and, if the change is unsatisfactory to the City, the City shall be entitled to require the Owner to change the management agent in accordance with the terms of this paragraph. 5. OTHER PROGRAM REQUIREMENTS 5.1 HOME Program Covenants Developer shall comply with all applicable federal requirements set forth in Subpart H of the HOME regulations, including the following: OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 22 5.1.1 (qualifications as Affordable Housing As more particularly provided in the Regulatory Agreement, Developer shall use, manage and operate the Property in accordance with the requirements of the HOME Program and 24 CFR 92.252 so as to qualify the housing on the Site as affordable housing until the later of the date the HOME Funds are repaid or the expiration of the Affordability Period. Developer hereby covenants and agrees to comply with all applicable requirements of the HOME Program, including, without limitation, those set forth herein 5.1.2 Use of HOME Funds In accordance with 24 CFR 92.205(a)(1) and 92.206(c), the HOME Funds shall be used exclusively for acquisition of the Property, which constitutes improved real property as well as permanent rental housing as required thereby. 5.1.3 Eligible Tenant and Participant Protections Developer shall comply with the requirements of 24 CFR 92.253. 5.1.4 Handicapped Accessibility If and to the extent applicable, Developer shall comply with (a) Section 504 of the Rehabilitation Act of 1973, and implementing regulation at 24 CFR Part 8C governing accessibility of projects assisted under the HOME Program; and (b) the Americans with Disabilities Act of 1990, and implementing regulations at 28 CFR Parts 35-36 in order to provide handicapped accessibility to the extent readily achievable. 5.1.5 Lead-Based Paint Developer shall maintain the Affordable Units in compliance with the applicable Property Standards as set forth in 24 CFR 92.251. Developer shall comply with the requirements, as applicable, of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846) and Residential Lead-Based Paint Hazard Reduction Act of 1992 and implementing regulations at 24 CFR Part 35, including testing and abatement activities. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 23 5.1.6 Affirmative Marketing Developer shall implement and perform such affirmative marketing procedures and requirements(24 CFR 92.351) for the Project as adopted by City and delivered to Developer in its Affirmative Fair Housing Marketing Plan. 5.1.7 Equal Opportunity and Fair Housing No person shall be excluded from participation in, be denied the benefits of or be subjected to discrimination under any program or activity funded in whole or in part with proceeds from the City Loan. 5.1.8 Property Standards Owner shall comply with 24 CFR 92.251. (i) The development of the Property shall comply with the City's building code and all other applicable local codes, rehabilitation standards, ordinances and zoning ordinances in effect at the time of project completion, and the Property shall be decent, safe and sanitary shall conform to the following codes that have been adopted by the City of Long Beach: Uniform Building Code (UBC) as adopted by the State of California (California Building Code Title 24 Part 2), National Electrical Code (NEC), Uniform Plumbing Code (UPC), Uniform Mechanical Code (UMC) and California Energy Code (CEC). (ii) The Property shall comply with the accessibility requirements at 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and, if applicable, the design and construction requirements at 24 CFR 100.205 for covered multifamily dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act (42 U.S.C. 3601-3619). 5.1.9 Displacement and Relocation Developer acknowledges and agrees that, pursuant to 24 CFR 92.253 and consistent with the other goals and objectives of this party, City must ensure that it has taken all reasonable steps to minimize the displacement of persons as a result of the Project, if any. Furthermore, to the extent applicable and to the extent feasibility, residential tenants must be provided a reasonable opportunity to lease and occupy a suitable, decent, safe, sanitary and affordable dwelling unit on the subject Property upon completion of construction. Developer agrees to cooperate fully and completely with City in meeting the requirements of 24 CFR 92.253 and shall take all actions and measures reasonable required by the City Manager in connection therewith. To the extent applicable to the Project, Developer agrees that any relocation assistance and/or benefits to which any occupant of the Property becomes entitled as a consequence of this Agreement, whether under state or federal law, shall be the obligation of Developer, and Developer agrees to defend, indemnify and hold City harmless therefrom. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO.8 PAGE 24 5.1.10 Faith Based Activities To the extent applicable to the Project, in accordance with 24 CFR 92.257, Developer will comply with the restrictions on the use of HOME Funds for faith based activities as set forth in Section 92.257. 5.1.11 Records and Reports Developer shall maintain and from time to time submit to City such records, reports and information as the City Manager may reasonably require in order to permit City to meet the recordkeeping and reporting requirements required of it pursuant to 24 CFR 92.508, including, without limitation, the following (such reports may be combined with and/or incorporated in the reports required elsewhere in this Agreement): (1) Records which demonstrate that the Property meets the property standard specified in 24 CFR 92.251 and the lead-based paint requirements of 24 CFR 92.355; (a) Records which demonstrate that each family occupying the Property is income eligible in accordance with 24 CFR 92.203; (b) Records which demonstrate that the Property meets the affordability and income targeting requirements of 24 CFR 92.252 for the Rental period. Records shall be kept for each family assisted; (c) Records which demonstrate that each lease complies with the tenant and participant protections, as specified in 24 CFR 92.253. Records shall be kept for each family; as applicable. (d) Equal opportunity and fair housing records,including, as follows: a. data on the extent to which each racial and ethnic group; b. and single-headed household (by gender of household head) have applied for, participated in, or benefitted from, any program or activity funded in whole or in part with HOME funds; C. documentation of actions undertaken to meet the requirements of 24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u); d. documentation of the actions the City has taken to affirmatively further fair housing; (e) Affirmative Marketing and MBE/WBE records, including, as applicable: e. if applicable, records documenting compliance with the affirmative marketing procedures and requirements of 24 CFR 92.351; f. if applicable, documentation and data on the steps taken by Developer to implement the City's outreach programs to minority-owned and female-owned OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO.8 PAGE 25 businesses including data indicating the racial/ethnic or gender character of each business entity receiving a contract or subcontract of$25,000 or more paid, or to be paid, with HOME funds; the amount of the contract or subcontract, and documentation of the Developer's affirmative steps to assure that minority business and women's business enterprises have an equal opportunity to obtain or compete for contracts and subcontracts as sources of supplies, equipment, construction and services; g. if applicable, records which demonstrate compliance with the requirements of 24 CFR 92.353 relating to displacement, relocation and real property acquisition, including project occupancy lists identifying the name and address of all persons occupying or moving into the Property on and after the date on which Developer obtained site control; h. if applicable, records demonstrating compliance with the labor requirements of 24 CFR 92.354, including contract provisions and payroll records; i. records demonstrating compliance with the lead-based paint requirements of 24 CFR 92.355; j. if applicable, records which support any exceptions to the conflict of interest prohibition pursuant to 24 CFR 92.356; k. debarment and suspension certifications required by 24 CFR Parts 24 and 91. 1. Developer shall retain all books and records relevant to the HOME Loan for a minimum of ten years after the project completion date, except that records of individual tenant income verifications, project rents and project inspections shall be retained for the most recent ten-year period until ten years after the affordability period terminates, or until the conclusion or resolution of any and all audits or litigation relevant to the HOME Loan, whichever is later. The City, HUD and the Controller General of the United States, and any of their representatives, shall have the right of access to any pertinent books, documents, papers or other records of the Developer, in order to make audits, examinations, excerpts and transcripts. in. Developer shall retain at all times the documentation submitted pursuant to 24 CFR 92.203(a)(1), which provided the basis for determining income eligibility. 5.1.12 Labor Standards (Davis Bacon) If required by applicable Governmental Regulations, any contract for the work of Developer in connection with the Project shall contain a Prevailing Wage Clause requiring that not less than the wages prevailing in the locality, as predetermined by the Secretary of the United States Department of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 276a-5), will be paid to all laborers and mechanics employed in the construction of the Project, and such contract(s) shall also be subject to the overtime provisions, as applicable, of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-332). Participating contractors, subcontractors, and other participants must comply with regulations issued under these Acts and with other federal laws and regulations pertaining to labor standards and HUD Handbook 1344.1 (Federal Labor Standards Compliance in OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 26 Housing and Community Development Programs), as applicable. The Developer shall supply to City a certification, in form and substance satisfactory to HUD and the City Manager, as to compliance with the provisions of this section before receiving any disbursement of HOME Loan funds. Developer shall comply with the provisions of 24 CFR 24 relating to the employment, engagement of services, awarding of contracts, or funding of any contractor or subcontractor during any period of debarment, suspension, or placement in ineligibility status. 5.1.13 Use of Debarred, Suspended, or Ineligbile Participants Developer shall comply with the provisions of 24 CFR 24 relating to the employment, engagement of services, awarding of contracts, or funding of any contractor or subcontractor during any period of debarment, suspension, or placement in ineligibility status. 5.1.14 Maintenance of Drug-Free Workplace Developer shall comply with the provisions of 24 CFR 24 relating to the employment, engagement of services, awarding of contracts, or funding of any contractor or subcontractor during any period of debarment, suspension, or placement in ineligibility status. 5.2 Other Federal Requirements and Nondiscrimination (24 CFR 92.350) Developer acknowledges that 24 CFR 92.350 provides that the Federal requirements set forth in 24 CFR Part 5, subpart A, are applicable to participants in the HOME Program, and that these Federal requirements include the following: 5.2.1 Nondiscrimination and Equal Opportunity (1) Civil Rights, Fair Housing, and Age and Disability Discrimination Acts Assurances: Developer assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, national origin, sex, age, handicap, religion, or religious preference, under any program or activity funded by this Agreement, as required by the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR part 100 et seq.; Executive Order 11063, as amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing Programs) and implementing regulations at 24 CFR part 107; title V1 of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-4) (Nondiscrimination in Federally Assisted Programs) and implementing regulations at 24 CFR part 1; the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and implementing regulations at 24 CFR part 146; section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8; Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42. U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 27 (2) Training, Employment and Contracting Opportunities Assurance of Compliance: The Project activities to be performed under this Agreement are assisted under a program providing direct federal financial assistance from HUD which is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 170lu("Section 3"), and the regulations issued by HUD to implement Section 3 (24 CFR Part 135) (the "Section 3 Regulations"). Pursuant to 24 CFR 135.3, the requirements of the Section 3 Regulations apply to the recipient of such financial assistance only where the amount of federal assistance exceeds $200,000, and apply to a contractor or subcontractor of such recipient only where the amount of assistance exceeds $200,000 and the amount of the contract or subcontract exceeds $100,000. Developer shall provide, to the greatest extent feasible, training, employment and contracting opportunities generated by the financial assistance to low- and very-low income persons and business concerns owned by low- or very-low income persons, or which employ low- or very-low income persons. (f) MBE/WBE Affirmative Action Outreach Program: Developer hereby agrees to comply with the City's minority and women business outreach program in accordance with Executive Order 11625, as amended by Executive Order 12007 (3 CFR, 1971-1975 Comp., p. 616 and 3 CFR, 1977 Comp., p. 139) (Minority Business Enterprises); Executive Order 12432 (3 CFR, 1983 Comp., p. 198) (Minority Business Enterprise Development); and Executive Order 12138, as amended by Executive Order 12608 (3 CFR, 1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women's Business Enterprise). (g) Disclosure Requirements The disclosure requirements and prohibitions of 31 USC 1352 and implementing regulations at 24 CFR Part 87; and the requirements for funding competitions established by the Housing and Urban Development Reform Act of 1989 (42 USC 3531 et seq.). (h) Displacement, Relocation and Acquisition. 24 CFR 92.353. Developer shall cooperate with the City in connection with any project- specific relocation plan to be prepared by the City, and shall certify that, to the extent applicable, it will comply or has complied with the federal relocation, displacement and acquisition rules governing the HOME Program, which are contained in the Uniform Relocation Act, 49 CFR Part 24, and applicable program regulations. 24 CFR Section 92.353 requires that tenants who are displaced from housing units demolished or converted as a result of HOME-funded activities be provided with relocation assistance. 5.2.2 Requests for Disbursements of Funds Notwithstanding anything contained in this Agreement to the contrary, Developer may not request disbursements of funds under this Agreement until the funds are OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 28 needed to permanently finance Eligible Costs (as defined by the HOME Program). The amount of each request shall be limited to the amount needed. 5.2.3 Eligible Costs Developer shall use HOME Loan proceeds only to pay costs defined as "eligible costs" pursuant to 24 CFR 92.206. 5.2.4 Affirmative Marketing Developer shall implement and perform such affirmative marketing procedures and requirements (24 CFR 92.351) for the Project as adopted by City and delivered to Developer in its Affirmative Fair Housing Marketing Plan. 5.2.5 Conflict of Interest Developer shall comply with any applicable conflict of interest provisions set forth at 24 CFR 570.611. (1) Interest of Employees, Officers and Officials. No employee, agent, consultant, officer or elected official or appointed official of the City, or employee, agent, consultant of officer of Developer, and no other public official of the City who exercises any functions or responsibilities with respect to the activities assisted with HOME funds or who are in a position to participate in a decision making process or gain inside information with regard to these activities, during their tenure and for one year thereafter, may obtain a financial interest or benefit from a HOME assisted activity or have an interest in any contract or subcontract, or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties. Developer shall incorporate, or cause to be incorporated, in all such contractors or subcontracts a provision prohibiting such interest pursuant to the purposes of this Section. Fulfillment of"sweat equity" obligations as defined in Section 8201 of the HOME regulations shall not be considered a violation of this prohibition. (i) Prohibition Against Occupying HOME-Assisted Units. No officer, employee, agent, official or consultant of Developer may occupy a HOME assisted Unit. 0) Consultant Activities. 24 CFR 92.358. No person providing consultant services in an employer-employee type relationship shall receive more than a reasonable rate of compensation for personal services paid for with HOME funds. In no event, however, shall such compensation exceed the limits in effect under the provisions of any applicable statute (e.g., annual HUD appropriations acts which have set the limit at the equivalent of the daily rate paid for Level IV of the Executive Schedule). Such services shall be evidenced by written agreements between the parties which detail the responsibilities, standards and compensation. Consultant services provided under an independent contractor relationship are not subject to the compensation limitation Level IV of the Executive Schedule. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 29 5.3 Lobbying Prohibition Owner hereby certifies to City, under penalty of perjury, under the terms of applicable federal law, that at all applicable times before, during and after the term of this Agreement, that: (a) No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; and (b) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions; and (c) Owner will require that the above stated language in paragraphs a. and b. be included in the award documents for all subawards at all tiers, including subcontracts, subgrants, loans, contracts, and cooperative agreements concerning the subject matter of this Agreement; and (d) Further, Owner and all subawards at all tiers, including subcontracts, subgrants, loans, contracts, and cooperative agreements concerning the subject matter of this Agreement, at all times, shall certify compliance with the provisions of 31 U.S.C. §1352 and any and all terms and conditions of the Byrd Anti-Lobbying Amendment, as amended from time to time. 5.4 Other HOME Program Requirements Developer shall comply with all other applicable requirements of the HOME Program. 6. ENFORCEMENT (a) Failure to comply with the affordability requirements of this Agreement is an event of default under the terms of the HOME Loan. Pursuant to the HOME Promissory Note evidencing the HOME Loan, subject to the right to cure, the HOME Loan will be due and payable immediately if the housing does not meet the affordability requirements of this Agreement. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 30 (b) If Owner defaults in the performance or observance of any covenant, agreement or obligation of Owner pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) days after written notice thereof(or such longer period as may apply to the specific alleged default) shall have been given by City, or, in the event said default cannot be cured within said time period, Owner has failed to commence to cure such default within said thirty (30) days and diligently prosecute said cure to completion, then City shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: (i) By mandamus or other suit, action or proceeding at law or in equity, require Owner to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of this Agreement; or (ii) Take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants and agreements of participant hereunder, including foreclosure of the Deed of Trust (provided, however, that foreclosure under the Deed of Trust shall be in the priority position of the Deed of Trust and not this Regulatory Agreement). (c) Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. (d) Notwithstanding anything to the contrary stated herein, a breach of this Agreement by Owner or its successors and assigns shall in no way defeat, invalidate or impair the obligation or priority of any mortgage or deed of trust encumbering the Property. 7. COVENANTS TO RUN WITH THE LAND Owner hereby subjects the Property to the covenants, reservations, and restrictions set forth in this Agreement. City and Owner hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land and shall pass to and be binding upon the Owner's successors in title to the Property; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire, except the nondiscrimination covenants contained in Section 5.1 shall remain in perpetuity. All covenants without regard to technical classification or designation shall be binding for the benefit of the City, and such covenants shall run in favor of the City for the entire term of this Agreement, without regard to whether the City is or remains an owner of any land or interest therein to which such covenants relate. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 31 8. ATTORNEYS' FEES In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 9. AMENDMENTS This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the Official Records of the County of Orange. 10. NOTICE 1. Any notice required to be given hereunder shall be made in writing and shall be given by (i) personal delivery, (ii) courier service that provides a receipt showing date and time of delivery, or (iii) certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: City: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Deputy Director of Economic Development With a copy to: City Attorney's Office City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Owner: Orange County Community Housing Corporation 2024 N. Broadway, 3`d Floor Santa Ana, CA 92706-2623 Attention: Executive Director Notices personally delivered or delivered by courier shall be effective upon receipt. Mailed notices shall be effective on the earlier of receipt or Noon on the second business day following deposit in the United States mail. 11. SEVERABILITY/WAIVER/INTERGRATION 1.1. Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 32 1.2. Waiver. Waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 1.3 Integration. This Agreement contains the entire Agreement between the parties and neither party relies on any warranty or representation not contained in this Agreement. 12. GOVERNING LAW This Agreement shall be governed by the internal laws of the State of California, without reference to the principles regarding the conflict of laws. 13. COUNTERPARTS This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. This Agreement may be executed by each party on a separate signature page, and when the executed signature pages are combined, shall constitute one single instrument. IN WITNESS WHEREOF, the City and Developer have executed this HOME Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. [signatures appear on following page] OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO. 8 PAGE 33 "OWNER" "CITY" ORANGE COUNTY COMMUNITY THE CITY OF HUNTINGTON HOUSING CORPORATION, BEACH, a municipal corporation of a California nonprofit public benefit the State of California corporation By: Nora Men ez �Sl VA S Its: Executive Director ATTEST: / 94 � City Clerk �obi,� EshtS��t� APPROVED O FORM: City Attorney (o INITI T D AN PPROVED: ssistant City Manager REVIE ED APPROVED: ri'tj Manager OCCHC-7792 BARTON DRIVE HOME REGULATORY AGREEMENT EXHIBIT NO.8 PAGE 34 CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness,accuracy,or validity of that document. State of California f County of Orange On Nov. 07, 2016 before me, CATHY GAMBINO Notary Public, (Here insert name and title of the officer) personally appeared - NORA MENDEZ - who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. CATHY BAMBINO COMM.# 2051586 to ul' � NOTARY PUBLIC CALIFORNIA `' • _ LOS ANGEIES COUNTY (Notary Seal) MY CONM.EXP.DEC. 12,201]"` Signature of NVubKc ADDITIONAL OPTIONAL INFORMATION INSTRUCTIONS FOR COMPLETING THIS FORM Any acknowledgment completed in California must contain verbiage exactly as DESCRIPTION OF THE ATTACHED DOCUMENT appears above in the notary section or a separate acknowledgment form must be properly completed and attached to that document. The only exception is if a Home regulatory Agmt&Declaration of Covenants&Restdctions(Home) document is to be recorded outside of California.In such instances,any alternative (Title or description of attached document) acknowledgment verbiage as may be printed on such a document so long as the verbiage does not require the notary to do something that is illegal for a notary in Program)Community Housing Development Organization(CHDO) California (i.e. certifying the authorized capacity of the signer). Please check the (Title or description of attached document continued) document carefully for proper notarial wording and attach this form if required Number of Pages 34 with Document Date • State and County information must be the State and County where the document signer(s)personally appeared before the notary public for acknowledgment. Exhibit 1 & 2 • Date of notarization must be the date that the signer(s)personally appeared which must also be the same date the acknowledgment is completed. (Additional information) • The notary public must print his or her name as it appears within his or her commission followed by a comma and then your title(notary public). • Print the name(s) of document signer(s) who personally appear at the time of notarization. CAPACITY CLAIMED BY THE SIGNER • Indicate the correct singular or plural forms by crossing off incorrect forms(i.e. ❑✓ Individual(s) he/she/they-is/afe)or circling the correct forms.Failure to correctly indicate this information may lead to rejection of document recording. ❑ Corporate Officer • The notary seal impression must be clear and photographically reproducible. Impression must not cover text or lines. If seal impression smudges,re-seal if a (Title) sufficient area permits,otherwise complete a different acknowledgment form. ❑ Partner(s) • Signature of the notary public must match the signature on file with the office of the county clerk. ❑ Attorney-in-Fact Additional information is not required but could help to ensure this ❑ Trustee(s) acknowledgment is not misused or attached to a different document. ❑ Other Indicate title or type of attached document,number of pages and date. Indicate the capacity claimed by the signer. If the claimed capacity is a corporate officer,indicate the title(i.e.CEO,CFO,Secretary). • Securely attach this document to the signed document C 2004-2015 Prol-ink Signing Service,Inc.-All Rights Reserved-TheProl-ink.com-Nationwide Notary Service A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On October 24, 2016 before me, P. L. Esparza, Notary Public, personally appeared Robin Estanislau and Jim Katapodis 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 a=�� Notary Public-California z a ' `` "' Orange County My Comm. Expires Aug 4,2017 —r-1W-1V-1V-1V-1V" t (Seal) (Notary Signat ) EXHIBIT 1 LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN, THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 EXHIBIT 2 AFFORDABILITY REQUIREMENTS (24 CFR 92.252; 92.504(c)(3)(III)) Developer shall submit its rent schedule and utility allowances thirty (30) days prior to initial rental of the units and on an annual basis thereafter. City shall review and approve or disapprove the proposed rent schedule and utility allowances for compliance with the maximum rent limitations contained in 24 CFR 92.252. City will provide updated HUD Income and rent limits to Developer as they become available. As of the date of this Agreement, the applicable income and rent limits are as follows: ORANGE COUNTY 2016 HOME PROGRAM INCOME LIMITS Household Very-Low Size (Low Low(High 30%Limits HOME) 60% Limits HOME) 1 20,500 34,150 40,980 54,600 2 23,400 39,000 46,800 62,400 3 26,350 43,900 52,680 70,200 4 29,250 48,750 58,500 78,000 5 31,600 52,650 63,180 84,250 6 33,950 56,550 67,860 90,500 7 36,300 60,450 72,540 96,750 8 38,650 64,350 77,220 103,000 ORANGE COUNTY 2016 HOME PROGRAM RENT LIMITS Unit Size Very-Low Income Low Income 2-Bedroom 914 1,447 These rents include tenant paid utilities. The Developer is to calculate the appropriate utility allowance for two-bedroom units based on the HUD Utility Schedule Model (HUSM) or a project-specific methodology. (See HOME fires-Vol. 13 No. 2, May 2016). Owner shall be responsible for ensuring that the current operative HOME income and rent limits in effect at the time of the tenant's rental application will be used to determine initial tenant eligibility and conformance with HOME affordability requirements and that each tenant recertification is conducted using current HOME income and rent limits to assure compliance with HOME Regulations. Income determination and rental rate adjustments shall occur upon annual lease renewal. An increase in rents for HOME assisted units is subject to the provisions of existing leases, including the provision that rents may not be adjusted until leases are renewed. Developer must provide tenants with not less than thirty (30) days prior written notice before implementing an increase in rents. EXHIBIT 9 ENVIRONMENTAL INDEMNITY ENVIRONMENTAL INDEMNITY BY ORANGE COUNTY COMMUNITY HOUSING CORPORATION IN FAVOR OF THE CITY OF HUNTINGTON BEACH THIS ENVIRONMENTAL INDEMNITY (this "Indemnity"), dated as of October , 2016, and made by ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation (referred to as "Borrower"), whose address for purposes of giving notices is 501 Golden Circle, Suite 200, Santa Ana, CA 92705, Attention: Executive Director, in favor of THE CITY OF HUNTINGTON BEACH (the "City"), whose address for purposes of giving notice is 2000 Main Street, Huntington Beach, California 92648. WITNESSETH WHEREAS, Borrower is the owner of the real property in the City of Huntington Beach described on Exhibit "A" attached hereto and made a part hereof, and the improvements thereon (collectively referred to as the "Property'); WHEREAS, Borrower and the City entered into that certain HOME Affordable Housing Agreement, dated as of October 17,2016 (the "HOME Housing Agreement"), pursuant to which the City agreed to make a loan to Borrower for the purpose of rehabilitating the Property as affordable rental housing (the "HOME Loan") (the Housing Agreement and the documents and instruments referred to therein which are being executed by Borrower concurrently herewith are referred to collectively as the"HOME Loan Documents"); WHEREAS, Borrower has agreed to execute and deliver to the City this Indemnity to induce the City to make the HOME Loan. NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual agreements hereinafter set forth, Borrower hereby agrees with the City as follows: 1. DEFINITIONS For the purpose of this Indemnity, "Hazardous Materials" or"Hazardous Substances" will include,but not be limited to, oil, flammable explosives, asbestos,urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including, without limitation, any substances defined as "extremely hazardous substances," "hazardous substances," "hazardous materials," "hazardous waste" or "toxic substances" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, including the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq. ("CERCLA"); the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act of 1976, as OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY PAGEI amended, 42 U.S.C. Sections 6901, et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution Control Act, as emended, 33, U.S.C. Section 1251 et seq.; the Occupational Safety and Health Act, as amended,29 U.S.C. Section 651;the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act,as amended,42 U.S.C. Section 300f et seq.;and those substances defined as "hazardous waste" in Section 25117 of the California Health and Safety Code, as "infectious waste" in Section 25117.5 of the California Health and Safety Code, or as "hazardous substances" in Section 25316 of the California Health and Safety Code or "hazardous materials" as defined in Section 353 of the California Vehicle Code; and in the regulations adopted and orders and publications promulgated pursuant to said laws. Other capitalized terms used in this Indemnity will have the meanings ascribed to them in the Housing Agreement with the same force and effect as if set forth in full below. 2. COVENANTS AND INDEMNITY The following covenants, and indemnities are hereby given and made by Borrower: 2.1 Covenants. (a) Borrower covenants that it will strictly comply with any and all laws, regulations, and/or orders which may be promulgated from time to time relating to Hazardous Materials ("Hazardous Materials Laws"), to immediately take, at Borrower's sole expense, all remedial action required by any Hazardous Materials Law or any judgment, consent decree, settlement or compromise in respect to any Hazardous Materials Claim(as defined herein below), and to keep the Property free of any lien imposed pursuant to any Hazardous Materials Law or in relation to any Hazardous Materials Claim. (b) Borrower covenants that the Property. will not, while Borrower is the owner of any portion thereof, be used for any activities involving, directly or indirectly, the use, generation, treatment, storage, release, transportation, presence, discharge or disposal of any Hazardous Materials, except for de minimis quantities used at the Property in strict compliance with all Hazardous Materials Laws and required in connection with the routine rehabilitation, operation and maintenance of the Property. (c) The City will have the right, at any time, to conduct an environmental audit of the Property at the City's expense, unless Hazardous Materials are found, then at Borrower's sole cost and expense, and Borrower will cooperate in the conduct of any such environmental audit. Other than in an emergency, such audit will be conducted only after prior notice has been given to Borrower and only in the presence of a representative of Borrower. Borrower will give the City and its agents and employees access to the Property to remove, or OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY PAGE 2 otherwise to mitigate the effects of, Hazardous Materials and Borrower will not unreasonably delay or condition such access. (e) Borrower will not install, or permit to be installed, on the Property friable asbestos or any substance containing asbestos and deemed hazardous by any Hazardous Materials Laws, and, with respect to any such material currently present in the Property, Borrower will promptly either(i)remove or cause to be removed any material that such Hazardous Materials Laws deem hazardous and require to be removed, or (ii) otherwise comply with such Hazardous Materials Laws, all at Borrower's sole cost and expense. If Borrower fails to so do within the cure period permitted under applicable law, regulation, or order, the City may do whatever is necessary to eliminate said substances from the premises or to otherwise comply with all Hazardous Materials Laws, and the costs thereof will be added to the Obligations (as hereinafter defined) of Borrower under this Section 2. (f) Borrower must immediately advise the City in writing of any of the following: (i) any pending or threatened claim against Borrower or the Property by any governmental entity or agency or by any other person or entity relating to Hazardous Materials or pursuant to the Hazardous Materials Laws ("Hazardous Materials Claims"), (ii) any condition or occurrence on the Property that (A) results in noncompliance by Borrower with any Hazardous Materials Laws, (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 Hazardous Materials Law, or(C) could reasonably be anticipated to form the basis of a Hazardous Materials Claim against the Property or Borrower. 2.2 Indemnity. Borrower hereby agrees to defend, indemnify, protect, and hold harmless the City and its members, officers, officials, employees, agents, representatives, servants, contractors, successors and assigns (collectively, the "Indemnitees"), except to the extent of the Indemnitees' gross negligence or willful misconduct, from and against any and all damages, losses, liabilities, obligations, penalties, claims (including, without limitation, any third party tort 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, whether foreseeable or unforeseeable, (collectively, the "Obligations") which may at any time be imposed upon, incurred by or asserted or awarded against the City as a direct or indirect consequence of: (a) The presence of any Hazardous Materials on, in, under, or affecting all or any portion of the Property; (b) The breach of any covenant made by Borrower in Section 2.1 hereof; or (c) The enforcement by the City of any of the provisions of this Section 2.2 or the assertion by Borrower of any defense to its obligations hereunder. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY PAGE 3 3. BORROWER'S UNCONDITIONAL OBLIGATIONS 3.1 Unconditional Obligations. Borrower 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 any of the Loan Documents or affecting any of the rights of the City with respect thereto. The obligations of Borrower hereunder will be absolute and unconditional irrespective of, and Borrower waives any defense based upon, (a) The validity, regularity, or enforceability of the Loan Documents or any other instrument or document executed or delivered in connection therewith; (b) Any alteration, amendment, modification, release, termination, or cancellation of any of the H O ME Loan 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 Borrower contained in any of the HOME Loan Documents; (c) Any extension of the maturity of the HOME Loan or any waiver of, or consent to any departure from, any provision contained in any of the HOME Loan Documents; (d) Any exculpatory provision in any of the H O M E Loan Documents limiting the City's recourse to property encumbered by the HOME Deed of Trust securing the HOME Loan, or to any other security, or limiting the City's rights to a deficiency judgment against Borrower; (e) Any exchange, addition, subordination, or release of, or nonperfection of any lien on or security interest in, any collateral for the HOME Loan, or any release, amendment, waiver of, or consent to any departure from any provision of, any other surety or guarantee given in respect of the HOME Loan; (f) The insolvency or bankruptcy _of Borrower or of any indemnitor or guarantor under any other indemnity or guarantee given in respect of the Loan; or (g) Any other circumstance that might otherwise constitute a defense available to, or a discharge of, Borrower, or Borrower's approved assignee, or any other indemnitor or guarantor with respect to the HOME Loan or any or all of the Obligations. 3.2 Continuation. The term of this Indemnity will continue until such time as no legal action can be successfully brought against the City due to applicable statutes of limitation. This Indemnity (a) is a continuing indemnity and will remain in full force and effect until the satisfaction in full of all of the Obligations (notwithstanding the payment in full of the HOME Loan or the release or other extinguishment of the HOME Deed of Trust, or any other security for the HOME Loan); and OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY PAGE (b) will continue to be effective or will be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the City upon the insolvency, bankruptcy, or reorganization of Borrower or otherwise, all as though such payment had not been made. 3.3 Survival. Borrower's duty to indemnify will survive any judicial or non judicial foreclosure under the HOME Deed of Trust or transfer of the Property in lieu thereof, the release and reconveyance or cancellation of the HOME Deed of Trust, and the satisfaction of all of Borrower's obligations under the HOME Loan Documents. 4. WAIVER Borrower, acknowledges that possible defenses to the enforceability of the Obligations may presently exist and/or may arise hereafter and as part of the City's consideration for entering into the Housing Agreement, they have specifically bargained for the waiver and relinquishment by Borrower of all such defenses. Borrower agrees that it has had the opportunity to seek and receive legal advice from skilled legal counsel of its choosing and represents and confirms that Borrower is fully informed regarding, and thoroughly understands, the nature of such possible defenses, the circumstances under which they may arise, the benefits that they might confer upon Borrower and the legal consequences to Borrower of waiving such defenses. Borrower makes this Indemnity with the intent that this Indemnity and all of the waivers herein will each and all be fully enforceable by the City and that the City are induced to enter into the HOME Housing Agreement in material reliance upon such presumed full enforceability. Without limitation to the foregoing, Borrower hereby waives the following: (a) Promptness and diligence; (b) Notice of acceptance and notice of the incurrence of any Obligation by Borrower; (c) Notice of any action taken by the City, Borrower, or any other interested party under any HOME Loan Document 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 Borrower of its Obligations hereunder, (e) The right to a trial by jury with respect to any dispute arising under, or relating to, this Indemnity; OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY PAGE (f) Any requirement that the City protect, secure, perfect, or insure any security interest or lien in or on any property subject thereto; (g) Any requirement that the City exhaust any. right or take any action against Borrower or any other person or collateral; and (h) Any defense that may arise by reason of: (1) The incapacity, lack of authority, death or disability of, or revocation hereof by, any person or persons; (2) The failure of the City 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 City, including, without limitation, an election to proceed by nonjudicial foreclosure or which destroys or otherwise impairs the subrogation rights of Borrower or any other right of Borrower to proceed against a guarantor by the operation of Section 580d of the California Code of Civil Procedure or otherwise. 5. NOTICES Any notice, demand, statement, request, or consent made hereunder will be in writing and will 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 electronic facsimile ("fax") transmission to the fax 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, will designate in writing): In the case of the City: 714-374-1590 In the case of Borrower: 714-558-8161 Any notice that is transmitted by fax transmission followed by delivery of a "hard" copy, will 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), will be deemed received on the documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required will be deemed received on the date of receipt thereof. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY PAGE 6 6. MISCELLANEOUS 6.1 Borrower must make any payment required to be made hereunder in lawful money of the United States of America, and in same day funds, to the City at its address specified in the first paragraph hereof. 6.2 No amendment of any provision of this Indemnity will be effective unless it is in writing and signed by Borrower and the City and no waiver of any provision of this Indemnity, and no consent to any departure by Borrower from any provision of this Indemnity, will be effective unless it is in writing and signed by the City, and then such waiver or consent will be effective only in the specific instance and for the specific purpose for which given. 6.3 No failure on the part of the City to exercise, and no delay in exercising, any right hereunder or under any HOME Loan Document will operate as a waiver hereof or thereof, nor will 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 City provided herein and in the HOME Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the City hereunder or under any HOME Loan Document against any party thereto are not conditional or contingent on any attempt by the City to exercise any of its rights hereunder or under any other HOME Loan Document against such party or against any other person or collateral. 6.4 If any provision of this Indemnity is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, then that provision will, as to such jurisdiction, be deemed 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 will (a) be binding upon Borrower, and Borrower's successors and assigns; and (b) inure, together with all rights and remedies of the City hereunder, to the benefit of the City, its directors, officers, employees, and agents, any successors to the City 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 City's rights and remedies under the H O M E Loan Documents, any successors to any such person, and all directors, officers, employees, and agents of all of the aforementioned parties. Without limiting the generality of clause (b) of the immediately preceding sentence, the City may, subject to, and in accordance with, the provisions of the HOME Loan Documents, assign or otherwise transfer all or any portion of its rights and obligations under any HOME Loan Document, to any other person, and such other person will thereupon become vested with all of the rights and obligations in respect thereof that were granted to the City herein or otherwise. None of the rights or obligations of Borrower hereunder may be assigned or otherwise transferred without the prior written consent of the City. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY PAGE 7 6.6 Borrower 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. Borrower 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 or in any other manner provided by law. Borrower agrees that a final judgment in any such action or proceeding will be conclusive 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 will 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 will be governed by, and construed and interpreted in accordance with,the internal 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 will constitute an original and all of which together will constitute one agreement. IN WITNESS WHEREOF, Borrower has duly executed this Indemnity as of the date set forth below. "BORROWER" ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation Dated: ��r/U�/ /,� By: en ez Its: Executive Director OCCBC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY PAGE 8 EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO.9-ENVIRONMENTAL INDEMNITY PAGE 9 EXHIBIT 10 ASSIGNMENT OF AGREEMENTS ASSIGNMENT OF AGREEMENTS FROM ORANGE COUNTY COMMUNITY HOUSING CORPORATION TO THE CITY OF HUNTINGTON BEACH 1. FOR VALUE RECEIVED, the undersigned, ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation ("Developer"), assigns to THE CITY OF HUNTINGTON BEACH, a municipal corporation of the state of California ("Assignee"), all of its right, title and interest in and to: a. All architectural, design, engineering and development agreements, and any and all amendments, modifications, supplements, addenda and general conditions thereto (collectively, "Architectural Agreements"); and b. All plans and specifications, shop drawings, working drawings, amendments, modifications, changes, supplements, general conditions and addenda thereto (collectively"Plans and Specifications") heretofore or hereafter entered into or prepared by any architect, engineer or other person or entity (collectively "Architect"), for or on behalf of Developer in connection with the rehabilitation of the Improvements on the Property described in Exhibit A attached. This assignment is subject to the prior rights, if any, of a lender approved by Assignee whose lien is senior to the HOME Deed of Trust held by Assignee. The Plans and Specifications, as of the date hereof, are those which Developer has heretofore, or will hereafter deliver to Assignee. 2. This ASSIGNMENT OF AGREEMENTS ("Assignment") constitutes a present and absolute assignment to Assignee as of the Effective Date, subordinate to a lender approved by Assignee whose lien is senior to the HOME Deed of Trust held by Assignee ("Senior Lender"); provided, however, Assignee confers upon Developer the right to enforce the terms of the Architectural Agreements and Developer's rights to the Plans and Specifications so long as no event which would constitute a Default after notice or the passage of time has occurred under the HOME Affordable Housing Agreement dated as of October q 2016, between Assignee and Developer (the "HOME Housing, Agreement"). Upon the occurrence of an event which would constitute a Default after notice or the passage of time under the HOME Housing Agreement, Assignee may, in its sole discretion, give notice to Architect of its intent to enforce the rights of Developer under the Architect Agreements and of its rights to the Plans and Specifications and may initiate or participate in any legal proceedings respecting the enforcement of said rights. Developer acknowledges that by accepting this Assignment, Assignee does not assume any of Developer's obligations under the Architectural Agreements or with respect to the Plans and Specifications. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 10-ASSIGNMENT OF AGREEMENTS PAGE 3. Developer represents and warrants to Assignee, as of the Effective Date, that: (a) all Architectural Agreements entered into by Developer are in full force and effect and are enforceable in accordance with their.terms and, to the best of Developer's knowledge, no default, or event which would constitute a default after notice or the passage of time, exists with respect to said Architectural Agreements; (b) all copies of the Architectural Agreements and Plans and Specifications delivered to Assignee are complete and correct in all material respects; and (c) Developer has not assigned any of its rights under the Architectural Agreements or with respect to the Plans and Specifications except as expressly permitted by the HOME Housing Agreement. 4. Developer agrees: (a) to pay and perform all obligations of Developer under the Architectural Agreements; (b) to enforce the payment and performance of all obligations of any other person or entity under the Architectural Agreements; (c) not to materially modify the existing Architectural Agreements nor to enter into any future Architectural Agreements without Assignee's prior written approval except as otherwise expressly permitted in the HOME Housing Agreement; and (d) not to further assign (other than assignment in connection with a loan which is senior in priority to Assignee's assignment), for security or any other purposes, its rights under the Architectural Agreements or with respect to the.Plans and Specifications without Assignee's prior written consent. 5. This Assignment secures performance by Developer of all obligations of Developer under the HOME Housing Agreement. This Assignment is supplemented by the provisions of the HOME Housing Agreement and said provisions are incorporated herein by reference. 6. The term "HOME Housing Agreement" as used herein shall mean the HOME Affordable Housing Agreement dated as October / 2016, between Developer and Assignee, as well as any future amendments and implementation agreements between Developer and Assignee which refer to this Assignment. Capitalized terms not otherwise defined herein shall have the meaning set forth in the HOME Housing Agreement. 7. This Assignment shall be governed by the internal laws of the State of California, except to the extent that Federal laws preempt the laws of the State of California, and Developer consents to the jurisdiction of any Federal or State Court within the State of California having proper venue for the filing and maintenance of any action arising hereunder. If Assignee should bring any action to enforce its rights hereunder at law or at equity, Developer shall reimburse Assignee for all reasonable attorneys' fees and costs expended in connection therewith. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 10-ASSIGNMENT OF AGREEMENTS PAGE 2 8. This Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns, and successors-in-interest of Developer and Assignee; provided, however, this shall not be construed and is not intended to waive any restrictions on assignment, sale, transfer, mortgage, pledge, hypothecation or encumbrance by Developer contained in the HOME Housing Agreement. 9. The Effective Date of this Assignment shall be the date it is executed by Developer. IN WITNESS WHEREOF, the undersigned has executed this Assignment as of the date set forth below. DEVELOPER: ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation Date: �vU�/ d 2U/.6 By: No fa- Mendez Its: Executive Director OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 10-ASSIGNMENT OF AGREEMENTS PAGE3 EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 EXHIBIT 11 ASSIGNMENT OF RENTS & LEASES 16-5414-145020/DO Recorded in Official Records, Orange County Hugh Nguyen, Clerk-Recorder Fidelity-8, ma Oaks I 1E 1 1 II II 1111[ II I 111111 II II N0 FEE 311 U� * $ R 0 0 0 8 8 6 4 6 3 7 $ FREE RECORDING REQUESTED BY 2016000587134 4:25 pm 11/18/16 AND WHEN RECORDED MAIL TO: 217105 A30 10 0.00 0.00 0.00 0.00 27.00 0.00 0.00 0.00 THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code§27383) APN: i ASSIGNMENT OF RENTS AND LEASES FROM ORANGE COUNTY COMMUNITY HOUSING CORPORATION TO THE CITY OF HUNTINGTON BEACH ,4,v,,6THIS ASSIGNMENT OF RENTS AND LEASES (the "Assignment") dated O-e-hrli r -I_, 2 0 1 6 is made by ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation ("Assignor"), in favor of THE CITY OF HUNTINGTON BEACH, a municipal corporation (the "Assignee"). RECITALS A. Assignor is the owner of the real property described in Exhibit "A" attached hereto and the owner of all of the personalty, fixtures, and improvements now or hereafter located thereon or.attached thereto now existing or to be constructed thereon. Said real property, personalty, fixtures, and the improvements are herein referred to collectively as the"Premises". B. The City has agreed to make a loan of HOME Funds to Assignor in the original principal amount of Seven Hundred Eighty-One Thousand, Two Hundred Twenty Dollars ($781,220) (the "HOME Loan"), pursuant to the terms of that certain HOME Affordable Housing Agreement by and between Assignor and Assignee dated as of October 2016 (the "HOME Housing Agreement"). The HOME Loan is evidenced by a HOME Promissory Note Secured by H O M E Deed of Trust, of even date herewith, executed by Assignor in favor of the City (the "HOME Promissory Note"). The HOME Loan is secured by a H O ME Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents), of even date herewith, executed by Assignor, as Trustor, for the benefit of the City as Beneficiary (the "HOME Deed of Trust"). In order to induce the City to make the HOME Loan to Assignor, Assignor has agreed to execute this Assignment. OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. I—ASSIGNMENT OF RENTS AND LEASES PAGE V` Fidelity Oaks FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code§27383) APN: ASSIGNMENT OF RENTS AND LEASES FROM ORANGE COUNTY COMMUNITY HOUSING CORPORATION TO THE CITY OF HUNTINGTON BEACH tov,,u JHIS ASSIGNMENT OF RENTS AND LEASES (the "Assignment") dated G-e-ta-b�r _, 2 0 16 is made by ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation ("Assignor"), in favor of THE CITY OF HUNTINGTON BEACH, a municipal corporation (the "Assignee"). RECITALS A. Assignor is the owner of the real property described in Exhibit "A" attached hereto and the owner of all of the personalty, fixtures, and improvements now or hereafter located thereon or attached thereto now existing or to be constructed thereon. Said real property, personalty, fixtures, and the improvements are herein referred to collectively as the "Premises". B. The City has agreed to make a loan of HOME Funds to Assignor in the original principal amount of Seven Hundred Eighty-One Thousand, Two Hundred Twenty Dollars ($781,220) (the "HOME Loan"), pursuant to the terms of that certain HOME Affordable Housing Agreement by and between Assignor and Assignee dated as of October, 2016 (the "HOME Housing Agreement"). The HOME Loan is evidenced by a HOME Promissory Note Secured by H O M E Deed of Trust, of even date herewith, executed by Assignor in favor of the City (the "HOME Promissory Note"). The HOME Loan is secured by a HOME Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents), of even date herewith, executed by Assignor, as Trustor, for the benefit of the City as Beneficiary (the "HOME Deed of Trust")- In order to induce the City to make the HOME Loan to Assignor, Assignor has agreed to execute this Assignment. OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 11—ASSIGNMENT OF RENTS AND LEASES PAGE 1 NOW THEREFORE, with reference to the foregoing and in reliance thereon and for good and valuable consideration, the receipt of which is hereby acknowledged, Assignor agrees as follows: AGREEMENT 1. All initially capitalized terms used herein, unless otherwise defined or required by context, shall have the meaning ascribed to them in the HOME Housing Agreement. 2. Subject to the prior rights, if any, of a lender whose lien is approved by Assignee as senior to the HOME Deed of Trust held by Assignee ("Senior Lender"), Assignor hereby absolutely grants, sells, assigns, transfers, and sets over to Assignee, by this Assignment, all of Assignor's interests, whether now existing or hereafter acquired, in all leases and other occupancy agreements of any nature, now or hereafter covering all or any part of the Premises, together with all extensions, renewals, modifications, or replacements of said leases and occupancy agreements, and together with any and all guarantees of the obligations of the lessees and occupants (the "Lessees") thereunder, whether now existing or hereafter executed, and all extensions and renewals of said guarantees. (Said leases and occupancy agreements, together with any and all guarantees, modifications, extensions and renewals thereof, are hereinafter referred to collectively as the "Leases" and individually as a"Lease".) 3. Assignor's purpose in making this Assignment is to relinquish to Assignee its right to collect and enjoy the rents, royalties, issues, profits, income, and other benefits at any time accruing by virtue of the Leases (hereinafter called"Rents and Profits"). 4. The parties intend that this Assignment shall be a present, absolute and unconditional assignment and shall, immediately upon execution, give the Assignee the right to collect the Rents and Profits and to apply them in payment of the principal and interest and all other sums payable on the indebtedness and other obligations under the Note and other loan documents, as well as all other sums payable under the HOME Deed of Trust or any other instrument given as security for the indebtedness. However, the Assignee hereby grants to Assignor a license to collect and use, subject to the provisions set forth below, the Rents and Profits as they respectively become due and to enforce the Leases, so long as there is no Default by Assignor in performance of the terms, covenants, or provisions of the H O M E Deed of Trust, the H O M E P r o m i s s o r y Note, or the H O M E Housing Agreement, this Assignment or any other loan document. Nothing contained herein, nor any collection of Rents and Profits by Assignee or by a receiver, shall be construed to make Assignee a "mortgagee in possession" of the Premises so long as Assignee has not entered into actual possession of the Premises. 5. Upon the occurrence of any Event of Default under the terms and conditions of this Assignment, the HOME Promissory Note, the HOME Deed of Trust, the HOME Housing Agreement or any other loan document, this Assignment shall constitute a direction and full OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 11-ASSIGNMENT OF RENTS AND LEASES PAGE 2 Authority to each Lessee under any Lease and each guarantor of any Lease to pay all Rents and Profits to Assignee without proof of the Default relied upon. Assignor hereby irrevocably authorizes each Lessee and guarantor to rely upon and comply with any notice or demand by Assignee for the payment to Assignee of any Rents and Profits due or to become due. 6. Assignor represents and warrants as to each Lease now or hereafter covering all or any portion of the Premises, unless Assignee has been otherwise advised in writing by Assignor: a. That each Lease is in full force and effect; b. That no material default exists on the part of the Lessee thereunder or Assignor; C. That no rent in excess of one month's rent has been collected in advance, except for a one-month security deposit; d. That no Lease or any interest therein, except to the extent required by the Senior Lender, has been previously assigned or pledged; and e. That all rent due to date under each Lease has been collected and no concession has been granted to any Lessee in the form of a waiver, release, reduction, discount, or other alteration of rent due or to become due except as previously disclosed to Assignor in writing. 7. Assignor agrees with respect to each Lease: a. If any Lease provides for a security deposit paid by the Lessee to Assignor and subject to the prior rights, if any, of a Senior Lender, this Assignment transfers to Assignee all of Assignor's right, title, and interest in and to each such security deposit; provided, however, that Assignor shall have the right to retain said security deposit so long as Assignor is not in Default under this Assignment, the HOME Deed of Trust, the HOME Promissory Note, the HOME Housing Agreement or any other H O ME Loan Document, subject to any applicable notice and cure period; and provided further that Assignee shall have no obligation to the Lessee with respect to such security deposit unless and until Assignee comes into actual possession and control of said security deposit. b. If any Lease provides for the abatement of rent during repair of the leased premises by reason of fire or other casualty, Assignor shall furnish rental insurance to Assignee, the policies to be with companies and in form, content, policy limits, and terms as are customary in the case of entities owning similar property or assets similarly situated. C. Each Lease shall remain in full force and effect despite any merger of the interest of Assignor and any Lessee thereunder. Except as otherwise provided in the HOME OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 11 -ASSIGNMENT OF RENTS AND LEASES PAGE 3 Housing Agreement, Assignor shall not terminate any Lease (except pursuant to the terms of the Lease upon a default by any Lessee thereunder), or materially modify or amend any Lease or any of the terms thereof, or grant any concessions in connection therewith or accept a surrender thereof, without the prior written consent of Assignee, which consent shall not be unreasonably withheld. d. Assignor shall not collect any Rents and Profits more than thirty (30) days in advance of the date on which they become due under the terms of any Lease. e. Assignor shall not discount any future accruing Rents and Profits. f. Assignor shall not consent to any assignment of any Lease, or any subletting thereunder, whether or not in accordance with its terms, on any terms less favorable than those that would reflect an arm's length transaction in light of prevailing market conditions (subject to the rent restrictions applicable to the Premises), without the prior written consent of Assignee, except as otherwise provided in the HOME Housing Agreement. g. Except as otherwise provided in the HOME Housing Agreement, Assignor shall not execute any further assignment of any of the Rents and Profits or any interest therein or suffer or permit any such assignment to occur by operation of law. h. Assignor shall faithfully perform and discharge all obligations of the lessor under each Lease, and shall give prompt written notice to Assignee of any notice of Assignor's default received from any Lessee or any other person and furnish Assignee with a complete copy of said notice. Assignor shall appear in and defend, at no cost to Assignee, any action or proceeding arising under or in any manner connected with any Lease. If requested by Assignee, Assignor shall enforce each Lease and all remedies available to Assignor against the Lessee in the case of default under the Lease by the Lessee. i. Except as otherwise provided in the HOME Housing Agreement, and except for residential leases entered into in the ordinary course of business, Assignor shall give Assignee written notice immediately upon entering into a Lease of any part of the Premises and shall promptly upon request of Assignee provide to Assignee a true and correct copy of each executed Lease. Upon written notice from Assignee to Assignor, such Lease shall be deemed included in this Assignment as though originally listed herein. At Assignee's option, such notice may be recorded, without cost to Assignor, in the Official Records of Orange County, California, which notice shall refer to this Assignment. j. Except as otherwise provided in the HOME Housing Agreement, Assignor shall not hire, retain, or contract with any third party for property management services with respect to the Premises without the prior written approval of Assignee, at Assignee's option, of such party and the terms of its contract for management services. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 11-ASSIGNMENT OF RENTS AND LEASES PAGE k. Nothing herein shall be construed to impose any liability or obligation on Assignee under or with respect to any Lease. Assignor shall indemnify, defend, and hold Assignee, its officers, directors, agents, employees, and representatives (the "Indemnitee(s)") harmless from and against any and all liabilities, losses, and damages that any Indemnitee may incur under any Lease or by reason of this Assignment, and of and from any and all claims and demands whatsoever that may be asserted against any Indemnitee by reason of any alleged obligations to be performed or discharged by Assignee under any Lease or this Assignment, unless any of the foregoing arises from or results from the active concurrent negligence, sole negligence or sole willful misconduct of any Indemnitee. Should any Indemnitee incur any liability, loss, or damage under any Lease or by reason of this Assignment and such liability, loss, or damage falls within the foregoing indemnification, Assignor shall immediately upon demand reimburse such Indemnitee for the amount thereof together with all costs and expenses and reasonable attorneys' fees and court costs incurred by such Indemnitee. All of the foregoing sums shall bear interest at the maximum rate permitted by law from demand by Indemnitee until paid. Any Rents and Profits collected by Assignee may be applied by Assignee, in its discretion, in satisfaction of any such liability, loss, damage, claim, demand, cost, expense, or fees. 8. Assignor hereby grants to Assignee the following rights: a. Upon an Event of Default as defined in the HOME Housing Agreement, Assignee shall be deemed to be the creditor of each Lessee in respect of any assignments for the benefit of creditors and any bankruptcy, arrangement, reorganization, insolvency, dissolution, receivership, or other debtor relief proceedings affecting such Lessee, without obligation on the part of Assignee, however, to file timely claims in such proceedings or otherwise pursue creditor's rights therein. b. Assignee shall have the right to assign Assignor's right, title, and interest in the Leases to any subsequent holder of the Deed of Trust or any participating interest therein or to any person acquiring title to all or any part of the Premises through foreclosure or otherwise. Any subsequent assignee shall have all the rights and powers herein provided to Assignee. C. Assignee shall have the right (but not the obligation), upon any Event of Default under the HOME Deed of Trust or the HOME Housing Agreement, to take any action as Assignee may deem necessary or appropriate to protect its security, including but not limited to appearing in any action or proceeding and performing any obligations of the lessor under any Lease; and Assignor agrees to pay, on demand, all costs and expenses, including without limitation reasonable attorneys' fees and court costs incurred by Assignee in connection therewith, together with interest thereon at the rate of ten percent(10%) per annum. d. Upon any Event of Default under this Assignment, the HOME Deed of Trust, the H O M E P r o in i s s o r y Note, the HOME Housing Agreement, or any other loan document (subject to all applicable notice and cure periods), and without notice to or consent of Assignor, Assignee shall have the following rights (none of which shall be construed to be OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 11 -ASSIGNMENT OF RENTS AND LEASES PAGE 5 obligations of Assignee): i. Assignee shall have the right under this Assignment to use and possess, without rental or charge, the Fixtures, Equipment, and Personal Property of the Assignor located in or on the Premises and used in the operation or occupancy thereof. Assignee shall have the right to apply any of the Rents and Profits to pay installments due for Personal Property rented or purchased on credit, insurance premiums on Personal Property, or other charges relating to Personal Property in or on the Premises. However, this Assignment shall not make Assignee responsible for the control, care, management, or repair of the Premises or any Personal Property or for the carrying out of any of the terms or provisions of any Lease. ii. Assignee shall have the right to apply the Rents and Profits and any sums recovered by Assignee hereunder to the outstanding Indebtedness, as well as to charges for taxes, insurance, improvements, maintenance, and other items relating to the operation of the Premises. iii. Assignee shall have the right to take possession of the Premises, manage and operate the Premises and Assignor's business thereon, and to take possession of and use all books of account and financial records of Assignor and its property managers or representatives relating to the Premises. iv. Assignee shall have the right to execute new Leases of any part of the Premises, including Leases that extend beyond the term of the HOME Deed of Trust. V. Assignee shall have the right to cancel or alter any existing Leases. vi. Assignee shall have the irrevocable authority, as Assignor's attorney-in-fact, such authority being coupled with an interest, to sign the name of Assignor and to bind Assignor on all papers and documents relating to the operation, leasing and maintenance of the Premises. e. All of the foregoing rights and remedies of Assignee are cumulative, and Assignee shall also have upon the occurrence of any such Default or Event of Default all other rights and remedies provided under the HOME Promissory Note, the HOME Housing Agreement, the HOME Deed of Trust, or any other loan document or other agreement between Assignor and Assignee, or otherwise available at law or in equity or by statute. 9. Failure of Assignee to avail itself of any terms, covenants, or conditions of this Assignment for any period of time or for any reason shall not constitute a waiver thereof. 10. Notwithstanding any future modification of the terms of the H O M E P r o m i s s o r y Note, the H O M E Deed of Trust, the H OME Housing Agreement, or any other loan document, this Assignment and the rights and OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 1 I-ASSIGNMENT OF RENTS AND LEASES PAGE 6 benefits hereby assigned and granted shall continue in favor of Assignee in accordance with the terms of this Assignment. 11. This Assignment shall be binding upon and inure to the benefit of the respective heirs, legal representatives, successors, and assigns of the parties hereto (including without limitation in the case of Assignee, any third parties now or hereafter acquiring any interest in the Indebtedness or other obligations of Assignor under the HOME Promissory Note or HOME Deed of Trust or a part thereof, whether by virtue of assignment, participation, or otherwise). The words Assignor, Assignee, and Lessee, wherever used herein, shall include the persons and entities named herein or in any Lease and designated as such and their respective heirs, legal representatives, successors and assigns, provided that any action taken by the named Assignee (or any successor designated as such by an instrument recorded in the Official Records of Orange County, California referring to this Assignment) shall be sufficient for all purposes notwithstanding that Assignee may have theretofore assigned or participated any interest in the obligation to a third party. All words and phrases shall be taken to include the singular or plural number, and the masculine, feminine, or neuter gender, as may fit the case. 12. Any change, amendment, modification, abridgment, cancellation, or discharge of this Assignment or any term or provision hereof shall be invalid without the written consent of Assignee. 13. Upon payment to Assignee of the full amount of the Indebtedness and other obligations secured hereby and by the H O M E P r o m i s s o r y Note and H O M E Deed of Trust, as evidenced by a recorded satisfaction or release of the H O M E Deed of Trust, this Assignment shall be void and of no further effect. In such event, Assignee shall cooperate with Assignor to execute such instruments as may be reasonably necessary to remove the lien of this instrument from the Official Records of Orange County. 14. All notices, demands, approvals, and other communications provided for in this Assignment shall be sufficiently given if. (i) personally delivered; (h) delivered by same day or overnight courier (acknowledged by receipt showing date and time of delivery); or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the addresses set forth below: If to Assignor: Orange County Community Housing Corporation 501 Golden Circle, Suite 200 Santa Ana, CA 92705 Attention: Executive Director OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 11 -ASSIGNMENT OF RENTS AND LEASES PAGE If to City: The City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager With a copy to: City Attorney's Office City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Notices personally delivered or delivered by courier shall be effective upon receipt or refusal to accept delivery. Mailed notices shall be effective on the earlier of(i) receipt of refusal to accept delivery, or(ii) noon on the second business day following deposit in the United States mail. 15. This Assignment may be recorded in the Official Records of Orange County, California, and Assignor shall pay all fees, charges, costs, and expenses of such recording. 16. If any provision hereof is determined to be illegal or unenforceable for any reason, the remaining provisions hereof shall not be affected thereby. 17. This Assignment shall be governed by and construed in accordance with the internal laws of the State of California. 18. If Assignee should bring any action to enforce its rights hereunder at law or at equity, Assignor shall reimburse Assignee for all reasonable attorneys' fees and costs expended in connection therewith. IN WITNESS WHEREOF, the undersigned Assignor has executed this Assignment as of the date first above written. "ASSIGNOR" ORANGE COUNTY COMMUNITY HOUSING CORPORATION, a California nonprofit public benefit corporation By: ez s:I Executive Director OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 11 -ASSIGNMENT OF RENTS AND LEASES PAGE 8 - CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness,accuracy,or validity of that document. State of California I County of Orange I i On Nov. 07, 2016 before me, CATHY GAMBINO Notary Public, (Here insert name and title of the officer) personally appeared - NORA MENDEZ - who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph f is true and correct. WITNESSiny hand and fftcial seal. P CATHY BAMBINO � Comm.# 2051686 rn ///� VI''•� NOTARY PUBLIC•CALIFORNIA N (Notary Seal) I LOS ANGELES COUNTY Signature of otary Publ c a., PAY COMM.Exp.DEC. 12,2017"0 ADDITIONAL OPTIONAL INFORMATION INSTRUCTIONS FOR COMPLETING THIS FORM Any acknowledgment completed in California must contain verbiage exactly as DESCRIPTION OF THE ATTACHED DOCUMENT appears above in the notary section or a separate acknowledgment form must be properly completed and attached to that document. The only exception is if a Assignment of Rents&Leases From Orange Co.Community document is to be recorded outside of California. In such instances,any alternative (Title or description of attached document) acknowledgment verbiage as may be printed on such a document so long as the verbiage does not require the notary to do something that is illegal for a notary in Housing Corp. to the City of Huntington Beach California (i.e. certifying the authorized capacity of the signer). Please check the (Title or description of attached document continued) document carefully for proper notarial wording and attach this form if required. Number Of Pa • State and County information must be the State and County where the document 05 $ Document Date f g signer(s)personally appeared before the notary public for acknowledgment. • Date of notarization must be the date that the signer(s)personally appeared which must also be the same date the acknowledgment is completed. (Additional information) • The notary public must print his or her name as it appears within his or her commission followed by a comma and then your title(notary public). • Print the name(s) of document signer(s) who personally appear at the time of notarization. CAPACITY CLAIMED BY THE SIGNER • Indicate the correct singular or plural forms by crossing off incorrect forms(i.e. El Individual(S) he/she/ is/aFe)or circling the correct forms.Failure to correctly indicate this information may lead to rejection of document recording. ❑ Corporate Officer . The notary seal impression must be clear and photographically reproducible. Impression must not cover text or lines. if seal impression smudges,re-seal if a (Title) sufficient area permits,otherwise complete a different acknowledgment form. ❑ Partner(s) • Signature of the notary public must match the signature on file with the office of thecounty clerk. ❑ Attorney-in-Fact Additional information 1s not required but could help to ensure this ❑ Trustee(s) acknowledgment is not misused or attached to a different document. ❑ Other Indicate title or type of attached document,number of pages and date. Indicate the capacity claimed by the signer. if the claimed capacity is a corporate officer,indicate the title(i.e.CEO,CFO,Secretary). • Securely attach this document to the signed document i C 2004-2015 Prol,ink Signing Service,Inc.-All Rights Reserved www.TheProl,ink.cnm-Nationwide Notary Service EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT NO. 11 —ASSIGNMENT OF RENTS PAGE 9 EXHIBIT 12 NOTICE OF HOME AFFORDABILITY RESTRICTIONS 16-5414-145020/DO Recorded in Official Records, Orange County [Fid-omy-sherman (Oaks Hugh Nguyen, Clerk-Recorder 18.00 1 * $ R 0 0 0 8 8 6 4 6 3 8 $ FREE RECORDING REQUESTED BY 2016000587135 4:25 pm 11/18116 AND WHEN RECORDED MAIL TO: 217 405 NO3 F13 4 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 The City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Clerk 441,, (Space Above This Line for Recorder's Office Use Only) Notice of HOME Affordability Restrietions on Transfer of Property NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f) as amended effective January 1, 2008, the City of Huntington Beach Housing Authority is recording this Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 7792 Barton Drive, Huntington Beach, California and more particularly described in Exhibit "A" attached hereto (the "Property"). The Property is subject to the Regulatory Agreement and Declaration of Covenants and Restrictions (the "Regulatory Agreement") recorded concurrently herewith, which restricts the use of the Property as follows: (1) Two of the four (4) 2-bedroom units shall be rented exclusively to Very Low Income households and two of the four (4) 2 bedroom units shall be rented exclusively to Low Income households at an Affordable Rent as provided in California Health and Safety Code Section 50053. (2) The maximum incomes of eligible Very Low and Low Income tenants shall be determined on the basis of the income limits for households in the Anaheim-Santa Ana-Garden Grove, CA SMSA, OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 12—NOTICE OF HOME AFFORDABILITY RESTRICTIONS PAGE 1 RLS 16-5414/7792 Barton Drive/144855/DO Fldeliiy-�;herman Oaks 13�12�� FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Clerk (Space Above This Line for Recorder's Office Use Only) Notice of HOME Affordability Restrictions on Transfer of Property NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f) as amended effective January 1, 2008, the City of Huntington Beach Housing Authority is recording this Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 7792 Barton Drive, Huntington Beach, California and more particularly described in Exhibit "A" attached hereto (the "Property"). The Property is subject to the Regulatory Agreement and Declaration of Covenants and Restrictions (the "Regulatory Agreement") recorded concurrently herewith, which restricts the use of the Property as follows: (1) Two of the four (4) 2-bedroom units shall be rented exclusively to Very Low Income households and two of the four (4) 2 bedroom units shall be rented exclusively to Low Income households at an Affordable Rent as provided in California Health and Safety Code Section 50053. (2) The maximum incomes of eligible Very Low and Low Income tenants shall be determined on the basis of the income limits for households in the Anaheim-Santa Ana-Garden Grove, CA SMSA, OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 12—NOTICE OF HOME AFFORDABILITY RESTRICTIONS PAGE 1 RLS 16-5414/7792 Barton Drive/144855/DO published approximately annually by the California Department of Housing and Community Development ("HCD"). The affordability restrictions imposed on the Property by the Regulatory Agreement are scheduled to expire on the date that is fifty-five (55) years after the issuance of the permanent certificate of occupancy for the initial construction of the housing on the Property. This Notice is recorded for the purpose of providing notice only and it in no way modifies the provisions of the Regulatory Agreement. THE CITY OF HUNTINGTON BEACH, a public body corporate and By a _Jim �Cc-i+ �oGl�s ATTEST: By. City Clerk — Rolom APPROVED AS TO FORM: By: City Attorney Wz (ohd►1-6 OCCHC—7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 12—NOTICE OF HOME AFFORDABILITY RESTRICTIONS PAGE 2 RLS 16-5414/7792 Barton Drive/144855/DO A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On October 24, 2016 before me, P. L. Esparza, Notary Public, personally appeared Robin Estanislau and Jim Katapodis 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. ;w P. L. ESPARZA WITNESS my hand and official seal. Commission#2032750 Q: Notary Public-California z Z �. D Orange County My Comm. Expires Aug 4,2017 (Seal) ota Signa re) EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HUNTINGTON BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT(S) 34 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 177, PAGE(S) 11 AND 12, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON SUBSTANCES LYING . BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. Plotted Easements APN: 165-223-02 EXHIBIT 13 SECTION 3 ACKNOWLEDGEMENTS 16-5414/145020/DO DEVELOPER/CONTRACTOR HUD SECTION 3 PROJECT COMPLIANCE REQUIREMENTS Policy Notwithstanding anything contained in federal law, the Contractor (throughout this checklist, reference to "Contractor" shall mean prime contractor and shall include "Developer" as applicable) and its subcontractors shall comply with Section 3 hiring requirements (24 CFR Part 1 3.5) and shall: 1. Contract with Section 3 businesses for a minimum of ten percent (10%) of the total dollar amount of all building trades work at the subject project site. 2. Hire Section 3 residents for a minimum of thirty percent (30%) of total hours, above the existing Core Workforce. Definitions • Existing Core Workforce: The core workforce is composed of those employees whose names appeared on the Contractor's active payroll for sixty (60) of the one hundred (100) working days prior to award of the project to the Contractor; and who possess any license required by state or federal law for work; and who have the ability to safely perform the basic functions of the applicable trade. • Section 3 Coordinator: Representative(s) of the City available to assist the Contractor and any subcontractor(s) meet the Section 3 goals described above. • Section 3 Business: A business that is fifty-one percent (51%) or more owned by a Section 3 resident;or whose permanent, full-time employees include a minimum of thirty percent (3(Y ) current Section 3 residents or workers who were Section 3 residents within three (3)years of the date of their first employment with the business. • Section 3 Resident: A low-income individual whose household income does not exceed eighty percent (80%) of-the area median income for the Orange County area and who resides in the City of Huntington Beach or an individual who lives in public housing. (Attachment A. "MUD Income Limits", provides income guidelines). OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 13-SECTION 3 ACKNOWLEDGEMENTS PAGE Section 3 Business Enterprises—Compliance Requirements Prior to bid opening, the Section 3 Coordinator will direct Developer/Contractor to do the following: 1. Advertise Subcontracting opportunities in at least one (1) of the newspapers specified as General Press and at least two (2) of the Community Newspaper outlets and/or Community Notices. Documentation of these efforts could consist of a tear sheet, proof of publication, or other verification that confirms the date the advertisement was placed. The media sources below are available for the advertisement of subcontracting and employment opportunities. Other known sources may also be used. General Press—Orange County Register Community Newspaper - Huntington Beach Wave Community Notices—Huntington Beach City Hall, Central Library & Community Centers 2. Provide written notice of such opportunities to all known Section 3 businesses. This notice shall be in sufficient time to allow the Section 3 businesses to respond to the bid invitation. 3. Work with outreach agencies that can assist in the recruiting of Section 3 businesses. Correspondence to outreach agencies will indicate specific contracting opportunities for Section 3 businesses. A list of outreach agencies is below. Other known agencies may be used. Huntington Beach Chamber of Commerce 2134 Main Street, 9100 I-luntington Beach, CA 92648 The Huntington Beach Chamber is pleased to advertise contracting opportunities to their members, but please provide Notice to the charnber as soon as possible, due to the chambers turn-around time. 4 Follow up on all non-responsive solicitations of Section 3 businesses and provide additional information about the contracting opportunity. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 13-SECTION 3 ACKNOWLEDGEMENTS PAGE 2 Prior to bid opening,the Contractor shall do the following: 1. Contract with Section 3 businesses for a minimum of ten percent (10%) of the total dollar amount of all buildng trades work at the project site. If the Contractor fails to meet this contracting requirement, the Contractor shall be subject to penalties outlined in Effects of Noncompliance on page 8. To avoid imposition of such penalties, the Contractor must demonstrate that it utilized its best efforts to contract with Section 3 businesses for a minimum of ten percent (10%) of the total dollar amount of all building trades work at the project site. The Contractor may demonstrate best efforts by detailing all efforts made on a contact log similar to Attachment I and affixing documents to the log that support such efforts (eg., proof of mailing, fax transmittal sheets, e-mails, etc.). and advertising in local media. The contact log must at a minimum include the following: Company called Contactiiforination(telephone orfox number,e-mail address) Contact person Time Dote Results ofthe conversation The City is committed to working with the Contractor to successfully achieve Section 3 requirements. 2. Obtain from the City a list of known Section 3 and local business enterprises previously contacted by other applicants and then contractor shall actively contact those businesses to ascertain whether they are interested in participating on the project team. Contractors are encouraged to contact other business enterprises that may qualify as Section 3 business enterprises. All contact with these businesses must be documented by providing a contact log (Attachment I) or a list of businesses contacted via fax, mail or e-mail. If a contact log is used it must include the information noted in Attachment I. If other lists are used, they should at a minimum include company name,address,contact person (ifavailable),date contacted via fax,mail or e-mail,and result of contact. 3. Contact the outreach agencies listed on page 4. All contact with these outreach agencies must be documented by providing a contact log similar to Attachment I or a list of agencies contacted via fax, mailor e-mail. If other lists are provided, they should at a niirrirnum include company name, address, contact person (if available), date contacted via fax, rnail or e- mail,and result of contact. 4. Submit to the City a Business Iiformation Form (Attachment J) for each listed subcontractor. The City will use this form to determine if-the subcontractor qualifies as a Section 3 business enterprise. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 13-SECTION 3 ACKNOWLEDGEMENTS PAGE 3 Section 3 Workforce— Compliance Requirements During construction,the Contractor shall do thefollowing: 1. The Contractor shall hire Section 3 residents for a minimum of thirty percent (30%) of total hours, above the existing Core Workforce. If the Contractor fails to meet this hiring requirement, the Contractor shall be subject to penalties outlined in Effects of Noncompliance on page 7. To avoid imposition of such penalties, the Contractor must demonstrate that it utilized its best efforts to hire Section 3 residents for a minimum of thirty percent (30%) of total hours, above the existing Core Workforce. The Contractor may demonstrate best efforts by detailing all efforts made on a contact log similar to Attachment I and affixing documents to the log that support such efforts (e.g., proof of mailing, fax transmittal sheets, e-mails, etc.). 2. The Contractor shall submit the following documentation to the City's Section 3 Coordinator at a date and time to be specified: • An executed HUD Section 3 Affidavit (Attachment B). 'This document is to be submitted with the Prime Contractor's bid. Must be completed by all subcontractors priorto issuance ofNoticeto Proceed. • An executed HUD Section 3 Compliance Certificate (Attachment Q. This document is to be submitted with the Contractor's bid and becomes a part of the Contractor's contract with the City and required for each subcontractor. Must be completed by all contractors prior to the issuance of Notice to Proceed. • A list of the Existing Core Workforce for the prune contractor and each listed subcontractor (Attachment D). Must be submitted prior to the issuance of Notice to Proceed. • A Project Employee Survey Form (Attachment E) for each new employee for the prime contractor and each listed subcontractor. The list shall include the employee's name, address, occupation, and date of hire. This form will be used to determine if the employee is or qualifies as a Section 3 resident, or in situations of subcontractors, whether they qualify as a Section 3 business. • An Employment Forecast Form (Attachment F) identifying the trades that will be used, numbers of workers needed, and forecasted number of hours for each trade. 'Phis form must be submitted even if no new hires are anticipated. (This is a mandatory monthly submittal.) OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 13 -SECTION 3 ACKNOWLEDGEMENTS PAGE 4 In addition to submitting the documentation listed above, during construction of the project,the Contractor shall do the following: I. If applicable, work with local unions to request hiring priority for journeymen and apprentices who are Huntington Beach residents. The Contractor shall provide priority to Huntington Beach residents for all hiring opportunities so as to ensure that a minimum of thirty percent (30%) of' all new hires are Huntington Beach residents. A sample letter is provided in these Section 3 documents. 2. Use the Request for Craft Employees Form (Attachment L) or Worker Requisition Form (Attachment M), as applicable, to notify the local Workforce Development Office, non- profit entities, and community-based organizations of available employment opportunities at the project site. As new construction employees are needed by the Contractor or subcontractor, the following should be followed: a. Union Contractors: Contractors are required to submit a letter (Attachment K) and the Request for Craft Employees Form (Attachment L) to their respective unions notifying them of the Contractor's Section 3 obligations when request ingworkers. b. Non-Union Contractors: Non-Union contractors are required to use the Worker Requisition Form (Attachment M) and submit same to the City's Workforce Development Bureau when requesting new workers. 3. Post public notices announcing HUD Section 3 Job and Contracting/Business Opportunities (Attachment H). The Contractor shal I postthese notices atthej obs i te. 4. With each monthly application for payment, the Contractor shall provide to the Section 3 Coordinator or designee, by the fifteenth (1.5"') calendar day of thehfollowing month, Contractor and subcontractor documentation to confirm compliance with Section 3 requirements. These documents shall include, but not be limited to: a. Certified Payrolls. b. Monthly Section 3 Hiring Report (Attachment G) for the Contractor and each subcontractor showing employee name, employer, date hired, occupation, family size, yearly income, section 3 status, and hours worked on the project to date. C. Construction Jobs Survey Form (Attachment C) for all new hires. d. Monthly Forecasting Form (Attachment F). OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 13 -SECTION 3 ACKNOWLEDGEMENTS PAGE 5 5. Submit other such documentation that the City may require to demonstrate the Contractor's/subcontractor's compliance with Section 3 requirements, such as follow up contact logs for Section 3 applicant inquiries. During construction of the project, the Contractor shall provide all required information to the Section 3 Coordinator or designee who will do the following: 1. Coordinate with the City's workforce development bureau and other community organizations that provide workforce opportunities and training. 2. Provide to the Contractor all documents and responses from Section 3 applicants for the purpose of having the Contractor follow up and respond to such inquiries. Such follow-up must be documented with a contact log similar to Attachment I or by providing a list of follow-ups contacted via fax, mail or e-mail. Fax, mailing lists and/or e-mail distributions should contain the applicant's name, fax number. mailing address or e-mail address, and the date faxing, mailing or e-mail ing occurred. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 13 -SECTION 3 ACKNOWLEDGEMENTS PAGE 6 Section 3 Workforce and Business Enterprises—Effects of Noncompliance The City is committed to working with the Contractor to meet the hiring and contracting requirements. In this regard, the Contractor shall include the Section 3 Coordinator in all meetings related to complying with the hiring and subcontracting goals. Failure to meet these goals or to assist in the documentation of the Contractor's best efforts to meet these goals, shall result in penalty equal to ten percent (10%) of each subsequent progress payment application beyond any norinal retention until the deficiency is corrected. Upon remediation of the deficiency, the penalty amount will be released to the Contractor. In the event that the Contractor fails to provide required documentation regarding both the thirty percent (30%) hiring and ten percent (10%) subcontracting goals, the maximum penalty that may be assessed is ten percent (10%) of each subsequent progress pay application. Note: h the event a subcontractor fails to furnish the required documentation to the Contractor, the Contractor shall withhold a penalty equal to ten percent (10%) of each payment application from that subcontractor. Upon remediation of the deficiency, the Contractor shall release the penalty amount to the subcontractor. The maximum penalty that may be assessed against a subcontractor is ten percent (10%) of each Subsequent pay application. OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 13-SECTION 3 ACKNOWLEDGEMENTS PAGE 7 HUD SECTION 3 CONTRACT/BUSINESS OPPORTUNITIES AND WORKFORCE DEVELOPMENT COMPLIANCE PERSONNEL LIST CONTRACTING/ BUSINESS EMPLOYMENT OPPORTUNITIES CONTACT City of Huntington Beach PHONE 714-536-5582 ADDRESS City Hall 2000 Main Street Huntington Beach, CA 92648 EMAIL For additional outreach efforts, please refer to the 'HUD Appendix to Part 135' (Attachment N). I the undersigned (Officer or authorized agent Signature's 'Title of company-Print Name) agree to adhere to the City of Huntington Beach Housing and Urban Development (HUD) Section 3 Policy and Checklist as stated herein. Signature Date OCCHC-7792 BARTON DRIVE HOME AFFORDABLE HOUSING AGREEMENT EXHIBIT 13-SECTION 3 ACKNOWLEDGEMENTS PAGE 8 City of Huntington Beach HUD Section 3 Compliance Attachments Table of Contents Department of Housing and Urban Development Income Limits Attachment A Affidavit indicating receipt of the City's Section 3 Policy and the HUD Section 3 Attachment B Compliance Certification Compliance Certification Attachment C One Time Submittal Existing Core Workforce List Attachment D One"Time Submittal City of Huntington Beach Project Employee Jobs Survey Attachment E (Examples in English and Spanish) City oil'Huntington Beach Employment Forecast Form Attachment F City of untington Beach Monthly Section 3 Hiring Report Attachment G Notice of Job and Contracting opportunities Attaclunent H (Examples in English and Spanish) Section 3 Business Telephone Log Attaclunent I Section 3 Outreach Agency Log Section 3 Business Iriformation Form Attachment J (Examples in English and Spanish) One Time Submittal Section 3 Sample Letter to Union(Union Contractors) Attachment K One Time Submittal Section 3 Craft Request Form (Union Contractors) Attachment L Section 3 Worker Request Form(Non-Union Contractors) Attachment M HUD Appendix to Section 135 Attachment Department of Housing and Urban Development(HUD) Income Limits Listed below are the current income limits that the City of Huntington Beach and its representatives will use to determine whether an individual or company meets the federal. definition of "Section 3"eligibility. If you do not qualify based on your current income and family size, but you meet the requirements based on your income and family size within the last three years, you still qualify. All income amounts are subject to adjustment by the City in accordance with HUD guidelines. 2016. Family Size Income Criteria 80% of Median 1 54,600 2 62,400 3 70,200 4 78,000 5 84,250 6 90,500 7 96,750 8 103,000 Attaclunent A CITY OF I--IUNIINGTONBEACH HUD SECTION 3 AFFIDAVIT Must be completed by 'the prime contractor and submitted with bid documells. Must be completed and submitted by can subcontractors prior issuance of Nonce to Proceed. IMPORTANT NOTE: YOUR SIGNATURE BELOW INDICATES THAT YOU RECEIVED A COPY OF 'THE CITY'S SEC"IION 3 POLICY AND REQUIREMENT'S AND THE II�I1D SECTION 3 COMPLIANCE CERTIFICATION (ATIACHMENT C) AND COMPLIANCE REQIJIRF,MINTS STATEDTHERLIN. I. THE UNDERSIGNED Officer of Authorized Signature Agent of Company (Print Name) Signature PROJECT NAME: COMPANY NAME: ADDRESS: TELEPHONE NUMBER: E-MAIL,ADDRESS: DATE: Attachment B HUD SECTION 3 COMPLIANCE CERTIFICATION Must be signed by prime contractor and all subcontractors prior to issuance of notice to proceed The contract for this work will include the following clause (referred to as the HUD Section 3 clause}: A. The work to be performed Linder this contract is subject to the reg4ements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 170lu (Section )}. The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing. Consistent with 24 CFR §135.72(b}, the City of Huntington Beach shall refrain from entering into a contract with any contractor after notification is received from IfUD that the contractor has been found in violation of the Section 3 regulations. The City will also review past performance of contractors on Section 3 projects in deterrnirnng contract awards. It is mandatory that all contractors seeking to be awarded a City of Huntington Beach Section 3 covered project attend the pre- bid conference. B. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 135, which nnplement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are Linder no contractual or other impediment that would prevent them from complying with the part 135 regulations. C, The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this Section 3 clause, and will post copies of the noticein conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number and job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of the person(s) taking applications for each of the positions: and the anticipated date the work shall begin. D. The contractor agrees include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 135,and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regtitions in 24 CFR part 135.The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found inviolation of the regulations 11124 CFR part 135. E. The contractor will certify that any vacant employment positions, including training positions, that are tilled (1) after the contractor is selected but before the contract is executed, and (2) with persons other than those whom the regulations of 24 CFR part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR part 135. F. The contractor understands that non-compliance and willful violation of HUM regulations in 24 CFR part 135 with respect to Section 3 and related regulations by itself.,its sub-contractors and or lower tier contractors will result in corrective measures taken by the City of Huntington Beach to achieve compliance, including suspension or withholding of contractor payments. G. With respect to work performed in connection with Section 3 covered Indian housing assistance, Section 7 (b) of the Indian Self Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract. Section 7 (b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment subcontracts shall be given to Iridians, and ji) preferencein the award of contracts and subcontracts shall be given to ,Indian organizations and Indian-owned Economic Enterprises. Parties o this contract that are subject to the provisions of Section 3 and Section 7 (b) agree to the comply with Section 3 to the maximum extent feasible,but not in derogation ofcompliance with Section 7(b) I, ZI IF UNDFRSI<.1-,1D, ()i BEI IAL:F ()-n lF,C-1()INIPANY I IEREBY C.UZ7fIFY TI-IAT I HAVE RECEIVED, READ AND DO UNDERSTAND THE CONTENTS OF THE ABOVE STATED "SECTION 3" CLAUSE. PROJECT: SIGNATURE PRINT NAME DA7E 7 171E {OFFICER OR I U7 HORIZED AGE!Vl) C'OMPANY ME ADDRESS CITY STATE, L11' CODE Attachment C City of Huntington Beach Existing Core Workforce List Must be completed and submitted by prime contractor and all subcontractors prior to ai-Issuance of Notice to :Proceed FIRM NAME: PROJECT: CONTRACT NO. SUBMITTED BY: TELEPHONE NO. Thefollowingis a listof"CoreEniployces."Tlieseemployees,in accordance with the delinitionofan Existing Core Workforce, have been on the active payroll for fifty(50)out of the last one hundred (100)working days prior to the award. The Contractor and subcontractor, at any tier, must submit this form prior to commencingwork on the project. The Contractor and subcontractor(s) shall provide to the Section 3 Coordinator or designee proof of their"Core Workforce" upon request.Alternative worksheets may be submitted only if the same information shown belows contained. Name SSN (last 4 Classification Hire Date Last Zip Verified (office digits only) Date Employed Code use only) Certification: I CERTIFY THAT THE INFORMATION CONTAINED HEREON IS TRUE AND CORRECT. IF,IT IS DETERIVIINEDTHATT'HE INFORMATION REPORTED HEREONIS NOT'IRUE AND CORRECT, I WILL NOT BE ALLOWED TO DO WORK (BEGIN. FINISH, COMPLETE) FOR THE CITY OF HUNTINGTON BEACH S[JBMIT TO: City of Huntington Beach Office of Business Development 2000 Main Street Huntington Beach, CA 92648 714-374-1519 Signature: Date: Title: Attachment D CITY OF HUNTINGTON BEACH PROJECT EMPLOYEE SURVEY To be completed by all new hires (including office personnel) Form to be submitted with certified payrolls every time an employee is hired (This form is mandatory and must be completed by the prime contractor and all subcontractors as required.) COMPANY NAME: P RO.1 F CT: NAME: ADDRESS: C Ff Y: TELEPHONE: Number of people living with you in your home: For the last three years., please give an estimate Of your gross annual income before Being employed at this construction project: (fill in lines below) Current Year Annual Income: Last Year Annual Income: 1 fwo (2) Years Ago Income: OR a Public Housing Resident or Received Section 8 Assistance Yes No (Circle One) Signature: Date: S IJ B M I T TO: City of Huntington Beach Office of Business Development 2000 Main Street I ILintington Beach, CA 92648 714-374-1519 Attachment E CITY OF HUNTINGTON BEACH EMPLOYMENT FORECAST FORM To ensure efforts are made to reach the City of lluntington Beach's numerical goals for job placement of Local loi income individuals, the prime contractor and all subcontractors shall provide the.following employment forecasts.for this project on a monthly basis (this document must be submitted with the certified payrolls). This is a mandatory monthly submittal. COMPANY NAME: DATE PROJECT: Project Start Date: Project End Date Total Forecasted Work Hours for Entire Project: Total Forecasted Workforce Size: TRADE NUMBER OF EMPLOYEES NEEDED FORECASTED WORK HOURS BY TO COMPLETE TASK TRADE Attachment F CITY OF HUNTINGTON BEACH EMPLOYMENT SECTION 3 WORKFORCE MONTHLY HIRING REPORT To ensure efforts cure Inade to reach the City, gflluntington Beach's numerical goals for job placement of local low-income individuals, the prime contractor and all subcontractors shall provide the follovving employment iq/brmation for this prgject on a monthly basis (this is a mandatory monthly submittal for by all contractors prime and subcontractors) and must be submitted with certified payrolls. PROJECT: COMPANY NAME: DATE Reported By (circle one): Prime Contractor Subcontractor Monthly Reporting Period: Name of New Hire Hire Date Occupation Attachment G NOTICE3 OPPORTUNITIESJOB AND CONTRACTING HUNTINGTON BEACH RESIDENTS MAY QUALIFY FOR EMPLOYMENT AND CONTRACTING OPPORTUNITIES ON THIS FEDERALLY FUNDED CONSTRUCTION PROJECT. LOW-INCOME AND VERY LOW-INCOME RESIDENTS AND BUSINESSES WILL RECEIVE HIRING PREFERENCE. INTERESTED HUNTINGTON BEACH RESIDENTS AND BUSINESSES SHOULD CONTACT THE DESIGNATED PERSON BELOW TO DETERMINE THEIR ELIGIBILITY FOR CURRENT AVAILABLE POSITIONS, POSSIBLE FUTURE POSITIONS OR OTHER EMPLOYMENT AND CONTRACTING INFORMATION. CONTI2AC 'ING/ BUSINESS EMPL,OYMENI' OPPORTUNITIES CONTACT PHONE ADDRESS City Hall 2000 Main Street Huntington Beach, CA 92648 EMAIL Attachinent H AVISO DE OPORTUNIDADES DE TRABAJO Y CONTRATOS Los RESIDENTES y NEGOCIOS DE HUNTINGTON BEACH PUEDEN CALIFICAR PARA OPORTUNIDADFS DE EMPLEO POR PARTS DEL PROGRAMA DE CONSTRUCCION FUNDADO POR FL GOBIERNO FEDERAL. RFSIDFNTES DE BAJOS INGRESOS RECIBIRAN PREFERENCIA PARA TRABAJOS Y CONTRACTOS. RESIDFNTES Y NEGOCIOS DE HUNTINGTON BEACH INTER-ESADOS, FAVOR DE PONERSE EN CONTACTO CON LA PERSONA DESIGNADA AL FONDO DE ESTA OJA, PARA DETERMINAR SU ELEGBILIDAD PARA POSICIONES DISPONIBLES, FUTURAS POSfC1ONFS POSIBLES Y OTRA INFORMACION DE EMPLEO. CONTRACTING/ BUSINESS EI\4PLOYMEN'I' OPPOIZl'UNI'T'IES CONTACT PI IONE ADDRESS City Hall 2000 Main Street Huntington Beach, CA 92648 EMAIL Attachment I Section 3 Business Contact Log for documenting contact with: Section 3 & Local Businesses PROJECT: COMPANY NAME: This form must be submitted with the prime contractor's bid documents. This form must also be maintained during the entire period of construction for any contact with businesses. Date/Time Company Mode of Contact Contact eslilis Of Contact Info Person Conversation Example: Example: Example: Example: Example: Example: 1/12/16 ABC Fax Fax: (xxx) John Doe, Fax was sent to John Doe 2:00 pm Contracting xxx-xxxx Owner contractor asking for their participation. Jahn Doe called us and we inquired about their product experience. John Doe sent me a listing of their completed projects. This contractor thinks they may qualify as a Section 3 business. We will include then as part of our proposed team Attachment 1 Section 3 Business Contact Log for documenting contact with: Outreach Agencies PROJECT: COMPANY NAME: This form must be submitted with the prime contractor's bid documents. This form must also be maintained during the entire period of construction for any contact with businesses. Date/Time Company Mode of Contact Contact Results of Contact Info Person COi1VerSatlOil Example: Example: Example: Example: Example: Example: 1/12/16 ABC Fax Fax: (xxx) John Doe, Fax was sent to John Doe 2:00 pm Contracting xxx-xxxx Owner contractor asking for their participation. John Doe called us and we inquired about their product experience. John Doe sent me a listing of their completed projects. This contractor thinks they may qualify as a Section 3 business. We will include then as part of our proposed team Attachment 1 THE CITY OF HUNTINGTON BEACH HUD SECTION 3 BUSINESS INFORMATION FORM Must be submitted with bid documents. To be completed by the prime contractor and all subcontractors. If not available with bid documents, this form must be received by the City of 10:00 am of the next working day. The sole purpose c?f this.forin is to calculate the number of&ction 3 business enterprises 1,1,orking on construction project. Please print or type. COMPANY NAME: ADDRESS: CI'I'Y/S"fA"I'E/"LIP CODE: TELEPHONE: FORM COMPLETED BY: SERVICE OR PRODUCT: Is 5 1% or more of your business owned by Section 3 Residents? Yes No (circle one) Is at least 30% of your workforce (full Time, Permanent Staff) made up of Section 3 residents or were they Section 3 residents within 3 year of their first date of employment? Yes No (circle one) Signature: Date: SUBMIT TO: City of Huntington Beach Office of Business Development 2000 Main Street Huntington Beach, CA 92648 714-374-1519 Attachment J CITY OF HUNTINGTON BEACH SAMPLE SECTION 3 LETTER TO UNION Must be completed by the prime conractor-and subcontractor prior to issuance of Notice to Proceed. Contractor Information Address City, State, Zip Telephone,Fax California License# Date Union Hall Address City, State,Zip Subject: Project Site- Dear: (Name of Contractor); is a subcontractor or contractor on the (Name of Project). This construction project falls under the United States Department of Ilousing and Urban Development (HUD) Section 3 regulations for the City of Huntington Beach. The Section 3 regulation compliance requires that contactors to the greatest extent feasible hire low- income residents of Huntington Beach and Signal Hill for the project. We are asking for your cooperation in using your best efforts to dispatch workers from your union that reside in Huntington Beach and Signal Hill. Please keep this letter on file. When we request that workers are dispatched to a job, we would appreciate your assistance in helping our company and the City of Huntington Beach meet the Section 3 local hiring requirements. Sincerely, (Person Name) Attachment K OR UNION CONTRACTORS USE CITY OF HUNTINGTON BEACH WORKER REQUEST FORM FOR UNION CONTRACTORS To the Contractor: Please complete and fax this form to the applicable union to request craft workers that fulfill all hiring requirements for this project. A duplicate fax request is to be sent to the Office of Business Development, attention Kellee Fritzal, Deputy Director or by email at kfritza]CcI)surfcity-hb.org. After taxing your request, please call the Local to verify receipt and substantiate their capacity to furnish workers as specified below. Please print your Fax Transmission Verification Reports and keep copies for Your records. To the Union: Please complete the"Union Use Only"section and fax this form back to the requesting Contractor. Please retaina copy of this form for your records and send a copy to the City of Huntington Beach Office of Business Development at 714-374-1519. To: Local# Fax#( ) Date: cc: From: Company: - - --- - Person Sending: Contact Phone: Contact F a x Please provide me with union craft workers. The City of H-untington Beach requires that 30% of project apprentice and journey-level hours be performed by residents of the cities of Huntington Beach to the extent feasible. 92646 92647 92648 92649 • I" Priority: Section 3 Local Requirement- Union craft employees, including apprentices, who reside in one of the local zip codes listed above, fi112 are determined be Section 3 eligible (80% of median income or less) should be dispatched first.The Workforce Investment Boardcan assist indeterminingSection 3 eligibility. • 2"'Priority: Local Requirement- Ifinsufficient union craft employees, including apprentices, who live in one of the zip codes listed above and are Section 3 eligible exist,other Huntington Beach and Signal Hill residents may fulfill hours to meet the requirements • General Dispatch - Union craft employees may be dispatched per nonnal dispatch procedures, notwithstanding the above Section 3 and local preferences. Craft Employees Requested Journeyman or Job/Craft Description Apprenticeship Number Requested Report Report bvel Date Time Total Workers Requested Please have worker(s) report to the following work address indicated below: Project& Site Address: Report to(on-site contact) On-site Tel # Fax: Comments or special requirements: Union Use Only (Please check boxes as appropriate Reception Date: Dispatch Date: Received By: Requested Dispatch Available for Dispatch Unavailable for Dispatch Comments Section 3 and Local 1-ocal Only General Dispatch Attachment L FOR NON-UNION CONTRACTORS USE CITY OF I-IUNTINGTON BEACII WORKER REQUEST FORM Company Information Phone: Fax: e-mail Name: Contact Person: Title: Address: Construction Type: Years in Business No. of employees: Benefits: None [ ] Med. [ ] Dental [ ] Vision [ ] Retirement [ ] Effective: Other: Position Title: Position Reports: Location of Position (Project Site Name): Expected Start Date: Total Openings Project Name & Location: SHIFT: M[ ] T[ ] W[ ] Th[ ] F[ ] S[ ] S[ ] Day[ ] Swing[ ] Night[ ] Flex[ ] Salary: /hr. mo., annual Salary Commission Hours to Type of Position: Perm [ ] Temp [ ] F/T [ ] P/T [ ] Seasonal [ ] Required Skills: Experience, education: Job Description: Referral Procedure: Please check Refer/Pre-Screen from CFWF [ ] Fax Resume [ ] Mail Resume [ ] E-mail [ ] Apply in person [ ] Call for appt. [ ] Is your Company in the Enterprise Zone: Yes [ ] No [ ] Refer to EDD CalJobs Yes [ ] No [ ] If yes, Company CA Tax ID Attachment M UD APPENDIX TO PART 135 I.Examples of Efforts To Offer Training and Employment Opportunities to Section 3 Residents. (1) and(2) Intentionally Omitted (3) Establishing training programs, which are consistent with the requirements of the Department of Labor,for public and Indian housing residents and other section 3 residents inthe building trades. (4) Advertising the training and employment positions by distributing flyers (which identify the positions to be filled, the qualifications required, and where to obtain additional information about the application process) to every occupied dwelling unit in the housing development or developments where category 1 or category 2 persons (as these tenns are defined in Sec. 135.34) reside. 5) Advertising the training and employment positions by posting flyers (which identify the positions to be filled, the qualifications required, and where to obtain additional information about the application process) in the common areas or other prominent areas of the housing development or developments. For HAs, post such advertising in he housing development or developments where category I or category 2 persons reside; for all other recipients, post such advertising in the housing development or developments and transitional housing in the neighborhood or service area of the section 3 covered project. (6) Contacting resident councils, resident management corporations, or other resident organizations, where they exist, in the housing development or developments where category 1 or category 2 persons reside, and community organizations in HUD-assisted neighborhoods, to request the assistance of these organizations in notifying residents of the training and employment positions to be filled. (7) Sponsoring (scheduling, advertising, financing or providing in-kind services) a job informational meeting to be conducted by an HA or contractor representative or representatives at a location in the housing development or developments where category I or category 2 persons reside or in the neighborhood or service area of the section 3 covered project. (8) Arranging assistance in conducting job interviews and completing job applications for residents of the housing development or developments where category I or category 2 persons reside and in the neighborhood or service area in which a section 3 project is located. Attachment N (9) Arranging for a location in the housing development or developments where category 1 persons reside, or the neighborhood or service area of the project, where job applications may be delivered to and collected by a recipient or contractor representative or representatives. (10) and(11)Intentionally Omitted (12) Consulting with State and local agencies administering training programs funded through TIPA, probation and parole agencies, unemployment compensation programs. community organizations and other officials or organizations to assist with recruiting Section 3 residents for the HA's or contractor's training and employment positions. (13) Intentionally Omitted (14) Employing a job coordinator, or contracting with a business concern that is licensed in the field of job placement (preferably one of the section 3 business concerns identified in part 135), that will undertake, on behalf of the HA, other recipient or contractor, the efforts to match eligible and qualified section 3 residents with the training and employment positions that the HA or contractor intends to till. (15) Intentionally Omitted (16) Where there are more qualified section 3 residents than there are positions to be filled, maintaining a file of eligible qualified section 3 residents for future employment positions. (17)-(20)Intentionally Omitted 11. Examples of Efforts To Award Contracts to Section 3 Business Concerns. (1)-(8)Intentionally Omitted (9) Carrying out workshops on contracting procedures and specific contract opportunities in a timely manner so that section 3 business concerns can take advantage of upcoming contracting opportunities, with such information being made available in languages other than English where appropriate. (10) Intentionally Omitted (1 1) Arranging solicitations, times for the presentation of bids, quantities, specifications, and delivery schedules in ways to facilitate the participation of section 3 business concerns. (12) Where appropriate, breaking out contract work items into economically feasible units to facilitate participation by section 3 business concerns. Res. No. 2016-70 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, ROBIN ESTANISLAU the duly appointed, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a Regular meeting thereof held on October 17, 2016 by the following vote: AYES: Posey, O'Connell, Katapodis, Hardy, Delgleize NOES: Sullivan, Peterson ABSENT: None RECUSE: None City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California ATTAC H M E N T #3 Attachment 3 HOME Federal Housing Grant Funds Available Budget Fund Fund Name Amount 843 HOME FY 2013/14 $247,946 1209 HOME FY 2014/15 292,282 1220 HOME FY 2015/16 177,376 1236 HOME FY 2016/17 63,616 352 LMIAF 218,780 Total $1,000,000 Budget Adjustment Requested—Transfer grant appropriations of$44,986 from HOME FY 2010/11 (Fund 850) to HOME FY 2014/15 (Fund 1209). Item 5. - 305 HB -364- suity INSURANCE AND INDEMNIFICATION WAIVER luntin�t,rincn,!B, MODIFICATION REQUEST 1. Requested by: Kellee Fritzal 2. Date: October 11, 2016 3. Name of contractor/permittee: Orange County Community Housing Corp (OCCHC)- 4. Description of work to be performed: Housing Provider 5. Value and length of contract: 55 years 6. Waiver/modification request: Waiver of $10,000 decitt&d7fu ev�v: v►1�✓rt . 7. Reason for request and why it should be granted: OCCHC to self-fund the deductible by keeping 10k in reserves in a dedicated account 8. Identify the risks to the City in approving this waiver/modification-Depart Vent Head Signature Date: APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted. Approval from the City Administrator's Office is only required if Risk Management and„Jhe City Attorneys Office disagree. 1. Ri$k Management ' Approved ❑ Denied Signature Date 2. City Attorney's Office Approved ❑ Denied Signature Date 3. City Administrator's Offic ❑ Approved ❑ Denied Signature Date If approved, the completed waiver/modification request is to be submitted to the ECy it Attorney's Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Administrative Services waiver form.doc 10/11/2016 9:08:00 AM ORANG-1 OP ID: SD 'ACORO�� CERTIFICATE OF LIABILITY INSURANCE DATE(MMIDD/YYYY) 10/04/2016 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED,subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT NAME: Stephanie Dufour Dufour Insurance Services,LLC PHONE 714-369-2998 FAX c,No: _ 5611 Littler Drive AICN.,�: _ Huntington Beach,CA 92649 E-MAIL p Stephanie Dufour ADDRESS:ste hanie dufourinsurance.com INSURER(S)AFFORDING COVERAGE NAIC# INSURER A:Philadelphia Indemnity 18058 INSURED Orange County Community INSURER B: Housing Corporation and"Stepping Up"Program INSURERC: 501 N.Golden Circle#200 INSURER D: Santa Ana,CA 92705 INSURER E: _ INSURER F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR TYPE OF INSURANCE ADDL UBR POLICY EFF POLICY EXP LIMITS LTR IN POLICYNUMBER MMIDDIYYYY MMIDD/YYYY A j X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE S 1,000,000 DAMAGE TO RENTED J CLAIMS-MADE 1XI OCCUR X X PHPK1434087 01/01/2016 01/01/2017 PREMISES(Ea occurrence) $ _100,000 A I X J Professional Liab PHPK1434087 01/01/2016 01/01/2017 MED EXP(Any one person) S 5,000 A X Sex Abuse MOlesta PHPK1434087 01/01/2016 01/01/2017 PERSONAL&ADV INJURY S 1,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 2,000,000 POLICY PRO- X I_ JECT LOC PRODUCTS-COMP/OP AGG $ 2,000,000 OTHER: $ AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT S 1,000,000 _ (Ea accident) A IANY AU10 X X PHPK1434087 01/01/2016 01/01/2017 BODILY INJURY _ ALL OWNED I SCHEDULED X BODILY INJURY(Per accident)!$ I�� _ nuros _ I AUTOS I � X i X-� NON-OWNED PROPERTY DAMAGE $ HIRED AUTOS AUTOS Per accident_ 7 I I$ I X UMBRELLA LIAB X I OCCUR EACH OCCURRENCE $ 3,000,000 A EXCESS LIAB CLAIMS-MADE X X PHUB525148 01/01/2016 01/01/2017 AGGREGATE S 3,000,000 DED X I RETENTION$ 10,000 $ WORKERS COMPENSATION I STATUTE EORH AND EMPLOYERS'LIABILITY Y I N ANY PROPRIETOR/PARTNER/EXECUTIVE ❑NIA ill E.L.EACH ACCIDENT S OFFICER/MEMBER EXCLUDED? - (MandatorymNH) E,L.DISEASE-EA EMPLOYEE S If yes,describe under DESCRIPTION OF DPERATIONS below E.L.DISEASE-POLICY LIMIT $ X X DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (ACORD 101,Additional Remarks Schedule,maybe attached if more space is required) Certificate Holder is named as Additional Insured as respects the operations APPROVE O of Named Insured's program activities and owned locations at 313 11th Street, 17361 Koledo Lane 17422 and 17432 Queens Lane,17291-17351 Koledo Lane,17401 &17421 Ko0o Lane, 17412 Koledo Lane,and 7792 Barton Ave, _ Huntington Beach,92647. MICHAEE.E. GATES CITY A?fORNEY CITY OF HUNTINGTON BEACH CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE THEREOF, City of Huntington Beach ACCORDAINCE RATION WITH THEEPOLICY PROVISIONSE WILL BE DELIVERED IN 2000 Main Street Huntington Beach,CA 92648 AUTHORIZED REPRESENTATIVE ©1988-2014 ACORD CORPORATION. All rights reserved. ACORD 25(2014/01) The ACORD name and logo are registered marks of ACORD ``' CERTIFICATE OF LIABILITY INSURANCE 10/1 DATE(MMIDD/YYYY) THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER.THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsements. PRODUCER CONTACT Aon Risk Services,Inc of Florida NAME: Aon Risk Services,Inc of Florida 1001 Brickell Bay Drive,Suite#1100 PHONE FAX Miami,FL 33131-4937 A/C No E:t:800-743-8130 A/C No);800-522-7514 EMAIL ADDRESS: ADP.COI.Center@Aon.com INSURER(S)AFFORDING COVERAGE NAIC# INSURER A: American Home Assurance Co. 19380 INSURED INSURER B: ADP TotalSource CO XXII,Inc 10200 Sunset Drive INSURER C: Miami,FL 33173 IJC/F INSURER D: Orange County Community Housing Corporation INSURER E 2024 North Broadway #300 Santa Ana,CA 92706-2023 INSURER F COVERAGES CERTIFICATE NUMBER: 1286000 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. LIMITS SHOWN ARE AS REQUESTED. INSR TYPE OF INSURANCE ADDL SUER POLICY NUMBER POLICY EFF POLICY EXP I LIMITS LTR INSR WVD MM/DD/YYYY MM/DD/YYYY COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ DAMAGE TO RENTED CLAIMS-MADE OCCUR PREMISES Ea occurrence $ MED EXP(Any oneperson) S PERSONAL&ADV INJURY $ GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ POLICY PROJECT LOC PRODUCTS-COMP/OP AGG $ OTHER $ AUTOMOBILE LIABILITY EO acccl dent SINGLE LIMIT S ANY AUTO BODILY INJURY Perperson) S OWNED SCHEDULED AUTOS ONLY AUTOS BODILY INJURY Per accident $ HIRED NON-OWNED PROPERTY DAMAGE AUTOS ONLY AUTOS ONLY Per accident $ UMBRELLA LIAB OCCUR EACH OCCURRENCE S EXCESS LIAB CLAIMS-MADE AGGREGATE S DEC I I RETENTION S WORKERS COMPENSATION X PER OTH- A AND EMPLOYERS'LIABILITY Y/N WC 061143993 CA 07/01/16 07/01/17 STATUTE ER ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? N/A E.L.EACH ACCIDENT $ 2,000,000 (Mandatory in NH) E.L.DISEASE-EA EMPLOYEE $ 2,000,000 If yes,describe under DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT $ 2,000,000 DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES(ACORD 101,Additional Remarks Schedule,may be attached if more space is required) All worksite employees working for ORANGE COUNTY COMMUNITY HOUSING CORPORATION,paid under ADP TOTALSOURCE,INC's payroll,are covered under the above stated policy. CERTIFICATE HOLDER CANCELLATION ORANGE COUNTY COMMUNITY HOUSING CORPORATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE 2024 North Broadway#300 THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN Santa Ana,CA 92706-2023 ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE dion k 6e'tviees, 2nc oIf Cflo-tlda ©1988-2015 ACORD CORPORATION.All rights reserved. ACORD 25(2016/03) The ACORD name and logo are registered marks of ACORD POLICY NUMBER: PHPK1434087 COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS - SCHEDULED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name Of Additional Insured Person(s) Or Organ ization s : Locations Of Covered Operations The City, its officers,elected or appointed officials,employees All locations to be serviced under grant contract. agents,and volunteers 2000 Main Street Huntington Beach, CA 92648 Information required to complete this Schedule, if not shown above, will be shown in the Declarations. A. Section II—Who Is An Insured is amended to include as an additional insured the person(s)or organization(s) shown in the Schedule, but only with respect to liability for"bodily injury", "property damage"or"personal and advertis- ing injury"caused, in whole or in part, by: 1. Your acts or omissions; or 2. The acts or omissions of those acting on your behalf; in the performance of your ongoing operations for the additional insured(s)at the location(s) designated above. B. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to"bodily injury" or"property damage"occurring after: 1.All work, including materials, parts or equipment furnished in connection with such work, on the project(other than service, maintenance or repairs)to be performed by or on behalf of the additional insured(s)at the location of the covered operations has been completed; or 2. That portion of"your work"out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project. CG 20 10 07 04 Copyright, Insurance Services Office, Inc., 2004 Page 1 of 1 0 � OP ID:SD Acc L) DATE(MMIDDIYYYY) EVIDENCE OF COMMERCIAL PROPERTY INSURANCE 10/04/2016 THIS EVIDENCE OF COMMERCIAL PROPERTY INSURANCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW.THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND,EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS EVIDENCE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S),AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE ADDITIONAL INTEREST. PRODUCER NAME, PHONE 714-369-2998 COMPANY NAME AND ADDRESS NAIL NO:18058 �Su our Insu�ance�ervlces,LT No Ext). Philadelphia Indemnity 5611 Littler Drive Insurance Company Huntington Beach,CA 92649 One Bala Plaza,Ste.100 Stephanie Dufour Bala Cynwood,PA 19004 FAX 714 840-6357 E-MAIL Stephanie@dufourinsurance.com IF MULTIPLE COMPANIES,COMPLETE SEPARATE FORM FOR EACH A/C NJ_ ADDRESS: CODE: SUB CODE: POLICY TYPE AGENCY----ORANG-1 Commercial Package CUSTOMER_ID#: NAMED INSURED&N2D,AgDeD OUnty Community Housin LOAN NUMBER POLICY NUMBER 501 N.Golden Circle#200 PHPK1434087 Santa Ana,CA 92705 - ----- - EFFECTIVE DATE EXPIRATION DATE CONTINUED UNTIL 01/01/16 01/01/17 I TERMINATED IF CHECKED ADDITIONAL NAMED INSURED(S) THIS REPLACES PRIOR EVIDENCE DATED: PROPERTY INFORMATION Use REMARKS on page 2,if mores ace is required) ® BUILDING OR ❑ BUSINESS PERSONAL PROPERTY LOCATION I DESCRIPTION 4-Plex Apartments 7792 Barton Ave Covera a effective 1 011 711 6- Huntington Beach,CA 92649 z131116� THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECTTD WHICH THIS EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN,THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. COVERAGE INFORMATION PERILS INSURED I BASIC I I BROAD I X I SPECIAL COMMERCIAL PROPERTY COVERAGE AMOUNT OF INSURANCE: $ 1,0189000 DED: 10,000 ES NO NIA [XK] BUSINESS INCOME ❑ RENTAL VALUE X If YES,LIMIT: _60,000 Actual Loss Sustained;#of months: BLANKET COVERAGE X If YES,indicate value(s)reported on property identified above:$ 190189000 TERRORISM COVERAGE X Attach Disclosure Notice/DEC IS THERE A TERRORISM-SPECIFIC EXCLUSION? X IS DOMESTIC TERRORISM EXCLUDED? X LIMITED FUNGUS COVERAGE X If YES,LIMIT: 259000 DED: 109000 FUNGUS EXCLUSION(If"YES",specify organization's form used) X REPLACEMENT COST X AGREED VALUE X _ COINSURANCE X If YES, 90% EQUIPMENT BREAKDOWN(If Applicable) X If YES,LIMIT: DED: ORDINANCE OR LAW -Coverage for loss to undamaged portion of bldg X If YES,LIMIT: 5009000 DED: _ 109000 Demolition Costs X If YES,LIMIT: 500,000 DED: 10,000 Incr.Cost of Construction X If YES,LIMIT: 500,000 DED: 10,000 EARTH MOVEMENT(If Applicable) X If YES,LIMIT: DED: FLOOD(If Applicable)_ X If YES,LIMIT: DED: WIND/HAIL INCL [X YES ❑ NO Subject to Different Provisions: X If YES,LIMIT: DED: NAMED STORM INCL ❑ YES ❑ NO Subject to Different Provisions: X If YES,LIMIT: DED: PERMISSION TO WAIVE SUBROGATION IN FAVOR OF MORTGAGE X HOLDER PRIOR TO LOSS CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. ADDITIONAL INTEREST X MORTGAGEE HCONTRACT OF SALE LENDER SERVICING AGENT NAME AND ADDRESS X LENDERS LOSS PAYABLE NAME AND ADDRESS Cltv of Huntington Beach AUTHORIZED REPRESENTATIVE 2000 Main Street Huntington Beach,CA 92648 APPROVED AS To FORM 210"o—e- 0 Page 1 of 2 ©2003-2014 ACORD CORPORATION. All rights reserved. ACORD 28(2014101) B&0 n rr and logo are registered marks of ACORD /By:A 'MICHAEL E.GATES I, CITY ATTORNEY f 1� CITY OF HUNTINGTON BEACH EVIDENCE OF COMMERCIAL PROPERTY INSURANCE REMARKS-Including Special Conditions(Use only if more space is required) ACORD 28(2014/01) Page 2 of 2